Document:

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                                                                   Exhibit 10.27

                     SETTLEMENT AND CROSS LICENSE AGREEMENT

      This is a Settlement and Cross License Agreement (the "Agreement"),
effective as of August 18, 2004 (the "Effective Date"), by and between (1)
Applera Corporation, a Delaware Corporation having its principal place of
business at 301 Merritt 7, P.O. Box 5435, Norwalk, Connecticut 06856-5435, and
all of its affiliates, divisions, and Affiliates (as defined in Article I of
this Agreement), including but not limited to Applera Corporation - Applied
Biosystems Group, an operating group of Applera Corporation, having its
principal place of business at 850 Lincoln Centre Drive, Foster City, California
94404 (collectively, Applera Corporation and all of its affiliates and
Affiliates are "Applera"); and (2) Illumina, Inc., having its principal place of
business at 9885 Towne Centre Drive, San Diego, California 92121-1975, and all
of its affiliates, divisions, and Affiliates (collectively, Illumina, Inc. and
all of its affiliates and Affiliates are "Illumina").

      WHEREAS, on December 3, 2002, Applera filed a complaint for patent
infringement against Illumina in the United States District Court for the
Northern District of California, Case No. C02-05660, alleging that Illumina
infringed certain patents;

      WHEREAS, on March 11, 2003, Applera dismissed its patent infringement
complaint and re-filed a substantially identical complaint for patent
infringement in the same court, Case No. C03-1048, and then, on April 22, 2003,
filed an amended complaint alleging infringement of an additional patent owned
by Applera ("the Patent Action");

      WHEREAS, in November 1999, Illumina and Applera's predecessor-in-interest
PE Corporation entered into a Joint Development Agreement (the "Joint
Development Agreement") with the objective of jointly developing and
commercializing bioanalytical instrumentation systems incorporating certain
Illumina and Applera technology;

      WHEREAS, on December 3, 2002, Applera served a notice and demand for
arbitration on Illumina regarding disputes alleged to be under the Joint
Development Agreement ("the Arbitration");

      WHEREAS, on December 11, 2002, Illumina filed a complaint for breach of
contract, declaratory relief, and other causes of action against Applera,
including claims relating to the Joint Development Agreement in San Diego County
Superior Court, Case No. GIC 801618 ("the State Court Action"), and afterward
asked for and received a temporary restraining order and a preliminary
injunction staying Applera's arbitration demand;

      WHEREAS, on May 2, 2003, Applera filed a cross-complaint in the State
Court Action for breach of contract, declaratory relief, and unfair competition,
and

      WHEREAS, Applera and Illumina desire to settle all the claims,
cross-claims, and counterclaims that were asserted or could have been asserted
in the Patent Action, the

<PAGE>

State Court Action, or the Arbitration, such settlement as provided in this
Settlement and Cross License Agreement;

      NOW, THEREFORE, in consideration of the promises, terms, and conditions
set forth in this Settlement and Cross License Agreement, the parties, intending
to be legally bound, agree as follows:

                             ARTICLE I: DEFINITIONS

      The following words and phrases shall have the meanings set forth below:

      1.1 "Blocking Patents" are all patents, both domestic and foreign
counterparts, either currently or after the Effective Date, owned or licensed by
Applera, that claim inventions that would necessarily be infringed by Illumina
or its customers as a direct result of their manufacture, use, or sale of the
Defined Product, but excluding the Excluded Patent Claims.

      1.2 "Defined Product" is Illumina's GoldenGate(TM) assay, as described in
Exhibit 1, as practiced through Illumina's products or services.

      1.3 "Excluded Patent Claims" are claims in patents, both domestic and
foreign counterparts, either currently or after the Effective Date, owned or
licensed by Applera that claim inventions that are instruments, enzymes, dyes,
nucleic acid sequences, polymerase chain reaction (PCR) methods, or software.

      1.4 "Modified Defined Product" shall mean a product (substantially similar
to a Defined Product and having all of the "steps" set forth on Exhibit 1
hereto) that is a modification of the Defined Product.

      1.5 "Patents-In-Suit" [*}

      1.6 "Party" shall mean Applera or Illumina, according to the appropriate
context and usage. "Parties" shall mean Applera and Illumina.

      1.7 "Affiliate" means , with respect to a Party, any Person that, directly
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such Party; where "control" refers to the
ownership, directly or indirectly, of the lesser of at least fifty percent (50%)
or the highest percentage permitted by applicable law of the voting securities
or other ownership interests of a Person (or Party) or otherwise the ability to
direct the management of such Person (or Party).

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[*] Certain information on this page has been omitted and filed
    separately with the Securities and Exchange Commission. Confidential
    treatment has been requested with respect to the omitted portions.

                                      -2-
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      1.8 "Person" means any individual, group, corporation, partnership,
limited liability company, joint venture, association or other organization or
entity (including, without limitation, any governmental agency or political
subdivision thereof).

      1.9 A "Successor" shall mean an entity that acquires all or substantially
all of the assets of Applera or Illumina, or of one or more operating divisions
thereof, or an entity that merges into or with Applera or Illumina or any
Affiliate of either.

      1.10 "Tag Sequences" are those particular sequences as set forth in
Exhibit 2 to this Agreement, developed under the First Amendment to Joint
Development Agreement, dated March 27, 2001.

