MASTER EQUIPMENT LEASE AGREEMENT
Quad-K Leasing, Inc., an Arizona corporation ("Lessor"), ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and Knight Transportation Indianapolis, Inc., an
Arizona corporation ("Lessee"), ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
hereby enter into the following agreement.
1. Lease. Lessor hereby leases to Lessee, and Lessee agrees to lease from
Lessor that certain Equipment described in Exhibit "A" hereto. Lessor hereby
agrees to lease to Lessee and Lessee agrees to Lease from Lessor any additional
Equipment listed on Exhibit "A" hereto from time to time and any Equipment shown
in Lessor's records as leased to the Lessee. Lessor is a licensed motor vehicle
carrier (MC #227271). Lessor shall be responsible for obtaining and paying any
motor vehicle carrier license or tax on any of the Equipment.
2. Possession and Use. The Equipment shall be kept in Lessee's possession
and Lessee shall be responsible for the care and maintenance of all such
Equipment. The Equipment shall be used solely in connection with Lessee's medium
to short haul truckload carrier business and shall be stored and maintained at
Lessee's principal place of business located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇. The Equipment shall be used solely in the loading and transportation of
personal property in connection with Lessee's truckload carrier business.
3. Lease Term. The Lease shall govern the lease of equipment between Lessor
and Lessee from and after October 1, 1998. The initial term of this Lease shall
expire on September 30, 1999. The Lease shall be automatically renewed for
successive additional one year terms, without action by Lessor or Lessee, unless
Lessee notifies Lessor within 30 days prior to the expiration of any Lease term
(or renewal thereof) that it is terminating this Lease.
4. Rent. In consideration for this Lease, Lessee shall pay to Lessor an
amount equal to all Lessor's costs of operations, including equipment
maintenance, and such other amounts as Lessor may be required to pay with
respect to the Equipment leased hereby, except as otherwise provided in Section
13. Lessor shall ▇▇▇▇ Lessee and Lessee shall pay monthly the Rent due
hereunder. As additional rent, Lessee agrees to pay Lessor 100% of all detention
and accessorial service charges.
5. Loading and Unloading. Lessee shall be solely responsible for loading
and unloading the Equipment. In the event Lessor loads the Lessee's Equipment,
Lessor shall be entitled to assess Lessee a reasonable charge therefor.
6. Return of the Equipment. At the expiration of the term of this Lease,
Lessee shall, at its own cost and expense, return the Equipment to Lessor at to
a place designated by Lessor, in as good condition and repair as it presently
is, reasonable wear and tear and normal depreciation excepted. Lessee shall not
be obligated to replace, return or repair any loss or total damage covered by
insurance which Lessee is obligated to provide and carry pursuant to this Lease,
if Lessee elects to pay such insurance proceeds to Lessor. In that event, the
Equipment shall be removed from this Lease and Lessor shall not be entitled to
any rental from such removed Equipment, after payment of all insurance proceeds
to Lessor.
7. Driver Requirements. Lessee shall be solely responsible for maintaining
all driver logs, cargo manifests, driver records, delivery records and any other
documentation required by the United States Department of Transportation
("DOT"). Lessee shall at all times comply with all federal, state and local laws
relating to or governing the Equipment or its operation. Lessee acknowledges
that motor carriers are required to use drivers who are qualified under the
safety regulations set forth at 49 CFR ▇▇.▇▇. 391.63 through 391.65. In
addition, Lessee acknowledges that 49 CFR ss. 395.8(j)(2) requires a motor
carrier who uses a driver intermittently to obtain from that driver a signed
statement giving the total time on duty during the immediately preceding seven
days from the time at which the driver was last relieved from duty prior to
beginning work for the motor carrier. Lessee agrees to comply at all times with
all laws applicable to the operation of the Equipment and applicable to Lessee
as a truck-load motor carrier, including, without limitation, any state and
federal laws governing safety, use, weight or size requirements or governing the
nature of the cargo which may be transported or the financial responsibility
requirements relating to the operation of a motor carrier including, without
limitation, any requirements relating to insurance or self-insurance.
