<SUBMISSION>
<ACCESSION-NUMBER>0001008886-00-000071
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20000630
<FILING-DATE>20000815
<FILER>
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<CONFORMED-NAME>COVENANT TRANSPORT INC
<CIK>0000928658
<ASSIGNED-SIC>4213
<IRS-NUMBER>880320154
<STATE-OF-INCORPORATION>NV
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
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<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-24960
<FILM-NUMBER>701589
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>400 BIRMINGHAM HIGHWAY
<CITY>CHATTANOOGA
<STATE>TN
<ZIP>37419
<PHONE>4238211212
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>400 BIRMINGHAM HIGHWAY
<CITY>CHATTANOOGA
<STATE>TN
<ZIP>37419
</MAIL-ADDRESS>
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<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>2000 2ND QTR. 10-Q
<TEXT>



                       SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549-1004


                                    FORM 10-Q

(Mark One)
(X) QUARTERLY REPORT PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                  For the quarterly period ended June 30, 2000

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                         Commission File Number 0-24960

                            Covenant Transport, Inc.
             (Exact name of registrant as specified in its charter)


          Nevada                                      88-0320154
(State or other jurisdiction of          (I.R.S. employer identification number)
incorporation or organization)

                               400 Birmingham Hwy.
                              Chattanooga, TN 37419
                                 (423) 821-1212
               (Address, including zip code, and telephone number,
                      including area code, of registrant's
                           principal executive office)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.

                                   YES X  NO __


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date (July 20, 2000).

             Class A Common Stock, $.01 par value: 11,645,350 shares
             Class B Common Stock, $.01 par value: 2,350,000 shares

Exhibit Index is on Page 14

<PAGE>



                                     PART I
                              FINANCIAL INFORMATION
                                                                     Page Number
Item 1. Financial statements

        Condensed Consolidated Balance Sheets as of December 31,1999
           and June 30, 2000 (Unaudited)                                       3

        Condensed Consolidated Statements of Income for the three and
           six months ended June 30, 1999 and 2000 (Unaudited)                 4

        Condensed Consolidated Statements of Cash Flows for the six months
           ended June 30, 1999 and 2000 (Unaudited)                            5

        Notes to Condensed Consolidated Financial Statements (Unaudited)       6

Item 2. Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                               8

Item 3. Quantitative and Qualitative Disclosures about Market Risk            12


                                     PART II
                                OTHER INFORMATION
                                                                     Page Number

Item 1.  Legal Proceedings                                                    14

Items 2 and 3.  Not applicable                                                14

Item 4.  Submission of Matters to a vote of Security Holders                  14

Item 5.  Not applicable                                                       14

Item 6.  Exhibits and reports on Form 8-K                                     14

                                       2

<PAGE>
<TABLE>
<CAPTION>

                    COVENANT TRANSPORT, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (In thousands except share data)

                                                                                 December 31,1999             June 30, 2000
                                                                                                               (unaudited)
                                                                               ---------------------         -----------------
                                     ASSETS
                                     ------
<S>                                                                            <C>                           <C>
Current assets:
  Cash and cash equivalents                                                              $1,046                    $    1,061

  Accounts receivable, net of allowance of $1,040 in 1999 and
     $1,112 in 2000                                                                      75,038                        71,998
  Drivers' advances and other receivables                                                 9,295                         9,070
  Tire and parts inventory                                                                3,046                         3,189
  Prepaid expenses                                                                        9,567                        13,000
  Deferred income taxes                                                                   1,310                         1,266
                                                                               -----------------             -----------------
Total current assets                                                                $    99,302                    $   99,585

Property and equipment, at cost                                                         349,672                       353,978
Less accumulated depreciation and amortization                                           80,638                        94,339
                                                                               -----------------             -----------------
Net property and equipment                                                              269,034                       259,639

Other                                                                                    15,638                        15,612
                                                                               -----------------             -----------------

Total assets                                                                        $   383,974                   $   374,835
                                                                               =================             =================

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current liabilities:
  Checks outstanding in excess of bank balances                                      $    3,599                    $    3,498
  Current maturities of long-term debt                                                    4,218                         1,359
  Accounts payable                                                                        7,260                         6,685
  Accrued expenses                                                                       17,136                        17,907
                                                                               -----------------             -----------------
Total current liabilities                                                                32,211                        29,449

Long-term debt, less current maturities                                                 140,497                       135,008
Deferred income taxes                                                                    47,412                        48,014
                                                                               -----------------             -----------------
Total liabilities                                                                       220,120                       212,471

Stockholders' equity:
  Class A common stock, $.01 par value; 20,000,000 shares authorized;
    12,564,250 and 11,774,850 shares issued and outstanding as of 1999 and                  126                           118
    2000, respectively
  Class B common stock, $.01 par value; 5,000,000 shares authorized;
    2,350,000 shares issued and outstanding as of 1999 and 2000                              24                            24
Additional paid-in-capital                                                               78,313                        78,343
Treasury stock                                                                                                        (6,442)
Retained earnings                                                                        85,389                        90,321
                                                                               -----------------             -----------------
Total stockholders' equity                                                              163,852                       162,364
                                                                               -----------------             -----------------
Total liabilities and stockholders' equity                                          $   383,974                   $   374,835
                                                                               =================             =================

</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       3

<PAGE>
<TABLE>
<CAPTION>

                    COVENANT TRANSPORT, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 2000
                      (In thousands except per share data)


                                                                Three months ended June 30,            Six months ended June 30,
                                                                        (unaudited)                           (unaudited)
                                                             ----------------------------------     --------------------------------

                                                                  1999              2000                 1999              2000
                                                                  ----              ----                 ----              ----
<S>                                                          <C>                <C>                   <C>              <C>
          Revenue                                                  $ 113,211        $ 139,398            $ 210,975         $ 265,879
          Operating expenses:
            Salaries, wages, and related expenses                     48,320           60,943               93,156           114,888
            Fuel, oil, and road expenses                              20,484           23,322               37,821            44,334
            Revenue equipment rentals and
               purchased transportation                               10,924           19,360               19,085            38,079
            Repairs                                                    2,431            3,049                4,374             6,057
            Operating taxes and licenses                               2,750            3,513                5,157             6,798
            Insurance                                                  2,854            3,645                5,648             7,021
            General supplies and expenses                              5,776            8,199               11,361            15,638
            Depreciation and amortization,
              including gain on disposal of equipment                  8,560           10,102               16,531            20,112
                                                             ----------------   --------------       --------------    -------------
          Total operating expenses                                   102,099          132,133              193,133           252,927
                                                             ----------------   --------------       --------------    -------------
          Operating income                                            11,112            7,265               17,842            12,952
          Interest expense                                             1,225            2,436                2,525             4,740
                                                             ----------------   --------------       --------------    -------------
          Income before income taxes                                   9,887            4,829               15,317             8,212
          Income tax expense                                           3,955            1,929                6,136             3,280
                                                             ----------------   --------------       --------------    -------------
          Net income                                                $  5,932         $  2,900             $  9,181          $  4,932
                                                             ================   ==============       ==============    =============

          Basic earnings per share                                  $   0.40         $   0.20             $   0.62          $   0.33

          Diluted earnings per share                                $   0.40         $   0.20             $   0.61          $   0.33

          Weighted average shares outstanding                         14,912           14,785               14,912            14,851

          Adjusted weighted average shares and assumed
            conversions outstanding                                   14,966           14,790               15,015            14,869

</TABLE>
The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.

                                       4

<PAGE>
<TABLE>
<CAPTION>

                    COVENANT TRANSPORT, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 2000
                                 (In thousands)

                                                                                           Six months ended June 30,
                                                                                                  (unaudited)
                                                                                  --------------------------------------------

                                                                                        1999                       2000
                                                                                        ----                       ----
<S>                                                                               <C>                        <C>
Cash flows from operating activities:
Net income                                                                               $    9,181                $    4,932
Adjustments to reconcile net income to net cash
   provided by operating activities:
      Provision for losses on receivables                                                       149                       144
      Depreciation and amortization                                                          16,715                    21,967
      Deferred income tax expense                                                             1,547                       646
      Gain on disposition of property and equipment                                           (184)                   (1,855)
      Changes in operating assets and liabilities:
        Receivables and advances                                                              (785)                       837
        Prepaid expenses                                                                    (2,347)                   (3,432)
        Tire and parts inventory                                                              (578)                     (143)
        Accounts payable and accrued expenses                                                 4,821                     2,176
                                                                                  ------------------         -----------------
Net cash flows provided by operating activities                                              28,520                    25,272

Cash flows from investing activities:
      Acquisition of property and equipment                                                (43,697)                  (39,989)
      Acquisition of company stock                                                                -                   (6,450)
      Proceeds from disposition of property and equipment                                    25,592                    29,711
                                                                                  ------------------         -----------------
Net cash flows used in investing activities                                                (18,105)                  (16,728)

Cash flows from financing activities:
     Changes in checks outstanding in excess of bank
        balances                                                                                833                     (101)
     Deferred costs                                                                               -                     (111)
     Exercise of stock option                                                                    20                        30
     Proceeds from issuance of long-term debt                                                25,000                    21,000
     Repayments of long-term debt                                                          (38,431)                  (29,347)
                                                                                  ------------------         -----------------
Net cash flows used in financing activities                                                (12,578)                   (8,529)
                                                                                  ------------------         -----------------

Net change in cash and cash equivalents                                                     (2,163)                        15

Cash and cash equivalents at beginning of period                                              2,926                     1,046
                                                                                  ------------------         -----------------

Cash and cash equivalents at end of period                                                $     763                $    1,061
                                                                                  ==================         =================

</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       5

<PAGE>



                    COVENANT TRANSPORT, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 1.     Basis of Presentation

      The condensed  consolidated  financial  statements include the accounts of
      Covenant Transport,  Inc., a Nevada holding company,  and its wholly-owned
      subsidiaries  (the Company).  All  significant  intercompany  balances and
      transactions have been eliminated in consolidation.

      The financial statements have been prepared,  without audit, in accordance
      with generally accepted accounting  principles,  pursuant to the rules and
      regulations of the Securities and Exchange  Commission.  In the opinion of
      management,  the accompanying financial statements include all adjustments
      which are necessary for a fair presentation of the results for the interim
      periods  presented,  such adjustments  being of a normal recurring nature.
      Certain  information  and  footnote  disclosures  have been  condensed  or
      omitted  pursuant to such rules and  regulations.  The  December  31, 1999
      Condensed  Consolidated Balance Sheet was derived from the audited balance
      sheet of the Company for the year then ended.  It is suggested  that these
      condensed  consolidated  financial statements and notes thereto be read in
      conjunction with the consolidated  financial  statements and notes thereto
      included in the Company's  Form 10-K for the year ended December 31, 1999.
      Results of operations in interim periods are not necessarily indicative of
      results to be expected for a full year.

Note 2.     Basic and Diluted Earnings Per Share

      The following  table sets forth for the periods  indicated the calculation
      of net earnings per share included in the Company's Condensed Consolidated
      Statements of Income:

<TABLE>
<CAPTION>
            (in thousands except per share data)                      Three months ended            Six months ended
                                                                            June 30,                    June 30,
                                                                       1999          2000          1999          2000
                                                                       ----          ----          ----          ----
            <S>                                                     <C>           <C>           <C>           <C>
            Numerator:

              Net Income                                                $5,932       $ 2,900       $ 9,181        $4,932

            Denominator:

              Denominator for basic earnings
                per share - weighted-average shares                     14,912        14,785        14,912        14,851

            Effect of dilutive securities:

              Employee stock options                                        54             5           103            18
                                                                    -----------   -----------   -----------   -----------

            Denominator for diluted earnings per share -
            adjusted weighted-average shares and assumed                14,966        14,790        15,015        14,869
            conversions
                                                                    ===========   ===========   ===========   ===========
            Basic earnings per share                                     $ .40         $ .20        $  .62        $  .33
                                                                    ===========   ===========   ===========   ===========
            Diluted earnings per share                                   $ .40         $ .20        $  .61        $  .33
                                                                    ===========   ===========   ===========   ===========
</TABLE>

Note 3.     Income Taxes

      Income tax expense varies from the amount computed by applying the federal
      corporate  income tax rate of 35% to income before income taxes  primarily
      due to state  income  taxes,  net of federal  income tax effect,  plus the
      effect of  nondeductible  amortization of goodwill.  Effective  income tax
      expense approximates 40% in the quarters ended June 30, 2000, and 1999.

                                       6

<PAGE>

Note 4.     Recent Accounting Pronouncement

       In June 1998, the Financial  Accounting  Standards Board issued Statement
       of Financial  Accounting  Standards No. 133,  Accounting  for  Derivative
       Instruments and Hedging Activities.  The statement established accounting
       and  reporting  standards  requiring  that  every  derivative  instrument
       (including certain derivative instruments embedded in other contracts) be
       recorded on the balance sheet as either an asset or liability measured at
       its fair value.  SFAS No. 133 requires  that changes in the  derivative's
       fair value be  recognized  currently in earnings  unless  specific  hedge
       accounting criteria are met. The Company may engage in hedging activities
       using futures, forward contracts,  options, and swaps to hedge the impact
       of market fluctuations on energy commodity prices and interest rates. The
       Company is  currently  assessing  the effect,  if any,  on its  financial
       statements of implementing  SFAS No. 133. The Company will be required to
       adopt the standard in 2001.


Note 5.     Stock Repurchase Plan

       In June 2000, the Company  authorized a stock  repurchase  plan for up to
       1.0 million  company shares to be purchased in the open market or through
       negotiated  transactions.   In  July  2000,  the  Company  authorized  an
       additional  0.5  million  shares to be  repurchased.  During  the  second
       quarter,  792,000 shares were purchased at an average price of $8.14, and
       as of July 27, 2000 a total of 971,500 had been purchased with an average
       price of $8.17. The stock repurchase program has no expiration date.

                                       7

<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Except for the historical  information  contained herein, the discussion in this
quarterly  report  contains   forward-looking   statements  that  involve  risk,
assumptions,  and  uncertainties  that are  difficult to predict.  Words such as
"believe," "may," "could," "expects,"  "likely,"  variations of these words, and
similar expressions,  are intended to identify such forward-looking  statements.
The  Company's  actual  results  could differ  materially  from those  discussed
herein.   Forward-looking   information   is  subject   to  certain   risks  and
uncertainties  that could cause actual results to differ  materially  from those
projected.  Without limitation,  these risks and uncertainties  include economic
factors such as recessions,  downturns in customers'  business  cycles,  surplus
inventories,  inflation,  fuel price  increases,  and higher interest rates; the
resale value of the  Company's  used revenue  equipment;  the  availability  and
compensation  of  qualified  drivers;   competition  from  trucking,  rail,  and
intermodal  competitors;  and the  ability to  identify  acceptable  acquisition
targets and  negotiate,  finance,  and  consummate  acquisitions  and  integrate
acquired  companies.  Readers should review and consider the various disclosures
made by the  Company  in its press  releases,  stockholder  reports,  and public
filings,  as well as the factors  explained in greater  detail in the  Company's
annual report on Form 10-K.

The Company grew its revenue  26.0%,  to $265.9  million in the six months ended
June 30, 2000, from $211.0 million during the same period of 1999. A significant
increase  in fleet size to meet  customer  demand as well as an  increase in the
freight  rates  contributed  to revenue  growth  over this  period.  Most of the
revenue growth was generated by three  acquisitions  acquired  during the fourth
quarter of 1999. In October 1999, the Company  purchased the trucking  assets of
ATW,  Inc.  ("ATW"),  a $40  million  annual  revenue  carrier  located in North
Carolina. In November 1999, the Company purchased all of the outstanding capital
stock of both Harold Ives Trucking Co. and Terminal  Truck Broker,  Inc.,  which
generated a combined $65 million of annual trucking and brokerage  revenue.  The
Company  intends to continue to grow both  internally and through  acquisitions,
with the main  constraint  on internal  growth  being the ability to recruit and
retain sufficient numbers of qualified drivers.

The Company's  pretax margin  decreased to 3.1% of revenue from 7.3% of revenue,
and the Company's net income decreased  approximately 46.3%, to $4.9 million for
the six months ended June 30, 2000,  from $9.2 million during the same period of
1999.  Several  factors  contributed to the decrease,  including  increased fuel
costs,  lower  utilization  of  equipment,  and a soft  freight  environment  as
compared to the previous  year.  The Company  merged the operations of Bud Meyer
and Harold Ives Trucking Co. into the Chattanooga  headquarters during the first
quarter of 2000, which impacted  utilization of equipment because a large number
of drivers were lost in the process.

The Company is continuing to grow its owner-operator fleet and finance equipment
under  operating  leases.  As of June 30, 2000, the Company had contracted  with
approximately 503  owner-operators  as compared to approximately 249 at June 30,
1999.  Owner-operators  provide a tractor  and a driver  and bear all  operating
expenses in exchange for a fixed payment per mile. The Company does not have the
capital outlay of purchasing  the tractor.  As of June 30, 2000, the Company had
financed approximately 771 tractors and 1,059 trailers under operating leases as
compared to 622 tractors and 69 trailers under  operating  leases as of June 30,
1999.  The payments to  owner-operators  and the  financing  of equipment  under
operating  leases  are  recorded  in revenue  equipment  rentals  and  purchased
transportation.  Expenses associated with owned equipment,  such as interest and
depreciation,   are  not  incurred,  and  for  owner-operator  tractors,  driver
compensation,  fuel,  and other  expenses are not  incurred.  Because  obtaining
equipment from  owner-operators  and under operating leases  effectively  shifts
financing  expenses from interest to "above the line"  operating  expenses,  the
Company  evaluates its efficiency using pretax margin and net margin rather than
operating ratio.

Effective  July 1, 2000,  the Company  merged its  logistics  business with five
other   transportation   companies   into  a  company   called   Transplace.com.
Transplace.com  operates  an  Internet-based  global  transportation   logistics
service and is developing  programs for the cooperative  purchasing of products,
supplies,  and services.  In the transaction,  Covenant contributed its customer
list,  logistics  business software and software license,  certain  intellectual
property,  and $5.0 million in cash for the initial  funding of the venture.  In
exchange, Covenant received 13% ownership in Transplace.com.  Upon completion of
the transaction,  Covenant ceased operating its own transportation logistics and
brokerage business, which consisted primarily of the Terminal Truck Broker, Inc.
business  acquired  in  November  1999.  The  contributed   operation  generated
approximately $5 million in net brokerage received on an annualized basis.

                                       8

<PAGE>

The following  table sets forth the percentage  relationship of certain items to
revenue:

<TABLE>
<CAPTION>
                                                                   Three Months Ended                Six Months Ended
                                                                       June  30,                          June 30,
                                                                   1999          2000              1999            2000
                                                                -----------   -----------      -------------    -----------
                 <S>                                            <C>           <C>              <C>              <C>
                 Revenue                                            100.0%        100.0%            100.0%           100.0%
                 Operating expenses:
                   Salaries, wages, and related expenses              42.7          43.7              44.2             43.2
                   Fuel, oil, and road expenses                       18.1          16.7              17.9             16.7
                   Revenue equipment rentals and purchased
                     transportation                                    9.6          13.9               9.0             14.3
                   Repairs                                             2.1           2.2               2.1              2.3
                   Operating taxes and licenses                        2.4           2.5               2.4              2.6
                   Insurance                                           2.5           2.6               2.7              2.6
                   General supplies and expenses                       5.1           5.9               5.4              5.9
                   Depreciation and amortization                       7.6           7.2               7.8              7.6
                                                                -----------   -----------      ------------      -----------
                 Total operating expenses                             90.2          94.8              91.5             95.1
                                                                -----------   -----------      ------------      -----------
                 Operating income                                      9.8           5.2               8.5              4.9
                 Interest expense                                      1.1           1.7               1.2              1.8
                                                                -----------   -----------      ------------      -----------
                 Income before income taxes                            8.7           3.5               7.3              3.1
                 Income tax expense                                    3.5           1.4               2.9              1.2
                                                                -----------   -----------      ------------      -----------
                 Net income                                           5.2%          2.1%              4.4%             1.9%
                                                                ===========   ===========      ============      ===========
</TABLE>
COMPARISON  OF THREE  MONTHS  ENDED JUNE 30, 2000 TO THREE MONTHS ENDED JUNE 30,
1999

Revenue  increased $26.2 million  (23.1%),  to $139.4 million in the 2000 period
from $113.2  million in the 1999  period.  The revenue  increase  was  primarily
generated by a 35.4% increase in weighted average tractors,  to 3,766 during the
2000 period from 2,782  during the 1999 period.  Most of the increase  came from
the  acquisitions  of Harold Ives  Trucking Co. and ATW. The Company also raised
its average revenue per loaded mile approximately $0.05 per mile versus the 1999
period.  The  Company's  growth was  partially  offset by an 11.0%  decrease  in
revenue per tractor  per week to $2,818 in the 2000  quarter  from $3,167 in the
1999  quarter.  Revenue per tractor per week was reduced  because of fewer miles
per  tractor  due to a less  robust  freight  environment  than in 1999  and the
acquisition of Harold Ives Trucking Co., which operated  single-driver  tractors
that generate fewer miles than team-driven tractors.

Salaries,  wages, and related expenses increased $12.6 million (26.1%), to $60.9
million  in the  2000  period  from  $48.3  million  in the  1999  period.  As a
percentage of revenue,  salaries, wages, and related expenses increased to 43.7%
in the 2000 period from 42.7% in the 1999  period.  Driver wages as a percentage
of revenue remained constant at 30.8% in the 2000 period and in the 1999 period.
A driver wage  increase  went into effect  April 1, 2000,  and was offset by the
Company utilizing more  owner-operators and a larger percentage of single-driver
tractors from the  operations  of Harold Ives Trucking Co.,  which have only one
driver to be  compensated.  The Company  experienced  an increase in non-driving
employee  payroll  expense to 5.9% of revenue  in the 2000  period  from 5.7% of
revenue in the 1999  period due to the  acquisition  of Terminal  Truck  Broker,
Inc.,  which paid out a  significant  percentage of its net revenue in salaries.
With the July 1, 2000,  merger of its logistics  business  into  Transplace.com,
Covenant will no longer  operate its own  transportation  logistics or brokerage
business.  The Company  will not bear the expense of  compensating  the Terminal
Truck Broker, Inc. employees in future periods.

Fuel, oil, and road expenses increased $2.8 million (13.8%), to $23.3 million in
the 2000  period  from $20.5  million in the 1999  period.  As a  percentage  of
revenue,  fuel, oil, and road expenses decreased to 16.7% of revenue in the 2000
period from 18.1% in the 1999 period. Fuel costs increased approximately 29% per
gallon in the second  quarter of 2000  versus the second  quarter of 1999.  This
increase  was  partially  offset by fuel  surcharges,  fuel  hedges,  and by the
increased usage of  owner-operators  who pay for their own fuel  purchases.  The
expense for  owner-operators  is reflected in the revenue  equipment rentals and
purchased  transportation  category. The number of gallons and the price of fuel
that was hedged for the second  quarter of 2000,  will remain  constant  for the
third and fourth quarters of 2000.