                   ARTICLE II: REPRESENTATIONS AND WARRANTIES

      2.1 Applera represents and warrants that it has legal power to extend the
rights granted to Illumina in this Agreement with respect to the Patents-In-Suit
and the Blocking Patents and any other rights granted hereunder and that it has
not made and will not make any commitments to others inconsistent with or in
derogation of such rights. Applera represents and warrants that (i) it owns the
Patents-In-Suit and has the right to grant releases and licenses with respect to
such patents of the full scope set forth herein and (ii) it has not assigned or
otherwise transferred to any third party any of its rights to any causes of
action, damages, or other remedies, or any patents, claims, counterclaims or
defenses, relating to the Patent Action, the State Court Action, or the
Arbitration.

      2.2 Illumina represents and warrants that it has legal power to extend the
rights granted to Applera in this Agreement and that it has not made and will
not make any commitments to others inconsistent with or in derogation of such
rights. Illumina represents and warrants that it has not assigned or otherwise
transferred to any third party any of its rights to any causes of action,
damages, or other remedies, or any patents, claims, counterclaims or defenses,
relating to the Patent Action, the State Court Action, or the Arbitration.

                       ARTICLE III: TERM AND TERMINATION

      3.1 Term: Once executed by Applera and Illumina, this Agreement will
become effective as of the Effective Date and will remain in effect
indefinitely.

                                      -3-
<PAGE>

               ARTICLE IV: PATENT LICENSE, DISMISSAL, AND RELEASE

      4.1 General Release of Illumina: Subject to Illumina's payment pursuant to
section 5.1, Applera, on behalf of itself, its agents, assigns, and Successors
hereby fully and forever releases Illumina and its past and present officers,
directors, attorneys, Affiliates, employees, assigns, and Successors with
respect to any and all liabilities, claims, counterclaims, claims for injunctive
relief, demands, contracts, debts, obligations, and causes of action of any
nature, kind, and description, whether in law, equity, or otherwise, whether or
not now known or ascertained (collectively, "Claims"), to the extent they do or
may exist on or before the Effective Date, including but not limited to any
matter, cause, or claims arising out of, or which is related to, or connected
with the claims alleged in the Patent Action, the State Court Action, or the
Arbitration, except Inventorship Claims. Inventorship Claims are defined as
follows: a claim by either Party that an invention claimed in an issued patent
therefor contains Collaboration Joint Intellectual Property (to which that Party
asserts rights under section 6 of the JDA) or Collaboration [PEB or Illumina]
Intellectual Property (to which that Party asserts rights under section 6 of the
JDA). Inventorship Claims will be decided by sending a notice to initiate a
"meet and confer" process which shall be initiated no later than one hundred
twenty (120) days from the Effective Date of this agreement as to any issued
patents, (and within five days of the Effective Date, Illumina will give Applera
notice of all such issued patents) and if such process fails, then arbitration
under the JAMS Comprehensive Arbitration Rules and Procedures, which arbitration
shall be final, binding, and non-appealable. Judge Legge or Judge Lynch shall be
the arbitrator, and if neither is available, the parties shall try to agree on
an arbitrator. If they cannot agree on one, JAMS shall select the arbitrator,
which selection shall be final and binding. Any Inventorship Claim shall be
subject to the "clear and convincing" evidence standard and case law of the
Court of Appeals for the Federal Circuit.

      As to any patents that have not have not issued as of the Effective Date,
the Inventorship Claim shall be brought within ninety (90) days of notice of
issuance of such patent by one party to the other, except that no Inventorship
Claim as to patents may be brought subsequent to five (5) years from the
Effective Date of this agreement. Moreover, only one Inventorship Claim may be
brought per invention, irrespective of whether such invention issues in multiple
jurisdictions. Inventorship will be corrected, if necessary, in all
jurisdictions in accordance with the resolution of the Inventorship Claim.
Although the Release of this section 4.1 will operate to the benefit of a
Successor of Illumina, the Parties understand and agree that they do not intend
to, and do not, release any Successor from any liability to Applera that the
Successor may have independently incurred prior to its becoming a Successor to
Illumina. The foregoing Release in this section 4.1 shall not apply to any
Claims that arise after the Effective Date.

      4.2 Subject to the licenses granted pursuant to sections 4.5 and and the
covenant not to sue granted pursuant to section 4.7, the general release in
sections 4.1 shall not apply to any infringing acts that occur after the
Effective Date of this Settlement

                                      -4-
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and Cross-License Agreement. The parties intend by this section 4.2 to
distinguish Augustine Medical, Inc. v. Progressive Dynamics, Inc., 194 F.3d 1367
(Fed. Cir. 1999).

      4.3 General Release of Applera: Illumina, on behalf of itself, its agents,
assigns, and Successors hereby fully and forever releases Applera and its past
and present officers, directors, attorneys, Affiliates, employees, assigns, and
Successors with respect to any and all Claims, to the extent they do or may
exist on or before the Effective Date, including but not limited to any matter,
cause, or claim arising out of, which is related to, or connected with the
claims alleged in the Patent Action, the State Court Action, or the Arbitration
except Inventorship Claims as defined in section 4.1. Although this Release will
operate to the benefit of a Successor of Applera, the Parties understand and
agree that they do not intend to, and do not release any Successor from any
liability to Illumina that the Successor may have independently incurred prior
to its becoming a Successor to Applera. The foregoing release shall not apply to
any Claims that arise after the Effective Date.

