<PAGE>
Exhibit (b)(2)
May 25, 2000
Mr. William J. Liles III
President
High Road Acquisition Corp.
3475 Lakeland Drive
Jackson, Mississippi 39208
Dear Jack:
You have advised Bank of America, N.A. (the "Bank") that you and certain
family trusts of which you are trustee, co-trustee or beneficiary (the "Liles
Family") and Mr. Bernard Ebbers have formed a Delaware corporation named High
Road Acquisition Corp. ("Acquisition Corporation") and a wholly-owned subsidiary
thereof named High Road Acquisition Subsidiary Corp. ("Acquisition Subsidiary")
to acquire (the "Transaction") all of the outstanding capital stock of KLLM
Transport Services, Inc. ("KLLM Transport") and refinance (i) the currently
existing unsecured credit facility of KLLM, Inc. ("KLLM") with an affiliate of
the Bank, (ii) the currently existing $5 million unsecured credit facility with
AmSouth Bank ("AmSouth"), and (iii) the currently existing $5 million letter of
credit facility with AmSouth (collectively, the "Refinancing"). The Transaction
would be accomplished by means of a cash tender offer by Acquisition Subsidiary
(the "Tender Offer"), followed by a second-step merger whereby Acquisition
Subsidiary would merge into KLLM Transport (the "Merger") with the result that
KLLM Transport would be a wholly-owned subsidiary of Acquisition Corporation.
The aggregate purchase price for the KLLM Transport shares would be up to $27.5
million.
You have further advised the Bank that (a) $75 million in senior debt
financing (the "Senior Financing"), up to $21.5 million of subordinated debt
financing (the "Subordinated Financing") to be provided by Mr. Bernard Ebbers
(or an investment vehicle thereof) (the "Investor") to Acquisition Corporation,
and $7 million of equity capital contributed to Acquisition Corporation (the
"Equity Contribution") by the Investor will be required in order to effect the
Transaction, to effect the Refinancing, to pay the related costs and expenses
and to provide funds for ongoing general corporate purposes after completion of
the Transaction, (b) no external financing other than the financing described
herein will be required in connection with the Transaction, and (c) as soon as
practicable after the closing of the Tender Offer (but no later than the closing
of the Senior Financing), Acquisition Corporation and Acquisition Subsidiary
<PAGE>
Mr. William J. Liles III
May 25, 2000
Page 2
will cause KLLM Transport and KLLM to become parties to and borrowers under the
Senior Credit Facility (as defined below). In connection with the formation of
Acquisition Corporation and consummation of the Tender Offer, the Liles Family
will contribute to Acquisition Corporation approximately 689,123 shares of KLLM
Transport common stock. The Subordinated Financing and the Equity Contribution
will be used to fund the purchase price of the KLLM Transport stock. References
herein to the "Transaction" shall include the Senior Financing and the
Subordinated Financing, each as described herein, the Tender Offer, the Merger,
the Equity Contribution, the Refinancing and all other transactions related to
the Transaction. References herein to "Borrower" shall include Acquisition
Corporation, Acquisition Subsidiary, KLLM Transport and KLLM.
Subject to and upon the terms and conditions hereinafter set forth, the
Bank is hereby pleased to commit to provide to Borrower a senior credit facility
("Senior Credit Facility") to effectuate the Senior Financing consisting of
revolving loans and letters of credit of up to $75 million in the aggregate for
which the Bank will act as Agent. The Bank will underwrite the entire Senior
Credit Facility with the right to assign a portion of the commitment to one or
more financing institutions at or after the closing (each with the Bank, a
"Lender" and collectively with the Bank, the "Lenders"). The following is an
outline of the basic terms of the Senior Credit Facility:
1. Revolving Credit Facility:
(a) Amount of Revolving Credit Facility: A three-year revolving
credit facility (the "Revolving Credit Facility") not exceeding
at any one time outstanding $75 million and providing for
advances of up to: (i) eighty five percent (85%) of the net
amount of eligible accounts receivable and (ii) a percentage of
the net book value of eligible rolling stock ("NBV") equivalent
to seventy five percent (75%) of the net orderly liquidation
value of eligible rolling stock ("OLV"); provided, that the
advance rate based on NBV specified in this clause (ii) shall be
adjusted at closing and at least every six months thereafter
based upon the receipt of new appraisals. Borrowing availability
shall be subject to reserves for driver's compensation and mark-
to-market exposure on interest rate protection products, as
established by the Bank in its reasonable discretion.
