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EXHIBIT 10.2
BANK OF AMERICA SUMMARY OF TERMS AND CONDITIONS
USA TRUCK INC.
$60,000,000 SENIOR CREDIT FACILITY
BORROWER: USA Truck Inc., a Delaware corporation (the "Borrower").
ADMINISTRATIVE AGENT: Bank of America, N.A. (the "Administrative Agent" or
"Bank of America") will act as sole and exclusive
administrative and collateral agent.
LENDERS: A syndicate of financial institutions (including Bank of
America) arranged on a best efforts basis, which
institutions shall be acceptable to the Borrower and the
Administrative Agent (collectively, the "Lenders").
SENIOR CREDIT FACILITY: An aggregate principal amount of up to $60,000,000 will
be available upon the terms and conditions hereinafter
set forth:
Senior Credit Facility: A $60,000,000 revolving credit
facility (the "Senior Credit Facility") with a sublimit
for the issuance of letters of credit (each a "Letter of
Credit") and a sublimit for swingline loans (each a
"Swingline Loan"). Letters of Credit will be issued by
Bank of America (in such capacity, the "Fronting Bank")
and Swingline loans will be made available by Bank of
America, and each Lender will purchase an irrevocable
and unconditional participation in each Letter of Credit
and Swingline Loan.
SWINGLINE OPTION: Swingline Loans will be made available on a same day
basis in an aggregate amount not exceeding $5,000,000.
Borrower must repay each Swingline Loan in full no later
than seven days after such loan is made.
PURPOSE: The proceeds of the Senior Credit Facility shall be
used: (i) to refinance the outstanding principal amount
of existing indebtedness of the Borrower; (ii) to pay
for capital expenditures; (iii) to provide for working
capital, letters of credit and other general corporate
purposes of the Borrower.
CLOSING: The execution of definitive loan documentation, to occur
on or before April 28, 2000 ("Closing").
INTEREST RATES: As set forth in Addendum I.
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MATURITY: The Senior Credit Facility shall terminate and all
amounts outstanding thereunder shall be due and payable
in full five years from Closing.
AVAILABILITY/SCHEDULED
AMORTIZATION: Senior Credit Facility: Loans under the Senior Credit
Facility ("Revolving Credit Loans") may be made, and
Letters of Credit may be issued, in each case subject to
availability. Availability shall be determined by a
Borrowing Base. Advance rates will be 85% for Eligible
Accounts Receivable and 85% of the lower of book value
or market value (per sampling of fleet) of Eligible
Unencumbered Equipment.
SECURITY: The Senior Credit Facility will be secured by a first
priority lien on Accounts Receivable, as defined in the
Loan Documents, and at closing, a conditional security
interest in Unencumbered Revenue Equipment, as defined
in the Loan Documents, which shall attach and be
perfected as follows: (i) upon the occurrence of a
Triggering Event, as defined below, the security
interest shall attach to the Unencumbered Revenue
Equipment, (ii) upon the occurrence of a Triggering
Event, the Borrower shall deliver all titles and other
documents necessary to Administrative Agent to perfect a
lien on the Unencumbered Revenue Equipment ("Perfection
Documents") to the Collateral Agent. The collateral
agent shall be a bank mutually acceptable to Lenders and
Borrower and (iii) upon receipt of the Perfection
Documents, the Administrative Agent shall have option to
perfect the Administrative Agent's security interest in
the Unencumbered Revenue Equipment by recording such
security interest on one or more titles to the
Unencumbered Revenue Equipment. Borrower shall advance
to Administrative Agent the cost to be incurred by
Administrative Agent in accomplishing such perfection.
The Loan Documents shall also contain a negative pledge
as to all other unencumbered corporate assets.
Triggering Event shall be defined as an Event of
Default, as defined in the Loan Documents, or the Total
Funded Debt to EBITDAR being greater than 2.50x until
September 30, 2000, then 2.35x thereafter.
Borrower shall prior to or at closing take all actions
necessary to insure that in the event the security
interest of the Administrative Agent attaches, it will
constitute a first priority lien on Borrower's
Unencumbered Revenue Equipment, including, but not
limited to obtaining third party consents, intercreditor
agreements and other agreements as shall be requested by
the Administrative Agent, in each case in form and
substance satisfactory to the Administrative Agent.
The foregoing security shall ratably secure the Senior
Credit Facility and any interest rate swap/foreign
currency swap or similar agreements with a Lender or its
affiliates under the Senior Credit Facility.