      4.4 Waiver of California Civil Code Section 1542: Applera and Illumina
hereby expressly waive any and all rights and benefits conferred to them by the
provisions of Section 1542 of the Civil Code of the State of California, or any
analogous or similar state law or federal law or regulation. California Civil
Code Section 1542 states as follows:

            A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
            NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
            THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
            SETTLEMENT WITH THE DEBTOR.

Applera and Illumina agree, understand, and recognize that, by executing this
Agreement, they hereby expressly waive any and all rights and benefits conferred
upon them by the provisions of Section 1542 of the Civil Code of the State of
California, and do so understanding the significance and consequences of such
waiver.

      4.5 Applera License Grant To Illumina: [*]

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    separately with the Securities and Exchange Commission. Confidential
    treatment has been requested with respect to the omitted portions.

                                      -5-
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[*]

      4.6 Illumina License Grant To Applera: Illumina grants to Applera and its
Affiliates the non-exclusive, paid-up, royalty-free, world-wide, perpetual right
and license to make, have made, import, export, use, lease, offer to sell, sell,
have sold, or otherwise dispose of Tag Sequences for any existing or future
Applera products or services including, without limitation, arrays, instruments,
oligonucleotide products, reagents, or commercial services. Illumina grants to
all direct and indirect purchasers of Applera's Tag Sequences, the
non-exclusive, world-wide, perpetual, right and license to use, lease, import,
export, offer to sell, sell, or otherwise dispose of Applera's Tag Sequences
purchased from Applera. No right to sublicense is granted except as specifically
provided for in this paragraph.

      4.7 Applera Covenants Not To Sue:

            (a) [*]

            (b) [*]

      4.8 Illumina Covenants Not To Sue:

            (a) Illumina covenants that at no time will it, its Successors, or
its assigns make any claim or commence or prosecute against Applera, or its
officers, directors, attorneys, shareholders, affiliated or related companies,
Affiliates, employees, agents, assigns, Successors, distributors, customers
(direct or indirect), or other transferees any suit, action, arbitration, or
proceeding of any kind based on the manufacture, use, sale, offer for sale, or
importation of Tag Sequences for any existing or future Applera products or
services including, without limitation, arrays, instruments, oligonucleotide
products, reagents, or commercial services. This covenant not to sue is limited
to Tag Sequences, however, and does not prevent Illumina from suing Applera for
infringement of patents not claiming Tag Sequences with respect to Applera
products or services merely because such products or services contain or use a
Tag Sequence.

            (b) Illumina covenants not to sue, or encourage, or pursue, directly
or

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[*] Certain information on this page has been omitted and filed
    separately with the Securities and Exchange Commission. Confidential
    treatment has been requested with respect to the omitted portions.

                                      -6-
<PAGE>

indirectly, any litigation, suit, proceeding, charge, claim, arbitration, or
complaint against Applera or its officers, directors, attorneys, shareholders,
affiliated or related companies, Affiliates, employees, agents, assigns,
Successors, distributors, customers (direct or indirect), or other transferees
relating in any way to or arising out of any matter covered by the General
Release in paragraph 4.3 above.

      4.9 Dismissal of the Patent Action, and the State Court Action, and the
Arbitration: After execution of this Agreement, and Illumina's payment pursuant
to section 5.1, the Parties shall direct their respective counsel as soon as
reasonably practicable to execute and file with the United States District Court
for the Northern District of California, the San Diego County Superior Court,
and the CPR Institute for Dispute Resolution, Stipulated Orders of Dismissal
("Stipulations").

                            ARTICLE V: CONSIDERATION

      5.1 Payment by Illumina: In consideration of the mutual promises and
covenants contained in this Agreement, Illumina agrees to pay Applera by wire
transfer the sum of $8,500,000.00 no later than fifteen (15) days after
execution of this Agreement.

      5.2 Fully Paid-Up License: At such time as Illumina has paid the payment
pursuant to section 5.1, Applera agrees that Illumina has a fully paid-up
license for the Patents-In-Suit pursuant to section 4.5 of this Agreement and an
irrevocable covenant not to sue for the Blocking Patents pursuant to section
4.7, and no further sums are due under the license for the terms of the
Patents-In-Suit.

      5.3 Transfer of Agreement by Licensees: Illumina and Applera as licensees
and recipients of covenants not to sue shall have the right to assign or
transfer their respective rights or delegate their respective obligations under
this Agreement to their Successors without the prior written consent of the
other Party.

      5.4 Transfer by Licensors: This Agreement shall be binding upon the
Successor or assignees of the rights of each Party as licensors or as promisors
regarding the covenants not to sue contained in this Agreement, and Applera or
Illumina, as applicable, shall require that the Successor or assignee agree in
writing to maintain such licenses or covenants not to sue.

                ARTICLE VI: NEGATION OF WARRANTIES & DISCLAIMER

      6.1 Nothing contained in this Agreement shall be construed as:

            (a) A warranty or representation by Applera as to the validity,
scope, or enforceability of the Patents-In-Suit or the Blocking Patents; or

            (b) An admission by Illumina that any of its products or services
infringe any of the Patents-In-Suit or the Blocking Patents; or

                                      -7-
<PAGE>

            (c) A warranty or representation by Applera or Illumina that
anything made, used, offered for sale, sold, leased, or otherwise disposed of
under a license granted in this Agreement is or will be free of infringement of
patents of third parties; or

            (d) A requirement that Applera or Illumina shall file any patent
application, secure any patent, or maintain any patent in force; or

            (e) An admission by Illumina that the Defined Product is a
Collaboration Product under the Joint Development Agreement; or

            (f) Conferring a right on either Party to use in advertising,
publicity, or otherwise any trademark or trade name of the other Party.