(b) Collateral Eligibility: Collateral eligibility and the
establishment of reserves against borrowing availability shall be
determined by the Bank in its reasonable discretion; provided,
however, that the following accounts shall in any event be
ineligible: (i) accounts outstanding for more than 90
<PAGE>
Mr. William J. Liles III
May 25, 2000
Page 3
days after the invoice date or more than 60 days past due, (ii)
intercompany accounts, (iii) foreign accounts, (iv) all accounts
owing by an account debtor as to which twenty five percent (25%)
or more of the accounts owing by such account debtor are
otherwise ineligible, (v) unbilled accounts, (vi) unapplied
lockbox receipts, and (vii) contra accounts; and, provided
further, that tractors and trailers not owned by Borrower (e.g.
leased or owner-operated tractors and trailers) shall in any
event be ineligible rolling stock.
(c) Letters of Credit: The Bank shall, upon Borrower's request,
cause to be issued for Borrower's account merchandise/documentary
and standby letters of credit ("Letters of Credit"). The
aggregate undrawn face amount of these Letters of Credit shall
not exceed $10 million at any one time outstanding. The
expiration date of the Letters of Credit shall not extend beyond
the Maturity Date and the aggregate undrawn face amount of the
Letters of Credit shall be one hundred percent (100%) reserved
against the borrowing availability created under the Revolving
Credit Facility.
2. Maturity Date: The Senior Credit Facility shall mature three years
from the closing date (the "Maturity Date"), which closing date shall
be contemporaneous with the closing of the Tender Offer.
3. Rate:
(a) Interest Rate: The unpaid balance on the revolving loans
outstanding under the Revolving Credit Facility shall bear
interest (payable monthly on the first day of each month) at a
rate equal to (i) the applicable margin plus the Prime Rate (as
defined below) or (ii) at Borrower's option (and provided no
event of default exists), the applicable margin plus the one
month, two month, three month or six month LIBOR rate. The
applicable margin will initially be two and three quarters
percent (2.75%) for LIBOR based loans and three quarters of one
percent (0.75%) for Prime Rate based loans. The applicable
margin shall be adjusted quarterly, commencing with the Bank's
receipt of Borrower's financial statements for the fiscal quarter
ending June 30, 2001, based on a performance based pricing matrix
attached hereto as Schedule A. LIBOR shall be defined in
accordance with the Bank's customary practices. LIBOR rate loans
shall be subject to certain restrictions relating to the maximum
number of such loans, the minimum and incremental amounts
thereof, and the terms and
<PAGE>
Mr. William J. Liles III
May 25, 2000
Page 4
maturity thereof. All interest (as well as the unused line fee
and letter of credit fees set forth in Section 4 below) under the
Senior Credit Facility shall be calculated on the basis of a 360-
day year for actual days elapsed, which results in more interest
than if a 365-day year were used.
(b) Default Rate: If any event of default occurs under the Senior
Credit Facility, then, from the date such event of default occurs
until it is cured, or until all obligations are paid and
performed in full, at the Lenders' option Borrower will pay
interest on the unpaid balance of loans outstanding at a per
annum rate two percent (2%) greater than the rate of interest
specified above.
(c) Prime Rate: "Prime Rate" means the rate of interest publicly
announced from time to time by the Bank as its prime rate. It is
a rate set by the Bank based upon various factors, including the
Bank's costs and desired return, general economic conditions, and
other factors, and it is used as a reference point for pricing
some loans. However, the Bank may price loans at, above, or
below the prime rate.
4. Fees:
(a) Borrower shall pay the following fees:
(i) Commitment Fee: Acquisition Corporation and Acquisition
Subsidiary shall pay a one time commitment fee ("Commitment
Fee") as set forth in the fee letter of even date herewith
among Acquisition Corporation, Acquisition Subsidiary and
the Bank (the "Fee Letter").
