WELLS FARGO BANK TERM NOTE
$10,000,000.00 Phoenix, Arizona
October 1, 1993
FOR VALUE RECEIVED, the undersigned KNIGHT TRANSPORTATION, INC.
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at Arizona RCBO #03839, 100 West Washington,
Phoenix, AZ 85003, or at such other place as the holder hereof may designate in
lawful money of the United States of America and n immediately available funds,
the principal sum of $10,000,000,00, with interest thereon as set forth herein.
INTEREST/FEES:
(a) INTEREST. The outstanding principal balance of this Note shall bear
interest at the rate of 5.75000% per annum (computed on the basis of a 360-day
year, actual days elapsed).
(b) DEFAULT INTEREST. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to 4% above the rate of
interest from time to time applicable to this Note.
(c) COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect all
principal and interest due hereunder by charging Borrower's demand deposit
account number 4159-518950 with Bank, or any other demand deposit account
maintained by any Borrower with Bank, for the full amount thereof. Should there
be insufficient funds in any such demand deposit account to pay all such sums
when due, the full amount of such deficiency shall be immediately due and
payable by Borrower.
REPAYMENT AND PREPAYMENT:
(a) REPAYMENT. Principal and interest shall be payable on the 1ST day of
each MONTH in installments or $192,558.23 each, commencing NOVEMBER 1, 1998, and
continuing up to and including SEPTEMBER 1, 2003, with a final installment
consisting of all remaining unpaid principal and accrued interest due and
payable in full on OCTOBER 1, 2003.
(b) PREPAYMENT. Borrower may prepay principal on this Note at any time in
the minimum amount of $100,000.00; provided however, that if the outstanding
principal balance of this Note is less than said amount, the minimum prepayment
amount shall be the entire outstanding principal balance hereof. In
consideration of Bank providing this prepayment option to Borrower, or if this
Note shall become due and payable at any time prior to the maturity date hereof
by acceleration or otherwise, Borrower shall pay to Bank immediately upon demand
a fee which is the sum or the discounted monthly differences for each month from
the month of prepayment through the month in which this Note matures, calculated
as follows for each such month:
(i) DETERMINE the amount of interest which would have accrued each month on
the amount prepaid at the interest rate applicable to such amount had it
remained outstanding until the scheduled maturity date hereof.
(ii) SUBTRACT from the amount determined in (i) above the amount of
interest which would have accrued for the same month on the amount prepaid for
the remaining term of this Note at the Money Market Funds Rate in effect on the
date of prepayment for new loans made for such term and in a principal amount
equal to the amount prepaid.
(iii) If the result obtained in (ii) for any month is greater than zero,
discount that difference by the Money Market Funds Rate used in (ii) above.
Each Borrower acknowledges that prepayment of such amount may result in
Bank incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum 2.000% above the Prime
Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed). The "Prime Rate" is a base rate that Bank from time to
time establishes and which serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto. Each change in
the rate of interest on any such past due prepayment fee shall become effective
on the date each Prime Rate change is announced within Bank.
1
The "Money Market Funds Rate" means the rate per annum which Bank estimates
and quotes to its borrowers as the rate, adjusted for reserve requirements,
federal deposit insurance and any other amount which Bank deems appropriate, at
which funds in the amount of a loan and for a period of time comparable to the
term of such loan are available for purchase in the money market on the date
such loan is made with the understanding that the Money Market Funds Rate is
Bank's estimate only and that Bank is under no obligation to actually purchase
and/or match funds for any transaction. This rate is not fixed by or related in
any way to any rate that Bank quotes or pays for deposits accepted through its
branch system.
All prepayments of principal shall be applied on the most remote principal
installment or installments then unpaid.
EVENTS OF DEFAULT:
Any default in the payment or performance of any obligation under this
Note, or any defined event of default under any loan agreement now or at any
time hereafter in effect between Borrower and Bank (whether executed prior to,
concurrently with or at any time after this Note), shall constitute an "Event of
Default" under this Note.
MISCELLANEOUS:
(a) REMEDIES. Upon the occurrence of any Event of Default, the holder of
this Note, at the holder's option, may declare all sums of principal, interest,
fees and charges outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.
(b) OBLIGATIONS JOINT AND SEVERAL. Should more than one person or entity
sign this Note as a Borrower, the obligations of each such Borrower shall be
joint and several.
(c) GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the state of Arizona.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.
KNIGHT TRANSPORTATION, INC.
By: /s/ Clark Jenkins
---------------------------------
CLARK JENKINS
CHIEF FINANCIAL OFFICER/SECRETARY
2
WELLS FARGO BANK DISBURSEMENT ORDER
DATE: OCTOBER 1, 1998
OFFICE: ARIZONA RCBO #03839, 100 WEST WASHINGTON, PHOENIX, AZ 85003
Wells Fargo Bank, National Association, is hereby authorized to pay the proceeds
of the credit accommodation to the undersigned granted in the principal amount
of $10,000,000.00 to the order of:
NAME AMOUNT
---- ------
$
- ------------------------------------------------------- -------------------
$
- ------------------------------------------------------- -------------------
$
- ------------------------------------------------------- -------------------
$
- ------------------------------------------------------- -------------------
$
- ------------------------------------------------------- -------------------
$
- ------------------------------------------------------- -------------------
KNIGHT TRANSPORTATION, INC.
By: /s/ Clark Jenkins
---------------------------------
CLARK JENKINS
CHIEF FINANCIAL OFFICER/SECRETARY
3
WELLS FARGO BANK CORPORATE RESOLUTION: BORROWING
TO: WELLS FARGO BANK, NATIONAL ASSOCIATION
RESOLVED: That this corporation, KNIGHT TRANSPORTATION, INC., proposes to
obtain credit from time to time, or has obtained credit, from Wells Fargo Bank,
National Association ("Bank").