Revenue  equipment rentals and purchased  transportation  increased $8.4 million
(77.2%),  to $19.4  million in the 2000  period  from $10.9  million in the 1999
period.  As a percentage  of revenue,  revenue  equipment  rentals and purchased
transportation  increased  to  13.9% in the 2000  period  from  9.6% in the 1999
period.  The  majority of the  increase  is due to growth in the  owner-operator
fleet. The Company  increased the number of  owner-operators  in its fleet to an
average  of  513 in the  2000  period  compared  to  249  in  the  1999  period.
Owner-operators  provide a tractor  and driver and cover all of their  operating
expenses in exchange for a fixed payment per mile. Accordingly, expenses such as
driver salaries, fuel, repairs,  depreciation,  and interest normally associated
with Company-
                                       9
<PAGE>

owned  equipment are  consolidated  in revenue  equipment  rentals and purchased
transportation when owner-operators are utilized.  The Company also entered into
additional  operating  leases.  As of June 30,  2000,  the Company had  financed
approximately 771 tractors and 1,059 trailers under operating leases as compared
to 622 tractors and 69 trailers under operating leases as of June 30, 1999.

Repairs  increased  approximately  $0.6 million (25.4%),  to $3.0 million in the
2000 period from $2.4  million in the 1999 period.  As a percentage  of revenue,
repairs remained essentially constant at 2.2% in the 2000 period and 2.1% in the
1999 period.

Operating taxes and licenses increased  approximately  $0.8 million (27.7%),  to
$3.5  million in the 2000  period  from $2.8  million in the 1999  period.  As a
percent of revenue,  operating taxes and licenses remained  essentially constant
at 2.5% in the 2000 period and 2.4% in the 1999 period.

Insurance,  consisting primarily of premiums for liability, physical damage, and
cargo damage  insurance,  and claims,  increased $0.8 million  (27.7%),  to $3.6
million in the 2000 period from $2.9 million in the 1999 period. As a percentage
of revenue,  insurance remained  essentially constant at 2.6% in the 2000 period
and 2.5% in the 1999 period.

General  supplies  and  expenses,  consisting  primarily  of driver  recruiting,
communications, and facilities expenses, increased $2.4 million (41.9%), to $8.2
million in the 2000 period from $5.8 million in the 1999 period. As a percentage
of revenue,  general supplies and expenses  increased to 5.9% in the 2000 period
from 5.1% in the 1999  period.  The 2000  increase  is  primarily  the result of
expenses  incurred from the acquisitions of ATW and Harold Ives Trucking Co., as
well as the addition of a driving school located in Arkansas.

Depreciation and amortization,  consisting  primarily of depreciation of revenue
equipment,  increased $1.5 million (18.0%),  to $10.1 million in the 2000 period
from $8.6 million in 1999 period.  As a percentage of revenue,  depreciation and
amortization  decreased  to 7.2% in the 2000 period from 7.6% in the 1999 period
as the result of several  factors.  The Company  utilized more  owner-operators,
leased more revenue equipment through operating leases,  and entered into a sale
leaseback  agreement  that resulted in a $1.1 million gain on sale of equipment.
These factors more than offset lower revenue per tractor.  Amortization  expense
primarily relates to covenants not to compete and goodwill from acquisitions.

Interest  expense  increased $1.2 million  (98.9%),  to $2.4 million in the 2000
period  from $1.2  million  in the 1999  period.  As a  percentage  of  revenue,
interest  expense  increased  to 1.7% in the 2000  period  from 1.1% in the 1999
period. The increase was primarily the result of higher debt balances related to
the acquisitions of ATW and Harold Ives, as well as higher interest rates.

As a result of the foregoing,  the Company's  pretax margin decreased to 3.5% in
the 2000 periods from 8.7% in the 1999 period.

The Company's effective tax rate remained  essentially  constant at 39.9% in the
2000 period and 40.0% in the 1999 period.

Primarily as a result of the factors  described above, net income decreased $3.0
million (51.1%),  to $2.9 million in the 2000 period (2.1% of revenue) from $5.9
million in the 1999 period (5.2% of revenue).

COMPARISON OF SIX MONTHS ENDED JUNE 30, 2000 TO SIX MONTHS ENDED JUNE 30, 1999

Revenue  increased $54.9 million  (26.0%),  to $265.9 million in the 2000 period
from $211.0  million in the 1999  period.  The revenue  increase  was  primarily
generated by a 35.2% increase in weighted average tractors,  to 3,680 during the
2000 period from 2,722  during the 1999 period.  Most of the increase  came from
the  acquisitions  of Harold Ives  Trucking Co. and ATW. The Company also raised
its average revenue per loaded mile by  approximately  $0.05 per mile versus the
1999 period.  The Company's  growth was partially  offset by an 8.8% decrease in
revenue  per  tractor  per week to $2,749 in the 2000  period from $3,015 in the
1999 period. Revenue per tractor per week was reduced because of fewer miles per
tractor  due  to a  less  robust  freight  environment  than  in  1999  and  the
acquisition of Harold Ives Trucking Co., which operated  single-driver  tractors
that  generate  fewer  miles  than  team-driven  tractors.   Also,  the  Company
experienced a large number of tractors without drivers during the first quarter,
primarily caused by the merger of the operations of Bud Meyer Truck Lines,  Inc.
and Harold Ives  Trucking  Co. into the  Chattanooga  facility.  The Company has
corrected the driver problem with currently all tractors being fully manned.

Salaries, wages, and related expenses increased $21.7 million (23.3%), to $114.9
million  in the  2000  period  from  $93.2  million  in the  1999  period.  As a
percentage of revenue,  salaries, wages, and related expenses decreased to 43.2%
in the 2000 period from 44.2% in the 1999  period.  Driver wages as a percentage
of revenue  decreased  to 30.2% in the 2000 period from 31.7% in the 1999 period
as  the  Company  utilized  more  owner-operators  and a  larger  percentage  of
single-driver  tractors from the operations of Harold Ives,  which have only one
driver to be  compensated.  On April 1, 2000, a driver wage  increase  went into
effect that is expected to increase  driver wages as a percentage  of revenue in
future  periods.  The Company  experienced an increase in  non-driving  employee
payroll  expense

                                       10
<PAGE>

to 6.3% of revenue in the 2000  period  from 5.9% of revenue in the 1999  period
due to the  acquisition  of  Terminal  Truck  Broker,  Inc.,  which  paid  out a
significant  percentage  of its net revenue in salaries.  With the July 1, 2000,
merger of its logistics  business into  Transplace.com,  Covenant will no longer
operate its own transportation logistics or brokerage business. The Company will
not bear the expense of compensating the Terminal Truck Broker,  Inc.  employees
in future periods.

Fuel, oil, and road expenses increased $6.5 million (17.2%), to $44.3 million in
the 2000  period  from $37.8  million in the 1999  period.  As a  percentage  of
revenue,  fuel, oil, and road expenses decreased to 16.7% of revenue in the 2000
period from 17.9% in the 1999 period. Fuel costs increased approximately 38% per
gallon in the first half of 2000  versus the first half of 1999.  This  increase
was  offset by fuel  surcharges,  fuel  hedges,  and by the  increased  usage of
owner-operators  who  pay  for  their  own  fuel  purchases.   The  expense  for
owner-operators  is reflected  in the revenue  equipment  rentals and  purchased
transportation  category.  The  number of  gallons  of fuel that was  subject to
hedging  contracts  was higher in the first  quarter of this  period than in the
second quarter.  The number of gallons of fuel at a fixed price that was subject
to hedging contracts is constant for the second through fourth quarters of 2000.

Revenue equipment rentals and purchased  transportation  increased $19.0 million
(99.5%),  to $38.1  million in the 2000  period  from $19.1  million in the 1999
period.  As a percentage  of revenue,  revenue  equipment  rentals and purchased
transportation  increased  to  14.3% in the 2000  period  from  9.0% in the 1999
period.  The  majority of the  increase  is due to growth in the  owner-operator
fleet. The Company  increased the number of  owner-operators  in its fleet to an
average  of  573 in the  2000  period  compared  to  218  in  the  1999  period.
Owner-operators  provide a tractor  and driver and cover all of their  operating
expenses in exchange for a fixed payment per mile. Accordingly, expenses such as
driver salaries, fuel, repairs,  depreciation,  and interest normally associated
with  Company-owned  equipment are consolidated in revenue equipment rentals and
purchased  transportation when  owner-operators  are utilized.  The Company also
entered into additional  operating  leases. As of June 30, 2000, the Company had
financed approximately 771 tractors and 1,059 trailers under operating leases as
compared to 622 tractors and 69 trailers under  operating  leases as of June 30,
1999.

Repairs  increased  approximately  $1.7 million (38.5%),  to $6.1 million in the
2000 period from $4.4  million in the 1999 period.  As a percentage  of revenue,
repairs  increased to 2.3% in the 2000 period from 2.1% in the 1999 period.  The
increase was  primarily  the result of an increase in the number of tractors and
trailers available for routine maintenance during the first quarter of 2000.

Operating taxes and licenses increased  approximately  $1.6 million (31.8%),  to
$6.8  million in the 2000  period  from $5.2  million in the 1999  period.  As a
percent of revenue,  operating taxes and licenses remained  essentially constant
at 2.6% in the 2000 period and 2.4% in the 1999 period.

Insurance,  consisting primarily of premiums for liability, physical damage, and
cargo damage  insurance,  and claims,  increased $1.4 million  (24.3%),  to $7.0
million in the 2000 period from $5.6 million in the 1999 period. As a percentage
of revenue,  insurance remained  essentially constant at 2.6% in the 2000 period
and 2.7% in the 1999 period.

General  supplies  and  expenses,  consisting  primarily  of driver  recruiting,
communications,  and facilities  expenses,  increased $4.3 million  (37.6%),  to
$15.6  million in the 2000 period from $11.4  million in the 1999  period.  As a
percentage of revenue,  general  supplies and expenses  increased to 5.9% in the
2000 period from 5.4% in the 1999 period.  The 2000  increase is  primarily  the
result  of  expenses  incurred  from the  acquisitions  of ATW and  Harold  Ives
Trucking Co., as well as the addition of a driving school located in Arkansas.

Depreciation and amortization,  consisting  primarily of depreciation of revenue
equipment,  increased $3.6 million (21.7%),  to $20.1 million in the 2000 period
from $16.5 million in 1999 period. As a percentage of revenue,  depreciation and
amortization  decreased  to 7.6% in the 2000 period from 7.8% in the 1999 period
as a result of several  factors.  The  Company  utilized  more  owner-operators,
leased  more  revenue  equipment  through  operating  leases,  and  the  Company
recognized a $1.9 million gain on sale of equipment  due to the sale of trailers
in the first quarter and a sale  leaseback  transaction  in the second  quarter.
These factors more than offset lower revenue per tractor.  Amortization  expense
primarily relates to covenants not to compete and goodwill from acquisitions.

Interest  expense  increased $2.2 million  (87.7%),  to $4.7 million in the 2000
period  from $2.5  million  in the 1999  period.  As a  percentage  of  revenue,
interest  expense  increased  to 1.8% in the 2000  period  from 1.2% in the 1999
period. The increase was primarily the result of higher debt balances related to
the acquisitions of ATW and Harold Ives, as well as higher interest rates.

As a result of the foregoing,  the Company's  pretax margin decreased to 3.1% in
the 2000 periods from 7.3% in the 1999 period.

The Company's effective tax rate remained  essentially  constant at 39.9% in the
2000 period and 40.1% in the 1999 period.

                                       11

<PAGE>

Primarily as a result of the factors  described above, net income decreased $4.2
million (46.3%),  to $4.9 million in the 2000 period (1.9% of revenue) from $9.2
million in the 1999 period (4.4% of revenue).

LIQUIDITY AND CAPITAL RESOURCES

The growth of the Company's business has required significant investments in new
revenue equipment.  The Company has financed its revenue equipment  requirements
with borrowings under a line of credit,  cash flows from  operations,  long-term
operating  leases,  and borrowings under installment notes payable to commercial
lending institutions and equipment manufacturers.  The Company's primary sources
of liquidity at June 30, 2000,  were funds  provided by cash flow from operating
activities,  line of credit,  and  operating  leases.  The Company  believes its
sources of liquidity are adequate to meet its current and projected needs.

The Company's  primary  sources of cash flow from  operations in the 2000 period
were net income increased by depreciation and amortization. Net cash provided by
operating  activities  was $25.3 million in the 2000 period and $28.5 million in
the 1999 period. The decrease in the 2000 period resulted primarily from a lower
net income and accounts payable and accrued expenses.

Net cash used in investing activities was $16.7 million and $18.1 million in the
2000 and 1999 periods, respectively. Investing activity was primarily to acquire
additional  revenue  equipment  as the Company  expanded its  operations  and to
repurchase  company  stock.  The  Company  expects  to spend no more than  $25.0
million on capital  expenditures during the remainder of 2000 (excluding planned
operating  leases of equipment).  Total projected net capital  expenditures  for
2000 are expected to be approximately  $40.0 million excluding  operating leases
and the effect of any potential acquisitions.

In June 2000,  the  Company  authorized  a stock  repurchase  plan for up to 1.0
million company shares to be purchased in the open market or through  negotiated
transactions.  In July 2000,  the Company  authorized an additional  0.5 million
shares to be  repurchased.  During  the  second  quarter,  792,000  shares  were
purchased  at an  average  price of  $8.14,  and as of July 27,  2000 a total of
971,500 had been purchased with an average price of $8.17.  The stock repurchase
program has no expiration date.

Net cash used in financing  activities was $8.5 million and $12.6 million in the
2000  and  1999  periods,  respectively.  At June  30,  2000,  the  Company  had
outstanding debt of $136.4 million, primarily consisting of approximately $104.0
million  drawn  under  the  Company's  primary  credit  agreement  (the  "Credit
Agreement"),  $25.0 million in 10-year senior notes, $3.0 million in an interest
bearing  note  to  the  former  primary  stockholder  of  Southern  Refrigerated
Transportation,  Inc. ("SRT") related to the acquisition of SRT in October 1998,
$3.9 million in term equipment  financing,  and $0.5 million in notes related to
non-compete agreements. Interest rates on this debt range from 5.9% to 9.0%.

The Credit Agreement is with a group of banks and has a maximum  borrowing limit
of $130.0 million.  Letters of credit are limited to an aggregate  commitment of
$10.0 million.  A commitment fee, that is adjusted  quarterly between 0.125% and
0.275% per annum based on cash flow coverage, is due on the daily unused portion
of the Credit Agreement.

The Company  amended the Credit  Agreement  in June 2000.  The Credit  Agreement
revolves  through  December 31, 2000, and then has a three-year  term out if not
renewed.  Payments  for interest  are due  quarterly  in arrears with  principal
payments due in twelve equal  quarterly  installments  beginning in 2001, if not
renewed. Borrowings under the Credit Agreement are based on the banks' base rate
or LIBOR and accrue  interest based on one, two, or three month LIBOR rates plus
an applicable  margin that is adjusted  quarterly between 0.55% and 0.925% based
on cash flow coverage. At June 30, 2000, the margin was 0.70%.

In October 1995,  the Company placed $25 million in 10-year senior notes with an
insurance company. The notes bear interest at 7.39%, payable semi-annually,  and
mature  on  October  1,  2005.  Principal  payments  are  due  in  equal  annual
installments  beginning in the seventh year of the notes.  Proceeds of the notes
were used to reduce borrowing under the Credit Agreement. The notes were amended
in May 2000.

The Credit  Agreement,  senior notes,  and the  headquarters  and terminal lease
agreement  entered into in 1996,  contain  certain  restrictions  and  covenants
relating  to, among other  things,  dividends,  tangible net worth,  cash flows,
acquisitions and dispositions,  and total indebtedness. All of these instruments
are  cross-defaulted.  At June 30, 2000, the Company was in compliance  with the
agreements. The Credit Agreement and the senior notes are secured by a pledge of
the  stock  of  all of the  Company's  subsidiaries.  In  addition,  the  Credit
Agreement  provides that virtually all of the Company's assets become collateral
in the event of a covenant violation.

                                       12

<PAGE>
INFLATION AND FUEL COSTS

Most of the Company's operating expenses are inflation-sensitive, with inflation
generally producing increased costs of operations.  During the past three years,
the most significant  effects of inflation have been on revenue equipment prices
and the compensation  paid to the drivers.  Innovations in equipment  technology
and  comfort  have  resulted  in higher  tractor  prices,  and there has been an
industry-wide  increase in wages paid to attract and retain  qualified  drivers.
The Company  attempts to limit the effects of  inflation  through  increases  in
freight rates and certain cost control efforts.

In addition to inflation,  fluctuations in fuel prices can affect profitability.
Fuel expense  comprises a larger  percentage  of revenue for Covenant  than many
other carriers  because of Covenant's  long average length of haul.  Most of the
Company's contracts with customers contain fuel surcharge  provisions.  Although
the Company  historically has been able to pass through most long-term increases
in fuel  prices  and taxes to  customers  in the form of  surcharges  and higher
rates,  increases  usually  are not fully  recovered.  At the end of the  second
quarter of 2000,  the national  average  price of diesel fuel as provided by the
U.S. Department of Energy was $1.432 as compared to $1.087 per gallon at the end
of the  second  quarter  of  1999.  This has  increased  the  Company's  cost of
operating.

SEASONALITY

In the trucking  industry,  revenue  generally  decreases  as  customers  reduce
shipments  during the winter  holiday  season and as inclement  weather  impedes
operations.  At the same time, operating expenses generally increase,  with fuel
efficiency  declining  because  of  engine  idling  and  weather  creating  more
equipment repairs. First quarter net income historically has been lower than net
income in each of the other three  quarters of the year  because of the weather.
The Company's equipment utilization typically improves substantially between May
and October of each year because of the trucking industry's seasonal shortage of
equipment on traffic  originating  in California  and the  Company's  ability to
satisfy some of that requirement. The seasonal shortage typically occurs between
May and August because California produce carriers'  equipment is fully utilized
for produce during those months and does not compete for shipments hauled by the
Company's dry van operation. During September and October, business increases as
a  result  of  increased  retail  merchandise  shipped  in  anticipation  of the
holidays.

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The Company is exposed to market  risks from  changes in (i)  certain  commodity
prices and (ii) certain interest rates on its debt.

COMMODITY PRICE RISK

Prices and  availability  of all  petroleum  products are subject to  political,
economic,  and market factors that are generally outside the Company's  control.
Because the Company's  operations  are dependent  upon diesel fuel,  significant
increases  in diesel  fuel  costs  could  materially  and  adversely  affect the
Company's  results of operations  and  financial  condition.  Historically,  the
Company has been able to recover a portion of  short-term  fuel price  increases
from customers in the form of fuel  surcharges.  The price and  availability  of
diesel fuel can be  unpredictable as well as the extent to which fuel surcharges
could be collected  to offset such  increases.  For the second  quarter of 2000,
diesel fuel expenses represented 14.7% of the Company's total operating expenses
and 14.0% of total  revenue.  The  Company  uses  purchase  commitments  through
suppliers,  to reduce a portion of its exposure to fuel price  fluctuations.  At
June 30, 2000, the national average price of diesel fuel as provided by the U.S.
Department  of Energy was $1.432 per  gallon.  At June 30,  2000,  the  notional
amount for  purchased  commitments  for the  remainder  of 2000 was 4.5  million
gallons.  At June 30, 2000, the price of the notional 4.5 million  gallons would
have  produced  approximately  $1.0 million of income to offset  increased  fuel
prices if the price of fuel  remained the same as of June 30, 2000.  At June 30,
2000, a ten percent  change in the price of fuel would  increase or decrease the
gain on fuel purchase commitments by approximately $0.6 million.

INTEREST RATE RISK

The Credit  Agreement,  provided  there has been no  default,  carries a maximum
variable  interest rate of LIBOR for the  corresponding  period plus 0.925%.  At
June 30, 2000, the Company had drawn $104.0 million under the Credit  Agreement,
which is subject to variable  rates.  This  exposes the Company to the risk that
interest rates might rise.  Considering  the current level of debt  outstanding,
each  one-percentage  point  increase  or  decrease  in LIBOR  would  affect the
Company's  pretax interest  expense under the Credit  Agreement by approximately
$1.0 million on an annualized basis.

The remaining $32.4 million of the Company's debt has fixed interest rates. This
exposes the Company to the risk that interest rates might fall.

The  Company  does  not  trade in  derivatives  with the  objective  of  earning
financial gains on price  fluctuations,  nor does it trade in these  instruments
when there are no underlying related exposures.

                                       13

<PAGE>

                            PART II OTHER INFORMATION

Item 1.           Legal Proceedings.
                  None

Items 2 and 3     Not applicable

Item 4            Submission of Matters to a Vote of Security Holders

         The Annual Meeting of Stockholders of Covenant Transport, Inc. was held
on May 18, 2000,  for the purpose of (a) electing  seven  directors for one-year
terms,  (b)  ratification  of the  selection  of  PricewaterhouseCoopers  LLP as
independent  certified public accounts for the Company,  and (c) approval of the
Company's  Outside  Director  Stock  Option  Plan.  Proxies for the meeting were
solicited pursuant to Section 14(a) of the Securities  Exchange Act of 1934, and
there was no  solicitation  in  opposition  to  management's  nominees.  Each of
management's nominees for director as listed in the Proxy Statement was elected.

         The voting tabulation on the election of directors was as follows:
<TABLE>
<CAPTION>
<S>                                         <C>                     <C>                   <C>
                                            Shares Voted            Shares Voted          Shares Voted
                                                   "FOR"               "AGAINST"             "ABSTAIN"
David R. Parker                                9,557,317                       0                79,674
Michael W. Miller                              9,555,910                       0                81,081
R. H. Lovin, Jr.                               9,556,470                       0                80,521
Mark A. Scudder                                9,555,530                       0                81,461
William T. Alt                                 9,363,598                       0               273,393
Hugh O. Maclellan, Jr.                         9,556,815                       0                80,176
Robert E. Bosworth                             9,556,798                       0                80,193

</TABLE>

         The  voting  tabulation  on the  selection  of  accountants  was  "FOR"
9,625,165; "AGAINST" 2,800; and "ABSTAIN" 9,026.

         The voting tabulation on approving the Company's Outside Director Stock
Option Plan was "FOR" 7,854,491; "AGAINST" 1,762,008; and "ABSTAIN" 20,492.

