July 29, 2003
Smithway Motor Xpress, Inc.
0000 Xxxxx Xxxxxx
Xxxx Xxxxx, Xxxx 00000
And
East West Motor Express, Inc.
0000 XX Xxxxx
Xxxxx Xxxx, Xxxxx Xxxxxx 00000
Re: Sixth Amendment to Amended and Restated Loan and
Security Agreement
Gentlemen:
Smithway Motor Xpress, Inc., an Iowa corporation ("Smithway Inc.") and East
West Motor Express, Inc., a South Dakota corporation ("East West") (Smithway
Inc. and East West each a "Borrower" and collectively the "Borrowers") and
LaSalle Bank National Association, a national banking association ("Bank") have
entered into that certain Amended and Restated Loan and Security Agreement dated
December 28, 2001 (the "Security Agreement"). From time to time thereafter,
Borrowers and Bank may have executed various amendments (each an "Amendment" and
collectively the "Amendments") to the Security Agreement (the Security Agreement
and the Amendments hereinafter are referred to, collectively, as the
"Agreement"). Borrowers and Bank now desire to further amend the Agreement as
provided herein, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. The Agreement hereby is amended as follows:
(a) The definition of "Maximum Loan Limit" set forth in Paragraph 1 of the
Agreement is deleted in its entirety and the following is substituted in its
place:
"Maximum Loan Limit" shall mean Twenty-Seven Million Five Hundred
Thousand and No/100 Dollars ($27,500,000.00).
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
July 29, 2003
Page 2
(b) Subsection 2(a) of the Agreement is deleted in its entirety and the
following is substituted in its place:
2. LOANS.
(a) Revolving Loans.
Subject to the terms and conditions of this Agreement and the Other
Agreements, during the Original Term and any Renewal Term, Lender shall, absent
the occurrence of an Event of Default, make revolving loans and advances to
Borrowers' (the "Revolving Loans") in an amount up to the sum of the following
sublimits (the "Revolving Loan Limit"):
(i) Up to eighty-five percent (85%), or such lesser percentage as
determined by Lender in its sole discretion determined in good faith, of the
face amount (less maximum discounts, credits and allowances which may be taken
by or granted to Account Debtors in connection therewith in the ordinary course
of Borrowers' business) of Borrowers' Eligible Accounts (consisting solely of
Eligible Accounts other than those set forth at subsection (ii) immediately
below); plus
(ii) Up to eighty-five percent (85%), or such lesser percentage as
determined by Lender in its sole discretion determined in good faith, of the
face amount (less maximum discounts, credits and allowances which may be taken
by or granted to Account Debtors in connection therewith in the ordinary course
of Borrowers' business) of Borrowers' Eligible Accounts (consisting solely of
Accounts which are unbilled for three (3) days or less) or Two Million Five
Hundred Thousand and No/100 Dollars ($2,500,000.00), whichever is less; plus
(iii) Intentionally Omitted; minus
(iv) such reserves as Lender elects, in its sole discretion determined in
good faith to establish from time to time;
provided, that the Revolving Loan Limit shall in no event exceed Twenty-Seven
Million Five Hundred Thousand and No/100 Dollars ($27,500,000.00) less the
then-outstanding principal balance of the Term Loans (the "Maximum Revolving
Loan Limit") except as such amount may be increased or, following the
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
July 29, 2003
Page 3
occurrence of an Event of Default, decreased by Lender, in its sole discretion.
The aggregate unpaid principal balance of the Revolving Loans shall not at
any time exceed the lesser of the (i) Revolving Loan Limit minus the Letter of
Credit Obligations and (ii) the Maximum Revolving Loan Limit minus the Letter of
Credit Obligations. If at any time the outstanding Revolving Loans exceeds
either the Revolving Loan Limit or the Maximum Revolving Loan Limit, in each
case minus the Letter of Credit Obligations, or any portion of the Revolving
Loans and Letter of Credit Obligations exceeds any applicable sublimit within
the Revolving Loan Limit, Borrowers shall immediately, and without the necessity
of demand by Lender, pay to Lender such amount as may be necessary to eliminate
such excess and Lender shall apply such payment to the Revolving Loans to
eliminate such excess.
Each Borrower hereby authorizes Lender, in its sole discretion, to charge
any of such Borrower's accounts or advance Revolving Loans to make any payments
of principal, interest, fees, costs or expenses required to be made under this
Agreement or the Other Agreements.
A request for a Revolving Loan shall be made or shall be deemed to be made,
each in the following manner: the Borrower requesting such Revolving Loan shall
give Lender same day notice, no later than 10:30 A.M. (Chicago time) for such
day, of its request for a Revolving Loan as a Prime Rate Loan. In the event that
a Borrower maintains a controlled disbursement account at Lender, each check
presented for payment against such controlled disbursement account and any other
charge or request for payment against such controlled disbursement account shall
constitute a request for a Revolving Loan as a Prime Rate Loan. As an
accommodation to Borrowers, Lender may permit telephone requests for Revolving
Loans and electronic transmittal of instructions, authorizations, agreements or
reports to Lender by Borrowers. Unless a Borrower specifically directs Lender in
writing not to accept or act upon telephonic or electronic communications from
such Borrower, Lender shall have no liability to Borrowers for any loss or
damage suffered by a Borrower as a result of Lender's honoring of any requests,
execution of any instructions, authorizations or agreements or reliance on any
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
July 29, 2003
Page 4
reports communicated to it telephonically or electronically and purporting to
have been sent to Lender by a Borrower and Lender shall have no duty to verify
the origin of any such communication or the authority of the Person sending it.