BE IT FURTHER RESOLVED, that any one of the following officers:
CHAIRMAN, CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER, SECRETARY,
PRESIDENT
together with any ONE of the following officers:
NONE
of this corporation be and they are hereby authorized and empowered for and on
behalf of and in the name of this corporation and as its corporate act and deed:
(a) To borrow money from Bank and to assume any liabilities of any other
person or entity to Bank, in such form and on such terms and conditions as shall
be agreed upon by those authorized above and Bank, and to sign and deliver to
Bank such promissory notes and other evidences of indebtedness for money
borrowed or advanced and/or for indebtedness assumed as Bank shall require; such
promissory notes or other evidences of indebtedness may provide that advances be
requested by telephone communication and by any officer, employee or agent of
this corporation so long as the advances are deposited into any deposit account
of this corporation with Bank; this corporation shall be bound to Bank by, and
Bank may rely upon, any communication or act, including telephone
communications, purporting to be done by any officer, employee or agent of this
corporation provided that Bank believes, in good faith, that the same is done by
such person.
(b) To contract for the issuance by Bank of letters of credit, to discount
with Bank notes, acceptances and evidences of indebtedness payable to or due
this corporation, to endorse the same and execute such contracts and instruments
for repayment thereof to Bank as Bank shall require, and to enter into foreign
exchange transactions with or through Bank.
(c) To mortgage, encumber, pledge, convey, grant, assign or otherwise
transfer all or any part of this corporation's real or personal property for the
purpose of securing the payment of any of the promissory notes, contracts,
instruments and other evidences of indebtedness authorized hereby, and to
execute and deliver to Bank such deeds of trust, mortgages, pledge agreements,
security agreements and/or other related documents as Bank shall require.
(d) To perform all acts and to execute and deliver all documents described
above and all other contracts and instruments which Bank deems necessary or
convenient to accomplish the- purposes of this resolution and/or to perfect or
continue the rights, remedies and security interests to be given to Bank
pursuant hereto, including without limitation, any modifications, renewals
and/or extensions of any of this corporation's obligations to Bank, however
evidenced; provided that the aggregate principal amount of all sums borrowed and
credits established pursuant to this resolution shall not at any time exceed the
sum of $20,100,000.00 outstanding and unpaid.
Loans made pursuant to a special resolution and loans made by offices of
Bank other than the office to which this resolution is delivered shall be in
addition to foregoing limitation.
4
BE IT FURTHER RESOLVED, that the authority hereby conferred is in addition
to that conferred by any other resolution heretofore or hereafter delivered by
this corporation to Bank and shall continue in full force and effect until Bank
shall have received notice in writing, certified by the Secretary of this
corporation, of the revocation hereof by a resolution duly adopted by the Board
of Directors of this corporation. Any such revocation shall be effective only as
to credit which is extended or committed by Bank, or actions which are taken by
this corporation pursuant to the resolutions contained herein, subsequent to
Bank's receipt of such notice. The authority hereby conferred shall be deemed
retroactive, and any and all acts authorized herein which were performed prior
to the passage of this resolution are hereby approved and ratified.
CERTIFICATION
I, CLARK JENKINS, Secretary of KNIGHT TRANSPORTATION, INC., a corporation
created and existing under the laws of the state of ARIZONA, do hereby certify
and declare that the foregoing is a full, true and correct copy of the
resolutions duly passed and adopted by the Board of Directors of said
corporation, by written consent of all Directors of said corporation or at a
meeting of said Board duly and regularly called, noticed and held on , at which
meeting a quorum of the Board of Directors was present and voted in favor of
said resolutions; that said resolutions are now in full force and effect; that
there is no provision in the Articles of Incorporation or Bylaws of said
corporation, or any shareholder agreement, limiting the power of the Board of
Directors of said corporation to pass the foregoing resolutions and that such
resolutions are in conformity with the provisions of such Articles of
Incorporation and Bylaws; and that no approval by the shareholders of, or of the
outstanding shares of, said corporation is required with respect to the matters
which are the subject of the foregoing resolutions.
IN WITNESS WHEREOF, I have hereunto set my hand and, if required by Bank
affixed the corporate seal of said corporation, as of
/s/ Clark Jenkins
----------------------------------
CLARK JENKINS, Secretary
(SEAL)
5
To: Wells Fargo Bank,
National Association
100 West Washington
Phoenix, AZ 85003
Re: KNIGHT TRANSPORTATION, INC. ("Borrower")
Attn:
-------------------------------------
The undersigned is the Chief Financial Officer* of Borrower. In said
capacity, the undersigned hereby certifies to Wells Fargo Bank, National
Association ("Bank") that (a) the financial statement of Borrower dated as of
June 30, 1998, heretofore or concurrently herewith delivered by Borrower to
Bank, and all schedules and footnotes thereto, are true and correct, and have
been prepared in accordance with generally accepted accounting principles, and
(b) as of the date hereof, there exists no default or defined Event of Default
under any loan agreement, promissory note or any other document in effect with
respect to any credit accommodation granted by Bank to Borrower.
Dated: Oct. 1, 1998 KNIGHT TRANSPORTATION, INC.
By: /s/ Clark Jenkins
--------------------------------
Title: Chief Financial Officer
* Insert the title of the signer who must be an officer of Borrower authorized
to borrow under the most current Corporate Borrowing Resolution delivered by
Borrower to Bank.
6