Item 5      Not applicable

Item 6.     Exhibits and reports on Form 8-K.
            (a) Exhibits

Exhibit
Number      Reference   Description
3.1            (1)      Restated Articles of Incorporation.
3.2            (1)      Amended By-Laws dated September 27, 1994.
4.1            (1)      Restated Articles of Incorporation.
4.2            (1)      Amended By-Laws dated September 27, 1994.
10.1           (1)      Incentive Stock Plan filed as Exhibit 10.9.
10.2           (1)      401(k) Plan filed as Exhibit 10.10.

                                       14

<PAGE>


10.3           (2)      Stock  Purchase  Agreement  made  and entered into as of
                        October 5, 1998, by and among Covenant Transport,  Inc.,
                        a Nevada corporation;  Smith Charitable Remainder Trust;
                        Southern  Refrigerated  Transport,   Inc.,  an  Arkansas
                        corporation;  Tony Smith  Trucking,  Inc.,  an  Arkansas
                        corporation;  and Tony and Kathy Smith, husband and wife
                        and residents of Arkansas, filed as Exhibit 10.22.
10.4           (3)      Amendment No. 2  to  the Incentive  Stock Plan, filed as
                        Exhibit 10.10.
10.5           (3)      Amended  and  Restated  Credit  Agreement dated June 18,
                        1999, filed as Exhibit 10.11.
10.6           (4)      Stock  Purchase Agreement  made  and  entered into as of
                        November  15,  1999,  by and among  Covenant  Transport,
                        Inc., a Tennessee corporation; Harold Ives; Marilu Ives,
                        Tommy Ives, Garry Ives, Larry Ives,  Sharon Ann Dickson,
                        and the Tommy Denver Ives Irrevocable Trust; Harold Ives
                        Trucking Co.; and Terminal Truck Broker, Inc.
10.7           (5)      Outside  Director Stock Option Plan, filed as Exhibit A.
10.8           (6)      Amendment to Amended and Restated Credit Agreement among
                        Covenant  Transport,  Inc., a Tennessee  corporation and
                        Covenant Asset Management, Inc., as borrowers, the banks
                        named  therein,   the  Letter  of  Credit  Banks,  named
                        therein,  and ABN AMRO Bank, N.V., as agent,  dated June
                        6, 2000.
10.9           (6)      Note  Purchase  Agreement  dated  May  15,  2000,  among
                        Covenant Asset Management,  Inc., a Nevada  corporation,
                        Covenant Transport, Inc., a Nevada corporation,  and CIG
                        & Co.
27             (6)      Financial Data Schedule.
--------------------------------------------------------------------------------
References:

Previously filed as an exhibit to and incorporated by reference from:

(1)      Form S-1, Registration No. 33-82978, effective October 28, 1994.
(2)      Form 10-K for the year ended December 31, 1998.
(3)      Form 10-Q for the quarter ended September 30, 1999.
(4)      Form 8-K for the event dated November 16, 1999.
(5)      Schedule 14A, filed April 13, 2000.
(6)      Filed herewith.

     (b) No  reports on Form 8-K have been filed  during the  quarter  for which
this report is filed.

                                    SIGNATURE



      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                    COVENANT TRANSPORT, INC.


Date: August 10, 2000               /s/ Joey B. Hogan
                                    -----------------
                                    Joey B. Hogan
                                    Treasurer and Chief Financial Officer

                                       15
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
<TEXT>


               AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

         THIS  AMENDMENT  TO  AMENDED  AND  RESTATED   CREDIT   AGREEMENT  (this
"Amendment") is made as of June 6, 2000, by and among COVENANT TRANSPORT,  INC.,
a Tennessee corporation ("CTI"), COVENANT ASSET MANAGEMENT, INC. (formerly known
as Covenant Leasing,  Inc.), a Nevada corporation  ("CAM"),  the banks signatory
hereto (the  "Banks"),  any assignees that may become "Banks" as provided in the
Credit Agreement  (hereinafter  defined),  and ABN AMRO BANK N.V., as Agent (the
"Agent").  Capitalized  terms not otherwise defined herein shall be ascribed the
meanings set forth in the Credit Agreement.

         WHEREAS, CTI has heretofore entered into that certain Credit Agreement,
dated as of January 17,  1995,  with the banks  signatories  thereto,  the banks
serving as letter of credit banks  thereunder,  and ABN AMRO Bank N.V. as Agent,
as amended by a number of amendments and as further amended and restated by that
certain  Amended and Restated  Credit  Agreement dated as of June 18, 1999 among
CAM,  CTI,  the Agent and the Banks (as so amended  and  restated,  the  "Credit
Agreement"),  pursuant  to which the Agent,  the Banks and the Banks  serving as
letter of credit  banks  thereunder  have agreed to provide a revolving  credit,
term loan and letter of credit facility for the benefit of CAM and CTI; and

         WHEREAS,  CAM and CTI have requested that the Agent and the Banks:  (i)
acknowledge name changes made with respect to certain of the direct and indirect
Subsidiaries of the Parent (all of the Parent's Subsidiaries,  together with the
Parent,  are  collectively,  the "Credit  Parties");  (ii) consent to a proposed
reorganization  of the  corporate  structure  of the  Credit  Parties  and waive
certain   provisions  of  the  Credit   Agreement   that  could   prohibit  such
reorganization;  (iii) consent to certain  proposed future  intercompany  loans,
dividends,  and  distributions  and  waive  certain  provisions  of  the  Credit
Agreement that could prohibit such activities;  (iv) amend the Credit Agreement,
inter alia, to (a) remove CTI as a direct  borrower  under the Credit  Agreement
and (b) add CTI as a guarantor of the  Obligations  under the Credit  Agreement;
(v) modify the provisions of the Credit Agreement and the Security  Documents to
provide,  for the  benefit  of the Agent and the Banks  (and the  holders of the
Senior  Notes  to  the  extent  required  under  the  Intercreditor  Agreement),
presently  effective,  perfected,  first priority security  interests in (a) all
Capital Securities of all direct and indirect Subsidiaries of the Parent and (b)
all Intercompany  Notes (defined  hereafter);  (vi) consent to the investment by
the Parent in  Transplace.com,  an entity to be formed by the Parent,  J.B. Hunt
Transport Services,  Inc., M.S. Carriers,  Inc., Swift Transportation Co., Inc.,
U.S. Xpress Enterprises,  Inc. and Werner Enterprises,  Inc. ("Transplace.com");
and  (vii)  consent  to the  distribution  by the  Parent  of up to  100% of its
interest in Transplace.com to the shareholders of the Parent.

         NOW THEREFORE,  in  consideration  of the premises and mutual covenants
contained  herein,  and other good and valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:

1.       Acknowledgment  of Name  Changes.  Subject  to the terms and conditions
         of this  Amendment,  the  Agent  and the  Banks acknowledge  that prior
         to the execution and

<PAGE>

         delivery of this  Amendment the following  Credit  Parties have changed
         their names as reflected below:

         Prior Name                           Present Name
         ----------                           ------------
         Covenant Leasing, Inc., a Nevada     Covenant Asset Management, Inc., a
         corporation                          Nevada corporation

         Intellectual  Property Co., a        CIP,  Inc., a Nevada  corporation
         Nevada corporation

         Covenant   Acquisition Co., a        Covenant.com,  Inc., a Nevada
         Nevada   corporation                 corporation


         Except as expressly set forth in this Amendment, this acknowledgment of
         name  changes  does  not  amend  or  waive  any  obligation,   duty  or
         requirement of the Credit Parties (including, without limitation, those
         Credit  Parties whose names have changed)  under the Credit  Agreement,
         the Guaranty Agreements or the other Loan Documents. The Credit Parties
         whose names have changed shall execute and deliver to the Agent (or the
         Collateral  Agent,  if  directed  by the  Agent)  all such  replacement
         documentation  as the Agent may  reasonably  require  to  evidence  the
         continuing  obligations of such Credit  Parties under their  respective
         new names.

2.       Consent to Reorganization; Limited Waiver of Specified Credit Agreement
         Provisions.  The Parent, CAM and CTI have each represented to the Agent
         and the Banks that a reorganization  of the corporate  structure of the
         Credit  Parties is in the best interest of the Credit  Parties and that
         the proposed  reorganization  will be comprised solely of the following
         transactions (collectively, the "Reorganization"):

         (a)      Existing   intercompany   loans   made  by  CTI  to   Southern
                  Refrigerated  Transport,  Inc.  ("SRT"),  and  Terminal  Truck
                  Broker,  Inc.  ("TTB")  in an  aggregate  principal  amount of
                  $15,340,453, will be evidenced by promissory notes in the form
                  attached  hereto as Exhibit B (or in such other form as may be
                  acceptable to the Agent in its sole discretion) (the "Existing
                  Debt Notes").

         (b)      CTI will  declare a  dividend  to the  Parent in the amount of
                  $115,340,453  and will pay that  dividend to the Parent by (i)
                  delivery to the Parent of a  promissory  note in the amount of
                  $100,000,000  in the form attached  hereto as Exhibit C (or in
                  such other form as may be  acceptable to the Agent in its sole
                  discretion) (the "Dividend Note");  and (ii) endorsement (with
                  recourse) to the Parent,  and  delivery to the Parent,  of the
                  Existing  Debt Notes.  The Dividend Note and the Existing Debt
                  Notes shall be deemed to be "Intercompany  Notes" as that term
                  is defined in this Amendment.

         (c)      The Parent  will  endorse  (with  recourse)  and  deliver  the
                  Dividend  Note and the Existing Debt Notes to CAM as a capital
                  contribution.

                                      -2-
<PAGE>

         (d)      The Parent  will  contribute  100% of  the Capital  Securities
                  of each of CIP, Inc. (formerly known as Intellectual  Property
                  Co.),  and  Covenant.com,  Inc.  (formerly  known as  Covenant
                  Acquisition Co.), to CTI as a capital contribution.

         (e)      CTI, as owner of 100% of the capital stock of CIP, Inc.,  will
                  contribute all of its Patents,  rights to license  agreements,
                  internally developed software,  and certain know-how conducive
                  to the  operation  of a  trucking  company to CIP,  Inc.  (the
                  "Intellectual Property"), as a capital contribution.

         (f)      CIP, Inc., will enter into written  licensing  agreements,  in
                  form and  substance  acceptable  to the Agent (the  "Licensing
                  Agreements"), with CTI and certain of the other Credit Parties
                  pursuant  to which the Credit  Parties  will have the right to
                  use the Intellectual  Property and shall pay royalties to CIP,
                  Inc., in amounts established by the Licensing Agreements.

         (g)      All of the computer programming and computer service personnel
                  currently  employed by CTI will cease to be  employees  of CTI
                  and will become  employees of  Covenant.com,  Inc. and some or
                  all computer and telecommunications  equipment held by CTI may
                  be transferred from CTI to Covenant.com, Inc.

         (h)      Covenant.com,  Inc.,   will   enter  into   written  servicing
                  agreements, in form and substance acceptable to the Agent (the
                  "Servicing  Agreements"),  with CTI and  certain  of the other
                  Credit  Parties  pursuant to which  Covenant.com,  Inc.,  will
                  provide   management   information  system  services  to  such
                  entities for a fee determined by the Servicing Agreements.

         (i)      In connection with the above steps in the Reorganization,  the
                  Parent may, in its discretion,  make capital  contributions to
                  the following Credit Parties in amounts no greater than as set
                  forth below:

                  Entity Name                     Permitted Capital Contribution
                  -----------                     ------------------------------
                  Bud Meyer Truck Lines, Inc.     $25,000,000
                  Southern Refrigerated           $9,516,391
                     Transport, Inc.

         (j)      Bud Meyer Truck Lines, Inc. ("BMTL") shall be merged into CTI.

         Subject to the terms and  conditions of this  Amendment,  the Agent and
         the Banks consent to the Reorganization so long as such  Reorganization
         is  consummated  no later  than  June  30,  2000  (the  "Reorganization
         Deadline")  and  the  Credit  Parties  deliver  to  the  Agent  by  the
         Reorganization   Deadline  notice  that  the  Reorganization  has  been
         completed.  The date of  consummation  of the last of the  transactions
         constituting part of the  Reorganization  shall be the  "Reorganization
         Date."  The  Agent  and the  Banks  waive  any

                                      -3-
<PAGE>

         violation of Sections  5.6(iii),  5.7, 5.10,  5.11, 5.15 or 5.17 of the
         Credit  Agreement that may be caused by the timely  consummation of the
         Reorganization  (the  "Reorganization   Waiver").  This  Reorganization
         Waiver is expressly  limited to the  consummation  of the  transactions
         constituting the  Reorganization  and shall not be considered a general
         waiver  of any  provision  of the  Credit  Agreement  nor  shall  it be
         construed as a continuing  waiver of any  covenant,  representation  or
         warranty of any Credit  Party under the Credit  Agreement  or any other
         Loan Document.

3.       Consent to Permitted  Activities;  Waiver of Specified Credit Agreement
         Provisions.  The Parent, CAM and CTI have each represented to the Agent
         and  the  Banks  that  certain   intercompany   loans,   dividends  and
         distributions and repurchases of capital stock are in the best interest
         of the  Credit  Parties  and  that  such  proposed  activities  will be
         comprised  solely  of  the  following   transactions   (together,   the
         "Permitted Activities"):

         (a)      From time-to-time,  the direct or indirect Subsidiaries of the
                  Parent  may  borrow  from  CAM  amounts  that  do  not,  in an
                  aggregate  principal  amount,  exceed at any time $130,000,000
                  plus amounts that have actually been paid to CAM in cash under
                  the  Existing  Debt  Notes and  Dividend  Note,  all  interest
                  actually paid to CAM in cash under the Future Debt Notes,  and
                  all future  cash  capital  contributions  under  Section  3(c)
                  below.  Such borrowing shall be evidenced by promissory  notes
                  in the form attached  hereto as Exhibit D with a grid attached
                  showing  draws  and  repayments  under  the  notes in form and
                  substance  acceptable  to the Agent (the "Future Debt Notes"),
                  which shall be pledged to the  Collateral  Agent and  promptly
                  delivered,  duly  endorsed  (with  recourse)  by  CAM,  to the
                  Collateral Agent pursuant to the provisions of Section 5.21(b)
                  of  the  Credit  Agreement  as  additional  security  for  the
                  repayment  of the  Obligations.  CAM shall  provide  the Agent
                  quarterly  updates of the grid on all Future Debt  Notes.  The
                  Future Debt Notes shall constitute Intercompany Notes;

         (b)      From  time-to-time,  any direct or indirect  Subsidiary of the
                  Parent may pay a dividend or make a  distribution  to its sole
                  stockholder so long as such dividend or distribution is passed
                  up to Parent and Parent contributes it as capital to CAM; and

         (c)      From time-to-time the Parent may make capital contributions to
                  CAM.

         The Agent and the Banks waive any violation of Sections 5.6(iii),  5.7,
         5.10,  5.11, 5.15 or 5.17 of the Credit Agreement that may be caused by
         the performance of the Permitted Activities (the "Activities  Waiver").
         The Activities  Waiver is expressly  limited to the  performance of the
         Permitted  Activities  and shall not be considered a general  waiver of
         any other provisions of the Credit Agreement.

4.       Consent to Permitted  Investment and Distribution;  Waiver of Specified
         Credit  Agreement  Provisions.  The  Parent,  CAM  and  CTI  have  each
         represented  to  the  Agent  and  the  Banks  that  the  investment  of
         $5,000,000 cash and the non-asset based

                                      -4-
<PAGE>

         transportation  logistics  business of TTB,  which consists of customer
         lists, office furniture,  computer hardware and software, leases, trade
         names, trademarks,  goodwill, know-how, employee relationships, and all
         other assets except cash,  accounts  receivable and other assets Parent
         may  negotiate to hold back (the  "Contributed  Assets"),  the value of
         which  non-cash  Contributed  Assets  shall not exceed  $2,000,000,  in
         Transplace.com and the distribution of all or a portion of the acquired
         equity  interest in  Transplace.com  directly or indirectly,  in one or
         more transactions,  and through one or more intermediary  entities,  to
         the  shareholders  of the Parent is in the best  interest of the Credit
         Parties  and that the  proposed  investment  and  distribution  will be
         comprised generally of the following  transactions  (collectively,  the
         "Permitted Investment and Distribution"):

         (a)      The Parent may borrow  from CAM,  or will  receive  from CTI a
                  dividend equal to,  $5,000,000  plus the Parent's share of any
                  start-up expenses, not to exceed $100,000, of Transplace.com;

         (b)      The Parent,  directly or  indirectly,  may cause TTB to either
                  (i) dividend the  non-cash  Contributed  Assets to the Parent,
                  for  contribution  by the  Parent  to  Transplace.com  or (ii)
                  contribute  the  non-cash   Contributed   Assets  directly  to
                  Transplace.com,  or (iii) contribute the non-cash  Contributed
                  Assets to a Subsidiary of Parent for  subsequent  contribution
                  by such Subsidiary to Transplace.com;

         (c)      The Parent  may,  but shall not be  required  to,  cause a new
                  Subsidiary  to be  formed  to  hold  all or a  portion  of the
                  Transplace.com  equity interests and may contribute,  or cause
                  to be contributed,  to such new Subsidiary all or a portion of
                  the Transplace.com equity interests;

         (d)      The Parent may, but shall not be required to,  distribute  all
                  or any portion of one or more  classes of equity  interests of
                  Transplace.com,   or,  if   applicable,   the  new  Subsidiary
                  referenced above, to the Parent's stockholders;

         (e)      The Parent, directly or indirectly,  may cause the liquidation
                  of the new Subsidiary  referenced  above which has no property
                  other  than the equity  interests  of  Transplace.com  and any
                  proceeds thereof;

         (f)      Neither  the Banks nor the  Collateral  Agent as agent for the
                  Banks  shall have a Lien in or to any of the equity  interests
                  of  Transplace.com or any new Subsidiary which has no property
                  other than equity interests of Transplace.com and any proceeds
                  thereof; and

         (g)      The  Banks  and the  Collateral  Agent as agent  for the Banks
                  hereby release any Lien in or to any of the Contributed Assets
                  and acknowledge  that they have no interest in any products or
                  proceeds thereof.

                                      -5-
<PAGE>

         The Agent  and the  Banks  waive any  violation  of  Sections  5.1(ii),
         5.6(iii),  5.7, 5.11, 5.15 and 5.17 of the Credit Agreement that may be
         caused by the Permitted  Investment and  Distribution  (the "Investment
         Waiver").  The  Investment  Waiver is  expressly  limited  to the above
         enumerated  activities undertaken in executing the Permitted Investment
         and  Distribution  and shall not be considered a general  waiver of any
         other provisions of the Credit Agreement.

5.       Removal of CTI as a Borrower.  Subject to the terms and  conditions  of
         this Amendment, the Credit Agreement and all other Loan Documents shall
         be deemed  amended such that CTI shall no longer be a "Borrower"  under
         the Credit Agreement. All references to "Borrowers", "either Borrower",
         "any Borrower" or phrases of similar import in the Credit  Agreement or
         any Loan Documents shall be deemed to be references solely to CAM.

6.       Other Amendments  to the  Credit Agreement. Subject  to  the  terms and
         conditions  of, and upon the  effectiveness  of,  this  Amendment,  the
         Credit Agreement shall be deemed amended as follows:

         (a)      Section 4.11 of the Credit Agreement is  amended  and restated
                  in its entirety as follows:

                  Section 4.11 Solvency.  (i) The Parent,  the Borrower and each
                  of   their   respective   Subsidiaries   (after   giving   due
                  consideration  to  any  rights  of  contribution   among  such
                  Persons), have each received fair consideration and reasonably
                  equivalent   value  for  the  incurrence  of  its  obligations
                  hereunder  and under the Loan  Documents,  (ii)  after  giving
                  effect to the incurrence of such obligations,  (A) the present
                  fair salable value of the Parent's, the Borrower's and each of
                  their respective Subsidiaries' assets exceeds its liabilities,
                  and  (B)  the  Parent,   the  Borrower  and  their  respective
                  Subsidiaries  each  retain  sufficient  capital  to  meet  the
                  reasonably   anticipated   needs  and  risks  of  its  ongoing
                  business,  and (iii) after giving effect to the  incurrence of
                  such  obligations  and the  acquisition  of such  rights,  (A)
                  neither the Parent,  the Borrower nor any of their  respective
                  Subsidiaries  has  incurred,  nor is it obligated  for,  debts
                  beyond its ability to pay such debts as they  mature,  and (B)
                  the present fair salable value of their  respective  assets is
                  greater  than that  needed to pay  their  respective  probable
                  existing debts as they become due.

         (b)      Section 5.3 of the Credit Agreement is amended and restated in
                  its entirety as follows:

                  Section 5.3 Use of Proceeds. Use the proceeds of any Extension
                  of  Credit  only to  refinance  the Debt  listed  on part A of
                  Schedule 4.9, for working  capital  purposes,  the issuance of
                  standby letters of credit  permitted  hereunder,  to pay costs
                  associated  with this Agreement and the other Loan  Documents,
                  for   financing  or   refinancing   Revenue   Equipment,   for
                  non-hostile  acquisitions and for general

                                       -6-
<PAGE>

                  corporate  purposes.  The  Borrower  may loan  proceeds of any
                  Extension  of Credit to any direct or indirect  Subsidiary  of
                  the Parent (and such Subsidiary may further loan such proceeds
                  to its  Subsidiaries)  provided that such  extension of credit
                  shall be (i) used for a purpose  permitted in the  immediately
                  preceding  sentence and (ii) evidenced by an Intercompany Note
                  (or series of  Intercompany  Notes)  which shall be pledged to
                  the  Collateral  Agent  and  promptly  delivered  to the Agent
                  pursuant  to the  provisions  of  Section  5.21(b)  hereof  as
                  additional  security for the repayment of the Obligations.  No
                  Extension of Credit and none of the proceeds  thereof shall be
                  used to purchase or carry, or to reduce or retire or refinance
                  any credit  incurred to purchase  or carry,  any margin  stock
                  (within  the  meaning  of  Regulations  U and X) or to  extend
                  credit to others for the purpose of purchasing or carrying any
                  margin  stock.  If requested by the Agent,  the Borrower  will
                  furnish  to  the  Agent  statements  in  conformity  with  the
                  requirements  of  Federal  Reserve  Form  U1  referred  to  in
                  Regulation  U and will  take all  other  action  necessary  or
                  desirable  to  ensure  that the Banks  and the  Extensions  of
                  Credit are at all times in compliance  with  Regulations U and
                  X.