8. Title. Title to the Equipment shall remain in Lessor and the Equipment
shall constitute the personal property of Lessor. Lessee agrees to keep the
Equipment free and clear of any and all liens, encumbrances or claims created
by, through or as a result of Lessee's use of the Equipment during the term of
this Lease. Lessor may lien or encumber the Equipment at any time and to any
extent.
9. Insurance. Lessee shall, at its own expense, insure the Equipment
against loss by fire, theft and extended risk coverage, including collision and
property damage and personal liability insurance. Property damage insurance
shall be in an amount equal to the full value of the Equipment as determined by
Lessor. In addition, Lessee shall obtain and maintain in force and effect
insurance coverage for personal injury, collision, and comprehensive damage and
property damage not less than $1,000,000 per occurrence, with an aggregate limit
of not less than $1,000,000 per occurrence. Lessor may self-insure claims for
personal injury, collision, comprehensive damage and property damage up to a
maximum limit of $250,000 per occurrence and for collision, comprehensive, and
cargo liability and up to a combined limit of $50,000 per occurrence. Lessee
shall cause Lessor to be named on such policies as an additional insured. Lessee
shall provide evidence of such coverage to Lessor at Lessor's written request.
Lessee shall pay all premiums for such insurance prior to delinquency and shall
not permit coverage to lapse or be terminated during the term of this Lease.
10. Indemnity. Lessee hereby agrees to indemnify and hold Lessor harmless
for, from and against any and all actions, claims, demands, liabilities, damages
or costs or expenses, including attorneys' fees and costs of court, expert's
fees and other fees or costs, arising from or in connection with any claim
brought or asserted against Lessor by any person or entity on account of or in
connection with Lessee's operation of the Equipment, whether such claim results
from personal injury, death, or damage to property or cargo, so long as such
claim is caused in whole or in part by Lessee's use or operation of the
Equipment during the term of this Lease. Lessor's indemnification rights
hereunder shall be in addition to any contractual or other rights it may have
against Lessee under the terms and conditions of this Lease.
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11. Inspection of Equipment. Lessee shall, upon Lessor's request, permit
Lessor or its representative to inspect the Equipment at any location where it
is stored and Lessee shall provide Lessor with reasonable access to the
Equipment from time to time in order to determine its condition and whether
Lessee is maintaining the Equipment in accordance with the terms and conditions
of this Lease.
12. Maintenance and Repair. Lessor shall perform all maintenance and repair
of the Equipment including, without limitation, day-to-day maintenance and the
replacement of engines or other capital items. Lessee shall cooperate with
Lessor to establish a regular maintenance schedule for each piece of Equipment
subject to this Lease.
13. Taxes and Assessments. Lessee shall reimburse Lessor for all taxes,
excise taxes, business privilege taxes, rental taxes, license or franchise fees,
personal property taxes, assessments, and any and all other governmental
charges, fees, fines, penalties or levies whatsoever whether assessable with
respect to the Equipment, whether payable by Lessor or Lessee relating to the
Equipment or the use, rental, transportation or delivery or operation thereof or
of any cargo carried thereby; provided, however, that Lessor shall have the sole
obligation to pay, and shall pay, the Arizona motor carrier tax, the federal
highway use tax and all use taxes levied with respect to the Equipment,
including the use tax payable on purchase of the Equipment.
14. Default. The occurrence of any one or more of the following events
shall constitute a material default under and a breach of this Lease:
a. Failure by Lessee to pay, when due, the rent provided herein or to
make any other payment of money required by Lessor.
b. Failure to pay, when due, any tax, assessment, premium or other
amount provided herein and designated as the responsibility of Lessee.
c. Failure to observe or perform any covenant, agreement, condition or
provision of this Lease.
d. The levy under execution, attachment by legal process, or filing or
creation of the lien against Lessee's interest in the Equipment.
e. Lessee becomes insolvent, bankrupt, or admits in writing its
inability to pay its debts as they mature, or makes an assignment for the
benefit of creditors, or applies for or consents to the appointment of a trustee
or receiver.
f. The institution of any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceedings, or other proceedings for relief under
the bankruptcy law, or similar law for the relief of creditors, by or against
Lessee and, if instituted against Lessee by another, such proceedings are (i)
allowed against it, (ii) consented to by Lessee, or (iii) not dismissed within
60 days after the institution of such proceedings.
