Lease Proposal Agreement between SunTrust Leasing Corporation and USA Truck, Inc. for Freightliner Tractors

Summary

SunTrust Leasing Corporation proposes to lease Freightliner FLD-120 tractors to USA Truck, Inc. for 42 months, with a total equipment cost of $10 million. USA Truck, Inc. will pay monthly lease rentals, maintain and insure the equipment, and cover all related costs except the Lessor's income taxes. At the end of the lease, USA Truck, Inc. can buy all the equipment for 40% of its cost or return it, with financial adjustments based on the sale proceeds. This proposal is not a binding commitment and is subject to final approval and documentation.

EX-4.23 6 d03812exv4w23.txt LEASE PROPOSAL TO LEASE AGREEMENT EXHIBIT 4.23 SUNTRUST LEASING CORPORATION LEASE PROPOSAL USA TRUCK, INC. LEASE PROPOSAL DATED OCTOBER 29, 2002 LESSOR: SunTrust Leasing Corporation/or its assignee or nominee LESSEE: USA Truck, Inc. EQUIPMENT: Freightliner FLD-120 Tractors EQUIPMENT COST: $10,000,000 BASIC TERM: Forty Two (42) Months BASIC TERM COMMENCEMENT DATE: The Basic Term will commence on the 30th day of the month in which the funding occurs. BASIC TERM RENTALS: Lease rentals are payable monthly in ARREARS from the Basic Commencement Date. Base Lease Monthly Rental Factor Commencement Date (As a % of Equipment Cost) ----------------- -------------------------- January, 2003 1.61946 February, 2003 1.61715 March, 2003 1.61484 April, 2003 1.61261 May, 2003 1.61246 June, 2003 1.61028 July, 2003 1.59754 August, 2003 1.59473 September, 2003 1.59148 October, 2003 1.59136 November, 2003 1.58867 December, 2003 1.58596 The above Monthly Rental Factors are based on current market conditions as of October 29, 2002. On this date the interpolated yield for the Five (5) year Treasury Note is 4.032%. On the Funding Date the Monthly Rental Factor will be adjusted upward or downward by .011704% for every 25 basis points change in the yield of the three (3) year Treasury Note. The implicit rate may also be adjusted upward or downward for each one basis point (.01%) change in the AA swap spreads as published in SWYC of Bloomberg Investor Service for 3 year, 30/360 basis, level payment obligations. 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 Basic Term Rentals.

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. 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; cost of installation, operations, maintenance, repair, and rebuilding; and other charges related to the use or possession of the Equipment. FEDERAL TAX INDEMNIFICATIONS: 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 or 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. 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.

2 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 Percent (40%) 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. 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. DISCLAIMER: This proposal letter is not a commitment by SunTrust Leasing Corporation to enter into this lease. A commitment can be issued only upon final approval by our Credit/Investment Committee.

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