         (c)      Section 5.12 of the Credit Agreement is  amended  and restated
                  in its entirety as follows:

                           Section 5.12 Minimum Consolidated Tangible Net Worth.
                  Permit Consolidated  Tangible Net Worth at any date to be less
                  than  $136,000,000  plus  the  aggregate  of 50%  of  positive
                  Consolidated  Net Income for each  fiscal  quarter  commencing
                  after December 31, 1999 (provided that, for any fiscal quarter
                  in  which   Consolidated  Net  Income  is  a  deficit  figure,
                  Consolidated  Net  Income  for such  fiscal  quarter  shall be
                  deemed to be zero),  plus the net  proceeds of any issuance of
                  Capital Securities of the Parent.

         (d)      Section 5.15 of  the  Credit Agreement is amended and restated
                  in its entirety as follows:

                  Section 5.15      Restricted Payments.

                           (a)   Generally.   Declare  or  make  any  Restricted
                  Payment,  except that this Section 5.15 shall not prohibit any
                  Restricted  Payment if: (i) at the time of the  declaration or
                  making thereof,  and immediately  after giving effect thereto,
                  no Default  would  exist,  and (ii) such  Restricted  Payment,
                  singly or when aggregated with all other  Restricted  Payments
                  made over the term of this Agreement,  does not exceed the sum
                  of $20,000,000  plus 50% of the aggregate of Consolidated  Net
                  Income for each fiscal quarter  commencing  after December 31,
                  1999  (provided that such  aggregate  Consolidated  Net Income
                  shall be  reduced  by 100% of any  deficit  for any  period in
                  which Consolidated Net Income is a deficit figure).

                                      -7-
<PAGE>

         (e)      Section 5.18 of the  Credit Agreement is  amended and restated
                  in its entirety as follows:

                  Section 5.18  Additional  Subsidiaries.  Create or acquire any
                  Subsidiary; provided that, if notwithstanding this Section the
                  Parent shall desire to acquire or create any Subsidiary,  such
                  Subsidiary  shall be  acquired or created so as to be a direct
                  Subsidiary  of  CTI  or  one of  CTI's  Subsidiaries  and  the
                  Borrower shall  immediately cause such Subsidiary to guarantee
                  the  Obligations  hereunder  and  to  become  a  party  to the
                  Security  Agreement  and to pledge  its  assets  specified  as
                  Collateral  therein,  in each case, to secure the Obligations.
                  In  addition,  the  Parent  and  CTI (or  its  Subsidiary,  as
                  appropriate) shall immediately pledge, or cause to be pledged,
                  100% of the capital stock of such Subsidiary to the Collateral
                  Agent for the  ratable  benefit  of the  Banks,  the Letter of
                  Credit  Banks,  Noteholders  and  the  Agent,  to  secure  the
                  Obligations.

         (f)      The text of existing  Section 5.21 of the Credit  Agreement is
                  hereby redesignated as clause (a) of Section 5.21 and there is
                  added immediately  thereafter a new clause (b) of Section 5.21
                  reading in its entirety as follows:

                  (b)  Notwithstanding  anything  to  the  contrary  in  Section
                  5.21(a) above,  the Parent and each of its  Subsidiaries  that
                  owns capital stock in any Person shall be deemed to have given
                  in favor of the Collateral  Agent,  for the ratable benefit of
                  the Agent,  the Banks and the Letter of Credit Banks (and,  to
                  the  extent  required  by  the  Intercreditor  Agreement,  the
                  holders  of the Senior  Notes) a  presently  effective,  first
                  priority:  (i)  pledge of all of the  issued  and  outstanding
                  capital stock of all of the  Subsidiaries  of the Parent;  and
                  (ii) security interest in all Intercompany Notes,  whether now
                  existing or hereafter created. The Parent and its Subsidiaries
                  shall  execute  such  documents  and  instruments  as  may  be
                  reasonably  required  by the  Agent or the  Required  Banks to
                  further effect such pledge and security  interest,  including,
                  without  limitation,  delivering  to  the  Agent  for  further
                  delivery  to  the   Collateral   Agent:   (i)  original  stock
                  certificates  and stock  powers  executed  in blank;  and (ii)
                  original  Intercompany  Notes endorsed (with recourse) over to
                  the Collateral Agent. To the extent required to give effect to
                  the provisions of this Section 5.21(b), the Security Documents
                  evidencing  the pledge of stock of the  Parent's  Subsidiaries
                  and the  pledge  of the  Intercompany  Notes  that are held in
                  escrow  by the  Collateral  Agent are  deemed to be  presently
                  effective  notwithstanding the absence of any Default or Event
                  of Default.  In the event that the Collateral Agent desires to
                  resign from its position under the Intercreditor Agreement, or
                  if  the   Intercreditor   Agreement  is   terminated   or  the
                  obligations  represented by the Senior Notes are extinguished,
                  the  Collateral  Agent  shall be entitled to assign all of its
                  duties and  responsibilities  to the Agent with respect to the
                  Loan  Documents  (including  the Security  Documents)  and the
                  Collateral  (including  the  pledged  capital  stock  and  the
                  Intercompany   Notes).   Should  the  Agent   succeed  to  the
                  Collateral Agent's  responsibilities  with respect to the Loan
                  Documents   (including   the  Security   Documents)   and  the
                  Collateral,  the

                                      -8-
<PAGE>

                  Agent shall be entitled to all benefits and rights afforded to
                  the Collateral Agent under the Loan Documents.

         (g)      In Section 10.1 of the Credit  Agreement,  the  definitions of
                  "Eligible   Account"  and  "Eligible  Revenue  Equipment"  are
                  revised so that such terms may be applied to the  Accounts and
                  Revenue  Equipment of all direct and indirect  Subsidiaries of
                  the Parent, not just the Accounts and Revenue Equipment of the
                  Borrower and its Subsidiaries.

         (h)      Section  10.1 of the Credit  Agreement is amended by inserting
                  the following definitions in alphabetical order within Section
                  10.1:

                  "CTI" means Covenant Transport, Inc., a Tennessee corporation.

                  "Existing  Guaranty  Agreements"  means,   collectively,   the
                  following documents:

                           (i) Amended and Restated  Parent  Guaranty  Agreement
                  dated as of June 6,  2000 by the  Parent in favor of the Banks
                  and the Agent  amending and restating  the Guaranty  Agreement
                  dated as of  January  17,  1995 by the  Parent in favor of the
                  Banks and the Agent;

                           (ii)     Consolidating  Amended and Restated Guaranty
                  Agreement  dated as of June 6, 2000 by the direct and indirect
                  Subsidiaries of the Parent in favor of the Banks and the Agent
                  consolidating,   amending  and   restating  (a)  the  Guaranty
                  Agreement  dated as of March 31, 1997 by C&F  Acquisition  Co.
                  (now known as Covenant.com,  Inc.), a Nevada corporation,  and
                  Intellectual  Property Co. (now known as CIP,  Inc.), a Nevada
                  corporation,  in favor of the  Banks  and the  Agent,  (b) the
                  Joinder  Agreement  dated as of December 31, 1997 by Bud Meyer
                  Truck Lines,  Inc., a Minnesota  corporation,  in favor of the
                  Banks and the Agent,  (c) the  Joinder  Agreement  dated as of
                  November 13, 1998 by Southern Refrigerated Transport, Inc., an
                  Arkansas  corporation,  and  Tony  Smith  Trucking,  Inc.,  an
                  Arkansas corporation, in favor of the Banks and the Agent, and
                  the Joinder  Agreement dated as of November 16, 1999 by Harold
                  Ives Trucking Co., and Arkansas corporation and Terminal Truck
                  Broker, Inc., an Arkansas corporation.

                  and  each as the same may be  further  amended,  supplemented,
                  restated or replaced, from time to time.

                  "Existing  Security   Documents"  means,   collectively,   the
                  following documents:

                           (i)      Amended and Restated  Borrower  Security
                  Agreement   dated  as  of  June  6,  2000  by  Covenant  Asset
                  Management, Inc. (formerly known as Covenant Leasing, Inc.), a
                  Nevada  corporation,   amending  and  restating  the  Security
                  Agreement dated as of June 18, 1999 by Covenant Leasing,  Inc.
                  (now  known  as
                                      -9-
<PAGE>

                  Covenant  Asset  Management,  Inc.) a Nevada  corporation,  in
                  favor the Collateral Agent;

                           (ii)  Consolidating  Amended and  Restated  Guarantor
                  Security  Agreement  dated as of June 6,  2000  consolidating,
                  amending and  restating:  (a) Security  Agreement  dated as of
                  January  17, 1995 by CTI in favor of the Agent,  (b)  Security
                  Agreement  dated as of October 15, 1995 by CTI in favor of the
                  Collateral  Agent,  as  amended  by  the  First  Amendment  to
                  Security  Agreement  dated as of March 31, 1997,  (c) separate
                  Security  Agreements  each  dated  as of  March  31,  1997  by
                  Intellectual  Property Co. (now known as CIP,  Inc.), a Nevada
                  corporation,  and CLI in favor of the  Collateral  Agent,  (d)
                  Security  Agreement dated as of December 31, 1997 by Bud Meyer
                  Truck  Lines,  Inc., a Minnesota  corporation  in favor of the
                  Collateral Agent, (e) Security  Agreement dated as of November
                  13, 1998 by Southern Refrigerated Transport, Inc., an Arkansas
                  corporation  and  Tony  Smith  Trucking,   Inc.,  an  Arkansas
                  corporation  in favor of the  collateral  Agent  (f)  Security
                  Agreement  dated  as of  November  16,  1999  by  Harold  Ives
                  Trucking  Co.,  an Arkansas  corporation  and  Terminal  Truck
                  Broker,   Inc.,  an  Arkansas  corporation  in  favor  of  the
                  collateral Agent;

                           (iii)    Amended  and   Restated  Trademark  Security
                  Agreement  dated  as of June 6,  2000 by CIP,  Inc.  (formerly
                  known as Intellectual Property Co.), a Nevada corporation,  in
                  favor of the  Collateral  Agent  amending  and  restating  the
                  Trademark  Security  Agreement  dated as of March 31,  1997 by
                  Intellectual  Property Co. (now known as CIP,  Inc.), a Nevada
                  corporation, in favor of the Collateral Agent;

                           (iv)  Amended and  Restated  Parent  Stock Pledge and
                  Security  Agreement  dated as of June 6, 2000 by the Parent in
                  favor of the Agent,  together with required stock certificates
                  and  duly  executed  stock  powers,  amending,  restating  and
                  consolidating:  (a) Stock Pledge and Security  Agreement dated
                  as of  January  17,  1995 by the Parent in favor of the Agent,
                  (b) Stock  Pledge and Security  Agreement  dated as of October
                  15, 1995 by the Parent in favor of the Collateral  Agent,  and
                  (c) Stock Pledge and Security  Agreement dated as of March 31,
                  1997 by the  Parent  in  favor  of the  Collateral  Agent,  as
                  amended by the First  Amendment  to Stock  Pledge and Security
                  Agreement  dated as of December 31, 1997 as further amended by
                  the Second  Amendment to Stock  Pledge and Security  Agreement
                  dated as November 13,  1998,  in each case  together  with the
                  required   stock   certificate(s)   and  duly  executed  stock
                  power(s);

                           (v) Amended and Restated  Guarantor  Stock Pledge and
                  Security Agreement dated as of June 6, 2000 by CTI in favor of
                  the   Collateral   Agent  together  with  the  required  stock
                  certificate(s)  and duly executed stock power(s)  amending and
                  restating  Stock  Pledge and  Security  Agreement  dated as of
                  November 16, 1999 by the CTI in favor of the Collateral  Agent
                  together  with  the  required  stock   certificates  and  duly
                  executed stock powers.

                                      -10-
<PAGE>

                  and  each as the same may be  further  amended,  supplemented,
                  restated or replaced, from time to time.

                           "Intercompany  Notes" means  promissory notes in form
                  of Exhibits B, C or D hereto, as applicable, (or in such other
                  form  as  may  be  acceptable  to  the  Agent,   in  its  sole
                  discretion)  made  by the  Parent  or one  of  its  direct  or
                  indirect  Subsidiaries  payable  to the  Parent  or one of its
                  direct  or  indirect  Subsidiaries,   which  promissory  notes
                  evidence intercompany obligations.

                           "Intercreditor   Agreement"  means  the  Amended  and
                  Restated Master Collateral and  Intercreditor  Agreement among
                  the Agent,  the holders of the Senior Notes and the Collateral
                  Agent,  dated as of June 6, 2000,  amending and  restating the
                  Master Collateral and Intercreditor Agreement among the Agent,
                  the  holders of the  Senior  Notes and the  Collateral  Agent,
                  dated  as of  October  15,  1995,  as  amended  by  the  First
                  Amendment to Master  Collateral  and  Intercreditor  Agreement
                  dated as of March 31,  1997,  and as  further  amended  by the
                  Second  Amendment  to  Master   Collateral  and  Intercreditor
                  Agreement  dated as of June 18,  1999  (and as the same may be
                  further amended, supplemented, restated or replaced, from time
                  to time).

                           "Security  Agreement"  means the Amended and Restated
                  Borrower  Security  Agreement  between  the  Borrower  and the
                  Collateral  Agent  dated  as of  June  6,  2000  amending  and
                  restating:  (a) the Security Agreement dated as of January 17,
                  1995 by CTI in favor the  Agent,  (b) the  Security  Agreement
                  dated as of October 15, 1995 by CTI in favor of the Collateral
                  Agent, as amended by the First Amendment to Security Agreement
                  dated as of March  31,  1997  and (c) the  Security  Agreement
                  dated as of June 18, 1999 by Covenant Leasing, Inc. (now known
                  as Covenant Asset Management,  Inc.) a Nevada corporation,  in
                  favor the Collateral  Agent, and any other security  agreement
                  executed by a Subsidiary in favor of the  Collateral  Agent as
                  security for the  Obligations  (and as the same may be further
                  amended,  supplemented,  restated  or  replaced,  from time to
                  time).

          (i)     The Credit Agreement is amended by adding a  new Section 5.18A
                  to read in its entirety as follows:

                  5.18A Licensing Agreements and Servicing Agreements.  Amend or
                  terminate any of the provisions of any Licensing  Agreement or
                  any Servicing  Agreement  without the prior written consent of
                  the Agent and the Required Banks.

         (j)      Forms of  Existing  Debt Note,  Dividend  Note and Future Debt
                  Note in the  form  attached  hereto  as  Exhibits  B, C and D,
                  respectively, are added to the Credit Agreement as Exhibits B,
                  C and D thereto.

                                      -11-
<PAGE>

         (k)      All  references to "Senior Note" or "Senior  Notes" or phrases
                  of  similar  import  in  the  Credit  Agreement  or  any  Loan
                  Documents  shall be deemed to be  references to the CAM Senior
                  Notes as defined in paragraph 10 hereof.

7.       Delivery of  Additional   Loan   Documents.   Simultaneously  with  the
         execution  and delivery of this  Amendment,  but to be effective at the
         time the  provisions  of Sections 3, 5 and 6 of this  Amendment  become
         effective,  the following  additional  Loan Documents shall be executed
         and delivered to the Agent: (i) replacement  Revolving Notes evidencing
         Base Rate Loans,  Alternate Base Rate Loans and Eurodollar  Loans, duly
         executed  by CAM and  payable to the order of each Bank  (collectively,
         the  "Replacement   Notes")  and  (ii)  a  Guaranty  Agreement  of  the
         obligations  of CAM under the Credit  Agreement,  duly  executed by CTI
         (the "CTI  Guaranty").  CTI  acknowledges  that all security  interests
         previously  granted by CTI under the Credit  Agreement  as a  borrower,
         remain in full force and effect and remain  continuing  obligations  of
         CTI as security for its obligations under the CTI Guaranty.

8.       Representations and Warranties.  CTI and CAM each hereby represents and
         warrants  to the Agent and the Banks that (a) this  Amendment  has been
         duly authorized,  executed and delivered by each of CTI and CAM, (b) no
         Default or Event of Default has occurred and is  continuing  as of this
         date, and (c) all of the representations and warranties made by CTI and
         CAM in the  Credit  Agreement  are true  and  correct  in all  material
         respects on and as of the date of this Amendment  (except to the extent
         that any such  representations  or warranties  expressly  referred to a
         specific prior date).  Any breach by CTI or CAM of the  representations
         and  warranties  contained in this Section shall be an Event of Default
         for  all  purposes  under  the  Credit  Agreement  and the  other  Loan
         Documents.

9.       Ratification.  CTI and CAM each hereby  ratifies and reaffirms each and
         every term,  covenant and condition  set forth in the Credit  Agreement
         and all other documents delivered by CTI or CAM in connection therewith
         (including  without limitation the other Loan Documents to which CTI or
         CAM is a party), effective as of the date hereof.

10.      Estoppel.  To  induce  the  Agent  and the  Banks  to enter  into  this
         Amendment,  CTI and CAM each hereby acknowledges and agrees that, as of
         the  date  hereof,  there  exists  no  right  of  offset,   defense  or
         counterclaim  in favor of CTI or CAM as against the Agent,  any Bank or
         any Letter of Credit Bank with respect to the obligations of CTI or CAM
         to any of such  parties  under the Credit  Agreement  or the other Loan
         Documents, either with or without giving effect to this Amendment.

11.      Effectiveness  of  this  Amendment.  All  of  the  provisions  of  this
         Amendment, excepting Section 4, shall be effective immediately upon the
         delivery to the Agent of this Amendment  executed by all parties hereto
         (including,  without  limitation,  the parties to the Guarantor Consent
         attached  hereto  as  Exhibit  A);  provided,  however,  that  (i)  the
         provisions  of Section 2 shall not be effective  until the Senior Notes
         and the  documents  related  thereto  (collectively,  the "Senior  Note
         Documents")  have (with the consent of the holders of the Senior Notes)
         been  terminated and replaced with senior notes issued by

                                      -12-
<PAGE>

         CAM  and  other  documents  related  thereto  executed  by CAM  and its
         affiliates and all other  relevant  parties on  substantially  the same
         terms as the Senior Notes and in form and  substance  acceptable to the
         Agent and the Required Banks in their sole  discretion (the "CAM Senior
         Notes" and,  together with the related senior note documents,  the "CAM
         Senior  Note  Documents"),   which  CAM  Senior  Note  Documents  shall
         specifically   allow  CAM  and  its   affiliates  to   consummate   the
         Reorganization  and  conduct  the  Permitted  Activities;  and (ii) the
         provisions of Sections 3, 5 and 6 shall not become  effective until the
         satisfaction  (or written waiver approved and executed by the Agent and
         the Required  Banks,  in their  respective  discretion)  of each of the
         following conditions:

         (a)      The   Reorganization   Date   shall  have   occurred   by  the
                  Reorganization  Deadline  and CAM shall  have  given the Agent
                  written   notice   of   the   Reorganization   Date   by   the
                  Reorganization Deadline.

         (b)      The  Agent  shall have received  the  Replacement  Notes, duly
                  executed by CAM.

         (c)      The Agent shall have received the CTI Guaranty, duly  executed
                  by CTI.

         (d)      The  Agent  shall  have  received  executed  originals  of the
                  Dividend  Note and the Existing Debt Notes (and all other then
                  existing   Intercompany   Notes),   all  duly  endorsed  (with
                  recourse)  by the holders  thereof in favor of the  Collateral
                  Agent.

         (e)      The  Agent  shall  have  received  such  additional   Security
                  Documents or modifications of the existing Security  Documents
                  as may  be  requested  by  the  Agent,  duly  executed  by the
                  appropriate Credit Parties (and, if appropriate, the Agent and
                  the  Collateral  Agent),  in each  case in form and  substance
                  satisfactory to the Agent.

         (f)      The Agent shall have received  evidence  (satisfactory  to the
                  Agent and the Required  Banks) that the Senior Note  Documents
                  have been  replaced by the CAM Senior Note  Documents and that
                  the CAM Senior Note Documents are in full force and effect and
                  that no default or event  that with  notice or the  passage of
                  time would constitute default shall have occurred thereunder.

         (g)      The  Agent   shall  have   received   an   amendment   to  the
                  Intercreditor  Agreement,  duly executed by all parties to the
                  Intercreditor  Agreement  reflecting the  Reorganization  (and
                  approved in form and  substance  by the Agent and the Required
                  Banks).  The Intercreditor  Agreement must continue to provide
                  that all of the Credit Parties'  obligations to the holders of
                  the Senior  Notes and to the Banks  shall be  maintained  on a
                  pari passu basis.

         (h)      The Agent shall have received a  certificate  of the Secretary
                  or an Assistant  Secretary of each of the Credit  Parties,  in
                  form and substance  satisfactory to the Agent, with respect to
                  (i) the  certificate  of  incorporation  and  by-laws  of such
                  Credit   Party,   (ii)   the   resolutions   authorizing   the
                  Reorganization and the execution,  delivery and performance of
                  this Amendment,  the CTI Guaranty,  the

                                      -13-
<PAGE>

                  Replacement Notes and all documents  executed and delivered to
                  the   Agent  in   connection   with   any  of  the   foregoing
                  (collectively,  the  "Amendment  Documents"),  and  (iii)  the
                  incumbency  of  officers of such Credit  Party  authorized  to
                  execute and deliver the Amendment Documents.

         (i)      The Agent shall have received a certificate  of good standing,
                  issued as of a recent date,  with respect to each Credit Party
                  from its jurisdiction of  incorporation  (and, with respect to
                  each Credit Party whose name has changed as recited in Section
                  1 hereof,  such certificate shall reflect the new name of such
                  Credit Party).

         (j)      The Agent shall have received a  certificate  duly executed by
                  the chief  financial  officer of the Parent  attesting  to the
                  solvency  of  the  Credit  Parties,   in  form  and  substance
                  satisfactory to the Agent.

         (k)      The Agent  shall  have  received  an opinion of counsel to the
                  Credit  Parties   regarding  (i)  the   consummation   of  the
                  Reorganization,  (ii) the due  authorization  and execution of
                  the  Amendment  Documents,  (iii)  the  enforceability  of the
                  Amendment  Documents,  (iv)  the  perfection  of the  security
                  interests   in  the  Capital   Securities   of  the   Parent's
                  Subsidiaries and in the Intercompany Notes, and (v) such other
                  matters  as may be  requested  by the  Agent  or the  Required
                  Banks, all in form and substance satisfactory to the Agent and
                  the Required Banks.

         (l)      The  Agent   shall  have   received   such  other   documents,
                  certificates,  instruments  and  opinions  as  the  Agent  may
                  reasonably request.

         (m)      The Agent shall have  received all fees and expenses  incurred
                  by the Agent in connection with  negotiation,  preparation and
                  execution of the Amendment  Documents and the  consummation of
                  the Reorganization  including,  without limitation,  the legal
                  fees and other out of pocket expenses of the Agent.

