EIGHTH AMENDMENT TO
CREDIT AGREEMENT
This EIGHTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of March 14, 2001, by and between Smithway Motor Xpress, Inc.
("Borrower"), Smithway Motor Xpress Corp. as Guarantor (the "Guarantor") and
LaSalle Bank National Association, formerly known as LaSalle National Bank, as
Lender (the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower and the Guarantor entered into a Credit Agreement
dated as of September 3, 1997, a First Amendment to Credit Agreement dated as of
March 1, 1998, a Second Amendment to Credit Agreement dated as of March 15,
1998, a Third Amendment to Credit Agreement dated as of October 30, 1998, a
Fourth Amendment to Credit Agreement dated as of August 20, 1999, a Fifth
Amendment to Credit Agreement dated as of December 17, 1999, a Sixth Amendment
to Credit Agreement dated as of July 1, 2000 and a Seventh Amendment to Credit
Agreement dated as of August 25, 2000 (collectively referred to as the
"Agreement"); and
WHEREAS, the Borrower has requested certain modifications to the Agreement
and the Lender is willing to do so on the following terms and conditions; and
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
1. Unless otherwise stated herein, all of the capitalized terms contained
in this document shall have the same meanings as contained in the Agreement.
2. Section 1.1(a) of the Agreement is deleted in its entirety and is
replaced with the following:
(a) The Revolving Credit. The Lender agrees, on the terms and
conditions hereinafter set forth, to make Loans to the Borrower (each
such Loan, a "Revolving Loan") from time to time on any Business Day
during the period from the Closing Date to the Revolving Termination
Date, in an aggregate amount not to exceed at any time outstanding the
amount of $32,500,000 (Thirty Two Million Five Hundred Thousand
Dollars) (the "Revolving Commitment"); provided, however, that, after
giving effect to any Borrowing of Revolving Loans, the aggregate
principal amount of all outstanding Revolving Loans shall not exceed
the Maximum Revolving Loan Balance. Within the limits of the Lender's
Revolving Commitment, and subject to the other terms and conditions
hereof, the Borrower may borrow under this subsection 1.1(a), prepay
and reborrow pursuant to this subsection 1.1(a). The "Maximum
Revolving Loan Balance" will be the lesser of the sum of the Borrowing
Base in effect from time to time plus the face amount of all Letters
of Credit outstanding from time to time, or the Revolving Commitment
then in effect. If at
any time the Revolving Loans exceed the Maximum Revolving Loan
Balance, Revolving Loans must be repaid immediately in an amount
sufficient to eliminate any excess.
The Borrower shall be irrevocably and unconditionally obligated,
forthwith without presentment, demand, protest or other formalities of
any kind, to reimburse the Lender for any amounts paid by the Lender
under any Letter of Credit. The Borrower hereby authorizes and directs
the Lender, at the Lender's option, to make a Revolving Loan in the
amount of any payment made by the Lender with respect to any Letter of
Credit. All amounts paid by the Lender with respect to any Letter of
Credit that are not immediately repaid by the Borrower with the
proceeds of a Revolving Loan or otherwise shall bear interest at the
interest rate then applicable to Revolving Loans, calculated using the
Prime Rate and the Applicable Margin in effect.
3. Section 1.2 of the Agreement is deleted in its entirety and is replaced
with the following:
Note. The Revolving Loans made by the Lender shall be evidenced by a
single Revolving Note payable to the order of the Lender in an amount
equal to $32,500,000.00 executed by the Borrower, in substantially the
form of Exhibit A hereto.
4. Section 6.9 of the Agreement is deleted in its entirety and is replaced
with the following:
Total Indebtedness. The total consolidated Indebtedness (excluding
indebtedness between Guarantor's consolidated group of companies
outstanding pursuant to the SMSD Transactions) of Guarantor and its
Subsidiaries (including Borrower) shall not exceed $65,000,000.
Neither SMSD nor Guarantor will incur any unconsolidated Indebtedness
other than Indebtedness to Lender. The indebtedness of Borrower to
SMSD arising pursuant to SMSD Transactions shall not exceed
$35,000,000 prior to September 30, 2001, $37,500,000 on or after
September 30, 2001, but prior to September 30, 2002. $40,300,000 on or
after September 30, 2002, but prior to September 30, 2003, and
$43,400,000 at anytime thereafter."
5. The requirement to comply with Section 6.17 for the period ending
December 31, 2000 is hereby waived.
