FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT
This First Amendment to Asset Purchase Agreement (the "Amendment") is
made as of October 24, 1996, by and among Smithway Motor Xpress, Inc., an Iowa
corporation ("Smithway"); Smithway Motor Xpress Corp., a Nevada corporation;
Xxxxxxxxx Transportation, Inc., a South Dakota corporation ("Seller"); and Xxxxx
and Xxxxxxx Xxxxxxxxx, individual residents of Yankton, South Dakota and
Seller's sole Shareholders (together, the "Shareholders").
RECITALS
The parties previously entered into that certain Asset Purchase
Agreement dated October 4, 1996, (the "Main Agreement"). Certain events have
transpired since the execution of the Main Agreement that the parties wish to
reflect in writing.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants, representations, and warranties herein contained, and upon the
terms and conditions hereinafter set forth, the parties hereto agree as follows:
1. Amendment of Main Agreement. The provisions of this Amendment shall
supplement and amend the Main Agreement as specifically stated herein. Except as
stated herein, the Main Agreement shall continue in full force and effect.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed in the Main Agreement.
2. California Lease. Section 2.11 of the Main Agreement is deleted in
its entirety and replaced with new Section 2.11, which shall read as follows:
2.11 California Lease. The parties have requested a Phase I
environmental site assessment concerning the property leased by Seller
in Stockton, California (the "California Property"). The parties have
received a draft of the executive summary, but the entire report has
not been delivered because of delays in receiving county records. The
executive summary recommends that samples be taken in two locations and
the parties have agreed to do so. It is anticipated that the results of
the sampling process and county records search will be known on or
about November 15. Seller hereby grants Smithway a license to use the
California Property to the full extent Seller is able to use the
California Property under the leased attached as Exhibit F to the Main
Agreement (the "California Lease"). The license granted pursuant to
this Section shall commence at Closing and extend until consummation of
one of Smithway's options set forth below. With five (5) business days
after the later of (a) delivery to Smithway of the final Phase I
environmental site assessment and (b) delivery to Smithway of the
results of the site sampling mentioned above, Smithway will select and
consummate one of the following options: (a) take an assignment of the
California Lease and all rights to payments from subtenants from
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Seller and agree to pay, perform, and discharge all obligations under
the California Lease; or (b) decline to accept assignment of the
California Lease and cease using the California Property, in which
event, the license referred to above shall extend for another thirty
(30) days. During the period of the license, Smithway shall reimburse
Seller, on a prorated daily basis, for the difference between Seller's
rent under the California Lease and the payments received from
subtenants. The deferred decision on the California Property shall not
affect the Closing of the other transactions under the Main Agreement.
3. Miscellaneous Equipment. Exhibit B to the Main Agreement is amended
to read as reflected on attached Amended Exhibit B. Exhibit B lists a Computer
System 36/400, disk drive, printers (4), 19 Memorex/IBM terminals, one XT
Caliber Computer, 15 emulation cards (the "Computer Equipment"). Seller shall
retain the Computer Equipment after Closing for a period of at least thirty (30)
days.
4. Transition Services. The parties recognize that each will require the
services of certain employees and assets employed or owned by the other after
Closing in order to effect a smooth transition. Certain employees of Seller are
listed on attached Exhibit X (the "Subject Employees"). Seller agrees to
continue the employment of the Subject Employees for thirty (30) days after
Closing, or such lesser period as to which the parties mutually agree (the
"Employment Period"). During the Employment Period, the Subject Employees shall
devote their time to duties of both Seller and Smithway, including, but not
limited to billing and collecting receivables of both Seller and Smithway and
performing such other tasks as may be reasonably requested. Smithway shall
reimburse Seller for all wages paid to the Subject Employees for services
performed during the Employment Period. Smithway and Seller also shall have
joint use of the Computer Equipment (and such other related equipment required
to make the Computer Equipment useful in the ordinary course of business).
Smithway shall pay Seller $5,000 for the use of the Computer Equipment from
Closing until conversion to Smithway's system.
5. Prepayment Penalties. Seller estimates that the maximum amount of such
prepayment penalties for Orix will be $7,000. Smithway shall pay up to $7,000 of
the actual amount of such Orix penalties. The penalty on Newcourt is estimated
at $6,993.81. Smithway will pay up to $3,500 of the amount finally negotiated by
Xxxxx Xxxxxxxxx.