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MANDATORY PREPAYMENTS
AND COMMITMENT
REDUCTIONS: In addition to the normal advances and payments on the
Senior Credit Facility, the Senior Credit Facility will
be prepaid by an amount equal to (i) 100% of the net
cash proceeds of all asset sales by the Borrower or any
subsidiary of the Borrower (including sales of stock of
subsidiaries), other than sale of revenue equipment and
inventory through the normal course of business, subject
to de minimus baskets and reinvestment provisions to be
agreed upon and net of selling expenses and taxes to the
extent such taxes are paid; (ii) 100% of the net cash
proceeds from the issuance of any debt (excluding
certain permitted debt to be agreed upon) by the
Borrower or any subsidiary of the Borrower; and (iii)
50% of the net cash proceeds from the issuance of equity
by the Borrower or any subsidiary of the Borrower.
OPTIONAL PREPAYMENTS
AND COMMITMENT
REDUCTIONS: The Borrower may prepay the Senior Credit Facility in
whole or in part at any time without penalty, subject to
reimbursement of the Lenders' breakage and redeployment
costs in the case of prepayment of LIBOR borrowings.
CONDITIONS PRECEDENT
TO CLOSING: The Closing (and the initial funding) of the Senior
Credit Facility will be subject to satisfaction of the
conditions precedent deemed appropriate by the
Administrative Agent and the Lenders for transactions of
this type, including, but not limited to, the following:
(i) The Administrative Agent's satisfactory review
of the Loan Documents (including all schedules
and exhibits thereto). The Loan Documents shall
not have been altered, amended or otherwise
changed or supplemented or any condition therein
waived without the prior written consent of the
Administrative Agent.
(ii) Receipt and review, with results satisfactory to
the Administrative Agent and its counsel, of
information regarding litigation, tax,
accounting, labor, insurance, pension
liabilities (actual or contingent), real estate
leases, environmental matters, material
contracts, debt agreements, property ownership,
contingent liabilities and management of the
Borrower, and its respective subsidiaries, which
information will include a review of
unencumbered revenue equipment and related
systems.
(iii) Receipt of audited consolidated financial
statements of USA Truck Inc. for the fiscal
years ended 1997, 1998 and 1999. Receipt of
company-prepared annual projections for the
transaction horizon.
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(iv) The negotiation, execution and delivery of
definitive documentation for the Senior Credit
Facility satisfactory to the Administrative
Agent and the Lenders (the "Loan Documents"),
which shall include, without being limited to
(a) satisfactory opinions of counsel to the
Borrower (which shall cover, among other things,
authority, legality, validity, binding effect
and enforceability of the documents for the
Senior Credit Facility) and of local counsel and
such other customary closing documents as the
Administrative Agent shall reasonably request,
and (b) satisfactory evidence that the
Administrative Agent (on behalf of the Lenders)
upon attachment of the conditional security
interest, will hold a perfected, first priority
lien in all of the collateral for the Senior
Credit Facility, subject to no other liens
except for permitted liens to be determined.
(v) There shall not exist any pending or threatened
action, suit, investigation or proceeding,
which, if adversely determined, could materially
and adversely affect the Borrower or its
subsidiaries, any transaction contemplated
hereby or the ability of the Borrower and its
subsidiaries to perform its obligations under
the documentation for the Senior Credit Facility
or the ability of the Lenders to exercise their
rights thereunder.
(vi) There shall not have occurred a material adverse
change since the most recently ended fiscal year
for which an audit has been completed in the
business, assets, liabilities (actual or
contingent), operations, condition (financial or
otherwise) or prospects of the Borrower, in each
case together with its subsidiaries taken as a
whole, or in the facts and information regarding
such entities as represented to date.
(vii) There shall be no less than $10 million of
availability under the Revolving Credit Facility
at Closing after giving effect to the payoff of
Deposit Guaranty Bank and all borrowings under
the Revolving Credit Facility on such date.
(viii) The Administrative Agent, any Lender and/or
their affiliates shall have received all fees
and expenses required to be paid on or before
Closing.
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(ix) Receipt and review, with results satisfactory to
the Administrative Agent and the Lenders, of
information confirming that the Borrower's
material computer applications and those of its
key vendors and customers adequately address the
Year 2000 problem in all material respects.
(x) The absence of any material disruption of or a
material adverse change in conditions in the
financial, banking or capital markets which the
Administrative Agent in their sole discretion,
deem material in connection with the syndication
of the Senior Credit Facility.
REPRESENTATIONS
AND WARRANTIES: Usual and customary representations and warranties for
transactions of this type, including, but not limited
to, the following: (i) corporate existence and status;
(ii) corporate power and authority/enforceability; (iii)
no violation of law or contracts or organizational
documents; (iv) no material litigation; (v) correctness
of specified financial statements and other information
and no material adverse change; (vi) no required
governmental or third party approvals; (vii) use of
proceeds/compliance with margin regulations; (viii)
status under Investment Company Act; (ix) ERISA matters;
(x) environmental matters; (xi) perfected liens and
security interests; (xii) payment of taxes; (xiii)
accuracy of disclosure; and (xiv) Year 2000
preparedness.