12.      Effectiveness of Section 4 of this Amendment. The provisions of Section
         4 of this Amendment shall not be effective until the  satisfaction  (or
         written  waiver  approved  and  executed by the Agent and the  Required
         Banks,  in  their  respective  discretion)  of  each  of the  following
         conditions:

         (a)      The  Agent  shall  have  received  documentation  (in form and
                  substance  satisfactory  to the  Agent)  evidencing  that  all
                  appropriate  and  necessary  corporate,  antitrust  (including
                  Hart-Scott-Rodino) and regulatory approvals have been obtained
                  with respect to the Permitted Investment and Distribution.

         (b)      The  Agent  shall  have  received  documentation  (in form and
                  substance  satisfactory to the Agent)  evidencing the approval
                  of the Permitted Investment and Distribution by all parties to
                  the Intecreditor Agreement.

                                      -14-
<PAGE>

         (c)      The Agent shall have received a  certificate  of the Secretary
                  or an Assistant  Secretary of each of the Credit  Parties,  in
                  form and substance  satisfactory to the Agent, with respect to
                  (i) the  certificate  of  incorporation  and  by-laws  of such
                  Credit Party,  (ii) the resolutions  authorizing the Permitted
                  Investment and  Distribution  and the execution,  delivery and
                  performance of this Amendment and the Amendment Documents, and
                  (iii)  the   incumbency  of  officers  of  such  Credit  Party
                  authorized to execute and deliver the Amendment Documents.

         (d)      The Agent  shall  have  received  an opinion of counsel to the
                  Credit  Parties  regarding  (i) the Permitted  Investment  and
                  Distribution  and (ii) such other  matters as may be requested
                  by the Agent or the Required Banks,  all in form and substance
                  satisfactory to the Agent and the Required Banks.

         (e)      The  Agent   shall  have   received   such  other   documents,
                  certificates,  instruments  and  opinions  as  the  Agent  may
                  reasonably request.

         (f)      The Agent shall have  received all fees and expenses  incurred
                  by  the  Agent  in  connection  with  the  evaluation  of  the
                  Permitted  Investment and  Distribution  and the  consummation
                  thereof  including,  without  limitation,  the legal  fees and
                  other out of pocket expenses of the Agent.

13.      Reimbursement  of  Expenses.  Each of CTI and CAM  agrees,  jointly and
         severally,  that it shall  reimburse  the Agent on demand for all costs
         and expenses (including, without limitation,  attorney's fees) incurred
         by such parties in connection  with the  negotiation,  preparation  and
         execution  of  the   Amendment   Documents,   the   evaluation  of  the
         Reorganization  and the transactions  contemplated  hereby and thereby,
         whether or not the  transactions  contemplated  hereby or  thereby  are
         consummated.  The reimbursement  obligations under this Amendment shall
         constitute Obligations under the Credit Agreement.

14.      Governing  Law. THIS  AGREEMENT  SHALL BE GOVERNED BY, AND CONSTRUED IN
         ACCORDANCE  WITH,  THE LAWS OF THE STATE OF GEORGIA FOR CONTRACTS TO BE
         PERFORMED ENTIRELY WITHIN SAID STATE.

15.      Severability  of Provisions.  Any provision of this Amendment  which is
         prohibited  or  unenforceable  in any  jurisdiction  shall,  as to such
         jurisdiction,  be  ineffective  to the  extent of such  prohibition  or
         unenforceability  without  invalidating the remaining provisions hereof
         or affecting the validity or  enforceability  of such  provision in any
         other jurisdiction.  To the extent permitted by Applicable Law, each of
         CAM and CTI  hereby  waives  any  provision  of law  that  renders  any
         provision hereof prohibited or unenforceable in any respect.

16.      Counterparts; Facsimile Delivery. This Amendment may be executed in any
         number of counterparts, each of which shall be deemed to be an original
         but all of which  together shall be deemed to be one  instrument.  This
         Amendment  shall be binding upon all parties

                                      -15-
<PAGE>

         hereto,  their successors and permitted assigns.  This Amendment may be
         delivered  by  facsimile  transmission  with  the  same  effect  as  if
         originally  executed  counterparts  of this Amendment were delivered to
         all parties hereto.

17.      Entire Agreement. The Credit Agreement and the other Loan Documents, as
         amended by this Amendment and the other Amendment  Documents,  embodies
         the entire agreement between the parties hereto relating to the subject
         matter hereof and supersedes all prior agreements,  representations and
         understandings, if any, relating to the subject matter hereof.

                                      -16-
<PAGE>

         IN WITNESS  WHEREOF,  the parties have caused this Amendment to be duly
executed by their respective officers thereunto duly authorized,  as of the date
first above written.

COVENANT TRANSPORT, INC.,                       COVENANT ASSET MANAGEMENT, INC.,
a Tennessee corporation                         a Nevada corporation   (formerly
                                                known as Covenant Leasing, Inc.)

By:  /s/ Joey B. Hogan                          By: /s/ Joey B. Hogan
Name:    Joey B. Hogan                          Name:   Joey B. Hogan
Title:   Chief Financial Officer                Title:  Chief Financial Officer


ABN AMRO BANK N.V., as Agent                    ABN AMRO BANK N.V., as a Bank


By: /s/ David J. Thomas                         By: /s/ David J. Thomas
Name:   David J. Thomas                         Name:   David J. Thomas
Title:  Group Vice President                    Title:  Group Vice President


By:   /s/ Jonathan F. Chiarieri                 By:  /s/ Jonathan F. Chiarieri
Name:     Jonathan F. Chiarieri                 Name:    Jonathan F. Chiarieri
Title:    Corporate Banking Officer             Title: Corporate Banking Officer


BANK ONE, NA (Main Office Chicago),             BANK OF AMERICA, N.A. (formerly
as a Bank                                       known as NationsBank, N.A.), as
                                                a Bank

By:   /s/ Nancy Anzelmo                         By:  /s/
Name:    Nancy Anzelmo                          Name:
Title:   Officer                                Title:


FIRST AMERICAN NATIONAL BANK, as a Bank        SUNTRUST BANK (successor in
                                               interest to SunTrust Bank,
                                               Chattanooga, N.A.), as a Bank

By:  /s/                                        By: /s/ Jon C. Long
Name:                                           Name:   Jon C. Long
Title:                                          Title:  Vice President


                                      -17-

<PAGE>


                                    EXHIBIT A

                            FORM OF GUARANTOR CONSENT

                                     CONSENT

         Reference is made to that certain Credit Agreement, dated as of January
17, 1995, among Covenant Transport,  Inc., a Tennessee corporation ("CTI"), with
the banks  signatories  thereto,  the banks  serving  as letter of credit  banks
thereunder,  and ABN AMRO Bank N.V.  as Agent  (the  "Agent"),  as  amended by a
number of  amendments,  and as further  amended  and  restated  by that  certain
Amended  and  Restated  Credit  Agreement  dated as of June 18,  1999 among CTI,
Covenant  Leasing,  Inc.,  a Nevada  corporation  (now known as  Covenant  Asset
Management, Inc.) ("CAM"), the Agent and the Banks (as amended and restated, the
"Credit  Agreement").  Capitalized  terms used but not defined herein shall have
the meanings ascribed to such terms in the Credit Agreement.

         Each of the undersigned (collectively, the "Guarantors") has guaranteed
in favor of the Agent,  the Banks and the Letter of Credit Banks  (collectively,
the "Guaranteed Parties") all of the obligations of CTI and CAM under the Credit
Agreement  pursuant  to one or  more  Guaranty  Agreements  (including,  without
limitation, the Existing Guaranty Agreements).

         Each  of  the  undersigned  hereby  consents  to  and  approves  of the
execution  and delivery by CAM and CTI of that certain  Amendment to Amended and
Restated Credit Agreement (the "Amendment") and to all other Amendment Documents
(as defined in the Amendment) and to the consummation of all of the transactions
contemplated  thereby  (including,  without limitation,  the Reorganization,  as
defined in the  Amendment).  Each  Guarantor  acknowledges  and agrees  that the
consummation of the Reorganization,  the execution and delivery of the Amendment
and the other Amendment Documents shall not diminish,  impair, alter,  discharge
or  otherwise  affect in any  manner  whatsoever  the  duties,  obligations  and
liabilities of the Guarantor under the Guaranty  Agreements  including,  without
limitation,   the   obligation  of  each   Guarantor  for  the  payment  of  the
"Obligations"  (as that term is defined in any Guaranty  Agreement or the Credit
Agreement).

         Each  Guarantor  hereby  ratifies,  confirms  and approves the Guaranty
Agreements to which it is a party and all of the terms and  provisions  thereof,
and  agrees  that such  Guaranty  Agreements  constitute  the valid and  binding
obligation  of  such  Guarantor,   enforceable  by  the  Guaranteed  Parties  in
accordance with their respective terms.

<PAGE>

         IN WITNESS WHEREOF, each Guarantor has executed this consent, as of the
___ day of ____________, 2000.

SOUTHERN REFRIGERATED TRANSPORT, INC., an Arkansas corporation
COVENANT TRANSPORT, INC., a Nevada corporation
TONY SMITH TRUCKING, INC., an Arkansas corporation
CIP, INC., a Nevada corporation
COVENANT.COM, INC., a Nevada corporation
TERMINAL TRUCK BROKER, INC., an Arkansas corporation
HAROLD IVES TRUCKING CO., an Arkansas corporation


By:____________________________
Name:    Joey B. Hogan
Title:   Treasurer

                                      -19-

<PAGE>
                                    EXHIBIT B

                           FORM OF EXISTING DEBT NOTE

                                 PROMISSORY NOTE

$_________________________                             ___________________, 2000

         FOR  VALUE   RECEIVED,   ________________________.   a   ______________
corporation  (the  "Borrower"),  promises  to  pay  to  the  order  of  Covenant
Transport,  Inc., a Tennessee corporation  ("Lender"),  or order, on demand, the
principal sum of ______________________  Dollars ($____________),  plus interest
compounding  quarterly on the average  unpaid balance during such quarter at the
annual  rate  equal to the  prime  interest  rate set  forth in the Wall  Street
Journal on the first  business day of such  calendar  quarter.  Interest will be
calculated  on a 360-day  basis and be payable in arrears on the first  business
day immediately  following each calendar  quarter.  Absent  manifest error,  the
Lender's  records  will be  conclusive  evidence  of the  principal  and accrued
interest owing hereunder.

         Presentment,  notice of dishonor,  and protest are hereby waived by all
makers, sureties, guarantors, and endorsers hereof. This Note shall be the joint
and several obligation of all makers, sureties,  guarantors,  and endorsers, and
shall be binding upon them and their  successors and assigns.  This Note will be
governed by the substantive laws of the State of Tennessee.



BORROWER'S ADDRESS:                                [BORROWER NAME]
_____________________                               a ______________ corporation
_____________________

                                                    By:_____________________
                                                    Name:
                                                    Title:

                                      -20-
<PAGE>

                                    EXHIBIT C

                              FORM OF DIVIDEND NOTE

                                 PROMISSORY NOTE

$_________________________                             ___________________, 2000

         Covenant  Transport,  Inc., a Tennessee  corporation (the  "Borrower"),
promises to pay to the order of Covenant  Transport,  Inc., a Nevada corporation
("Lender"),  or order,  on demand,  the principal sum of  ______________________
Dollars  ($____________),  plus  interest  compounding  quarterly on the average
unpaid  balance  during  such  quarter  at the  annual  rate  equal to the prime
interest rate set forth in the Wall Street  Journal on the first business day of
such  calendar  quarter.  Interest  will be calculated on a 360-day basis and be
payable in arrears on the first business day immediately following each calendar
quarter. Absent manifest error, the Lender's records will be conclusive evidence
of the principal and accrued interest owing hereunder.

         Presentment,  notice of dishonor,  and protest are hereby waived by all
makers, sureties, guarantors, and endorsers hereof. This Note shall be the joint
and several obligation of all makers, sureties,  guarantors,  and endorsers, and
shall be binding upon them and their  successors and assigns.  This Note will be
governed by the substantive laws of the State of Nevada.



BORROWER'S ADDRESS:                                  COVENANT TRANSPORT, INC.
                                                     a Tennessee corporation
_____________________
_____________________
                                                     By:_____________________
                                                     Name:
                                                     Title:

<PAGE>

                                    EXHIBIT D


                            FORM OF FUTURE DEBT NOTE



                                           _______________________________, 2000


                            REVOLVING PROMISSORY NOTE



         The undersigned borrower  ("Borrower')  promises to pay to the order of
Covenant Asset Management, Inc., a Nevada corporation ("Lender"), at its offices
located  at  ___________  _________________,   ________________________  Dollars
($_______________),  or so much thereof  that may be advanced  from time to time
together with interest on the  outstanding  balance in accordance with the terms
set forth in the Credit and Security  Agreement  dated  ________________,  1999,
between Borrower and Lender (the "Agreement").

         Notwithstanding  anything to the  contrary in the  Agreement  or in the
Note,  Lender  shall  have  the  absolute   unconditional  right,  in  its  sole
discretion,  to require  Borrower to pay the  outstanding  principal  balance on
demand,  together with accrued and unpaid interest. If Lender elects to exercise
the right to demand payment,  Lender will provide Borrower thirty (30) days from
the date of Lender's written notice of demand to make payment.

         Presentment,  demand,  protest and notice of dishonor are hereby waived
by the undersigned.

         This  promissory note shall be governed under and construed by the laws
of the State of Nevada.

BORROWER:


COVENANT TRANSPORT, INC.
a Tennessee corporation

By:_____________________________
Name:
Title:

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>NOTE PURCHASE AGREEMENT
<TEXT>

================================================================================


                         COVENANT ASSET MANAGEMENT, INC.
                            COVENANT TRANSPORT, INC.


                                   $25,000,000


                7.39% Guaranteed Senior Notes due October 1, 2005

                                PPN: 22283# AA 6



                             NOTE PURCHASE AGREEMENT



                            Dated as of May 15, 2000
                           Closing Date: June 6, 2000


================================================================================

<PAGE>


                                TABLE OF CONTENTS


Section                                                                     Page


1.       BACKGROUND; AUTHORIZATION OF NOTES....................................1
         1.1.     Background...................................................1
         1.2.     Authorization of Notes.......................................1

2.       SALE AND PURCHASE OF NOTES............................................2

3.       CLOSING...............................................................2

4.       CONDITIONS TO CLOSING.................................................2
         4.1.     Representations and Warranties...............................2
         4.2.     Performance; No Default......................................3
         4.3.     Compliance Certificates......................................3
         4.4.     Opinions of Counsel..........................................3
         4.5.     Purchase Permitted By Applicable Law, etc....................3
         4.6.     Sale of Other Notes..........................................4
         4.7.     Payment of Purchasers' Counsel Fees..........................4
         4.8.     Private Placement Number.....................................4
         4.9.     Changes in Corporate Structure...............................4
         4.10.    Prepayment of Outstanding Notes..............................4
         4.11.    Subsidiary Guaranty..........................................4
         4.12.    Intercreditor Agreement......................................4
         4.13.    Bank Loan Agreement..........................................4
         4.14.    Transaction Fee..............................................5
         4.15.    Proceedings and Documents....................................5

5.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................5
         5.1.     Organization; Power and Authority............................5
         5.2.     Authorization, etc...........................................5
         5.3.     Disclosure...................................................6
         5.4.     Organization and Ownership of Shares of Subsidiaries;
                  Affiliates...................................................6
         5.5.     Financial Statements.........................................7
         5.6.     Compliance with Laws, Other Instruments, etc.................7
         5.7.     Governmental Authorizations, etc.............................8
         5.8.     Litigation; Observance of Agreements, Statutes and Orders....8
         5.9.     Taxes........................................................8
         5.10.    Title to Property; Leases....................................8
         5.11.    Licenses, Permits, etc.......................................9
         5.12.    Compliance with ERISA........................................9
         5.13.    Private Offering by the Company.............................10
         5.14.    Use of Proceeds; Margin Regulations.........................10
         5.15.    Existing Indebtedness; Future Liens.........................11
         5.16.    Foreign Assets Control Regulations, etc.....................11
         5.17.    Status under Certain Statutes...............................11
         5.18.    Environmental Matters.......................................11
         5.19.    Solvency....................................................12

6.       REPRESENTATIONS OF THE PURCHASERS....................................12
         6.1.     Purchase for Investment.....................................12
         6.2.     Source of Funds.............................................12
         6.3.     Authorization, etc..........................................14

7.       INFORMATION AS TO COMPANY............................................14
         7.1.     Financial and Business Information..........................14
         7.2.     Officer's Certificate.......................................17
         7.3.     Inspection..................................................17

8.       PREPAYMENT OF THE NOTES..............................................18
         8.1.     Required Prepayments........................................18
         8.2.     Optional Prepayments with Make-Whole Amount.................18
         8.3.     Allocation of Partial Prepayments...........................19
         8.4.     Maturity; Surrender, etc....................................19
         8.5.     Purchase of Notes...........................................19
         8.6.     Make-Whole Amount...........................................19

9.       AFFIRMATIVE COVENANTS................................................22
         9.1.     Compliance with Law.........................................22
         9.2.     Insurance...................................................22
         9.3.     Maintenance of Properties...................................23
         9.4.     Payment of Taxes and Claims.................................23
         9.5.     Corporate Existence, etc....................................23
         9.6.     Compliance with Parent Guarantee............................24

10.      NEGATIVE COVENANTS...................................................24
         10.1.    Transactions with Affiliates................................24
         10.2.    Merger, Consolidation, etc..................................24
         10.3.    Sales of Assets.............................................25
         10.4.    Disposal of Ownership of a Subsidiary.......................25
         10.5.    Sale-and-Leaseback Transactions.............................26
         10.6.    Maintenance of Consolidated Tangible Net Worth..............26
         10.7.    Limitation on Total Debt; Limitation on Funded Debt
                      Incurrence..............................................26
         10.8.    Restricted Payments.........................................27
         10.9.    Restricted Investments......................................27
         10.10.   Fixed Charges Coverage......................................27
         10.11.   Liens.......................................................27
         10.12.   Line of Business............................................29
         10.13.   Subsidiary Guaranty.........................................30

11.      EVENTS OF DEFAULT....................................................30

12.      REMEDIES ON DEFAULT, ETC.............................................32
         12.1.    Acceleration................................................32
         12.2.    Other Remedies..............................................33
         12.3.    Rescission..................................................33
         12.4.    No Waivers or Election of Remedies, Expenses, etc...........33

13.      REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES........................34
         13.1.    Registration of Notes.......................................34
         13.2.    Transfer and Exchange of Notes..............................34
         13.3.    Replacement of Notes........................................34

14.      PAYMENTS ON NOTES....................................................35
         14.1.    Place of Payment............................................35
         14.2.    Home Office Payment.........................................35

15.      EXPENSES, ETC........................................................35
         15.1.    Transaction Expenses........................................35
         15.2.    Survival....................................................36

16.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.........36

17.      AMENDMENT AND WAIVER.................................................36
         17.1.    Requirements................................................36
         17.2.    Solicitation of Holders of Notes............................37
         17.3.    Binding Effect, etc.........................................37
         17.4.    Notes held by Company, etc..................................37

18.      NOTICES..............................................................38

19.      REPRODUCTION OF DOCUMENTS............................................38

20.      CONFIDENTIAL INFORMATION.............................................38

21.      SUBSTITUTION OF PURCHASER............................................39

22.      MISCELLANEOUS........................................................40
         22.1.    Successors and Assigns......................................40
         22.2.    Payments Due on Non-Business Days...........................40
         22.3.    Severability................................................40
         22.4.    Construction................................................40
         22.5.    Counterparts................................................40
         22.6.    Governing Law...............................................41


<PAGE>


SCHEDULE A                 --       Information Relating To Purchasers

SCHEDULE B                 --       Defined Terms

SCHEDULE 4.9               --       Changes in Corporate Structure

SCHEDULE 5.3               --       Disclosure Materials

SCHEDULE 5.4               --       Subsidiaries of the Company and Ownership of
                                    Subsidiary Stock

SCHEDULE 5.5               --       Financial Statements

SCHEDULE 5.8               --       Certain Litigation

SCHEDULE 5.11              --       Patents, etc.

SCHEDULE 5.14              --       Use of Proceeds

SCHEDULE 5.15              --       Existing Indebtedness

SCHEDULE 10.9              --       Restricted Investments

SCHEDULE 10.11             --       Liens

EXHIBIT 1.2                --       Form of 7.39% Guaranteed Senior Note due
                                    October 1, 2005

EXHIBIT 4.4(a)             --       Form of Opinion of Counsel for the Company
                                    and the Parent

EXHIBIT 4.4(b)             --       Form of Opinion of Special Counsel for the
                                    Purchasers

EXHIBIT 4.11               --       Form of Subsidiary Guaranty

EXHIBIT 4.12               --       Form of Intercreditor Agreement

EXHIBIT 9.6                --       Parent Guarantee



<PAGE>

                         COVENANT ASSET MANAGEMENT, INC.
                           639 ISBELL ROAD, SUITE 390
                               RENO, NEVADA 89509


                7.39% GUARANTEED SENIOR NOTES DUE OCTOBER 1, 2005


                                                        Dated as of May 15, 2000

TO EACH OF THE PURCHASERS LISTED IN
         THE ATTACHED SCHEDULE A:


Ladies and Gentlemen:

         Each  of  Covenant  Asset  Management,  Inc.,   a  Nevada   corporation
(the  "Company"),  and  Covenant  Transport,  Inc.,  a Nevada  corporation  (the
"Parent"), agrees with you as follows:

1.       BACKGROUND; AUTHORIZATION OF NOTES.

1.1.     Background.

         You  and  each  of the  Other  Purchasers  are  the  holders  of  7.39%
Guaranteed Senior Notes due October 1, 2005 (the "Old Notes") issued by Covenant
Transport,  Inc., a Tennessee  corporation  ("CTI").  The Old Notes are secured,
pari passu with the Bank  Lenders,  pursuant to the Security  Documents  and the
Master Collateral and Intercreditor Agreement dated as of October 15, 1995 among
you and the Other  Purchasers and the Bank Lenders,  as heretofore  amended.  In
order to permit a reorganization of the Parent and its Subsidiaries, you and the
Other  Purchasers have agreed to the prepayment of the Old Notes at the price of
100% of the principal amount thereof,  plus interest accrued thereon to the date
of prepayment.  The prepayment will be financed in part through the issuance and
sale by the Company of new senior notes, as hereafter  provided,  to you and the
Other Purchasers. For purposes of the Collateral,  this Agreement is intended to
be the successor to the separate Note  Purchase  Agreements  dated as of October
15, 1995 among CTI, the Parent and the purchasers named therein.