      6.2 Applera makes no representations, extends no warranties of any kind,
whether express or implied, including, but not limited to, the warranties of
merchantability and fitness for a particular purpose, and assumes no
responsibilities whatever with respect to the manufacture, use, sale, lease, or
other disposition by Illumina or its vendees or other transferees of products
made by Illumina incorporating or made by use of inventions covered by the
Patents-In-Suit licensed under this Agreement or covered by the Blocking
Patents. Illumina agrees to assume all financial and service obligations for
Illumina products or services manufactured, used, offered for sale, sold,
leased, or otherwise disposed of by it, and Applera shall not incur any
liability or responsibility to Illumina or to third parties for any failure in
production, design, operation, or otherwise for Illumina products or services
manufactured, used, offered for sale, sold, leased, or otherwise disposed of by
Illumina. In no event shall Applera be liable for consequential damages or
contingent liabilities arising out of the failure of Illumina products or
services to operate properly. This Section 6.2 shall survive the termination of
this Agreement.

      6.3 Illumina makes no representations, extends no warranties of any kind,
whether express or implied, including, but not limited to, the warranties of
merchantability and fitness for a particular purpose, and assumes no
responsibilities whatever with respect to the manufacture, use, sale, lease, or
other disposition by Applera or its vendees or other transferees of products
made by Applera incorporating or made by use of inventions licensed to Applera
under this Agreement. Applera agrees to assume all financial and service
obligations for Applera's products or services manufactured, used, offered for
sale, sold, leased, or otherwise disposed of by it, and Illumina shall not incur
any liability or responsibility to Applera or to third parties for any failure
in production, design, operation, or otherwise for Applera products or services
manufactured, used, offered for sale, sold, leased, or otherwise disposed of by
Applera. In no event shall Illumina be liable for consequential damages or
contingent liabilities arising out of the failure of the Applera products or
services to operate properly. This Section 6.3 shall survive the termination of
this Agreement.

                          ARTICLE VII: CONFIDENTIALITY

      7.1 This Agreement shall be confidential, except as noted in this
paragraph.

                                      -8-
<PAGE>

            (a) Each Party shall have the right to issue a press release within
two days of the execution of this Agreement. Neither Party may issue any
subsequent press release or written publication about this Agreement without the
prior written consent of the other Party. Neither Party will be required to
issue any press release. No Party shall make any disparaging remarks about the
other Party in any press release.

            (b) Either Party is permitted to make such disclosure of any aspect
of this Agreement as is necessary to comply with applicable laws or regulations;
provided, however, that the disclosing Party shall provide reasonable prior
notification to the other Party and an opportunity for such other Party to seek
a protective order or other injunctive relief to limit or protect the
confidentiality of such disclosure.

                          ARTICLE VIII: MISCELLANEOUS

      8.1 Termination of the Joint Development Agreement: The Parties hereby
agree that the Joint Development Agreement, including any later amendments or
modifications to the Joint Development Agreement, is terminated no later than
the Effective Date of this Agreement, pursuant to section 11.2.1 of the Joint
Development Agreement.

      8.2 Entire Agreement: This Agreement and the attachments constitute the
entire and complete understanding of the Parties, and supersede all previous
communications, representations, understandings, or agreements, whether written
or oral, with respect to the subject matter of this Agreement. This Agreement
and any of the attachments may be amended or modified only by written instrument
executed by each Party.

      8.3 Remedies: Waiver of one right or remedy will not be deemed a waiver of
any other right or remedy.

      8.4 Modification - Waiver: No cancellation, modification, amendment,
deletion, addition, or other change in this Agreement or any provision of this
Agreement, or waiver of any right or remedy provided, shall be effective for any
purpose unless specifically set forth in a writing signed by the Party to be
bound by the change. No waiver of any right or remedy in respect of any
occurrence or event on one occasion shall be deemed a waiver of such right or
remedy in respect of such occurrence or event on any other occasion.

      8.5 Controlling Law: All questions concerning the validity and operation
of this Agreement and the performance of the obligations imposed upon the
Parties under this Agreement will be governed by the laws of the State of
California, without giving effect to conflict of law provisions.

      8.6 Agreement Severability: If any provision of this Agreement is held
invalid, such invalidity shall not affect other provisions of this Agreement.
The Parties agree to promptly negotiate in good faith to modify any invalid
provision consistent with the spirit and intentions of this Agreement and the
attachments.

                                      -9-
<PAGE>

      8.7 Notices: Any notice that is required or permitted to be given pursuant
to this Agreement shall be sent by facsimile, confirmed contemporaneously by
certified mail, postage prepaid, return receipt requested, or by hand delivery
with a signed receipt, to the addresses set forth below, or to such other
address as either Party may from time to time notify the other of in writing:

      Illumina:                           Applera:
      Illumina, Inc.                      Applied Biosystems Group
      9885 Towne Centre Drive             850 Lincoln Centre Drive
      San Diego, California 92121         Foster City, California 94404
      Attn: Mr. Jay Flatley               Attn:  Legal Department

      With a copy to:                     With a copy to:

      James J. Elacqua                    Matthew D. Powers
      Craig Y. Allison                    Vernon M. Winters
      Dewey Ballantine LLP                Weil, Gotshal & Manges LLP
      1950 University Ave.                201 Redwood Shores Parkway
      East Palo Alto, Cal. 94303          Redwood Shores, Cal. 94065

      Either Party may change the person or location that can receive notices
upon thirty days prior written notice to the other Party.

