Exhibit 10.20 (Lease Guaranty)


    
      

    

    EXHIBIT
      10.20

    
 

    LEASE
      GUARANTY

    


    In
      consideration of and as an inducement for the granting, execution and delivery
      of the Lease Agreement, dated as of April 3, 2006 (hereinafter, as amended
      from
      time to time, called “Lease”),
      a
      copy of which is attached hereto as Exhibit
      A,
      by CT
      Chattanooga TN, LLC, a Delaware limited liability company, the Landlord therein
      named (hereinafter called “Landlord”),
      to
      Covenant Transport, Inc., a Tennessee corporation, the Tenant therein named
      (hereinafter called “Tenant”),
      and
      in further consideration of the sum of One Dollar ($1.00) and other good and
      valuable consideration paid by Landlord to the undersigned COVENANT TRANSPORT,
      INC., a Nevada corporation (hereinafter called “Lease
      Guarantor”),
      Lease
      Guarantor, intending to be legally bound, hereby guarantees to Landlord, its
      successors and assigns, the full and prompt payment when due of all Basic Rent
      and Additional Rent and any and all other sums and charges payable by Tenant
      under the Lease, and the full, faithful and prompt performance and observance
      of
      all the covenants, terms, conditions, and agreements therein provided to be
      performed and observed by Tenant (collectively, the “Obligations”);
      and
      Lease Guarantor does hereby become surety to Landlord, its successors and
      assigns for and with respect to all of the Obligations. Lease Guarantor is
      the
      direct or indirect owner of all outstanding partnership interests, membership
      interests or shares, as applicable, of Tenant and Lease Guarantor acknowledges
      that it will derive substantial benefits from the Lease. Capitalized terms
      used
      in this Guaranty and not otherwise defined herein shall have the meanings
      assigned thereto in the Lease.

    


    Lease
      Guarantor hereby covenants and agrees to and with Landlord, its successors
      and
      assigns, that if default shall at any time be made by Tenant, its successors
      and
      assigns, in the payment of any such rent or other sums or charges payable by
      Tenant under the Lease or in the performance of any of the covenants, terms,
      conditions or agreements contained in the Lease, Lease Guarantor will forthwith
      pay such rent or other sums or charges to Landlord, its successors or assigns
      (as applicable), and any arrears thereof, and will forthwith faithfully perform
      and fulfill all of such covenants, terms, conditions and agreements, and will
      forthwith pay to Landlord, it successors or assigns (as applicable), all damages
      and all costs and expenses that may arise in consequence of any default by
      Tenant under the Lease (including, without limitation, all reasonable attorneys’
fees incurred by Landlord or caused by any such default and/or by the
      enforcement of this Guaranty). In addition, Lease Guarantor hereby covenants
      and
      agrees to and with each Indemnitee that if default shall at any time be made
      by
      Tenant, its successors and assigns in the payment of any indemnity payable
      by
      Tenant under the Lease, Lease Guarantor will forthwith pay such indemnity to
      such Indemnitee, and Lease Guarantor hereby agrees that each Indemnitee shall
      be
      a third party beneficiary hereunder and may directly enforce its rights under
      this sentence against Lease Guarantor.

    