6. Cabovers. No financing documents or payoff amounts have been provided
with respect to Tractor No. 780 and 781 listed on Exhibit E to the Main
Agreement (the "Cabovers"). Smithway shall purchase the Cabovers from Seller as
follows: Upon receipt of a payoff letter from the lender on the Cabovers,
Smithway shall pay the lender up to $114,000 of the total amount due to retire
all obligations for both Cabovers and Seller shall pay the remainder, if any and
convey title to the Cabovers to Smithway free and clear of all liens. If the
amount required to retire the obligations and convey free and clear title is
greater than $114,000 for both Cabovers, (a) Seller may pay the remainder and
Smithway shall complete the purchase or (b) Seller may retain the Cabovers and
Smithway shall have no obligation or liability whatsoever with respect to the
Cabovers. If the payoff amount is not known at Closing, Smithway may rent the
Cabovers from Closing until November 2, 1996, for $44 each per day.
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7. Inspections and Inventory. Under Section 2.13 of the Main Agreement,
the parties have agreed to certain Inspections of Tractors, Trailers, Leased
Tractors, and Leased Trailers, the majority of which will occur within the three
(3) business days after Closing. The parties also intend to conduct a physical
count of certain inventory listed on Exhibit B to the Main Agreement. For
purposes of Closing, the inventory purchase price is assumed to be $179,663.12,
which shall be paid at closing but shall be adjusted to be an actual amount
following a physical count as promptly as possible after Closing. The settlement
of (a) the inventory adjustment and (b) the payment of any aggregate Adjustment
Amount by Seller shall be held on or before November 2, 1996.
8. Prepaid Licenses. The amount of the payment by Smithway under Section
2.5 of the Main Agreement shall be $15,240.
9. Driver Assets.
A. Seller has permitted drivers to have pets on board certain
Tractors and Leased Tractors if such drivers pay a $500 deposit.
Smithway does not permit drivers to have pets. As a driver retention
incentive Smithway will "grandfather" existing drivers and pets that
have paid deposits and will permit any drivers with pets that have not
yet paid deposits to become "grandfathered" by making a $500 deposit
with Smithway. Seller will transfer all deposits to Smithway at
Closing.
B. All driver-owned toolboxes will be left on Tractors and
Leased Tractors and will be given to drivers if installed on tractors
not being purchased by Smithway. All Seller-owned toolboxes may be
removed from Tractors and Leased Tractors by Seller.
10. Deposit of Transfer Documents and Purchase Price. The parties have
agreed to meet and execute Closing documents on October 24, 1996. They have
agreed that the Closing will be effective at 12:01 a.m. October 26, 1996. The
Closing deliveries of Seller and the Shareholders shall be held by Xxxxxxx Law
Firm, P.C., until the effective time of the Closing, and the Closing deliveries
of Smithway and SMXC shall be held by Xxxx Xxxxxxxxx or wire transferred to
creditors October 25, 1996, until the effective time of the Closing. Xxxxxxx Law
Firm, P.C., shall be authorized to deliver the respective Closing deliveries
held by it at or after the effective time of the Closing unless it has received
notice of a breach of the Main Agreement by Seller or the Shareholders prior to
such time. Davenport, Evans, Xxxxxxx & Xxxxx X.X., shall be authorized to
deliver the respective Closing deliveries held by it at or after the effective
time of the Closing unless it has received notice of a breach of the Main
Agreement by Smithway or SMXC prior to such time.
11. Auction. Seller has stored certain non-rolling stock assets
(storage trailers and passenger trailers) at the rear of the Property. Smithway
agrees that Seller may hold one auction on a mutually acceptable weekend day to
dispose of the assets. Seller agrees that neither the auction, nor any
pre-auction activities, will disrupt Smithway's business, and Seller agrees to
arrange all the auction and related activities to prevent any business
disruption. The rights granted hereunder do not afford the right to use any of
the physical structures on the Property.
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12. Counterparts. This Amendment may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Amendment shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Amendment or any counterpart hereof to
produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment on the date first written.
XXXXXXXXX TRANSPORTATION, INC., SMITHWAY MOTOR XPRESS, INC.,
a South Dakota corporation an Iowa corporation
By:--------------------------- By:-------------------------
Xxxxx Xxxxxxxxx, President Xxxxxxx X. Xxxxx, President
------------------------------ SMITHWAY MOTOR XPRESS CORP.,
Xxxxx Xxxxxxxxx, Individually a Nevada corporation
------------------------------ By:-------------------------
Xxxxxxx Xxxxxxxxx, Individually Xxxxxxx X. Xxxxx, President
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