Each Borrower hereby irrevocably authorizes Lender to disburse the proceeds
of each Revolving Loan requested by such Borrower, or deemed to be requested by
such Borrower, as follows: the proceeds of each Revolving Loan requested under
Section 2(a) shall be disbursed by Lender in lawful money of the United States
of America in immediately available funds, by wire transfer or Automated
Clearing House (ACH) transfer to such bank account as may be agreed upon by such
Borrower and Lender from time to time, or elsewhere if pursuant to a written
direction from such Borrower.
(c) Subsection 4(b) of the Agreement is deleted in its entirety and the
following is substituted in its place:
(iv) One-Time Fee: Borrowers shall pay to Lender a one-time fee of Ten
Thousand and No/100 Dollars ($10,000.00), which fee shall be
fully earned and payable upon execution of this Amendment.
(d) Section 10 of the Agreement is deleted in its entirety and the
following is substituted in its place:
10. TERMINATION: AUTOMATIC RENEWAL.
THIS AGREEMENT SHALL BE IN EFFECT UPON EXECUTION OF THIS
AMENDMENT UNTIL JULY 1, 2004 (THE "ORIGINAL TERM") AND SHALL
AUTOMATICALLY RENEW ITSELF FROM MONTH TO MONTH THEREAFTER (EACH
SUCH ONE-MONTH RENEWAL BEING REFERRED TO HEREIN AS A "RENEWAL
TERM") unless (A) THE DUE DATE OF THE LIABILITIES IS ACCELERATED
PURSUANT TO SECTION 16 HEREOF; OR (B) A BORROWER OR LENDER ELECTS
TO TERMINATE THIS AGREEMENT AT THE END OF THE ORIGINAL TERM OR AT
THE END OF ANY RENEWAL TERM BY GIVING THE OTHER PARTY WRITTEN
NOTICE OF SUCH ELECTION AT
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
July 29, 2003
Page 5
LEAST FIFTEEN (15) DAYS PRIOR TO THE END OF THE ORIGINAL TERM OR
THE THEN CURRENT RENEWAL TERM IN WHICH CASE BORROWERS SHALL PAY
ALL OF THE LIABILITIES IN FULL ON THE LAST DAY OF SUCH TERM. If
one or more of the events specified in clauses (a) and (b)
occurs, then (i) Lender shall not make any additional Loans on or
after the date identified as the date on which the Liabilities
are to be repaid; and (ii) this Agreement shall terminate on the
date thereafter that the Liabilities are paid in full. At such
time as Borrowers have repaid all of the Liabilities and this
Agreement has terminated, Borrowers shall deliver to Lender a
release, in form and substance satisfactory to Lender, of all
obligations and liabilities of Lender and its officers,
directors, employees, agents, parents, subsidiaries and
affiliates to such Borrowers, and if Borrowers are obtaining new
financing from another lender, Borrowers shall deliver such
lender's indemnification of Lender, in form and substance
satisfactory to Lender, for checks which Lender has credited to
such Borrower's account, but which subsequently are dishonored
for any reason or for automatic clearinghouse or wire transfers
not yet posted to such Borrower's account.
(e) Exhibit A of the Agreement is amended and restated as the First Amended
and Restated Exhibit A as attached hereto and made a part hereof.
2. This Amendment shall not become effective until fully executed by all
parties hereto.
3. Except as expressly amended hereby and by any other supplemental
documents or instruments executed by either party hereto in order to effectuate
the transactions contemplated hereby, the Agreement and Exhibit A thereto hereby
are ratified and confirmed by the parties hereto and remain in full force and
effect in accordance with the terms thereof.
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
July 29, 2003
Page 6
LASALLE BANK NATIONAL ASSOCIATION
By /s/ Xxxx Xxxxxxx
---------------------------------
Title Sr VP
------------------------------
ACKNOWLEDGED AND AGREED TO
this 31st day of July, 2003:
SMITHWAY MOTOR XPRESS, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx
Title President
EAST WEST MOTOR EXPRESS, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx
Title President
Consented and agreed to by the
following guarantor(s) of the
obligations of Smithway Motor
Xpress, Inc. and East West
Motor Express, Inc. to
LaSalle Bank National Association.
SMSD Acquisition Corp.
By: /s/ G. Xxxxx Xxxxx
-----------------------------------
G. Xxxxx Xxxxx
Title: Vice President
Date: July 31st, 2003
Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
July 29, 2003
Page 7
Smithway Motor Xpress Corp.
By: /s/ G. Xxxxx Xxxxx
-----------------------------------
G. Xxxxx Xxxxx
Title: Vice President
Date: July 31st, 2003
Exhibits available upon request.