      8.8 The Parties agree and consent to execute such other documents or
instruments as may be necessary to effectuate the terms, conditions, and the
Parties' intentions as reflected in this Agreement. The Parties covenant that
they will work diligently and in good faith to resolve any dispute that may
arise under this Agreement or the attachments.

      8.9 No Admission of Liability: The Parties acknowledge and agree that the
execution or provisions of this Agreement will not constitute any admissions of
infringement or liability of any kind by either Party.

                                      -10-
<PAGE>

      8.10 Signatory Authority: The Parties acknowledge that they have reviewed
the terms and conditions of this Agreement and the attachments with counsel. By
affixing their signatures, each person signing this Agreement and the
attachments personally warrants that he has been duly authorized and has full
authority: (a) to execute this Agreement or the attachment on behalf of the
Party on whose behalf he is signing, and (b) irrevocably to bind such Party and
its successors and assigns to the terms thereof.

                                       Applera Corporation

                                       By: /s/ PAUL GROSSMAN
                                          --------------------------------
                                            Paul Grossman, Ph.D.
                                          Vice President, Intellectual Property,
                                          Applied Biosystems Group and
                                          Assistant Secretary, Applera
                                          Corporation

                                       Date: 8/18/04

                                       Illumina, Inc.

                                       By: /s/ JAY FLATLEY
                                          --------------------------------
                                           Jay Flatley
                                           President and CEO

                                       Date: 8/18/04

                                      -11-
<PAGE>

                                    EXHIBIT 1

                     Description of the GoldenGate(TM) Assay

Illumina's GoldenGate(TM) assay involves all of the following steps:

[*]

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the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

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                                    EXHIBIT 2

                                  Tag Sequences

                                       [*]

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                                                                   EXHIBIT 10.19

                                                                    July 7, 2004

Smithway Motor Xpress, Inc.
2031 Quail Avenue
Fort Dodge, Iowa 50501

And

East West Motor Express, Inc.
1170 JB Drive
Black Hawk, South Dakota 57718

RE:   TWELFTH 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 ("LENDER")
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 Lender 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 Lender 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:

<PAGE>

Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
July 7, 2004
Page 2

      (a) The definitions of "BUSINESS DAY", "MAXIMUM LOAN LIMIT" and "PRIME
RATE LOANS" set forth in Paragraph 1 of the Agreement are deleted in their
entirety and the following are substituted in their place:

            "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or
            (i) with respect to all matters, determinations, fundings and
            payments in connection with LIBOR Rate Loans, any day on which banks
            in London, England or Chicago, Illinois are required or permitted to
            close, and (ii) with respect to all other matters, any day that
            banks in Chicago, Illinois are permitted or required to close.

            "MAXIMUM LOAN LIMIT" shall mean Twenty Million and No/100 Dollars
            ($20,000,000.00).

            "PRIME RATE LOANS" shall mean the Loans bearing interest at the
            Prime Rate plus the Prime Margin, as set forth in Paragraph 4 of the
            Agreement.

      (b) Paragraph 1 of the Agreement is amended to add the following
definitions:

            "INTEREST PERIOD" shall have the meaning specified in Paragraph 4 of
            the Agreement hereto.

            "LIBOR RATE" shall mean with respect to any LIBOR Rate Loan for any
            Interest Period, a rate per annum equal to the offered rate for
            deposits in United States dollars for a period equal to such
            Interest Period as it appears on Telerate Service page 3750 as of
            11:00 a.m. (London time) two Business Days prior to the first day of
            such Interest Period. " TELERATE SERVICE PAGE 3750" means the
            display designated as "Page 3750" on the Telerate Service (or such
            other page as may replace page 3750 of that service or such other
            service as may be nominated by the British Bankers' Association as
            the vendor for the purpose of displaying British Bankers'
            Association interest settlement rates for United States dollar
            deposits).

            "LIBOR RATE LOANS" shall mean the Loans bearing interest at the
            LIBOR Rate plus the LIBOR Margin, as set forth in Paragraph 4 of the
            Agreement.

<PAGE>

Smithway Motor Xpress, Inc.
East West Motor Express, Inc.
July 7, 2004
Page 3

            "TAX" shall mean in relation to any LIBOR Rate Loans and the
            applicable LIBOR Rate, any tax, levy, impost, duty, deduction,
            withholding or charges of whatever nature required (i) to be paid by
            Bank and/or (ii) to be withheld or deducted from any payment
            otherwise required hereby to be made by Borrower to Bank; provided,
            that the term "Tax" shall not include any taxes imposed upon the net
            income of Bank.