1.2.     Authorization of Notes.

         The Company will authorize the issue and sale of $25,000,000  aggregate
principal amount of its 7.39%  Guaranteed  Senior Notes due October 1, 2005 (the
"Notes",  such term to include any such notes  issued in  substitution  therefor
pursuant to Section 13 of this  Agreement  or the Other  Agreements).  The Notes
will be  guaranteed  by the Parent and by each of the  Subsidiaries  and will be
substantially  in the form set out in Exhibit 1.2, with such changes  therefrom,
if any,  as may be  approved  by you and the  Company.  The  Notes  also will be
secured,  pari passu with the Bank  Lenders,  by the  Collateral  pursuant to an
amendment of the Security  Documents  and an amendment  and  restatement  of the
Master Collateral and Intercreditor Agreement to so provide. Certain capitalized
terms  used in this  Agreement  are  defined  in  Schedule  B;  references  to a
"Schedule" or an "Exhibit" are, unless otherwise specified,  to a Schedule or an
Exhibit attached to this Agreement.

2.       SALE AND PURCHASE OF NOTES.

         Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will  purchase  from the  Company,  at the Closing
provided for in Section 3, Notes in the principal amount specified opposite your
name in  Schedule  A at the  purchase  price  of 100%  of the  principal  amount
thereof.  Contemporaneously  with entering into this  Agreement,  the Company is
entering  into  separate  Note  Purchase  Agreements  (the  "Other  Agreements")
identical  with  this  Agreement  with  each of the  other  purchasers  named in
Schedule A (the "Other  Purchasers"),  providing for the sale at such Closing to
each of the Other Purchasers of Notes in the principal amount specified opposite
its name in Schedule A. Your  obligation  hereunder and the  obligations  of the
Other   Purchasers  under  the  Other  Agreements  are  several  and  not  joint
obligations  and you shall have no obligation  under any Other  Agreement and no
liability  to any Person for the  performance  or  non-performance  by any Other
Purchaser thereunder.

3.       CLOSING.

         The sale and purchase of the Notes to be purchased by you and the Other
Purchasers  shall occur at the offices of  Gardner,  Carton & Douglas,  at 10:00
a.m.,  New York time,  at a closing (the  "Closing")  on June 6, 2000 or on such
other  Business Day thereafter on or prior to June 9, 2000 as may be agreed upon
by the Company and you and the Other Purchasers. At the Closing the Company will
deliver to you the Notes to be purchased by you in the form of a single Note (or
such greater  number of Notes in  denominations  of at least $100,000 as you may
request)  dated the date of the Closing and  registered  in your name (or in the
name of your  nominee),  against  delivery by you to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer  of  immediately  available  funds for the  account  of the  Company to
account  number  6728004257 at First Union National Bank,  ABA#  053000219,  for
credit to Covenant  Asset  Management,  Inc. If at the Closing the Company shall
fail to tender such Notes to you as provided  above in this Section 3, or any of
the  conditions  specified  in Section 4 shall not have been  fulfilled  to your
satisfaction,   you  shall,  at  your  election,  be  relieved  of  all  further
obligations  under this  Agreement,  without  thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.

4.       CONDITIONS TO CLOSING.

         Your  obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your  satisfaction,  prior to or at
the Closing, of the following conditions:

4.1.     Representations and Warranties.

         The  representations  and  warranties  of the Company and the Parent in
this Agreement shall be correct when made and at the time of the Closing.

4.2.     Performance; No Default.

         The Company and the Parent shall have  performed  and complied with all
agreements and conditions  contained in this Agreement  required to be performed
or complied  with by them prior to or at the Closing and after giving  effect to
the issue and sale of the Notes (and the application of the proceeds  thereof as
contemplated  by  Schedule  5.14) no  Default  or Event of  Default  shall  have
occurred and be continuing.  The Company, the Parent or any Subsidiary shall not
have entered into any  transaction  since the date of the most recent  financial
statements  referred  to in  Schedule  5.5 that  would have been  prohibited  by
Section 10 had such Section applied since such date.

4.3.     Compliance Certificates.

(a)      Officer's  Certificate.  Each of the Company and the Parent  shall have
         delivered  to you an  Officer's  Certificate,  dated  the  date  of the
         Closing,  certifying that the conditions specified in Sections 4.1, 4.2
         and 4.9 have been fulfilled.

(b)      Secretary's  Certificate.  Each of the  Company  and the  Parent  shal
         have  delivered to you a certificate  certifying as to the  resolutions
         attached  thereto  and  other  corporate  proceedings  relating  to the
         authorization, execution and delivery of the Notes and the Agreements.

4.4.     Opinions of Counsel.

         You shall have received opinions in form and substance  satisfactory to
you,  dated the date of the Closing (a) from Scudder Law Firm P.C.,  counsel for
the  Company and the Parent,  covering  the matters set forth in Exhibit  4.4(a)
(and each of the Company and the Parent  instructs  its counsel to deliver  such
opinion to you) and (b) from Gardner,  Carton & Douglas, your special counsel in
connection  with  such  transactions,  substantially  in the form  set  forth in
Exhibit 4.4(b) and covering such other matters incident to such  transactions as
you may reasonably request.

4.5.     Purchase Permitted By Applicable Law, etc.

         On the  date  of the  Closing  your  purchase  of  Notes  shall  (i) be
permitted  by the laws and  regulations  of each  jurisdiction  to which you are
subject,  without recourse to provisions (such as Section  1405(a)(8) of the New
York  Insurance  Law)  permitting  limited  investments  by insurance  companies
without restriction as to the character of the particular  investment,  (ii) not
violate  any  applicable  law  or  regulation  (including,  without  limitation,
Regulation  T, U or X of the Board of Governors of the Federal  Reserve  System)
and (iii) not subject you to any tax,  penalty or liability under or pursuant to
any applicable  law or regulation,  which law or regulation was not in effect on
the date  hereof.  If  requested  by you,  you shall have  received an Officer's
Certificate  certifying as to such matters of fact as you may reasonably specify
to enable you to determine  whether such purchase is so  permitted.  On the date
hereof,  you  represent  that there would be no  violation  of this Section 4.5,
based upon your present knowledge.

4.6.     Sale of Other Notes.

         Contemporaneously  with the Closing the Company shall sell to the Other
Purchasers and the Other  Purchasers shall purchase the Notes to be purchased by
them at the Closing as specified in Schedule A.

4.7.     Payment of Purchasers' Counsel Fees.

         Without limiting the provisions of Section 15.1, the Company shall have
paid on or before  the  Closing  the fees,  charges  and  disbursements  of your
special  counsel  referred  to in  Section  4.4 to  the  extent  reflected  in a
statement  of such  counsel  rendered to the Company at least one  Business  Day
prior to the Closing.

4.8.     Private Placement Number.

         A Private  Placement  number  issued by Standard & Poor's CUSIP Service
Bureau (in  cooperation  with the  Securities  Valuation  Office of the National
Association of Insurance  Commissioners)  shall have been obtained for the Notes
by Gardner, Carton & Douglas.

4.9.     Changes in Corporate Structure.

         Except as specified in Schedule 4.9, neither the Company nor the Parent
shall have  changed its  jurisdiction  of  incorporation  or been a party to any
merger or  consolidation  and  neither  the  Company  nor the Parent  shall have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial  statements referred
to in Schedule 5.5.

4.10.    Prepayment of Outstanding Notes.

         CTI shall have prepaid its outstanding  7.39%  Guaranteed  Senior Notes
due October 1, 2005 in the principal amount of $25,000,000 at a price of 100% of
such principal amount, plus interest accrued to the date of such prepayment.

4.11.    Subsidiary Guaranty.

         Each  Subsidiary  shall have  executed  and  delivered  the  Subsidiary
Guaranty in substantially the form of the attached Exhibit 4.11.

4.12.    Intercreditor Agreement.

         The Bank  Lenders and you and the Other  Purchasers  shall have entered
into an amendment and  restatement of the Master  Collateral  and  Intercreditor
Agreement  in  substantially   the  form  of  the  attached  Exhibit  4.12  (the
"Intercreditor Agreement").

4.13.    Bank Loan Agreement.

         The Company shall have  delivered to you a correct and complete copy of
the Bank Loan Agreement.

4.14.    Transaction Fee.

         The  Company  shall  have  paid a  transaction  fee of  $10,000  in the
aggregate  to you and the Other  Purchasers,  by wire  transfer  of  immediately
available  funds to Chase  NYC/CTR/BNF=CIGNA  Private  Placements/AC=9009001802,
ABA#021000021.

4.15.    Proceedings and Documents.

         All corporate and other proceedings in connection with the transactions
contemplated  by this  Agreement and all documents and  instruments  incident to
such transactions  shall be satisfactory to you, and you shall have received all
such counterpart originals or certified or other copies of such documents as you
or they may reasonably request.

5.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         Each of the Company and the Parent represents and warrants to you that:

5.1.     Organization; Power and Authority.

         Each of the Company  and the Parent is a  corporation  duly  organized,
validly  existing and in good  standing  under the laws of its  jurisdiction  of
incorporation,  and is duly  qualified as a foreign  corporation  and is in good
standing in each  jurisdiction in which such  qualification  is required by law,
other than those  jurisdictions as to which the failure to be so qualified or in
good  standing  could  not,  individually  or in the  aggregate,  reasonably  be
expected to have a Material  Adverse Effect.  Each of the Company and the Parent
has the corporate  power and authority to own or hold under lease the properties
it purports to own or hold under  lease,  to transact  the business it transacts
and proposes to transact,  to execute and deliver this  Agreement  and the Other
Agreements and the Notes and to perform the provisions hereof and thereof.

5.2.     Authorization, etc.

         This  Agreement and the Other  Agreements  and the Notes have been duly
authorized by all necessary  corporate action on the part of each of the Company
and the Parent, and

(a)      this Agreement  constitutes,  and upon  execution and delivery  thereof
         each Note will constitute, a legal, valid and binding obligation of the
         Company  enforceable  against the Company in accordance with its terms,
         and

(b)      this Agreement,  including the Parent  Guarantee,  constitutes a legal,
         valid and  binding  obligation  of the Parent  enforceable  against the
         Parent in accordance with its terms,

except (in each case) as such  enforceability  may be limited by (i)  applicable
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
affecting  the  enforcement  of  creditors'  rights  generally  and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

         The  Subsidiary  Guaranty  has been duly  authorized  by all  necessary
corporate  action on the part of each Subsidiary and upon execution and delivery
thereof  will  constitute  the  legal,  valid  and  binding  obligation  of each
Subsidiary,  enforceable  against each  Subsidiary in accordance with its terms,
except as such  enforceability  may be  limited  by (i)  applicable  bankruptcy,
insolvency,  reorganization,  moratorium  or other  similar laws  affecting  the
enforcement of creditors' rights generally and (ii) general principles of equity
(regardless  of whether such  enforceability  is  considered  in a proceeding in
equity or at law).

5.3.     Disclosure.

         Except as disclosed in Schedule 5.3,  this  Agreement,  the  documents,
certificates  or other writings  delivered to you by or on behalf of the Company
in connection with the transactions  contemplated hereby (including the Parent's
annual report for the year ended December 31, 1999, its proxy  statement for the
2000  annual  meeting  of  stockholders,  and all  forms  10-Q  filed  with  the
Securities and Exchange Commission  subsequent to December 31, 1999 and prior to
the date of Closing) and the financial  statements listed in Schedule 5.5, taken
as a whole,  do not contain any untrue  statement of a material  fact or omit to
state any material fact necessary to make the statements  therein not misleading
in light of the  circumstances  under which they were made.  Except as expressly
described in Schedule  5.3, or in one of the  documents,  certificates  or other
writings identified  therein, or in the financial  statements listed in Schedule
5.5,  since  December  31,  1999,  there  has been no  change  in the  financial
condition,  operations,  business,  properties or prospects of the Company,  the
Parent or any Subsidiary  except changes that  individually  or in the aggregate
could not reasonably be expected to have a Material Adverse Effect.  There is no
fact known to the Company that could  reasonably  be expected to have a Material
Adverse Effect that has not been set forth herein or in the Memorandum or in the
other  documents,  certificates  and other  writings  delivered  to you by or on
behalf of the Company  specifically  for use in connection with the transactions
contemplated hereby.

5.4.     Organization and Ownership of Shares of Subsidiaries; Affiliates.

(a)      Schedule 5.4 contains  (except as noted  therein)  complete and correct
         lists (i) of the  Subsidiaries,  showing,  as to each  Subsidiary,  the
         correct  name  thereof,  the  jurisdiction  of  its  organization,  the
         percentage  of shares of each  class of its  capital  stock or  similar
         equity interests  outstanding  owned by the Parent (or the Company,  as
         the case may be) and each other  Subsidiary,  (ii) of the Company's and
         the  Parent's  Affiliates,  other than  Subsidiaries,  and (iii) of the
         Company's and the Parent's directors and senior officers.

(b)      All of the  outstanding  shares  of  capital  stock or  similar  equity
         interests  of each  Subsidiary  shown in Schedule 5.4 as being owned by
         the Company,  the Parent and the Subsidiaries have been validly issued,
         are fully  paid and  nonassessable  and are owned by the  Company,  the
         Parent or  another  Subsidiary  free and clear of any Lien  (except  as
         otherwise disclosed in Schedule 5.4).

(c)      Each   Subsidiary  identified  in  Schedule  5.4  is a  corporation  or
         other  legal  entity  duly  organized,  validly  existing  and in  good
         standing under the laws of its  jurisdiction  of  organization,  and is
         duly qualified as a foreign corporation or other legal entity and is in
         good  standing  in each  jurisdiction  in which such  qualification  is
         required by law, other than those jurisdictions as to which the failure
         to be so qualified or in good standing  could not,  individually  or in
         the  aggregate,  reasonably  be  expected  to have a  Material  Adverse
         Effect.  Each such  Subsidiary  has the  corporate  or other  power and
         authority to own or hold under lease the  properties it purports to own
         or hold under  lease and to transact  the  business  it  transacts  and
         proposes to transact.

(d)      No  Subsidiary  is a  party  to,  or  otherwise  subject  to any  legal
         restriction or any agreement (other than this Agreement, the agreements
         listed on Schedule 5.4 and customary  limitations  imposed by corporate
         law  statutes)  restricting  the  ability  of  such  Subsidiary  to pay
         dividends  out of profits or make any other  similar  distributions  of
         profits to the Company or any of its Subsidiaries that owns outstanding
         shares of capital stock or similar equity interests of such Subsidiary.

5.5.     Financial Statements.

         The  Company  and the  Parent  have  delivered  to you and  each  Other
Purchaser copies of the consolidated  financial statements of the Parent and its
Subsidiaries listed on Schedule 5.5. All of said financial statements (including
in each case the related  schedules  and notes)  fairly  present in all material
respects the consolidated  financial position of the Parent and its Subsidiaries
as of the  respective  dates  specified in such  Schedule  and the  consolidated
results  of their  operations  and cash  flows  for the  respective  periods  so
specified and have been prepared in accordance  with GAAP  consistently  applied
throughout  the  periods  involved  except  as set  forth in the  notes  thereto
(subject,  in the case of any interim financial  statements,  to normal year-end
adjustments).

5.6.     Compliance with Laws, Other Instruments, etc.

         The execution,  delivery and  performance by the Company and the Parent
of this  Agreement and the Notes will not (i)  contravene,  result in any breach
of, or  constitute  a default  under,  or result in the  creation of any Lien in
respect of any property of the Company,  the Parent or any Subsidiary under, any
indenture,  mortgage, deed of trust, loan, purchase or credit agreement,  lease,
corporate charter or by-laws,  or any other agreement or instrument to which the
Company,  the Parent or any  Subsidiary  is bound or by which the  Company,  the
Parent or any Subsidiary or any of their  respective  properties may be bound or
affected,  (ii)  conflict  with  or  result  in a  breach  of any of the  terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental  Authority  applicable to the Company,  the Parent or
any  Subsidiary  or (iii)  violate any provision of any statute or other rule or
regulation of any Governmental  Authority  applicable to the Company, the Parent
or any Subsidiary.

         The  execution,  delivery and  performance  by each  Subsidiary  of the
Subsidiary  Guaranty  will not (i)  contravene,  result  in any  breach  of,  or
constitute a default under,  or result in the creation of any Lien in respect of
any property of such Subsidiary  under, any agreement,  or corporate  charter or
by-laws, to which such Subsidiary is bound or by which such Subsidiary or any of
its  properties  may be bound or  affected,  (ii)  conflict  with or result in a
breach of any of the terms,  conditions or  provisions  of any order,  judgment,
decree, or ruling of any court,  arbitrator or Governmental Authority applicable
to such  Subsidiary  or (iii) violate any provision of any statute or other rule
or regulation of any Governmental Authority applicable to such Subsidiary.

5.7.     Governmental Authorizations, etc.

         No consent,  approval or authorization  of, or registration,  filing or
declaration with, any Governmental  Authority is required in connection with the
execution,  delivery  or  performance  by the  Company  and the  Parent  of this
Agreement  or the  Notes  or the  execution,  delivery  or  performance  by each
Subsidiary of the Subsidiary Guaranty.

5.8.     Litigation; Observance of Agreements, Statutes and Orders.

(a)      Except as disclosed  in Schedule  5.8,  there are no actions,  suits or
         proceedings  pending or, to the knowledge of the Company or the Parent,
         threatened  against  or  affecting  the  Company,  the  Parent  or  any
         Subsidiary or any property of the Company, the Parent or any Subsidiary
         in any court or before any  arbitrator  of any kind or before or by any
         Governmental  Authority that,  individually or in the aggregate,  could
         reasonably be expected to have a Material Adverse Effect.

(b)      None of the Company,  the Parent and any Subsidiary is in default under
         any term of any  agreement or  instrument  to which it is a party or by
         which it is  bound,  or any  order,  judgment,  decree or ruling of any
         court,  arbitrator or Governmental  Authority or is in violation of any
         applicable  law,  ordinance,  rule  or  regulation  (including  without
         limitation  Environmental  Laws) of any Governmental  Authority,  which
         default  or  violation,   individually  or  in  the  aggregate,   could
         reasonably be expected to have a Material Adverse Effect.

5.9.     Taxes.

         The  Parent,  the  Company  and their  Subsidiaries  have filed all tax
returns that are required to have been filed in any jurisdiction,  and have paid
all taxes  shown to be due and  payable on such  returns and all other taxes and
assessments levied upon them or their properties,  assets, income or franchises,
to the extent such taxes and assessments  have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) the amount
of which is not  individually  or in the aggregate  Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate  proceedings and with respect to which the Company,  the Parent or a
Subsidiary,  as the case may be, has established adequate reserves in accordance
with GAAP.  Neither the Company nor the Parent  knows of any basis for any other
tax or assessment that could  reasonably be expected to have a Material  Adverse
Effect.  The charges,  accruals  and  reserves on the books of the Company,  the
Parent and the Subsidiaries in respect of Federal,  state or other taxes for all
fiscal periods are adequate.  The Federal  income tax  liabilities of the Parent
have been  determined  by the Internal  Revenue  Service and paid for all fiscal
years up to and including the fiscal year ended December 31, 1996.

5.10.    Title to Property; Leases.

         The Company,  the Parent and the Subsidiaries  have good and sufficient
title to their respective  properties that  individually or in the aggregate are
Material,  including all such  properties  reflected in the most recent  audited
balance  sheet  referred to in Section 5.5 or purported to have been acquired by
the  Company,  the Parent or any  Subsidiary  after said date (except as sold or
otherwise disposed of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Agreement.  All leases that individually or in
the  aggregate are Material are valid and  subsisting  and are in full force and
effect in all material respects.

5.11.    Licenses, Permits, etc.

         Except as disclosed in Schedule 5.11,

(a)      the Company,  the Parent and the  Subsidiaries own or use all licenses,
         permits,  franchises,  authorizations,   patents,  copyrights,  service
         marks, trademarks and trade names, or rights thereto, that individually
         or in the  aggregate  are  Material,  without  known  conflict with the
         rights of others;

(b)      to the best knowledge of the Company and the Parent,  no product of the
         Company or the Parent or their  Subsidiaries  infringes in any material
         respect  any  license,  permit,   franchise,   authorization,   patent,
         copyright,  service mark, trademark, trade name or other right owned by
         any other Person; and

(c)      to the  best  knowledge  of the  Company  and the  Parent,  there is no
         Material  violation  by any  Person  of any right of the  Company,  the
         Parent  or  any  of  the  Subsidiaries  with  respect  to  any  patent,
         copyright,  service mark, trademark, trade name or other right owned or
         used by the Company, the Parent or any of the Subsidiaries.

5.12.    Compliance with ERISA.

(a)      The Company,  the Parent and  each ERISA  Affiliate  have  operated and
         administered  each Plan in compliance  with all applicable  laws except
         for such instances of  noncompliance  as have not resulted in and could
         not  reasonably  be  expected to result in a Material  Adverse  Effect.
         Neither the Company or the Parent nor any ERISA  Affiliate has incurred
         any  liability  pursuant  to Title I or IV of ERISA or the  penalty  or
         excise tax  provisions of the Code  relating to employee  benefit plans
         (as  defined  in  Section 3 of  ERISA),  and no event,  transaction  or
         condition  has occurred or exists that could  reasonably be expected to
         result in the  incurrence  of any such  liability by the  Company,  the
         Parent or any ERISA Affiliate,  or in the imposition of any Lien on any
         of the rights,  properties or assets of the Company,  the Parent or any
         ERISA  Affiliate,  in either case pursuant to Title I or IV of ERISA or
         to such penalty or excise tax  provisions  or to Section  401(a)(29) or
         412 of the Code,  other than such  liabilities or Liens as would not be
         individually or in the aggregate Material.

(b)      The present value of the aggregate  benefit  liabilities  under each of
         the Plans (other than  Multiemployer  Plans), if any,  determined as of
         the end of such  Plan's most  recently  ended plan year on the basis of
         the actuarial assumptions specified for funding purposes in such Plan's
         most recent actuarial  valuation  report,  did not exceed the aggregate
         current  value of the  assets of such Plan  allocable  to such  benefit
         liabilities.  The term "benefit  liabilities" has the meaning specified
         in section  4001 of ERISA and the terms  "current  value" and  "present
         value" have the meaning specified in section 3 of ERISA.

(c)      The  Company,  the Parent and the ERISA  Affiliates  have not  incurred
         withdrawal  liabilities  (and are not subject to contingent  withdrawal
         liabilities)  under  section  4201 or  4204  of  ERISA  in  respect  of
         Multiemployer Plans that individually or in the aggregate are Material.