    This
      Guaranty is an absolute and unconditional guaranty of payment (and not merely
      of
      collection) and of performance and is a surety agreement. Lease Guarantor’s
      liability hereunder is direct and may be enforced without Landlord being
      required to resort to any other right, remedy or security and this Guaranty
      shall be enforceable against Lease Guarantor, its successors and assigns,
      without the necessity for any suit or proceedings on Landlord’s part of any kind
      or nature whatsoever against Tenant and without the necessity of any notice
      of
      non-payment, non-performance or non-observance or of any notice of acceptance
      of
      this Guaranty or of Landlord’s intention to act in reliance hereon or of any
      other notice or demand to which Lease Guarantor might otherwise be entitled,
      all
      of which Lease Guarantor hereby expressly waives; and Lease Guarantor hereby
      expressly agrees that the validity of this Guaranty and the obligations of
      Lease
      Guarantor hereunder shall in nowise be terminated, affected or impaired by
      reason of the assertion or the failure to assert by Landlord against Tenant
      of
      any of the rights or remedies reserved to Landlord pursuant to the provisions
      of
      the Lease.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This
      Guaranty shall be a continuing guaranty, and (whether or not Lease Guarantor
      shall have notice or knowledge of any of the following) the liability and
      obligation of Lease Guarantor hereunder shall be absolute and unconditional
      and
      shall remain in full force and effect without regard to, and shall not be
      released, discharged or in any way impaired by (a) any amendment or modification
      of, or supplement to, or extension or renewal of, the Lease or any assignment
      or
      transfer thereof; (b) any exercise or non-exercise of any right, power, remedy
      or privilege under or in respect of the Lease or this Guaranty or any waiver,
      consent or approval by Landlord with respect to any of the covenants, terms,
      conditions or agreements contained in the Lease or any indulgences, forbearances
      or extensions of time for performance or observance allowed to Tenant from
      time
      to time and for any length of time; (c) any bankruptcy, insolvency,
      reorganization, arrangement, readjustment, composition, liquidation or similar
      proceeding relating to Tenant, its successors and assigns or their properties
      ;
      (d) any limitation on the liability or obligation of Tenant under the Lease
      or
      its estate in bankruptcy or of any remedy for the enforcement thereof, resulting
      from the operation of any present or future provision of the federal or state
      bankruptcy law or any other statute or from the decision of any court; (e)
      any
      sublease or transfer by Tenant or any assignment of its interest under the
      Lease; or (f) any termination of the Lease prior to the expiration of its
      Term.

    


    All
      of
      Landlord’s rights and remedies under the Lease and under this Guaranty are
      intended to be distinct, separate and cumulative and no such right and remedy
      therein or herein mentioned is intended to be in exclusion of or a waiver of
      any
      of the others. No termination of the Lease or taking or recovering of the
      premises demised thereby shall deprive Landlord of any of its rights and
      remedies against Lease Guarantor under this Guaranty. This Guaranty shall apply
      to the Obligations pursuant to any extension, renewal, amendment, modification
      and supplement of or to the Lease as well as to the Obligations thereunder
      during the original Term thereof in accordance with the original provisions
      thereof.

    


    The
      Lease
      Guarantor hereby waives any requirement that the Landlord protect, secure,
      perfect or insure any security interest or lien or any property subject thereto
      or exhaust any right to take any action against any person or any collateral
      (including any rights relating to marshaling of assets).

    


    The
      Obligations will be paid strictly in accordance with the terms of the Lease,
      regardless of the value, genuineness, validity, regularity or enforceability
      of
      the Obligations, and of any law, regulation or order now or hereafter in effect
      in any jurisdiction affecting any of such terms or the rights of the Landlord
      with respect thereto. The liability of the Lease Guarantor to the extent herein
      set forth shall be absolute and unconditional, not subject to any reduction,
      limitation, impairment, termination, defense, offset, counterclaim or recoupment
      whatsoever (all of which are hereby expressly waived by the Lease Guarantor)
      whether by reason of any claim of any character whatsoever, including, without
      limitation, any claim of waiver, release, surrender, alteration or compromise,
      or by reason of any liability at any time to the Lease Guarantor or otherwise,
      whether based upon any obligations or any other agreements or otherwise,
      howsoever arising, whether out of action or inaction or otherwise and whether
      resulting from default, willful misconduct, negligence or otherwise, and without
      limiting the foregoing, irrespective of: (a) any lack of validity or
      enforceability of the Lease or of any agreement or instrument relating thereto;
      (b) any change in the time, manner or place of payment of, or in any other
      term
      in respect of, all or any of the Obligations, or any other amendment or waiver
      of or consent to Obligations, or any other amendment or waiver of or consent
      to
      any departure from the Lease or any other agreement relating to any Obligations;
      (c) any increase in, addition to, exchange or release of, or nonperfection
      of
      any lien on or security interest in, any collateral or any release or amendment
      or waiver of or consent to any departure from or failure to enforce any other
      guarantee, for all or any of the indebtedness; (d) any other circumstance which
      might otherwise constitute a defense available to, or a discharge of, the Tenant
      in respect of the obligations of the Lease Guarantor in respect hereof; (e)
      the
      absence of any action on the part of the Landlord to obtain payment for the
      Obligations from the Tenant; (f) any insolvency, bankruptcy, reorganization
      or
      dissolution, or any proceeding of the Tenant or the Lease Guarantor, including,
      without limitation, rejection of the guaranteed Obligations in such bankruptcy;
      or (g) the absence of notice or any delay in any action to enforce any
      Obligations or to exercise any right or remedy against the Lease Guarantor
      or
      the Tenant, whether hereunder, under any Obligations or under any agreement
      or
      any indulgence, compromise or extension granted.