6. The following definition contained in Section 9.1 of the Agreement is
deleted in its entirety and is replaced with the following:
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"Borrowing Base" means an amount as of any time of determination equal
to the sum of: (a) eighty five percent (85%) of the aggregate amount
of the Borrower's and East West's then existing Eligible Accounts,
provided, however, that the percentage advance against Eligible
Accounts may be reduced to 80% in Lender's sole and absolution
discretion upon not less than 60 days prior written notice to Borrower
after review of the results of a field audit examination conducted by
Lender, plus (i) fifty five percent (55%) of the aggregate net book
value of the Borrower's and East West's trucks and trailers on which
Bank has a perfected first security interest. Net book value is
defined as the depreciated book value of all of Borrower's and East
West's trucks and trailers pledged to Lender. In the event (i) the
ratio of (x) Borrower's Consolidated Net Income before deduction for
interest and taxes to (y) actual interest expense, calculated at the
end of each fiscal quarter hereafter for the immediate three month
period then ending, is greater than 2.00 to 1.00, and (ii) Borrower
has a net profit of at least $1.00 for the same fiscal period, then,
effective upon the date of delivery of a compliance certificate by
Borrower showing such calculations, the borrowing base with respect to
trucks and trailers shall be increased from fifty five percent (55%)
to sixty percent (60%) until such time as such ratio is less than 2.00
to 1.00, in which event the borrowing base on truck and trailers shall
again be reduced to fifty five percent (55%).
7. Lender, or any persons designated by it, shall have the right to call at
Borrower's places of business at any reasonable times, and, without hindrance or
delay, to inspect the Collateral and to inspect, audit, check and make extracts
from Borrower's books, records, journals, orders, receipts and any
correspondence and other data relating to Borrower's business, the Collateral or
any transactions between the parties hereto, and shall have the right to make
such verification concerning Borrower's business as Lender may consider
reasonable under the circumstances. Borrower authorizes Lender to discuss the
affairs, finances and business of Borrower with any officers, employees or
directors of Borrower, and to discuss the financial condition of Borrower with
Borrower's independent public accountants. Any such discussions shall be without
liability to Lender or to Borrower's independent public accountants. Borrower
shall pay to Lender all out-of-pocket expenses incurred by Lender in the
exercise of its rights hereunder, and all of such expenses shall constitute
Liabilities hereunder, shall be payable on demand.
8. This Amendment will become effective upon:
(a) the execution and delivery of this Amendment by each of
Borrower, Guarantor, East West and SMSD; and
(b) the payment of an amendment fee of $35,000.00.
After the required deliveries and payments are made to the Bank, this
Amendment will be deemed effective as of March 1, 2001, provided that Section 5
hereof will be deemed effective as of December 29, 2000.
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9. Borrower shall pay 50% of the legal fees incurred in connection with the
preparation of this Amendment and the documents and instruments referred to
herein, and shall pay 100% of all out of pocket costs incurred by the Lender or
its attorneys.
10. Borrower expressly acknowledges and agrees that all collateral,
security interests, liens, pledges, and mortgages heretofore, under this
Amendment, or hereafter granted to Lender, including, without limitation, such
collateral, security interests, liens, pledges and mortgages granted under the
Agreement, and all other supplements to the Agreement, extend to and cover all
of the obligations of Borrower to Lender, now existing or hereafter arising
including, without limitation, those arising in connection with the Agreement,
as amended by this Amendment, upon the terms set forth in such agreements, all
of which security interests, liens, pledges, and mortgages are hereby ratified,
reaffirmed, confirmed and approved.
11. Borrower represents and warrants to Lender that (i) it has all
necessary power and authority to execute and deliver this Amendment and perform
its obligations hereunder, (ii) this Amendment and the Agreement, as amended
hereby, constitute the legal, valid and binding obligations of Borrower and are
enforceable against Borrower in accordance with their terms, (iii) all
representations and warranties of Borrower contained in the Agreement, as
amended, and all other agreements, instruments and other writings relating
thereto, are true, correct and complete as of the date hereof, and (iv) no Event
of Default, except as waived by this Amendment, exists under the Agreement.
12. The parties hereto acknowledge and agree that the terms and provisions
of this Amendment amend, add to and constitute a part of the Agreement. Except
as expressly modified and amended by the terms of this Amendment, all of the
other terms and conditions of the Agreement, as amended, and all documents
executed in connection therewith or referred to or incorporated therein remain
in full force and effect and are hereby ratified, reaffirmed, confirmed and
approved.
