First Union Commercial Corporation Equipment Lease Commitment Letter with USA Truck, Inc.

Contract Categories: Business Finance › Financing Agreements
Summary

First Union Commercial Corporation has issued a commitment letter to USA Truck, Inc. for the lease of new Class Eight sleeper tractors valued at approximately $10 million. The lease term is 42 months, with monthly payments based on specified rates and indexed to the 3-year US Interest Rate Swap. USA Truck, Inc. may purchase the equipment at fair market value at lease end. The agreement includes a terminal rental adjustment clause and requires USA Truck, Inc. to indemnify First Union against certain risks and losses. Equipment delivery is scheduled between January and December 2004.

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EX-4.31 6 dex431.htm FIRST UNION COMMERCIAL COMMITMENT LETTER First Union Commercial Commitment Letter

EXHIBIT 4.31

 

FIRST UNION COMMERCIAL CORPORATION PROPOSAL EXHIBIT (NO. 1)

 

USA TRUCK, INC.

 

PROPOSAL EXHIBIT (NO. 1)

 

The terms of this Proposal Exhibit are incorporated by reference within the Proposal letter dated November 3, 2003.

 

1. TYPE OF EQUIPMENT: New 400 Class Eight Sleeper Tractors.

 

2. ANTICIPATED FUNDING AMOUNT: Approximately $10,000,000.00.

 

3. EQUIPMENT LOCATION: 4303 North Main Street, East Peoria, Illinois, 61611.

 

4. ANTICIPATED DELIVERY DATE: January 15th through December 15th, 2004.

 

5. LEASE TERM: Forty-two (42) months.

 

6. LEASE PAYMENTS: Lessee shall make forty-two (42) monthly payments, each payable in arrears, with the following monthly payment factors according to the month of equipment takedown:

 

Month

    JAN
     FEB
     MAR
     APR
     MAY
     JUNE
     JULY
     AUG
     SEPT
     OCT
     NOV
     DEC
  

Lease Rate

    3.04 %   3.01 %   2.98 %   2.95 %   2.96 %   2.94 %   2.72 %   2.68 %   2.64 %   2.66 %   2.62 %   2.59 %

Pmt. Factor

    1.60899     1.60735     1.60569     1.60358     1.60453     1.60293     1.58972     1.58759     1.58545     1.58630     1.58423     1.58214  

 

Until the closing of each schedule under the proposed transaction, Wachovia’s pre-tax yield will be indexed on a one-to-one basis to reflect changes in the 3 year US Interest Rate Swap (USSWAP3 Index HP on Bloomberg), which was 2.63% on October 28, 2003.

 

7. PURCHASE OPTION: At the end of the lease term, Lessee shall have the option to purchase the equipment for its then Fair Market Value.

 

8. TERMINAL RENTAL ADJUSTMENT CLAUSE: If the fair market value paid to Lessor by the Lessee or a third party exceeds or falls below forty percent (40%) of original equipment cost, the excess will be refunded to Lessee or the shortfall will be reimbursed to Lessor by Lessee through a rental adjustment.

 

9. DEPRECIATION: For the account of the LESSOR and assumed to be three (3) year MACRS property.

 

10. EXPENSES: NONE.

 

11 INDEMNIFICATION: Lessee shall indemnify Lessor against all hazards, liabilities, claims, actions, contingencies and risk of loss caused by the acts and omissions of Lessee. Additionally, Lessee shall indemnify Lessor against the loss of tax benefits retained by Lessor caused by the acts and omissions of Lessee.

 

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