(d)      The expected  postretirement  benefit obligation  (determined as of the
         last day of the Company's most recently ended fiscal year in accordance
         with Financial  Accounting  Standards Board Statement No. 106,  without
         regard to liabilities attributable to continuation coverage mandated by
         section  4980B  of the  Code)  of  the  Company,  the  Parent  and  the
         Subsidiaries is not Material.

(e)      The execution and delivery of this  Agreement and the issuance and sale
         of the Notes hereunder will not involve any transaction that is subject
         to the prohibitions of section 406 of ERISA or in connection with which
         a tax could be imposed  pursuant  to section  4975(c)(1)(A)-(D)  of the
         Code. The  representation  by the Company in the first sentence of this
         Section 5.12(e) is made in reliance upon and subject to the accuracy of
         your  representation in Section 6.2 as to the sources of the funds used
         to pay the purchase price of the Notes to be purchased by you.

5.13.    Private Offering by the Company.

         Neither the  Company nor the Parent nor anyone  acting on behalf of the
Company or the Parent has offered the Notes or any similar  securities  for sale
to, or solicited any offer to buy any of the same from, or otherwise  approached
or negotiated in respect  thereof with,  any person other than you and the Other
Purchasers.  Neither the  Company nor the Parent nor anyone  acting on behalf of
the Company or the Parent has taken, or will take, any action that would subject
the issuance or sale of the Notes to the registration  requirements of Section 5
of the Securities Act.

5.14.     Use of Proceeds; Margin Regulations.

         The  Company  will apply the  proceeds  of the sale of the Notes as set
forth in  Schedule  5.14.  No part of the  proceeds  from the sale of the  Notes
hereunder  will be used,  directly or  indirectly,  for the purpose of buying or
carrying  any margin  stock  within the meaning of  Regulation U of the Board of
Governors  of the  Federal  Reserve  System (12 CFR 221),  or for the purpose of
buying or carrying or trading in any securities  under such  circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220).  Margin stock does not constitute any of the value of the consolidated
assets of the Company  and its  Subsidiaries  and the Company  does not have any
present  intention  that margin stock will  constitute  any of the value of such
assets. As used in this Section, the terms "margin stock" and "purpose of buying
or carrying" shall have the meanings assigned to them in said Regulation U.

5.15.    Existing Indebtedness; Future Liens.

(a)      Except as  described  therein,  Schedule 5.15  sets  forth  a  complete
         and correct list of all outstanding  Indebtedness  of the Company,  the
         Parent and the  Subsidiaries  as of March 31,  2000,  since  which date
         there has been no  Material  change  in the  amounts,  interest  rates,
         sinking funds,  installment  payments or maturities of the Indebtedness
         of the Company or its  Subsidiaries.  Neither the Company or the Parent
         nor any  Subsidiary  is in default and (except as  contemplated  by the
         Intercreditor  Agreement)  no waiver of default is currently in effect,
         in the payment of any principal or interest on any  Indebtedness of the
         Company, the Parent or such Subsidiary and no event or condition exists
         with  respect to any  Indebtedness  of the  Company,  the Parent or any
         Subsidiary that would permit (or that with notice or the lapse of time,
         or both,  would permit) one or more Persons to cause such  Indebtedness
         to become due and  payable  before its  stated  maturity  or before its
         regularly scheduled dates of payment.

(b)      Except as disclosed in Schedule 5.15,  neither the Company,  the Parent
         nor any  Subsidiary  have agreed or consented to cause or permit in the
         future (upon the happening of a contingency  or otherwise) any of their
         property,  whether now owned or hereafter acquired,  to be subject to a
         Lien not permitted by Section 10.11.

5.16.    Foreign Assets Control Regulations, etc.

         Neither the sale of the Notes by the Company  hereunder  nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign  assets  control  regulations  of the United States  Treasury
Department  (31  CFR,  Subtitle  B,  Chapter  V,  as  amended)  or any  enabling
legislation or executive order relating thereto.

5.17.    Status under Certain Statutes.

         None of the  Company,  the  Parent  or any  Subsidiary  is  subject  to
regulation  under the  Investment  Company Act of 1940,  as amended,  the Public
Utility  Holding  Company Act of 1935, as amended,  or the Federal Power Act, as
amended.

5.18.    Environmental Matters.

         None of the Company,  the Parent or any Subsidiary has knowledge of any
claim or has  received  any  notice of any  claim,  and no  proceeding  has been
instituted  raising  any claim  against  the  Company,  the Parent or any of the
Subsidiaries  or any of their  respective real properties now or formerly owned,
leased or operated by any of them or other  assets,  alleging  any damage to the
environment or violation of any Environmental  Laws,  except, in each case, such
as could not reasonably be expected to result in a Material Adverse Effect.

(a)      None of the Company,  the Parent or any Subsidiary has knowledge of any
         facts  which  would  give  rise to any  claim,  public or  private,  of
         violation of Environmental Laws or damage to the environment  emanating
         from,  occurring  on or in any way  related to real  properties  now or
         formerly owned, leased or operated by any of them or to other assets or
         their  use,  except,  in each  case,  such as could not  reasonably  be
         expected to result in a Material Adverse Effect.

(b)      None of the Company,  the Parent or any  Subsidiary  has (i) stored any
         Hazardous Materials on real properties now or formerly owned, leased or
         operated by any of them (ii) disposed of any  Hazardous  Materials in a
         manner contrary to any  Environmental  Laws, in each case in any manner
         that could  reasonably  be  expected  to result in a  Material  Adverse
         Effect.

(c)      All buildings on all real  properties now owned,  leased or operated by
         the  Company,  the  Parent or any  Subsidiary  are in  compliance  with
         applicable Environmental Laws, except where failure to comply could not
         reasonably be expected to result in a Material Adverse Effect.

5.19.    Solvency.

         The  Parent,   the  Company  and  each  Subsidiary  (after  giving  due
consideration  to any  rights of  contribution  among  such  Persons)  have each
received fair  consideration and reasonably  equivalent value for the incurrence
of its obligations  hereunder or as contemplated  hereby. After giving effect to
the transactions  contemplated  herein, (i) the fair value of the assets of each
of the Parent,  the Company and each  Subsidiary  (both at fair valuation and at
present fair saleable value) exceeds its  liabilities,  (ii) each of the Parent,
the  Company  and each  Subsidiary  is able to and expects to be able to pay its
debts as they  mature,  and  (iii)  each of the  Parent,  the  Company  and each
Subsidiary  has capital  sufficient to carry on its business as conducted and as
proposed to be conducted.

6.       REPRESENTATIONS OF THE PURCHASERS.

6.1.     Purchase for Investment.

         You represent that you are purchasing the Notes for your own account or
for one or more separate accounts maintained by you or for the account of one or
more  pension or trust  funds and not with a view to the  distribution  thereof,
provided that the  disposition  of your or their  property shall at all times be
within  your or their  control.  You  understand  that the  Notes  have not been
registered  under the Securities Act and similar State  securities laws, and may
be resold only if registered  pursuant to the  provisions of the  Securities Act
and such State laws or if an exemption from  registration  is available,  except
under  circumstances  where neither such  registration  nor such an exemption is
required by law, and that the Company is not required to register the Notes. You
represent that you are an "accredited investor" as defined in Regulation 230.501
issued pursuant to the Securities Act.

6.2.     Source of Funds.

         You  represent  that at least  one of the  following  statements  is an
accurate  representation  as to each source of funds (a  "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:

(a)      the Source does not include  assets  allocated to any separate  account
         maintained  by you in which any  employee  benefit plan (or its related
         trust)  has  any  interest,  other  than a  separate  account  that  is
         maintained solely in connection with your fixed contractual obligations
         under which the amounts payable,  or credited,  to such plan and to any
         participant or  beneficiary of such plan  (including any annuitant) are
         not  affected  in any  manner  by  the  investment  performance  of the
         separate account

(b)      the Source is an "insurance  company  general  account" as such term is
         defined in the  Department of Labor  Prohibited  Transaction  Exemption
         ("PTE")  95-60  (issued July 12, 1995) ("PTE 95-60") and as of the date
         of this Agreement  there is no "employee  benefit plan" with respect to
         which the  aggregate  amount of such  general  account's  reserves  and
         liabilities  for the  contracts  held by or on behalf of such  employee
         benefit plan and all other  employee  benefit  plans  maintained by the
         same employer (and affiliates  thereof as defined in Section V(a)(1) of
         PTE  95-60)  or  by  the  same  employee  organization  (in  each  case
         determined in accordance  with the provisions of PTE 95-60) exceeds 10%
         of the total  reserves  and  liabilities  of such  general  account (as
         determined under PTE 95-60) (exclusive of separate account liabilities)
         plus  surplus as set forth in the  National  Association  of  Insurance
         Commissioners Annual Statement filed with your state of domicile; or

(c)      the Source is either (i) an insurance  company pooled separate account,
         within the meaning of PTE 90-1  (issued  January 29,  1990),  or (ii) a
         bank  collective  investment  fund,  within  the  meaning  of PTE 91-38
         (issued July 12, 1991) and, except as you have disclosed to the Company
         in writing  pursuant to this paragraph (b), no employee benefit plan or
         group of plans maintained by the same employer or employee organization
         beneficially  owns more than 10% of all assets allocated to such pooled
         separate account or collective investment fund; or

(d)      the  Source  constitutes  assets of an  "investment fund"  (within  the
         meaning  of  Part V of the  QPAM  Exemption)  managed  by a  "qualified
         professional  asset manager" or "QPAM" (within the meaning of Part V of
         the  QPAM  Exemption),  no  employee  benefit  plan's  assets  that are
         included in such investment  fund, when combined with the assets of all
         other  employee  benefit  plans  established  or maintained by the same
         employer or by an affiliate  (within the meaning of Section  V(c)(1) of
         the  QPAM   Exemption)  of  such  employer  or  by  the  same  employee
         organization  and managed by such QPAM,  exceed 20% of the total client
         assets managed by such QPAM, the conditions of Part I(c) and (g) of the
         QPAM Exemption are satisfied, neither the QPAM nor a person controlling
         or  controlled  by the QPAM  (applying  the  definition of "control" in
         Section V(e) of the QPAM  Exemption)  owns a 5% or more interest in the
         Company  and (i) the  identity  of such  QPAM and (ii) the names of all
         employee  benefit  plans whose assets are  included in such  investment
         fund have been  disclosed  to the  Company in writing  pursuant to this
         paragraph (c); or

(e)      the Source is a governmental plan; or

(f)      the Source is one or more employee benefit plans, or a separate account
         or trust fund comprised of one or more employee benefit plans,  each of
         which has been  identified  to the Company in writing  pursuant to this
         paragraph (e); or

(g)      the Source is the assets of one or more employee benefit plans that are
         managed by an "in-house  asset manager," as that term is defined in PTE
         96-23 and such  purchase  and holding of the Notes is exempt  under PTE
         96-23; or

(h)      the Source does not include assets of any employee  benefit plan, other
         than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms  "employee  benefit plan",  "governmental
plan",  "party in interest" and  "separate  account"  shall have the  respective
meanings assigned to such terms in Section 3 of ERISA.

6.3.     Authorization, etc.

         This  Agreement has been duly  authorized  by all  necessary  corporate
action  by you,  and this  Agreement  constitutes  a legal,  valid  and  binding
obligation  of you  enforceable  against  the you in  accordance  with its terms
except as such  enforceability  may be  limited  by (i)  applicable  bankruptcy,
insolvency,  reorganization,  moratorium  or other  similar laws  affecting  the
enforcement of creditors' rights generally and (ii) general principles of equity
(regardless  of whether such  enforceability  is  considered  in a proceeding in
equity or at law).

7.       INFORMATION AS TO COMPANY.

7.1.     Financial and Business Information.

         The  Parent  shall   deliver  to  each  holder  of  Notes  that  is  an
Institutional  Investor (if any),  provided that the Parent (as the case may be)
shall have been  notified  of the  identity  of such  holder and shall have been
provided the proper address for notice:

(a)      Quarterly  Statements -- within 60 days after the end of each quarterly
         fiscal  period in each fiscal  year of the Parent  (other than the last
         quarterly fiscal period of each such fiscal year), duplicate copies of,

(i)      a consolidated  balance sheet of the Parent and its  Subsidiaries as at
         the end of such quarter, and

(ii)     consolidated  statements of income,  changes in  stockholders' equity
         and cash flows of the Parent and its  Subsidiaries for such quarter and
         (in the case of the second and third  quarters)  for the portion of the
         fiscal year ending with such quarter,

         setting  forth in each case in  comparative  form the  figures  for the
         corresponding  periods in the previous  fiscal year,  all in reasonable
         detail,  prepared  in  accordance  with GAAP  applicable  to  quarterly
         financial  statements  generally,  and certified by a Senior  Financial
         Officer as fairly presenting,  in all material respects,  the financial
         position  of the  companies  being  reported  on and their  results  of
         operations and cash flows,  subject to changes  resulting from year-end
         adjustments,  provided that delivery  within the time period  specified
         above of copies of the Parent's  Quarterly Report on Form 10-Q prepared
         in  compliance  with  the  requirements  therefor  and  filed  with the
         Securities  and  Exchange  Commission  shall be deemed to  satisfy  the
         requirements of this Section 7.1(a) with respect to the Parent;

(b)      Annual Statements -- within 100 days after the end of each fiscal  yea
         of the Company and the Parent, duplicate copies of,

(i)      a consolidated balance sheet of the Parent and  its Subsidiaries, as at
         the end of such year, and

(ii)     consolidated  statements of income, changes in shareholders' equity and
         cash flows of the Parent and its Subsidiaries, for such year,

         setting  forth in each case in  comparative  form the  figures  for the
         previous fiscal year, all in reasonable detail,  prepared in accordance
         with GAAP, and accompanied

(A)      by an opinion  thereon  of  independent  certified  public  accountants
         of recognized  national  standing,  which opinion shall state that such
         financial  statements  present fairly,  in all material  respects,  the
         financial  position  of the  companies  being  reported  upon and their
         results  of  operations  and cash  flows  and  have  been  prepared  in
         conformity with GAAP, and that the  examination of such  accountants in
         connection  with such financial  statements has been made in accordance
         with  generally  accepted  auditing  standards,  and  that  such  audit
         provides a reasonable basis for such opinion in the circumstances, and

(B)      a certificate  of such  accountants  stating  that they  have  reviewed
         this Agreement and stating further whether, in making their audit, they
         have become  aware of any  condition or event that then  constitutes  a
         Default or an Event of  Default,  and,  if they are aware that any such
         condition or event then exists, specifying the nature and period of the
         existence  thereof (it being understood that such accountants shall not
         be liable, directly or indirectly,  for any failure to obtain knowledge
         of any Default or Event of Default unless such accountants  should have
         obtained  knowledge  thereof  in  making  an audit in  accordance  with
         generally accepted auditing standards or did not make such an audit),

         provided that the delivery  within the time period  specified  above of
         the Parent's  Annual Report on Form 10-K for such fiscal year (together
         with the  Parent's  annual  report to  shareholders,  if any,  prepared
         pursuant to Rule 14a-3 under the Exchange  Act)  prepared in accordance
         with the  requirements  therefor  and  filed  with the  Securities  and
         Exchange  Commission,   together  with  the  accountant's   certificate
         described  in  clause  (B)  above,  shall  be  deemed  to  satisfy  the
         requirements of this Section 7.1(b);

(c)      SEC and Other Reports -- promptly upon their  becoming  available,  one
         copy of (i) each financial statement, report, notice or proxy statement
         sent by the  Parent  or any  Subsidiary  to public  securities  holders
         generally,  and (ii) each regular or periodic report, each registration
         statement  (without  exhibits  except as  expressly  requested  by such
         holder),  and each  prospectus and all amendments  thereto filed by the
         Company,  the Parent or any Subsidiary with the Securities and Exchange
         Commission  and  of  all  press  releases  and  other  statements  made
         available generally by the Company, the Parent or any Subsidiary to the
         public concerning developments that are Material;

(d)      Notice of Default or Event of  Default  --  promptly,  and in any event
         within five Business Days after a Responsible Officer becoming aware of
         the existence of any Default or Event of Default or that any Person has
         given any notice or taken any action with respect to a claimed  default
         hereunder  or that any  Person has given any notice or taken any action
         with  respect to a claimed  default of the type  referred to in Section
         11(f), a written  notice  specifying the nature and period of existence
         thereof and what action the  Company or the Parent (as  applicable)  is
         taking or proposes to take with respect thereto;

(e)      ERISA  Matters --  promptly,  and in any event within five days after a
         Responsible  Officer becoming aware of any of the following,  a written
         notice  setting forth the nature  thereof and the action,  if any, that
         the Parent or an ERISA Affiliate proposes to take with respect thereto:

(i)      with respect to any Plan, any reportable  event, as defined in section
         4043(b)  of ERISA and the  regulations  thereunder,  for  which  notice
         thereof has not been waived  pursuant to such  regulations as in effect
         on the date hereof; or

(ii)     the  taking  by  the  PBGC  of  steps  to  institute,  or  the
         threatening  by the  PBGC  of the  institution  of,  proceedings  under
         section 4042 of ERISA for the  termination  of, or the appointment of a
         trustee to  administer,  any Plan,  or the receipt by the Company,  the
         Parent or any ERISA  Affiliate  of a notice from a  Multiemployer  Plan
         that  such  action  has been  taken by the PBGC  with  respect  to such
         Multiemployer Plan; or

(iii)    any event, transaction or condition that could result in the incurrence
         of any liability by the Parent or any ERISA Affiliate pursuant to Title
         I or IV of ERISA or the  penalty or excise tax  provisions  of the Code
         relating to employee benefit plans, or in the imposition of any Lien on
         any of the  rights,  properties  or assets  of the  Parent or any ERISA
         Affiliate  pursuant to Title I or IV of ERISA or such penalty or excise
         tax  provisions,  if such  liability or Lien,  taken  together with any
         other such  liabilities  or Liens then  existing,  could  reasonably be
         expected to have a Material Adverse Effect;

(f)      Notices  from  Governmental  Authority  --  promptly,  and in any event
         within 30 days of receipt thereof,  copies of any notice to the Parent,
         the Company or any  Subsidiary  from any Federal or state  Governmental
         Authority  relating  to any  order,  ruling,  statute  or other  law or
         regulation that could reasonably be expected to have a Material Adverse
         Effect;

(g)      Requested  Information -- with reasonable  promptness,  such other data
         and  information  relating  to  the  business,   operations,   affairs,
         financial condition, assets or properties of the Parent, the Company or
         any  Subsidiary or relating to the ability of the Parent or the Company
         to perform its  obligations  hereunder and under the Notes as from time
         to time may be reasonably requested by any such holder of Notes; and

(h)      Rule 144A  Information  -- promptly  upon request,  such  financial and
         other  information  as  such  Institutional   Investor  may  reasonably
         determine  to be  necessary  in order  to  permit  compliance  with the
         information  requirements of Rule 144A under the Securities Act (or any
         successor provision) in connection with the resale of the Notes, except
         at such times as the Parent is subject to the reporting requirements of
         Section 13 or 15(d) of the Exchange Act.

7.2.     Officer's Certificate.

         Each  set of  financial  statements  delivered  to a  holder  of  Notes
pursuant  to  Section  7.1(a)  or  Section  7.1(b)  shall  be  accompanied  by a
certificate  of a Senior  Financial  Officer  of the Parent (as the case may be)
setting forth:

(a)      Covenant   Compliance   --   the   information    (including   detailed
         calculations)  required in order to establish whether the Parent was in
         compliance with the  requirements of Section 10 during the quarterly or
         annual period covered by the statements then being furnished (including
         with respect to each such Section,  where applicable,  the calculations
         of the maximum or minimum amount, ratio or percentage,  as the case may
         be,  permissible under the terms of such Sections,  and the calculation
         of the amount, ratio or percentage then in existence); and

(b)      Event of  Default -- a statement  that such officer  has  reviewed  the
         relevant terms hereof and has made, or caused to be made,  under his or
         her  supervision,  a review of the  transactions  and conditions of the
         Parent,  the Company and the  Subsidiaries  from the  beginning  of the
         quarterly  or  annual  period  covered  by the  statements  then  being
         furnished to the date of the certificate and that such review shall not
         have  disclosed  the  existence  during such period of any condition or
         event that constitutes a Default or an Event of Default or, if any such
         condition  or event  existed  or exists  (including  any such  event or
         condition  resulting from the failure of the Parent, the Company or any
         Subsidiary to comply with any Environmental Law), specifying the nature
         and period of  existence  thereof and what action the Parent shall have
         taken or proposes to take with respect thereto.

7.3.    Inspection.

         Each of the Parent and the Company shall permit the  representatives of
each holder of Notes that is an Institutional Investor:

(a)      No Default -- if no Default or Event of  Default  then  exists,  at the
         expense of such holder and upon  reasonable  prior notice to the Parent
         to visit the principal  executive office of the Parent and the Company,
         to discuss the  affairs,  finances  and  accounts  of the  Parent,  the
         Company  and the  Subsidiaries  with  the  Parent's  and the  Company's
         officers,  and (with the consent of the Parent,  which consent will not
         be unreasonably  withheld) their independent  public  accountants,  and
         (with the consent of the Parent, which consent will not be unreasonably
         withheld) to visit the other offices and properties of the Parent,  the
         Company and each Subsidiary,  all at such reasonable times and as often
         as may be reasonably requested in writing; and

(b)      Default -- if a Default or Event of Default then exists, at the expense
         of the Parent to visit and inspect any of the offices or  properties of
         the  Parent,  the  Company  or any  Subsidiary,  to  examine  all their
         respective books of account, records, reports and other papers, to make
         copies and extracts therefrom, and to discuss their respective affairs,
         finances and accounts with their  respective  officers and  independent
         public  accountants  (and by this provision the Parent  authorizes said
         accountants  to discuss  the  affairs,  finances  and  accounts  of the
         Parent,  the  Company  and the  Subsidiaries),  all at such  reasonable
         business times and as often as may be reasonably requested.

8.       PREPAYMENT OF THE NOTES.

8.1.     Required Prepayments.

         On October 1, 2001 and on each  October 1 thereafter  to and  including
October 1, 2004 the Company  will prepay  $5,000,000  principal  amount (or such
lesser  principal  amount as shall then be  outstanding) of the Notes at par and
without payment of the Make-Whole Amount or any premium,  provided that upon any
partial  prepayment  of the Notes  pursuant  to Section  8.2 or  Section  8.7 or
purchase  of the Notes  permitted  by Section 8.5 the  principal  amount of each
required  prepayment  of the Notes  becoming  due under this  Section 8.1 on and
after the date of such  prepayment  or  purchase  shall be  reduced  in the same
proportion as the aggregate unpaid principal amount of the Notes is reduced as a
result of such prepayment or purchase.