(ii) Unused Line Fee: Borrower shall pay an unused line fee,
payable monthly, computed at the rate of one half of one
percent (0.50%) per annum on the difference between (a) the
maximum amount of the Revolving Credit Facility and (b) the
sum of (i) the average daily unpaid balance of the revolving
loans outstanding during the month, with the unpaid balance
for this purpose calculated by applying payments immediately
upon receipt, plus (ii) the aggregate undrawn amount of all
letters of credit outstanding during the month.
<PAGE>
Mr. William J. Liles III
May 25, 2000
Page 5
(iii) Letter of Credit Fees: With respect to the Letters of
Credit, Borrower shall pay, in addition to the issuer's
normal issuance, amendment, and processing fees and costs,
(A) to the Bank, a fronting fee equal to one eighth of one
percent (1/8%) per annum of the face amount of each Letter
of Credit issued for the account of the Borrower and (B) to
the Lenders, a fee equal to two and three quarters percent
(2.75%) per annum of the face amount of each Letter of
Credit issued for the account of the Borrower payable
monthly beginning on the first day of each month following
the month of issuance. The Letter of Credit fee rate will
be adjusted annually, commencing with the Bank's receipt of
the financial statements of the Borrower for the fiscal
quarter ending June 30, 2001, based on a performance based
pricing matrix attached hereto as Schedule A. If an event
of default occurs, then, from the date such event of default
occurs until it is cured, or until all obligations are paid
and performed in full, at the Lenders' option Borrower shall
pay a fee two percent (2%) per annum greater than the fee
otherwise payable.
(iv) Other Fees: Borrower shall pay such other fees as are set
forth in the Fee Letter.
5. Collateral: All loans, advances, reimbursement obligations with
respect to the Letters of Credit, and other obligations, liabilities
and indebtedness of Borrower to the Bank and the Lenders shall be
secured by valid, perfected and enforceable first priority liens upon
and security interests in all of Borrower's present and future assets,
wherever located, including all accounts, contract rights,
instruments, investment property, documents, fixtures, chattel paper,
general intangibles, patents, trademarks, copyrights, trade names,
deposit accounts, inventory, equipment, rolling stock, real property,
leasehold interests and the stock of KLLM and its subsidiaries and the
stock of any other subsidiaries of Acquisition Corporation and KLLM
Transport; provided, however, that the Bank is willing to consider
releasing any real property securing additional financing obtained by
Borrower after the closing date to the extent that the terms and
conditions of such additional financing are satisfactory to the
Lenders, in their discretion. All loans shall be coterminous, cross-
guaranteed, and cross-collateralized. The Guarantors (as defined
below) shall also pledge the stock of their subsidiaries.
<PAGE>
Mr. William J. Liles III
May 25, 2000
Page 6
6. Guarantors: The Senior Credit Facility shall be unconditionally
guaranteed by all of the subsidiaries of Acquisition Corporation and
KLLM Transport (collectively, the "Guarantors").
7. Collateral/Financial Reporting: Borrower shall deliver to Lenders (a)
borrowing base certificates, at least weekly for accounts receivable,
reflecting sales, collections and credits, and monthly for rolling
stock, by unit at NBV, (b) appraisals of rolling stock, at least every
six months, (c) unaudited consolidated and consolidating financial
statements within 30 days after the end of each month, (d) audited
consolidated financial statements, and unaudited consolidating
financial statements, within 120 days after the end of each year, and
(e) an annual budget within 60 days prior to the beginning of each
year, all of which shall be in form acceptable to the Bank. All
financial statements shall be prepared in accordance with GAAP. The
Borrower shall permit the Bank to perform real estate and equipment
appraisals at its reasonable discretion at Borrower's expense.
8. Blocked Account: Borrower shall deposit all funds collected into a
blocked account controlled by the Bank and all funds so deposited
shall be wire transferred to the Bank each day for application to the
outstanding revolving loans.