13. If there is an express conflict between the terms of this Amendment and
the terms of the Agreement, or any of the other agreements or documents executed
in connection therewith or referred to or incorporated therein, the terms of
this Amendment shall govern and control.
14. This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original.
15. This Amendment was executed and delivered in Chicago, Illinois and
shall be governed by and construed in accordance with the internal laws (as
opposed to conflicts of law provisions) of the State of Illinois.
IN WITNESS WHEREOF, this Eighth Amendment has been duly executed as of the
day and year specified at the beginning hereof.
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SMITHWAY MOTOR XPRESS, INC., as Borrower
By: /s/ G. Xxxxx Xxxxx
Title: Exec. V.P.
Address Notice:
X.X. Xxx 000
Xxxx Xxxxx, Xxxx 00000
Attn: G. Xxxxx Xxxxx
Facsimile: (000) 000-0000
Tel: (000) 000-0000
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SMITHWAY MOTOR XPRESS CORP., as
Guarantor
By: /s/ G. Xxxxx Xxxxx
Title: Exec. V.P.
Address Notice:
X.X. Xxx 000
Xxxx Xxxxx, Xxxx 00000
Attn: G. Xxxxx Xxxxx
Facsimile: (000) 000-0000
Tel: (000) 000-0000
LASALLE BANK NATIONAL ASSOCIATION,
as Lender
By: Xxxxx X. Xxxxxx
Title: AVP
Address notices and Lending Office:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
CONSENT AND RATIFICATION
The undersigned, pursuant to that certain Guaranty dated as of September 3,
1997, is a guarantor of all of the obligations of the Borrower to the Lender
under the terms of the Agreement and hereby consents to the Eighth Amendment to
the Agreement. Guarantor hereby reaffirms and ratifies his guaranty as if the
same were fully set forth herein.
SMITHWAY MOTOR XPRESS CORP., as Guarantor
By: /s/ G. Xxxxx Xxxxx
Title: Exec. V.P.
The undersigned, pursuant to that certain Guaranty dated as of March 15,
1998, is a guarantor of all of the obligations of the Borrower to the Lender
under the terms of the Agreement
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and hereby consents to the Eighth Amendment to the Agreement. Guarantor hereby
reaffirms and ratifies his guaranty as if the same were fully set forth herein.
EAST WEST MOTOR EXPRESS, INC., as Guarantor
By: /s/ G. Xxxxx Xxxxx
Title: Exec. V.P.
The undersigned, pursuant to that certain Guaranty dated as of December 17,
1999, is a guarantor of all of the obligations of the Borrower to the Lender
under the terms of the Agreement and hereby consents to the Eighth Amendment to
the Agreement. Guarantor hereby reaffirms and ratifies his guaranty as if the
same were fully set forth herein.
SMSD ACQUISITION CORP., a South Dakota
corporation, as Guarantor
By: /s/ G. Xxxxx Xxxxx
Title: Exec. V.P.
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EXHIBIT A
AMENDED AND RESTATED NOTE
$32,500,000 As of March 14, 2001
Smithway Motor Xpress, Inc. an Iowa corporation (the "Borrower"), promises
to pay to the order of LaSalle Bank National Association (the "Lender") the
lesser of the principal sum of Thirty Two Million Five Hundred Thousand Dollars
($32,500,000) or the aggregate unpaid principal amount of all Loans made by the
Lender to the Borrower pursuant to Article II of the Credit Agreement (as the
same may be amended or modified, the "Agreement") hereinafter referred to, in
immediately available funds at the main office of LaSalle Bank National
Association in Chicago, Illinois, together with interest on the unpaid principal
amount hereof at the rates and on the dates set forth in the Agreement. The
Borrower shall pay the principal of and accrued and unpaid interest on the Loans
in full on the Revolving Termination Date.
The Lender shall record in accordance with its usual practice, the date,
amount and interest rate of each Loan and the date and amount of each principal
and interest payment hereunder.
This Note is issued pursuant to, and is entitled to the benefits of, the
Credit Agreement, dated as of September 3, 1997 between the Borrower and Lender,
to which Agreement, as it may be amended from time to time, reference is hereby
made for a statement of the terms and conditions governing this Note, including
the terms and conditions under which this Note may be prepaid or its maturity
date accelerated. Capitalized terms used herein and not otherwise defined herein
are used with the meanings attributed to them in the Agreement.
SMITHWAY MOTOR XPRESS, INC.
By: /s/ G. Xxxxx Xxxxx
Print Name: G. Xxxxx Xxxxx
Title: Exec. V.P.
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