      (c) Subparagraph 8(a) of the Agreement is deleted in its entirety and the
following is substituted in its place:

            (a)   Borrower shall direct all of its Account Debtors to make all
                  payments on the Accounts directly to a post office box (the
                  "LOCK BOX") designated by, and under the exclusive control of,
                  Bank or another financial institution acceptable to Bank.
                  Borrower shall establish an account (the "LOCK BOX ACCOUNT")
                  in Borrower's name with Bank or such other financial
                  institution acceptable to Bank, into which all payments
                  received in the Lock Box shall be deposited, and into which
                  Borrower will immediately deposit all payments received by
                  Borrower for Accounts in the identical form in which such
                  payments were received, whether by cash or check. If Borrower,
                  any Affiliate or Subsidiary, or any shareholder, officer,
                  director, employee or agent of Borrower or any Affiliate or
                  Subsidiary, or any other Person acting for or in concert with
                  Borrower shall receive any monies, checks, notes, drafts or
                  other payments relating to or as proceeds of Accounts or other
                  Collateral, Borrower and each such Person shall receive all
                  such items in trust for, and as the sole and exclusive
                  property of, Bank and, immediately upon receipt thereof, shall
                  remit the same (or cause the same to be remitted) in kind to
                  the Lock Box Account. If the Lock Box Account is not
                  established with Bank, the financial institution with which
                  the Lock Box Account is established shall acknowledge and
                  agree, in a manner satisfactory to Bank, that the amounts on
                  deposit in such Lock Box Account are the sole and exclusive
                  property of Bank, that such financial institution has no right
                  to setoff against the Lock Box Account or against any other
                  account maintained by such financial institution into which
                  the contents of the Lock Box Account are transferred, and that
                  such financial institution shall wire, or otherwise transfer
                  in immediately available funds in a manner satisfactory to
                  Bank, funds deposited in the Lock Box Account on a daily basis
                  as such

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Page 4

                  funds are collected. Borrower agrees that all payments made to
                  such Lock Box Account or otherwise received by Bank, whether
                  in respect of the Accounts or as proceeds of other Collateral
                  or otherwise, will be applied on account of the Liabilities in
                  accordance with the terms of this Agreement; provided, that so
                  long as no Event of Default has occurred, payments received by
                  Bank shall not be applied to the unmatured portion of the
                  LIBOR Rate Loans, but shall be held in an interest bearing
                  cash collateral account maintained by Bank until the earlier
                  of (i) the last day of the Interest Period applicable to such
                  LIBOR Rate Loan and (ii) the occurrence of an Event of
                  Default; provided further, that so long as no Event of Default
                  has occurred, the immediately available funds held in such
                  interest bearing cash collateral account may be disbursed, at
                  Borrower's discretion, to Borrower so long as after giving
                  effect to such disbursement, Borrower's availability under
                  Paragraph 1 of Exhibit A of the Agreement at such time equals
                  or exceeds the outstanding Liabilities at such time. If the
                  Lock Box Account is established with Bank, Borrower agrees to
                  pay all fees, costs and expenses which Bank incurs in
                  connection with opening and maintaining the Lock Box Account
                  and depositing for collection by Bank any check or other item
                  of payment received by Bank on account of the Liabilities. All
                  of such fees, costs and expenses shall constitute Loans
                  hereunder, shall be payable to Bank by Borrower upon demand,
                  and, until paid, shall bear interest at the highest rate then
                  applicable to Loans hereunder. All checks, drafts, instruments
                  and other items of payment or proceeds of Collateral shall be
                  endorsed by Borrower to Bank, and, if that endorsement of any
                  such item shall not be made for any reason, Bank is hereby
                  irrevocably authorized to endorse the same on Borrower's
                  behalf. For the purpose of this paragraph, Borrower
                  irrevocably hereby makes, constitutes and appoints Bank (and
                  all Persons designated by Bank for that purpose) as Borrower's
                  true and lawful attorney and agent-in-fact (i) to endorse
                  Borrower's name upon said items of payment and/or proceeds of
                  Collateral and upon any Chattel Paper, document, instrument,
                  invoice or similar document or agreement relating to any
                  Account of Borrower or goods pertaining thereto; (ii) to take
                  control in any manner of any item of payment or proceeds
                  thereof; and (iii) to have access to any lock box or postal
                  box into which any of

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Page 5

                  Borrower's mail is deposited, and open and process all mail
                  addressed to Borrower and deposited therein.

      (d) Subparagraph 8(c) of the Agreement is deleted in its entirety and the
following is substituted in its place:

            (c)   For purposes of calculating interest, Bank shall, within two
                  (2) Business Days after receipt by Bank at its office in
                  Chicago, Illinois of (i) checks and (ii) cash or other
                  immediately available funds from collections of items of
                  payment and Proceeds of any Collateral, apply the whole or any
                  part of such collections or Proceeds against the Liabilities
                  in such order as Bank shall determine in its sole discretion.
                  For purposes of determining the amount of Loans available for
                  borrowing purposes, (i) checks and (ii) cash or other
                  immediately available funds from collections of items of
                  payment and Proceeds of any Collateral shall be applied in
                  whole or in part against the Liabilities, in such order as
                  Bank shall determine in its sole discretion, on the day of
                  receipt, subject to actual collection.

      (e) Paragraph 4(a) of the Agreement is deleted in its entirety and the
following is substituted in its place:

            (a)   INTEREST RATE: Subject to the terms and conditions set forth
                  below, the Loans shall bear interest at the per annum rate of
                  interest of the Prime Rate plus the Prime Margin set forth
                  below or at the LIBOR Rate plus the LIBOR Margin set forth
                  below, at Borrower's option, based on the following matrix.
                  Initially, the Loans shall bear interest as reflected in Level
                  II of the matrix through December 31, 2004, with the first
                  test upon the submission by Borrower of fiscal year end 2004
                  audited financial statements (and shall be tested quarterly on
                  a rolling twelve (12) month basis by Bank thereafter) and, if
                  applicable, reset by Bank.