9. Interest Rate Protection: Borrower shall enter into interest rate
protection agreement(s) with the Bank, affiliates thereof or another
major financial institution acceptable to the Bank, in its sole
discretion (with a single term or any number of staggered terms), such
that the aggregate notional principal amounts thereunder at all times
during the term of the Senior Credit Facility are equal to no less
than fifty percent (50%) of the aggregate amount projected to be
outstanding under the Senior Credit Facility and the Subordinate Debt
(as defined below).
10. Conditions Precedent: The extension of the aforementioned financing
arrangement by the Bank is subject to the fulfillment of a number of
conditions, including, but not limited to, the following:
(a) The execution and delivery, in form and substance acceptable to
the Bank and its counsel, of the Bank's customary agreements,
documents, instruments, financing statements, consents, landlord
waivers, documents indicating compliance with all applicable
federal and state environmental laws and regulations, evidences
of corporate authority, opinions of counsel and such other
writings to confirm and effectuate the financing arrangements as
may be required by the Bank and its counsel.
<PAGE>
Mr. William J. Liles III
May 25, 2000
Page 7
(b) The loan and security agreement for the Senior Credit Facility
shall contain such terms, conditions, representations, warranties
and covenants as the Bank deems appropriate for this transaction
including, without limitation, financial covenants, acceptable to
the Bank, with respect to leverage ratio, minimum tangible net
worth and fixed charge coverage, as set forth on Schedule B. The
loan and security agreement shall, without limitation, include
restrictions, acceptable to the Bank, on distributions,
indebtedness, acquisitions, investments, loans, management fees,
capital expenditures and transfers of funds or other assets by
Borrower, and an agreement by Borrower to pay all legal fees of
the Bank and audit and appraisal expenses incurred by the Bank
together with an allocated charge of $650 per day per auditor.
(c) Other than as disclosed to the Bank, no material adverse change
shall have occurred, as determined by the Bank in its sole
discretion, in the business, operations, profits or prospects of
Borrower since the financial statements dated March 3, 2000.
(d) There shall exist no action, suit, investigation, litigation, or
proceeding pending or threatened in any court or before any
arbitrator or governmental instrumentality seeking to enjoin,
restrain, prohibit or to obtain damages in respect of the
Transaction, or that in the Bank's good faith judgment (i) could
reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise), operations,
performance, or properties of Borrower or which could impair
Borrower's ability to perform satisfactorily under the proposed
financing arrangement or (ii) could be expected to materially and
adversely affect the Transaction.
(e) The Bank shall have received a pro forma balance sheet of
Borrower dated as of the date of closing which balance sheet
shall reflect no material changes from the most recent pro forma
balance sheet of Borrower previously delivered to the Bank.
(f) There shall exist at the date of closing remaining unused
borrowing availability, after disbursements and advances, of at
least $10 million, with all obligations of Borrower being
current.
<PAGE>
Mr. William J. Liles III
May 25, 2000
Page 8
(g) Receipt by the Bank of policies of insurance for the Borrower,
with terms of coverage and endorsements as may be required by the
Bank.
(h) All governmental and third party consents and approvals necessary
in connection with the Transaction have been obtained by the
Borrower.
(i) Receipt by the Bank of unconditional guarantees from the
Guarantors in form and substance acceptable to the Bank.
(j) Borrower shall have obtained $21,490,691 in new unsecured
subordinated debt (the "Subordinate Debt") from the Investor to
effectuate the Subordinated Financing on terms and conditions
acceptable to the Bank. The Subordinate Debt shall provide, in
part, that it is fully subordinate in right of payment to the
Senior Credit Facility; provided, that, if no event of default
exists under the Senior Credit Facility (i) the Investor may
receive a payment of $10 million immediately after closing the
Merger, (ii) the Investor may receive regularly scheduled
interest payments, (iii) after receipt by the Bank of Borrower's
audited financial statements for the year ended December 31,
2000, (A) if Borrower's EBITDA, as reflected on such financial
statements, is at least $21 million and there is excess
availability under the Senior Credit Facility (after giving
effect to any such distribution respecting the Subordinate Debt)
of at least $10 million, the Investor may receive up to fifty
percent (50%) of all remaining amounts then due and owing with
respect to the Subordinate Debt and (B) if Borrower's EBITDA, as
reflected on such financial statements, is at least $26 million
and there is excess availability under the Senior Credit Facility
(after giving effect to any such distribution respecting the
Subordinate Debt) of at least $10 million, the Investor may
receive one hundred percent (100%) of all remaining amounts then
due and owing with respect to the Subordinate Debt, and (iv)
after receipt by the Bank of Borrower's audited financial
statements for the year ended December 31, 2001 and any fiscal
year ended thereafter, if Borrower's EBITDA, as reflected on such
financial statements, is at least $21 million and there is excess
availability under the Senior Credit Facility (after giving
effect to any such distribution respecting the Subordinate Debt)
of at least $10 million, the Investor may receive one hundred
percent (100%) of all remaining amounts then due and owing with
respect to the Subordinate Debt, if any.
