1
EXHIBIT 10.1
SUNTRUST LEASING CORPORATION COMMITMENT LETTER
USA TRUCK, INC.
USA TRUCK, INC. LEASE PROPOSAL
LESSOR: SunTrust Leasing Corporation and/or its
assignee or nominee
LESSEE: USA Truck, Inc.
EQUIPMENT: Up to 230 New 2000 and 2001 Model Freightliner
Tractors
ESTIMATED EQUIPMENT COST: $16,500,000.00
BASIC TERM: 42 Months
BASIC TERM COMMENCEMENT DATE: Fundings under this lease line shall be
completed between January 15, 2000 and
December 31, 2000. The Basic Term will
commence on the 30th day of the month
following the date of the Lease Schedule.
BASIC TERM RENTALS: Lease Rentals will be payable monthly in
arrears from the Basic Term Commencement Date.
Base Lease Monthly Rental Factor
Commencement Date (As a % of Equip. Cost)
----------------- -----------------------
January 15, 2000 1.71097
February 15, 2000 1.70676
March 15, 2000 1.70246
April 15, 2000 1.69879
May 15, 2000 1.69669
June 15, 2000 1.68903
July 15, 2000 1.67892
August 15, 2000 1.67294
September 15, 2000 1.66673
October 15, 2000 1.66314
November 15, 2000 1.65738
December 15, 2000 1.64540
The above Monthly Rental Factor is based on
current market conditions as of December 30,
1999. As of this date the yield for the Three
(3) Year Treasury Note is 6.20%. The Monthly
Rental Factor will be adjusted upward or
downward by .011704% for every 25 basis points
change in the yield of the 3-Year Treasury, or
pro rata share thereof. On the Acceptance
Date, the then prevailing Lease Rate Factor
shall be determined by the Lessor and shall
remain fixed for the Base Lease Term.
2
INTERIM LEASE TERM AND RENT: The Interim Lease Term will run from the date
the Equipment is accepted by the Lessee to
(but not including) the Basic Term
Commencement Date. Interim Rent will be paid
by the Lessee on the Basic Term Commencement
Date in an amount equal to the daily
equivalent of the Basic Term Rentals.
END OF TERM OPTIONS: At the end of the Basic Term, the Lessee shall have the
option of purchasing the Equipment or returning the Equipment to the Lessor in
accordance with the terms described below.
TERMINATION: At the satisfactory conclusion of the Basic
Term, the Lessee shall have the option to
purchase all, but not less than all, of the
equipment on a Lease Schedule. In this event,
the Lessee will have a purchase price as
follows:
Forty-Five Percent (45%) of the Equipment Cost
In the event the Lessee chooses to return the Equipment, the Lessor
will sell the Equipment. If the Net Proceeds of the sale (after expenses) are
greater than the Purchase Price, the excess proceeds will be returned to the
Lessee. If the Net Proceeds are less than the Purchase Price, the difference
between the proceeds and the Purchase Price will be paid by the Lessee to the
Lessor as a final Rental Payment then due.
LEASE RENTAL AND ASSUMPTIONS: The rentals quoted in this TRAC Lease Proposal
are based on the following assumptions and are
subject to adjustment should any or all of
such assumptions not be valid:
1. The Lessor will be entitled to depreciate
the Equipment and all of the Equipment will
qualify for accelerated depreciation,
utilizing a depreciable life of Three (3)
years for the Equipment.
2. To support the Lessor's tax treatment of
the Lease as a true lease, the Lessee may be
required to furnish an independent expert
appraisal to the effect that at the end of the
Basic Lease Term (a) the Equipment will have a
fair market value of at lease twenty percent
(20%) of its original cost, and (b) the
Equipment will have a remaining useful life of
the longer of one year or twenty percent (20%)
of the originally estimated useful life of the
Equipment.
3. At the time the Lessor becomes the owner of
the equipment, the Equipment will be new,
tangible personal property and the Lessee will
be deemed to be the original user thereof.
EARLY TERMINATION: In the event that any item of Equipment is (I)
damaged or destroyed to such extent that it
cannot be reasonably restored to normal
operating condition or (II) seized or
condemned by governmental authorities (i.e.,
eminent domain) or (III) lost due to theft or
disappearance for a period in excess of 45
days, the Lease with respect to such Equipment
will terminate and the Lessee thereof will pay
the Stipulated Loss Value with respect
thereto.
3
NET LEASE: The Lease will be a net lease in that the
Lessee will be responsible for any and all
costs and expenses in connection with the
Equipment, including sales and use taxes, and
any other taxes with the exception of federal
and state net income taxes on the net income
of the Lessor. The Lessee is also responsible
for maintaining and insuring the Equipment and
for all fees, insurance premiums, operations,
maintenance, repair, rebuilding and other
charges related to the use or possession of
the Equipment.
FEDERAL TAX INDEMNIFICATION: The Lessee will indemnify the Lessor for any
loss or deduction in federal tax benefits
based on the tax assumptions outlined above if
such loss or reduction is caused by (i) any
breach, inaccuracy or incorrectness of any
representation, warranty or covenant made by
the Lessee, (ii) the acts of omissions (not
including the execution of documents
contemplated hereby or any act or omission
expressly required or expressly permitted by
such documents) of the lessee, or (iii) any
change in federal law with an effective date
that precedes the date of acceptance of the
Equipment for lease by the Lessee. If an
Investment Tax Credit provision is passed,
benefit will flow to Lessee at the same lease
rate as indicated in this proposal.
MAINTENANCE: Lessee will maintain the Equipment leased by
it so that it remains in good operating
condition (ordinary wear and tear excepted)
and in compliance with any and all applicable
laws, regulations and state inspections.
DOCUMENTATION: This Proposal is not intended to address all
the final legal and documentation matters
pertaining to this Lease. The lease
documentation will represent the final legal
agreement. The lease documentation will be
furnished by the Lessor.
CREDIT APPROVAL: This Proposal Letter is subject to the credit
approval of SunTrust Leasing Corporation.
SUNTRUST BANK
By: /s/ TIM W. WAGNER
------------------------
Title: First Vice President
---------------------
The undersigned accepts and agrees to the lease terms of this commitment this
the 6th day of January, 2000.
USA TRUCK, INC.
By: /s/ JERRY D. ORLER
------------------------
Title: CFO and Secretary
---------------------