COVENANTS: Usual and customary covenants for transactions of this
type, including, but not limited to, the following: (i)
delivery of financial statements and other reports; (ii)
delivery of compliance and borrowing base certificates;
(iii) delivery of notices of default, material
litigation and material governmental and environmental
proceedings; (iv) compliance with laws (including
environmental laws and ERISA matters) and material
contractual obligations; (v) payment of taxes; (vi)
maintenance of insurance; (vii) limitation on liens and
negative pledges; (viii) limitation on mergers,
consolidations and sale of the company and/or assets;
(ix) limitation on incurrence of debt; (x) limitation on
stock repurchases in excess of $5 million in any fiscal
year or $10 million in the aggregate over the life of
the facility. Stock repurchases will be subject to
before mentioned limits and to no proforma events of
default after giving effect to the redemptions; (xi)
redemptions and/or prepayment of other debt; (xii)
limitation on investments and acquisitions, provided
however such limitation shall not prohibit one or more
acquisitions if the aggregate purchase price for all
such acquisitions does not exceed $10 million; (xiii)
limitation on transactions with affiliates; and (xiv)
Year 2000 compliance.
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Financial covenants to include (but not be limited to):
o Maintenance on a rolling four quarter basis of a Maximum
Leverage Ratio (total funded debt/EBITDAR) of 3.00x (total
funded debt is to include capitalized leases and the present
value of operating leases).
o Maintenance on a rolling four quarter basis of a Minimum
Fixed Charge Coverage Ratio (EBITDAR/(cash interest expense
plus scheduled principal/lease repayments plus 25% Revolving
Credit Facility outstandings plus rents plus cash taxes)) of
1.25x.
o Minimum Net Worth of $65 million with step-ups equal to 50%
of cumulative net income, less any stock repurchases,
subject to the above limits.
EVENTS OF DEFAULT: Usual and customary for financings of this type,
including, but not limited to, the following: (i)
nonpayment of principal, interest, fees or other
amounts, (ii) violation of covenants, (iii) inaccuracy
of representations and warranties, (iv) cross-default to
other material agreements and indebtedness, with
"material" for purposes of this event of default meaning
one or more defaults outstanding at any one time on
indebtedness that equals or exceeds $2 million in the
aggregate, (v) bankruptcy and other insolvency events,
(vi) material judgments, (vii) ERISA matters, (viii)
actual or asserted invalidity of any loan documentation
or security interests.
ASSIGNMENTS AND
PARTICIPATIONS: Each Lender will be permitted to make assignments in
acceptable minimum amounts to other financial
institutions approved by the Administrative Agent and
Borrower, which approval shall not be unreasonably
withheld. Lenders will be permitted to sell
participations with voting rights limited to significant
matters such as changes in amount, rate and maturity
date and releases of all or substantially all of the
collateral.
WAIVERS AND
AMENDMENTS: Amendments and waivers of the provisions of the loan
agreement and other definitive credit documentation will
require the approval of Lenders holding loans and
commitments representing a percentage to be determined
of the aggregate amount of loans and commitments under
the Senior Credit Facility, except that (i) the consent
of all of the Lenders affected thereby shall be required
with respect to (a) increases in the commitment of such
Lenders, (b) reductions of principal, interest, or fees,
(c) extensions of scheduled maturities or times for
payment, and (d) releases of all or substantially all of
the collateral or consents to waivers of the negative
pledge.
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INDEMNIFICATION: The Borrower shall indemnify the Administrative Agent
and the Lenders and their respective affiliates from and
against all losses, liabilities, claims, damages or
expenses arising out of or relating to the Senior Credit
Facility, the Borrower's use of loan proceeds or the
commitments, including, but not limited to, reasonable
attorneys' fees (including the allocated cost of
internal counsel) and settlement costs. This
indemnification shall survive and continue for the
benefit of the indemnitees at all times after the
Borrower's acceptance of the Lenders' commitments for
the Senior Credit Facility, notwithstanding any failure
of the Senior Credit Facility to close.
CLEAR MARKET
PROVISION: From the date of acceptance of the commitment until
Closing, there shall be no competing offering, placement
or arrangement of any debt securities or bank financing
by or on behalf of the Borrower. The Borrower will
immediately advise Bank of America if any such
transaction is contemplated.
GOVERNING LAW: Missouri.
FEES/EXPENSES: As set forth in Addendum I.
OTHER: This Summary of Terms is intended as an outline of
certain of the material terms of the Senior Credit
Facility and does not purport to summarize all of the
conditions, covenants, representations, warranties and
other provisions which would be contained in definitive
legal documentation for the Senior Credit Facility
contemplated hereby. The Borrower shall waive its right
to a trial by jury. The Borrower and other parties to
the Loan Documents shall agree to binding arbitration in
the event of a dispute or disagreement.