<PAGE>
Mr. William J. Liles III
May 25, 2000
Page 9
(k) Acquisition Corporation shall have obtained a $7,000,000 cash
contribution in capital from the Investor to effectuate the
Equity Contribution on terms and conditions acceptable to the
Bank which shall be used to fund part of the purchase price of
the KLLM Transport stock.
(l) The Bank's receipt of an environmental compliance review of all
of the Borrower's real estate, including the completion by
Borrower of the Bank's standard environmental questionnaire, with
the results thereof being satisfactory to the Bank.
(m) In the event that the proposed syndication cannot be achieved
within 60 days in a manner satisfactory to the Bank under the
structure outlined in this letter, Borrower agrees that the Bank
shall be entitled, in consultation with Borrower, to change the
pricing, structure or other terms of the Senior Credit Facility
if the Bank determines that such changes are advisable to ensure
a successful syndication or an optimal credit structure.
(n) Borrower shall have satisfied the Bank that Borrower's material
computer applications are capable of recognizing all dates on and
after January 1, 2000.
(o) There not having occurred and being continuing since the date
hereof a material adverse change in the market for syndicated
bank credit facilities or a material disruption of, or a material
adverse change in, financial, banking or capital market
conditions, in each case as determined by the Bank in its sole
discretion.
(p) The execution and delivery, in form and substance acceptable to
the Bank and its counsel, of all other documentation necessary to
effectuate the Transaction, including, but not limited to all
documentation required (i) to effect the purchase of KLLM
Transport's capital stock, (ii) to create the Subordinate Debt on
the terms described herein and (iii) to effect the Equity
Contribution, the Tender Officer and the Merger on the terms
described herein.
The summary of terms and conditions contained herein is not meant to be, nor
should it be construed as, an attempt to define all of the terms and conditions
of the transaction contemplated hereby, nor is it intended to reflect specific
document phrasing that will exist in the loan and security agreement. It is
intended only to outline the basic points of business
<PAGE>
Mr. William J. Liles III
May 25, 2000
Page 10
understanding around which binding legal documentation will be negotiated and/or
structured. Further negotiations will not be precluded by the issuance of this
letter or by acceptance by the Borrower.
All out-of-pocket fees and expenses incurred by the Bank in connection with
the documentation of the Senior Credit Facility, the syndication thereof, and
the Bank's review and due diligence, such as reasonable legal, title insurance,
field exam and appraisal expenses, together with an allocated charge of $650 per
day per field examiner, shall be paid by Borrower whether or not the transaction
herein contemplated is consummated. The Bank acknowledges its previous receipt
of $50,000 as a deposit against such expenses as are described in this
paragraph. Such deposit has been and may be applied immediately by the Bank
against its expenses and the balance, if any, may be applied against future
expenses. Borrower is obligated to make continuing deposits to reimburse out of
pocket costs upon the request of the Bank. In the event that Borrower declines
for any reason to borrow from the Lenders, or the transaction is not consummated
for any other reason whatsoever (other than the Bank's failure to close in
violation of the terms hereof), the Bank shall be entitled to retain the full
amount of all deposits and the Commitment Fee as compensation for administrative
costs incurred and damages sustained. Borrower's obligation for costs and
expenses shall survive termination of this letter.