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Lease
      Guarantor further agrees that, to the extent that the Tenant or the Lease
      Guarantor makes a payment or payments to the Landlord, which payment or payments
      or any part thereof are subsequently invalidated, declared to be fraudulent
      or
      preferential, set aside and/or required to be repaid to the Tenant or the Lease
      Guarantor or their respective estate, trustee, receiver or any other party
      under
      any bankruptcy law, state or federal law, common law or equitable cause, then
      to
      the extent of such payment or repayment, this Guaranty and the advances or
      part
      thereof which have been paid, reduced or satisfied by such amount shall be
      reinstated and continued in full force and effect as of the date of such initial
      payment, reduction or satisfaction occurred.

    


    Lease
      Guarantor shall have no rights (direct or indirect) of subrogation,
      contribution, reimbursement, indemnification or other rights of payment or
      recovery from any person or entity (including, without limitation, the Tenant)
      for any payments made by the Lease Guarantor hereunder, and Lease Guarantor
      hereby waives and releases absolutely and unconditionally, any such rights
      of
      subrogation, contribution, reimbursement, indemnification and other rights
      or
      recovery which it may now or hereafter acquire, in each case, until the Lease
      has terminated and all Obligations have been fully and finally paid and
      performed thereunder.

    


    Lease
      Guarantor represents and warrants to Landlord that (a) Lease Guarantor is duly
      organized, validly existing and in good standing under the laws of the state
      of
      Nevada; (b) the execution and delivery of this Guaranty has been duly authorized
      by all necessary corporate action on the part of Lease Guarantor, and this
      Guaranty has been duly executed and delivered by Lease Guarantor, (c) the making
      of this Guaranty does not (i) require any vote or consent of shareholders of
      Lease Guarantor, or the filing or registration with, consent or approval of,
      or
      notice to, with or by any governmental authority or any other person, (ii)
      result in or cause a default under or violation of, or create a lien pursuant
      to, the Lease Guarantor’s organizational documents, or any agreement, indenture,
      contract, order, decree or judgment to which the Lease Guarantor is a party
      or
      by which the Lease Guarantor’s is bound; or (iii) violate any law, rule or
      regulation to which the Lease Guarantor is subject; (d) Tenant is a wholly
      owned
      direct or indirect subsidiary of Lease Guarantor; (e) this Guaranty constitutes
      the legal, valid and binding obligation of Lease Guarantor, enforceable against
      Lease Guarantor in accordance with its terms, except as enforceability may
      be
      limited by bankruptcy, insolvency or similar laws affecting the enforcement
      of
      creditors’ rights generally; (f) neither the Lease Guarantor nor any Subsidiary
      of the Lease Guarantor is an “investment company” or a company “controlled” by
      an “investment company”, within the meaning of the Investment Company Act of
      1940, as amended; and (g) the information, financial statements and reports
      furnished in writing by the Lease Guarantor or the Tenant in connection with
      the
      Lease and the Purchase and Sale Agreement, dated as of March 17, 2006, between
      Tenant and Landlord and the transactions contemplated thereby are true and
      correct in every material respect as of the date as of which such information,
      financial statement or report is stated or certified, and does not contain
      an
      untrue statement of a material fact, or omit to state any material fact
      necessary to make the statements herein or therein contained, in the light
      of
      the circumstances under which they were made, not misleading.


    
      
        
        

      

      
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    Lease
      Guarantor hereby agrees to deliver to the Landlord and the Lender (if any)
      the
      financial statements described in Paragraph 29 of the Lease on the dates, and
      otherwise in accordance with the provisions, set forth in such Paragraph 29
      of
      the Lease.