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<TABLE>
<CAPTION>
                                        REVOLVING LOANS            TERM LOANS
                                   --------------------------      ----------
                FUNDED DEBT                            LIBOR          PRIME          LIBOR
LEVEL            TO EBITDA         PRIME MARGIN       MARGIN         MARGIN          MARGIN
-----        ------------------    ------------       -------      ----------       -------
<S>          <C>                   <C>                <C>          <C>              <C>
I               >or= 3.5              50 BPS          300 BPS        50 BPS         350 BPS
II           >or= 2.5 AND < 3.5       25 BPS          275 BPS        25 BPS         325 BPS
III          >or= 1.5 AND < 2.5       25 BPS          250 BPS        25 BPS         300 BPS
IV                < 1.5                0 BPS          225 BPS        25 BPS         275 BPS
</TABLE>

      "EBITDA" shall mean with respect to any period, Borrower's net income
      after taxes for such period (excluding any after-tax gains or losses on
      the sale of assets, other than the sale of Inventory in the ordinary
      course of business) and excluding other after-tax extraordinary gains or
      losses) plus interest expense, income tax expense, depreciation and
      amortization for such period, plus or minus any other non-cash charges or
      gains which have been subtracted or added in calculating net income after
      taxes for such period.

      "Funded Debt" shall mean, with respect to any period, all Debt of Borrower
      for borrowed money, whether or not evidenced by bonds, debentures, notes
      or similar instruments.

      "Prime Rate" means the publicly announced prime rate of LaSalle Bank
      National Association (which is not intended to be LaSalle Bank National
      Association's lowest or most favorable rate in effect at any time) (the
      "Prime Rate") in effect from time to time, said rate of interest to
      increase or decrease by an amount equal to each increase or decrease in
      the Prime Rate effective on the effective date of each such change in the
      Prime Rate; and

      "Interest Period" shall mean any continuous period of thirty (30), sixty
      (60) or ninety (90) days, as selected from time to time by Borrower by
      irrevocable notice (in writing, by telex, telegram or cable) given to Bank
      not less than two (2) Business Days prior to the first day of each
      respective Interest Period; provided that: (i) each such period occurring
      after such initial period shall commence on the day on which the
      immediately preceding period expires; (ii) the final Interest Period shall
      be

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Page 7

      such that its expiration occurs on or before the end of the Original Term
      or any Renewal Term; and (iii) if for any reason Borrower shall fail to
      timely select a period, then such Loans shall continue as, or revert to,
      Prime Rate Loans. Interest shall be payable on the last Business Day of
      each month and on the date of any payment hereon by Borrower.

      Upon the occurrence of an Event of Default, the Loans shall bear interest
      at the rate of two percent (2.0%) per annum in excess of the interest rate
      otherwise payable thereon, which interest shall be payable on demand. All
      interest shall be calculated on the basis of a 365-day year.

      (f) Subparagraph 4(b)(iv) of the Agreement is deleted in its entirety and
the following is substituted in its place:

            (iv)  AMENDMENT FEE: Borrowers shall pay to Lender an amendment fee
                  of One Thousand and No/100 Dollars ($1,000.00), which fee
                  shall be fully earned and payable upon execution of this
                  Amendment.

      (g) The following subparagraph is hereby added to the end of Paragraph 4
of the Agreement:

            4.1   OTHER LIBOR PROVISIONS:

                  (a)   Subject to the provisions of this Agreement, Borrower
                        shall have the option (i) as of any date, to convert all
                        or any part of the Prime Rate Loans to, or request that
                        new Loans be made as, LIBOR Rate Loans of various
                        Interest Periods, (ii) as of the last day of any
                        Interest Period, to continue all or any portion of the
                        relevant LIBOR Rate Loans as LIBOR Rate Loans; (iii) as
                        of the last day of any Interest Period, to convert all
                        or any portion of the LIBOR Rate Loans to Prime Rate
                        Loans; and (iv) at any time, to request new Loans as
                        Prime Rate Loans; provided, that Loans may not be
                        continued as or converted to LIBOR Rate Loans, if the
                        continuation or conversion thereof would violate the
                        provisions of subparagraphs 4.1(b) and 4.1(c) of this
                        Agreement or if an Event of Default has occurred.

                  (b)   Bank's determination of LIBOR as provided above shall be
                        conclusive, absent manifest error. Furthermore, if Bank
                        determines, in good faith (which determination shall be
                        conclusive, absent manifest error), prior to the
                        commencement of any Interest

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Page 8

                        Period that (i) U.S. Dollar deposits of sufficient
                        amount and maturity for funding the Loans are not
                        available to Bank in the London Interbank Eurodollar
                        market in the ordinary course of business, or (ii) by
                        reason of circumstances affecting the London Interbank
                        Eurodollar market, adequate and fair means do not exist
                        for ascertaining the rate of interest to be applicable
                        to the Loans requested by Borrower to be LIBOR Rate
                        Loans or the Loans bearing interest at the rates set
                        forth in Paragraph 4 of this Agreement shall not
                        represent the effective pricing to Bank for U.S. Dollar
                        deposits of a comparable amount for the relevant period
                        (such as for example, but not limited to, official
                        reserve requirements required by Regulation D to the
                        extent not given effect in determining the rate), Bank
                        shall promptly notify Borrower and (x) all existing
                        LIBOR Rate Loans shall convert to Prime Rate Loans upon
                        the end of the applicable Interest Period, and (y) no
                        additional LIBOR Rate Loans shall be made until such
                        circumstances are cured.