This letter may not be delivered or disclosed by the Borrower to any third
party except the Liles Family, the Investor and those who are in a confidential
relationship with them, such as their legal counsel, accountants, or financial
advisors; provided, that this letter may be delivered or disclosed as required
in connection with any governmental filings required in connection with the
Transaction or the execution and delivery of this letter by Acquisition
Corporation and Acquisition Subsidiary. This letter is solely for the benefit
of Acquisition Corporation and Acquisition Subsidiary and may not be relied on
by any other party without the prior written consent of the Bank.
By acceptance of this letter, Borrower agrees to indemnify and hold the Bank
(whether acting for itself or as agent) and each Lender, their respective
affiliates and each such party's respective directors, officers, employees,
agents, attorneys and consultants, harmless from and against any and all losses,
claims, damages, liabilities and expenses (including fees and disbursements of
counsel) that may be incurred by or asserted against any such indemnitees in
connection with or arising out of any documentation, investigation, litigation,
proceeding or other matters related to the Transaction, this commitment letter
or the credit facilities discussed herein, whether or not any such indemnitees
are a party to such documentation, investigation, litigation, proceeding or
other matters and whether or not the Transaction is consummated or any future
documentation executed; provided however, that no person shall have the right
to be so indemnified hereunder for matters arising solely from its own willful
misconduct or bad faith.
<PAGE>
Mr. William J. Liles III
May 25, 2000
Page 11
The Bank, the Lenders and their affiliates shall not be responsible or liable to
the Borrower or any other person for any special, indirect, punitive, exemplary
or consequential damages which may be alleged. The obligation contained in this
paragraph will survive the closing of the Senior Credit Facility and/or any
termination of this letter.
BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS LETTER, ANY TRANSACTION
RELATING HERETO, OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE. This letter may only be amended, modified or revised in a writing
executed by all parties hereto.
This letter supersedes and replaces all previous communications between the
parties, written or oral. This letter must be executed and returned no later
than 5 p.m. time on May 26, 2000 along with the Commitment Fee referenced in
the Fee Letter (by wire transfer in immediately available funds or as a
permitted deduction from an existing account with the Bank) or the Bank's
commitment in accordance with the foregoing shall automatically terminate.
This letter agreement shall be governed by and construed in accordance with
the law of the State of Georgia.
This commitment, unless previously terminated as above provided, shall expire
at 5 p.m. (Atlanta, Georgia time) August 11, 2000 unless extended in writing by
the Bank in its sole discretion.
We look forward to working with you in the weeks ahead.
Very truly yours,
Bank of America, N.A.
By:
----------------------------
Its:
---------------------------
<PAGE>
Mr. William J. Liles III
May 25, 2000
Page 12
AGREED AND ACCEPTED this
___ day of ____________, 2000.
High Road Acquisition Corp.
By:
-----------------------------
Its:
----------------------------
High Road Acquisition Subsidiary Corp.
By:
-----------------------------
Its:
----------------------------
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Letter of Credit Fee
Funded Debt / EBITDA Prime Rate Loans LIBOR Loans Rate
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than or equal to 1.75 0% 1.50% 1.50%
to 1
--------------------------------------------------------------------------------------------------
Greater than 1.75 to 1 but 0% 1.75% 1.75%
less than or equal to 2.50
to 1
--------------------------------------------------------------------------------------------------
Greater than 2.50 to 1 but 0.25% 2.25% 2.25%
less than or equal to 3.00
to 1
--------------------------------------------------------------------------------------------------
Greater than 3.00 to 1 but 0.50% 2.50% 2.50%
less than or equal to 3.50
to 1
--------------------------------------------------------------------------------------------------
Greater than 3.50 to 1 but 0.75% 2.75% 2.75%
less than or equal to 4.00
to 1
--------------------------------------------------------------------------------------------------
4.00 to 1 or greater 1.00% 3.00% 3.00%
--------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SCHEDULE B
1. MINIMUM FIXED CHARGE COVERAGE RATIO.
Defined as EBITDA minus capital expenditures minus cash taxes minus
distributions other than payments on the Subordinated Debt, divided by principal
plus interest.