    


    This
      Guaranty shall be legally binding upon Lease Guarantor and its successors and
      permitted assigns and shall inure to the benefit of Landlord and its successors
      and assigns. Lease Guarantor shall not assign its rights and obligations under
      this Guaranty to any Person without the Landlord’s and the Lender’s (if any)
      prior written consent. 

    


    Lease
      Guarantor will not enter into any amendment to this Guaranty, and no such
      amendment will be effective in any event, without the prior written consent
      thereto by the Landlord and the Lender, if any. Lease Guarantor will from time
      to time during the Term, promptly following request of Landlord or Lender,
      confirm in writing to Landlord and to Lender that this Guaranty remains in
      full
      force and effect in accordance with its terms.

    


    All
      notices sent pursuant to this Guaranty shall be in writing and shall be deemed
      to have been given for all purposes (i) three (3) days after having been sent
      by
      United States mail, by registered or certified mail, return receipt requested,
      postage prepaid, addressed to the other party at its address as stated below,
      or
      (ii) one (1) business day after having been sent for overnight delivery by
      Federal Express, United Parcel Service or other nationally recognized air
      courier service.

    


    To
      the
      addresses stated below:

    


    
      	 	
              If
                to Landlord:

            
	 	 	 
	 	 	
              c/o
                SunTrust Equity Funding, LLC

            
	 	 	
              303
                Peachtree Street, 24th
                Floor

            
	 	 	
              MC
                3951

            
	 	 	
              Atlanta,
                Georgia 30308

            
	 	 	
              Attention:
                Allison
                McLeod

            
	 	 	
              Facsimile:
                (404) 230-1344

            


    

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	 	
              With
                a copy to:

            
	 	 	 
	 	 	
              Greenberg
                Traurig, LLP

            
	 	 	
              77
                West Wacker Drive, Suite 2500

            
	 	 	
              Chicago,
                Illinois 60601

            
	 	 	
              Attention:
                Julia R. Sarron

            
	 	 	
              Facsimile:
                (312) 899-0396

            
	 	 	 
	 	
              If
                to Lease Guarantor:

            
	 	 	 
	 	 	
              Covenant
                Transport, Inc.

            
	 	 	
              400
                Birmingham Highway, Inc.

            
	 	 	
              Chattanooga,
                Tennessee 37419

            
	 	 	
              Attention:
                Joey B. Hogan

            
	 	 	
              Facsimile:
                (423) 821-5442

            
	 	 	 
	 	
              With
                a copy to:

            
	 	 	 
	 	 	
              Scudder
                Law Firm, P.C., L.L.O.

            
	 	 	
              411
                S. 13th
                Street

            
	 	 	
              Lincoln,
                Nebraska 68508

            
	 	 	
              Attention:
                Mark Scudder

            
	 	 	
              Facsimile:
                (402) 435-4239

            


    

     

    Each
      of
      Landlord and Lease Guarantor may substitute its address by giving fifteen (15)
      days’ notice to the other party in the manner provided above. Any notice may be
      given on behalf of any party by its counsel.

    


    LEASE
      GUARANTOR AND LANDLORD (BY ITS ACCEPTANCE OF THIS GUARANTY) HEREBY MUTUALLY
      WAIVE TRIAL BY JURY IN CONNECTION WITH ANY DISPUTE ARISING HEREUNDER. THE TERMS
      AND PROVISIONS OF THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
      ACCORDANCE WITH, THE LAWS OF THE STATE OF TENNESSEE.

    


    [signature
      page to follow]

    


     


    
      
        
          
            	 	 	 


          

          


        

        
        

      

      
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    IN
      WITNESS WHEREOF, Lease Guarantor, intending to be legally bound hereby, has
      caused this Guaranty to be executed by its duly authorized officers as of
      this 3rd day of April, 2006.

    


    
      	 	 	
              COVENANT
                TRANSPORT, INC., a Nevada corporation

            
	 	 	 
	 	
              By:

            	    
/s/
              Joey B. Hogan
	 	
              Name:

            	     
Joey
              B. Hogan
	 	
              Title:

            	     
              EVP/CFO


    

    


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