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g. The attachment, execution or other judicial seizure of
substantially all Lessee's assets, if such seizure is not discharged within 30
days.
15. Lessor's Remedies. In the event of a default hereunder which is not
cured within 30 days after the occurrence of such default, Lessor shall have the
right to exercise any one or more of the following remedies:
a. Terminate this Lease, by giving Lessee notice of termination, in
which event this Lease shall end and all right, title and interest of Lessee in
the Equipment shall expire and terminate.
b. Terminate the right of Lessor to the Equipment without terminating
this Lease by giving notice to Lessee that Lessee's right of possession shall
end as of the date stated in the termination notice.
c. Enforce the provisions of this Lease and protect the rights of
Lessor hereunder by action in law or equity.
d. Seek any other relief, whether available at law or in equity.
e. If Lessor terminates the right of Lessee to possession without
terminating this Lease, such termination shall not release Lessee, in whole or
in part, from Lessee's obligation to pay rent or any other amounts due
hereunder. In the event of the termination of this Lease, together with Lessor's
termination of Lessee's right to possession, Lessor shall be entitled to recover
all rent due as of the time of termination, all expenses required to be paid by
Lessee through the date of termination, plus any and all damages Lessor may
incur.
f. In the event of any default under this Lease, Lessee shall pay
Lessor's costs, charges and expenses, including reasonable costs and attorney's
fees, and any costs of court, including expert's fees and accounting fees. In
the event of any default hereunder, Lessor shall have the right to enter
Lessee's premises and reclaim possession of the Equipment.
16. Waivers. Lessor may waive any default hereunder without waiving any
other then existing or future default. All remedies of Lessor hereunder are
cumulative and are in addition to any other remedies available at law or in
equity that Lessor may have and Lessor may, to the extent permitted by law,
exercise such remedies concurrently or separately, and exercise of any one
remedy shall not be deemed an election of such a remedy to preclude the exercise
of any other remedy.
17. Legal Costs and Attorneys' Fees. In the event suit or other legal
action is initiated by either party to enforce its rights hereunder, the party
who does not prevail agrees to pay to the prevailing party its reasonable
attorneys' fees and costs of court.
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18. Time. Time is of the essence of this Lease and every covenant, term and
condition hereof.
19. Controlling Law. The substantive laws of the State of Arizona shall
govern the validity, performance and enforcement of this Lease without respect
to any choice of law provisions.
20. Notices. Any notice required to be given under this Lease shall be in
writing and may be delivered personally or by courier or sent by United States
mail, postage prepaid, addressed to the party at the address shown in this
Lease, unless a written notice of change of address is given, in which event
notice shall be sent to the address given in such change. Any notice, which is
mailed in accordance with the preceding sentence, shall be deemed to be
delivered three business days after the date such notice is deposited in the
United States mail, postage prepaid.
21. Counterparts and Supersession. This Lease may be executed in one or
more counterparts and, when so executed, those executed counterpart shall
constitute a single, binding agreement between and among those parties signatory
thereto. This Lease amends and supersedes all prior equipment leases between
Lessor and Lessee.
DATED this 28th day of October, 1998.
LESSOR:
QUAD-K LEASING, INC.,
an Arizona corporation,
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its President
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By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Its Secretary
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LESSEE:
KNIGHT TRANSPORTATION INDIANAPOLIS, INC.,
an Arizona corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its President
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EXHIBIT A
All Lessor's tractors and trailers, as more particularly reflected on
Lessor's records.