                  (c)   If, after the date hereof, the introduction of, or any
                        change in any applicable law, treaty, rule, regulation
                        or guideline or in the interpretation or administration
                        thereof by any governmental authority or any central
                        bank or other fiscal, monetary or other authority having
                        jurisdiction over Bank or its lending offices (a
                        "Regulatory Change"), shall, in the opinion of counsel
                        to Bank, make it unlawful for Bank to make or maintain
                        LIBOR Rate Loans, then Bank shall promptly notify
                        Borrower and (i) the LIBOR Rate Loans shall immediately
                        convert to Prime Rate Loans on the last Business Day of
                        the then existing Interest Period or on such earlier
                        date as required by law and (ii) no additional LIBOR
                        Rate Loans shall be made until such circumstance is
                        cured.

                  (d)   If, for any reason, a LIBOR Rate Loan is paid prior to
                        the last Business Day of any Interest Period or if a
                        LIBOR Rate Loan does not occur on a date specified by
                        Borrower in its request (other than as a result of a
                        default by Bank), Borrower agrees to indemnify Bank
                        against any loss (including any loss on redeployment

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July 7, 2004
Page 9

                        of the deposits or other funds acquired by Bank to fund
                        or maintain such LIBOR Rate Loan) cost or expense
                        incurred by Bank as a result of such prepayment.

                  (e)   If any Regulatory Change (whether or not having the
                        force of law) shall (i) impose, modify or deem
                        applicable any assessment, reserve, special deposit or
                        similar requirement against assets held by, or deposits
                        in or for the account of or loans by, or any other
                        acquisition of funds or disbursements by, Bank; (ii)
                        subject Bank or the LIBOR Rate Loans to any Tax or
                        change the basis of taxation of payments to Bank of
                        principal or interest due from Borrower to Bank
                        hereunder (other than a change in the taxation of the
                        overall net income of Bank); or (c) impose on Bank any
                        other condition regarding the LIBOR Rate Loans or Bank's
                        funding thereof, and Bank shall determine (which
                        determination shall be conclusive, absent any manifest
                        error) that the result of the foregoing is to increase
                        the cost to Bank of making or maintaining the LIBOR Rate
                        Loans or to reduce the amount of principal or interest
                        received by Bank hereunder, then Borrower shall pay to
                        Bank, on demand, such additional amounts as Bank shall,
                        from time to time, determine are sufficient to
                        compensate and indemnify Bank from such increased cost
                        or reduced amount.

                  (f)   Bank shall receive payments of amounts of principal of
                        and interest with respect to the LIBOR Rate Loans free
                        and clear of, and without deduction for, any Taxes. If
                        (1) Bank shall be subject to any Tax in respect of any
                        LIBOR Rate Loans or any part thereof or, (2) Borrower
                        shall be required to withhold or deduct any Tax from any
                        such amount, the LIBOR Rate applicable to such LIBOR
                        Rate Loans shall be adjusted by Bank to reflect all
                        additional costs incurred by Bank in connection with the
                        payment by Bank or the withholding by Borrower of such
                        Tax and Borrower shall provide Bank with a statement
                        detailing the amount of any such Tax actually paid by
                        Borrower. Determination by Bank of the amount of such
                        costs shall be conclusive, absent manifest error. If
                        after any such adjustment any part of any Tax paid

<PAGE>

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                        by Bank is subsequently recovered by Bank, Bank shall
                        reimburse Borrower to the extent of the amount so
                        recovered. A certificate of an officer of Bank setting
                        forth the amount of such recovery and the basis therefor
                        shall be conclusive, absent manifest error.

                  (g)   Each request for LIBOR Rate Loans shall be in an amount
                        not less than Two Million and No/100 Dollars
                        ($2,000,000.00), and in integral multiples of, Two
                        Million and No/100 Dollars ($2,000,000.00).

                  (h)   Unless otherwise specified by Borrower, all Loans shall
                        be Prime Rate Loans.

                  (i)   No more than four (4) Interest Periods may be in effect
                        with respect to outstanding LIBOR Rate Loans at any one
                        time.

      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.

                                  LASALLE BANK NATIONAL ASSOCIATION

                                  By  /s/ PETER WALTHER
                                    ------------------------------------

                                  Title  Vice President
                                       ---------------------------------

ACKNOWLEDGED AND AGREED TO
this 7th day of July, 2004:

SMITHWAY MOTOR XPRESS, INC.

By  /s/ G. LARRY OWENS
  ---------------------------------
    G. LARRY OWENS

TITLE: PRESIDENT, CEO AND CHAIRMAN

<PAGE>

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East West Motor Express, Inc.
November 11, 2004
Page 11

EAST WEST MOTOR EXPRESS, INC.

By  /s/ G. LARRY OWENS
  --------------------------------
    G. LARRY OWENS

TITLE: PRESIDENT, CEO AND CHAIRMAN

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. LARRY OWENS
  --------------------------------
    G. LARRY OWENS

TITLE: PRESIDENT, CEO AND CHAIRMAN

DATE: July 7 2004

SMITHWAY MOTOR XPRESS CORP.

By  /s/ G. LARRY OWENS
  --------------------------------
    G. LARRY OWENS

TITLE: PRESIDENT, CEO AND CHAIRMAN

DATE: July 7, 2004

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