Tested quarterly on a rolling four quarter basis, commencing December 31,
2000.
Covenant level, no less than 1 to 1.
2. MINIMUM TANGIBLE NET WORTH.
Covenant level, at least $7 million tangible net worth at all times.
3. MAXIMUM LEVERAGE RATIO.
Defined as funded indebtedness divided by EBITDA.
Tested quarterly on a rolling four quarter basis, commencing June 30, 2000
Covenant level, no more than 4 to 1.
4. MINIMUM EBITDA.
Tested at (a) June 30, 2000 for the immediately preceding six months and (b)
September 30, 2000 for the immediately preceding nine months.
Covenant level, no less than $8 million at June 30, 2000 and $13 million at
September 30, 2000.
<PAGE>
May 25, 2000
CONFIDENTIAL
Mr. William J. Liles III
President
High Road Acquisition Corp.
3475 Lakeland Drive
Jackson, Mississippi 39208
Re: Commitment Letter (the "Commitment Letter") of even date herewith among
Bank of America, N.A. (the "Bank"), and High Road Acquisition Corp. and
High Road Acquisition Subsidiary Corp. (collectively, "Acquisition
Companies", and together with KLLM Transport Services, Inc. and KLLM, Inc.,
"Borrower")
Dear Jack:
We refer to the Commitment Letter referenced above. Capitalized terms used
herein without definition shall have the meanings set forth in the Commitment
Letter.
This letter is the Fee Letter described in the Commitment Letter.
Acquisition Companies agree to pay, or cause to be paid by Borrower, the
following fees to the Bank:
(a) Commitment Fee. Acquisition Companies shall pay the Bank a commitment fee
of $150,000, which fee shall be fully earned as of the date of execution of
the Commitment Letter by Acquisition Companies.
(b) Closing Fee. Borrower shall pay the Bank a fee of $937,500 on the date of
the closing of the Senior Credit Facility, less the amount of any portion
of the Commitment Fee received by the Bank prior to the date of closing.
(c) Administration Fee. Borrower shall pay the Bank an annual fee of $75,000
on each anniversary of the date of the closing of the Senior Credit
Facility.
<PAGE>
Mr. William J. Liles III
Fee Letter
Page 2
May 25, 2000
(d) Early Termination Fee. In the event that the Senior Credit Facility is for
any reason whatsoever terminated prior to the Maturity Date, Borrower shall
pay the Bank an early termination fee, in the amounts set forth below, in
order to compensate the Bank for their reliance expenses and their loss of
anticipated profits. If the effective date of the termination of the
Senior Credit Facility occurs in (i) the first year of the Senior Credit
Facility, then the early termination fee shall be two percent (2%) of the
maximum aggregate amount of the Senior Credit Facility (the "Facility
Amount") and (ii) the second year of the Senior Credit Facility, then the
early termination fee shall be one percent (1%) of the Facility Amount. If
at the time of prepayment any LIBOR loans are outstanding, then Borrower
shall pay to the Bank additional sums to compensate the Lenders for the
cancellation of part or all of the LIBOR financing.
The fees described above shall be in addition to Borrower's obligation to
reimburse the Bank for all out-of-pocket costs and expenses as described in the
Commitment Letter.
All fees described in this letter shall be fully earned on the due dates thereof
and shall not be subject to refund or rebate under any circumstances. Such fees
constitute compensation for services rendered and do not constitute interest or
a charge for the use of money.
Please indicate your agreement to the foregoing by signing and returning a copy
of this letter to the undersigned.
Sincerely,
BANK OF AMERICA, N.A.
By:
-------------------------
Name:
-----------------------
Title:
----------------------
<PAGE>
Mr. William J. Liles III
Fee Letter
Page 3
May 25, 2000
AGREED AND ACCEPTED this ____
day of May, 2000.
HIGH ROAD ACQUISITION CORP.
By:
------------------------
Name:
----------------------
Title:
---------------------
HIGH ROAD ACQUISITION SUBSIDIARY CORP.
By:
-------------------------
Name:
-----------------------
Title:
----------------------