8.2.     Optional Prepayments with Make-Whole Amount.

         The Company may, at its option,  upon notice as provided below,  prepay
at any time all,  or from time to time any part of, the Notes,  in an amount not
less than  $1,000,000  in aggregate  principal  amount of Notes in the case of a
partial  prepayment,  at 100% of the  principal  amount  so  prepaid,  plus  the
Make-Whole  Amount  determined  for the  prepayment  date with  respect  to such
principal  amount.  The Company will give each holder of Notes written notice of
each  optional  prepayment  under this  Section 8.2 not less and 20 days and not
more than 60 days prior to the date fixed for such prepayment.  Each such notice
shall  specify  such date,  the  aggregate  principal  amount of the Notes to be
prepaid on such date,  the principal  amount of each Note held by such holder to
be prepaid  (determined in accordance  with Section 8.3), and the interest to be
paid on the prepayment date with respect to such principal amount being prepaid,
and shall be accompanied by a certificate  of a Senior  Financial  Officer as to
the  estimated   Make-Whole  Amount  due  in  connection  with  such  prepayment
(calculated  as if the date of such  notice  were  the date of the  prepayment),
setting forth the details of such  computation.  Two Business Days prior to such
prepayment, the Company shall deliver to each holder of Notes a certificate of a
Senior Financial Officer specifying the calculation of such Make-Whole Amount as
of the specified prepayment date.

8.3.     Allocation of Partial Prepayments.

         In the case of each  partial  prepayment  of the Notes,  the  principal
amount of the Notes to be prepaid  shall be allocated  among all of the Notes at
the time outstanding in proportion, as nearly as practicable,  to the respective
unpaid principal amounts thereof not theretofore called for prepayment.

8.4.     Maturity; Surrender, etc.

         In the case of each prepayment of Notes pursuant to this Section 8, the
principal  amount of each Note to be  prepaid  shall  mature  and become due and
payable on the date fixed for such  prepayment,  together  with interest on such
principal amount accrued to such date and the applicable  Make-Whole  Amount, if
any.  From and after  such  date,  unless  the  Company  shall  fail to pay such
principal  amount  when so due and  payable,  together  with  the  interest  and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue.  Any Note paid or prepaid in full shall be  surrendered  to the
Company and cancelled and shall not be reissued,  and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

8.5.     Purchase of Notes.

         The Company  will not and will not permit any  Affiliate  to  purchase,
redeem,  prepay  or  otherwise  acquire,  directly  or  indirectly,  any  of the
outstanding  Notes  except  upon  the  payment  or  prepayment  of the  Notes in
accordance  with the terms of this  Agreement  and the Notes.  The Company  will
promptly  cancel  all Notes  acquired  by it or any  Affiliate  pursuant  to any
payment,  prepayment  or purchase of Notes  pursuant  to any  provision  of this
Agreement  and no Notes may be issued in  substitution  or exchange for any such
Notes.

8.6.     Make-Whole Amount.

         The term "Make-Whole Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining  Scheduled
Payments  with  respect to the Called  Principal of such Note over the amount of
such Called  Principal,  provided that the Make-Whole  Amount may in no event be
less than zero.  For the purposes of  determining  the  Make-Whole  Amount,  the
following terms have the following meanings:

         "Called  Principal"  means,  with respect to any Note, the principal of
such Note that is to be  prepaid  pursuant  to  Section  8.2 or has become or is
declared to be  immediately  due and payable  pursuant to Section  12.1,  as the
context requires.

         "Discounted  Value" means,  with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining  Scheduled  Payments with
respect to such Called  Principal from their  respective  scheduled due dates to
the Settlement  Date with respect to such Called  Principal,  in accordance with
accepted  financial  practice  and at a  discount  factor  (applied  on the same
periodic  basis as that on which  interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.

         "Reinvestment Yield" means, with respect to the Called Principal of any
Note, 0.50% over the yield to maturity implied by (i) the yields reported, as of
10:00  A.M.  (New York City  time) on the  second  Business  Day  preceding  the
Settlement Date with respect to such Called Principal, on the display designated
as the "PX  Screen" on the  Bloomberg  Financial  Market  Service (or such other
display as may replace the PX Screen on Bloomberg  Financial Market Service) for
actively  traded  U.S.  Treasury  securities  having  a  maturity  equal  to the
Remaining  Average Life of such Called  Principal as of such Settlement Date, or
(ii) if such yields are not  reported as of such time or the yields  reported as
of such time are not ascertainable, the Treasury Constant Maturity Series Yields
reported,  for the latest day for which such  yields have been so reported as of
the second  Business Day  preceding  the  Settlement.  Date with respect to such
Called  Principal,  in Federal  Reserve  Statistical  Release H.15 (519) (or any
comparable  successor  publication) for actively traded U.S. Treasury securities
having a constant  maturity  equal to the Remaining  Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be determined,  if
necessary,  by (a) converting U.S.  Treasury bill quotations to  bond-equivalent
yields in accordance  with  accepted  financial  practice and (b)  interpolating
linearly  between  (1) the  actively  traded  U.S.  Treasury  security  with the
Remaining  Average Life closest to and greater than the  Remaining  Average Life
and (2) the actively traded U.S.  Treasury security with the duration closest to
and less than the Remaining Average Life.

         "Remaining  Average Life" means,  with respect to any Called Principal,
the number of years  (calculated  to the nearest  one-twelfth  year) obtained by
dividing (i) such Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining Scheduled Payment with
respect to such Called  Principal by (b) the number of years  (calculated to the
nearest  one-twelfth  year) that will elapse  between the  Settlement  Date with
respect to such Called  Principal and the  scheduled due date of such  Remaining
Scheduled Payment.

         "Remaining  Scheduled  Payments"  means,  with  respect  to the  Called
Principal  of any Note,  all  payments of such  Called  Principal  and  interest
thereon that would be due after the Settlement  Date with respect to such Called
Principal  if no  payment  of such  Called  Principal  were  made  prior  to its
scheduled due date, provided that if such Settlement Date is not a date on which
interest  payments  are due to be made  under the terms of the  Notes,  then the
amount of the next succeeding  scheduled interest payment will be reduced by the
amount of interest  accrued to such  Settlement  Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.

         "Settlement  Date" means,  with respect to the Called  Principal of any
Note,  the date on which such  Called  Principal  is to be prepaid  pursuant  to
Section  8.2 or has become or is  declared  to be  immediately  due and  payable
pursuant to Section 12.1, as the context requires.

8.7.     Change in Control.

(a)      Notice of Change in Control or Control Event. The Company will,  within
         five Business Days after any  Responsible  Officer has knowledge of the
         occurrence  of any Change in Control or  Control  Event,  give  written
         notice of such  Change in Control or  Control  Event to each  holder of
         Notes.  In the case that a Change in Control has occurred,  such notice
         shall  contain and  constitute an offer to prepay Notes as described in
         subparagraph  (b) of this Section 8.7 and shall be  accompanied  by the
         certificate described in subparagraph (e) of this Section 8.7.

(b)      Offer to  Prepay  Notes.  The  offer to prepay  Notes  contemplated  by
         subparagraph  (a) of this  Section 8.7 shall be an offer to prepay,  in
         accordance with and subject to this Section 8.7, all, but not less than
         all,  the Notes held by each  holder (in this case  only,  "holder"  in
         respect of any Note registered in the name of a nominee for a disclosed
         beneficial owner shall mean such beneficial  owner) on a date specified
         in such offer (the "Proposed Prepayment Date") that is not less than 10
         days and not more  than 30 days  after  the date of such  offer (if the
         Proposed  Prepayment  Date shall not be  specified  in such offer,  the
         Proposed  Prepayment  Date shall be the 30th day after the date of such
         offer).

(c)      Rejection.  A holder of Notes  may  accept  the  offer to  prepay  made
         pursuant to this Section 8.7 by causing a notice of such  acceptance to
         be  delivered  to the Company at least five days prior to the  Proposed
         Prepayment  Date. A failure by a holder of Notes to respond to an offer
         to  prepay  made  pursuant  to this  Section  8.7  shall be  deemed  to
         constitute a rejection of such offer by such holder.

(d)      Prepayment.  Prepayment  of the Notes to be  prepaid  pursuant  to this
         Section  8.7 shall be at 100% of the  principal  amount of such  Notes,
         together with interest on such Notes accrued to the date of prepayment.
         The prepayment shall be made on the Proposed Prepayment Date.

(e)      Officer's Certificate.  Each offer to prepay the Notes pursuant to this
         Section 8.7 shall be accompanied by a certificate, executed by a Senior
         Financial  Officer  of the  Company  and dated the date of such  offer,
         specifying:  (i) the Proposed  Prepayment Date; (ii) that such offer is
         made pursuant to this Section 8.7;  (iii) the principal  amount of each
         Note offered to be prepaid; (iv) the interest that would be due on each
         Note offered to be prepaid,  accrued to the Proposed  Prepayment  Date;
         (v) that the  conditions of this Section 8.7 have been  fulfilled;  and
         (vi) in  reasonable  detail,  the  nature  and  date of the  Change  in
         Control.

(f)      "Change  in  Control"   Defined.  "Change  in  Control"  means  any  of
         the following events or  circumstances:  if any person (as such term is
         used in section  13(d) and section  14(d)(2) of the  Exchange Act as in
         effect on the date of the Closing) or related  persons  constituting  a
         group (as such term is used in Rule  l3d-5  under  the  Exchange  Act),
         other than the Parker Family, either (i) become the "beneficial owners"
         (as such term is used in Rule l3d-3 under the Exchange Act as in effect
         on the date of the Closing),  directly or indirectly,  of more than 50%
         of the  total  voting  power of all  classes  then  outstanding  of the
         Company's  or the  Parent's  voting  stock or (ii) shall have  acquired
         substantially all the assets of the Company or the Parent.

(g)      "Control Event"  Defined.  "Control  Event" means: (i) the execution by
         the Company,  the Parent or any of their  Subsidiaries or Affiliates of
         any  agreement  or  letter  of  intent  with  respect  to any  proposed
         transaction  or  event or  series  of  transactions  or  events  which,
         individually or in the aggregate,  may reasonably be expected to result
         in a Change in Control,  (ii) the  execution  of any written  agreement
         which,  when fully performed by the parties thereto,  would result in a
         Change in  Control,  or (iii) the  making of any  written  offer by any
         person (as such term is used in section  13(d) and section  14(d)(2) of
         the  Exchange  Act as in effect on the date of the  Closing) or related
         persons  constituting a group (as such term is used in Rule l3d-5 under
         the  Exchange  Act as in  effect  on the  date of the  Closing)  to the
         holders of the common  stock of the  Company or the Parent (as the case
         may be), which offer,  if accepted by the requisite  number of holders,
         would result in a Change in Control.

(h)      "Parker  Family"  Defined.   "Parker  Family"  means  David  R.  Parker
         (President  and  Chairman  of the  Board of the  Parent  on the date of
         Closing),  Jacqueline  Parker and Clyde M.  Fuller  (collectively,  the
         "Founders"),  in respect of any  individual,  (i) the heirs,  legatees,
         descendants and blood relatives to the third-degree of consanguinity of
         the Founders and (ii) any trusts for the  exclusive  benefit of, or any
         corporation,  partnership or limited  partnership  that is wholly-owned
         by, any such  individual  referred to in clause (i), and his/her spouse
         and lineal  descendants,  so long as such  individual has the exclusive
         right to control each such trust,  corporation,  partnership or limited
         partnership.

All calculations contemplated in this Section 8.7 involving the capital stock of
any Person, shall be made with the assumption that all convertible Securities of
such Person then  outstanding and all convertible  Securities  issuable upon the
exercise of any warrants, options and other rights outstanding at such time were
converted  at such time and that all  options,  warrants  and similar  rights to
acquire shares of capital stock of such Person were exercised at such time.

9.       AFFIRMATIVE COVENANTS.

         Each of the Parent and the Company (as the case may be) covenants  that
so long as any of the Notes are outstanding:

9.1.     Compliance with Law.

         The  Company  and  the  Parent  will  and  will  cause  each  of  their
Subsidiaries  to  comply  with all laws,  ordinances  or  governmental  rules or
regulations  to which each of them is subject,  including,  without  limitation,
Environmental  Laws,  and will  obtain  and  maintain  in effect  all  licenses,
certificates,   permits,   franchises  and  other  governmental   authorizations
necessary to the ownership of their  respective  properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance  with such laws,  ordinances or governmental rules or regulations
or  failures  to  obtain or  maintain  in effect  such  licenses,  certificates,
permits,   franchises   and  other   governmental   authorizations   could  not,
individually  or in the  aggregate,  reasonably  be  expected to have a Material
Adverse Effect.

9.2.     Insurance.

         The  Company  and  the  Parent  will  and  will  cause  each  of  their
Subsidiaries  to  maintain,  with  financially  sound  and  reputable  insurers,
insurance with respect to their  respective  properties  and businesses  against
such  casualties  and  contingencies,  of such types,  on such terms and in such
amounts (including  deductibles,  co-insurance and  self-insurance,  if adequate
reserves are  maintained  with  respect  thereto) as is customary in the case of
entities of established  reputations  engaged in the same or a similar  business
and similarly situated.

9.3.     Maintenance of Properties.

         The  Company  and  the  Parent  will  and  will  cause  each  of  their
Subsidiaries  to maintain and keep,  or cause to be maintained  and kept,  their
respective  properties in good repair,  working order and condition  (other than
ordinary wear and tear), so that the business carried on in connection therewith
may be properly  conducted at all times,  provided  that this Section  shall not
prevent  the  Company,  the  Parent or any  Subsidiary  from  discontinuing  the
operation and the maintenance of any of its properties if such discontinuance is
desirable  in the conduct of its  business and the Company or the Parent (as the
case may be) has concluded that such discontinuance  could not,  individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

9.4.     Payment of Taxes and Claims.

         The  Company  and  the  Parent  will  and  will  cause  each  of  their
Subsidiaries  to file all tax returns  required to be filed in any  jurisdiction
and to pay and  discharge  all taxes shown to be due and payable on such returns
and all other taxes,  assessments,  governmental  charges,  or levies imposed on
them or any of their  properties,  assets,  income or franchises,  to the extent
such taxes and  assessments  have  become due and  payable  and before they have
become delinquent and all claims for which sums have become due and payable that
have or might become a Lien on properties  or assets of the Company,  the Parent
or any Subsidiary,  provided that the Company, the Parent or any Subsidiary need
not pay any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company,  the Parent or such Subsidiary (as
the case may be) on a timely basis in good faith and in appropriate proceedings,
and the  Company,  the  Parent  or such  Subsidiary  (as  the  case  may be) has
established  adequate  reserves therefor in accordance with GAAP on the books of
the  Company,  the  Parent or such  Subsidiary  (as the case may be) or (ii) the
nonpayment  of all  such  taxes  and  assessments  in the  aggregate  could  not
reasonably be expected to have a Material Adverse Effect.

9.5.     Corporate Existence, etc.

         The Company and the Parent will at all times  preserve and keep in full
force and effect its corporate existence.  Subject to Sections 10.2 through 10.5
(inclusive),  the Company and the Parent will at all times  preserve and keep in
full  force and  effect  the  corporate  existence  of each of its  Subsidiaries
(unless  merged into the Company or a Subsidiary  of the Company) and all rights
and franchises of the Company,  the Parent and the Subsidiaries  unless,  in the
good faith  judgment  of the  Company  or the  Parent (as the case may be),  the
termination  of or failure to  preserve  and keep in full force and effect  such
corporate  existence,  right or  franchise  could  not,  individually  or in the
aggregate, have a Material Adverse Effect.

9.6.     Compliance with Parent Guarantee.

         The  Parent  will at all  times  comply  with the  terms of the  Parent
Guarantee.

10.      NEGATIVE COVENANTS.

         Each of the Company and the Parent covenants that so long as any of the
Notes are outstanding:

10.1.    Transactions with Affiliates.

         Each of the  Company  and the  Parent  will not and will not permit any
Subsidiary  to enter into  directly or indirectly  any  transaction  or Material
group of related transactions (including without limitation the purchase, lease,
sale or exchange of properties of any kind or the rendering of any service) with
any Affiliate (other than the Parent, the Company or another Subsidiary), except
in the  ordinary  course and  pursuant  to the  reasonable  requirements  of the
Company's or such  Subsidiary's  business and upon fair and reasonable  terms no
less favorable to the Company or such  Subsidiary  than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.

10.2.    Merger, Consolidation, etc.

         Each of the Company and the Parent will not, and will not permit any of
the  Subsidiaries to,  consolidate  with or merge with any other  corporation or
convey,  transfer  or  lease  substantially  all  of  its  assets  in  a  single
transaction  or series of  transactions  to any Person (except that a Subsidiary
(other than the  Company)  may (x)  consolidate  with or merge with,  or convey,
transfer or lease  substantially  all of its assets in a single  transaction  or
series of  transactions  to, a  Wholly-Owned  Subsidiary  of the  Company or the
Parent and (y) convey,  transfer or lease all of its assets in  compliance  with
the provisions of Section 10.3),  provided that the foregoing  restriction  does
not apply to the  consolidation  or merger of the Company or the Parent with, or
the  conveyance,  transfer  or lease of  substantially  all of the assets of the
Company or the Parent in a single  transaction or series of transactions to, any
Person so long as:

(a)      the  successor  formed by such  consolidation  or the  survivor of such
         merger or the Person  that  acquires by  conveyance,  transfer or lease
         substantially  all of the  assets of the  Company  or the  Parent as an
         entirety, as the case may be (the "Successor Corporation"),  shall be a
         solvent corporation organized and existing under the laws of the United
         States of America, any State thereof or the District of Columbia;
(b)      if the Company or the Parent,  as the case may be, is not the Successor
         Corporation, such corporation shall have executed and delivered to each
         holder of Notes its assumption of the due and punctual  performance and
         observance  of each  covenant and  condition of this  Agreement and the
         Notes (if applicable); and

(c)      immediately after giving effect to such transaction no Default or Even
         of Default would exist.

No such conveyance,  transfer or lease of substantially all of the assets of the
Company or the Parent shall have the effect of releasing the Company, the Parent
or any  Successor  Corporation  from its liability  under this  Agreement or the
Notes.

10.3.    Sales of Assets.

         The Company and the Parent will not, and will not permit any Subsidiary
to, make any Transfer, provided that the foregoing restriction does not apply to
a Transfer if:

(a)      the property  that is the subject of such Transfer  constitutes  either
         (i) inventory held for sale, or (ii) equipment,  fixtures,  supplies or
         materials  no longer  required in the  operation of the business of the
         Parent, the Company or such Subsidiary or that is obsolete, and, in the
         case of any  Transfer  described  in clause  (i) or clause  (ii),  such
         Transfer is in the  ordinary  course of business (an  "Ordinary  Course
         Transfer");

(b)      either (i) such  Transfer  is from a  Subsidiary  to the Company or the
         Parent or to a Wholly-Owned  Subsidiary,  or (ii) such Transfer is from
         the  Company or the  Parent to a  Wholly-Owned  Subsidiary,  so long as
         immediately  before  and  immediately  after the  consummation  of such
         transaction,  and after giving effect  thereto,  no Default or Event of
         Default  exists or would  exist  (each such  Transfer,  an  "Intergroup
         Transfer"); and

(c)      such  Transfer is not  an  Ordinary  Course  Transfer or an  Intergroup
         Transfer  (such  transfers   collectively   referred  to  as  "Excluded
         Transfers"),  and  all of the  following  conditions  shall  have  been
         satisfied with respect  thereto (the date of the  consummation  of such
         Transfer  of  property  being  referred  to  herein  as  the  "Property
         Disposition  Date"):  (i) such  Transfer does not involve a Substantial
         Portion of the property of the Parent and its Subsidiaries, (ii) in the
         good faith  opinion of the Company and the Parent,  the  Transfer is in
         exchange for  consideration  with a Fair Market Value at least equal to
         that of the  property  exchanged,  and is in the best  interests of the
         Company and the Parent,  and (iii)  immediately  after giving effect to
         such transaction no Default or Event of Default would exist.

         "Substantial  Portion" means, with respect to any Transfer of property,
any portion of property of the Parent and its  Subsidiaries,  if the Disposition
Value of such  property,  when  added  to the  Disposition  Value  of all  other
property  of the  Parent  and its  Subsidiaries  that was  subject to a Transfer
(other than an Excluded  Transfer)  during the period  commencing on the date of
Closing  and  ending on and  including  the  Property  Disposition  Date of such
property exceeds an amount equal to 10% of Consolidated  Assets determined as of
the end of the then most recently ended fiscal quarter of the Parent.

10.4.    Disposal of Ownership of a Subsidiary.

         The Company and the Parent will not, and will not permit any Subsidiary
to, sell or otherwise  dispose of any shares of Subsidiary  Stock,  nor will the
Company or the Parent  permit any such  Subsidiary  to issue,  sell or otherwise
dispose of any shares of its own Subsidiary  Stock,  provided that the foregoing
restrictions do not apply to:

(a)      the issue of directors' qualifying shares by any such Subsidiary;

(b)      any such Transfer of Subsidiary Stock constituting an Intergroup
         Transfer;

(c)      any such Transfer of Subsidiary Stock that does not constitute a
         Restricted Payment; and

(d)      the Transfer of all of the  Subsidiary  Stock of  a Subsidiary  of  the
         Company or the Parent  owned by the Company or the Parent,  as the case
         may be, and their other  Subsidiaries  if: (i) such Transfer  satisfies
         the  requirements  of Section  10.3(c),  (ii) in  connection  with such
         Transfer the entire  Investment  (whether  represented by stock,  Debt,
         claims or  otherwise)  of the  Company or the  Parent  and their  other
         Subsidiaries  in such  Subsidiary  is sold,  transferred  or  otherwise
         disposed of to a Person  other than (A) the Company or the Parent,  (B)
         another  Subsidiary  not being  simultaneously  disposed  of, or (C) an
         Affiliate, and (iii) the Subsidiary being disposed of has no continuing
         Investment in any other Subsidiary not being simultaneously disposed of
         or in the Company or the Parent.

10.5.    Sale-and-Leaseback Transactions.

         The Company and the Parent will not, and will not permit any Subsidiary
to, enter into any Sale-and-Leaseback  Transaction other than Sale-and-Leaseback
Transactions  covering not more than  $25,000,000  of over the road equipment in
the aggregate in any fiscal year.

10.6.     Maintenance of Consolidated Tangible Net Worth.

         The Company and the Parent will not permit  Consolidated  Tangible  Net
Worth at any time to be less than the sum of

(a)      $136,000,000 plus

(b)      an aggregate  amount equal to 50% of  Consolidated  Net Income (but, in
         each case, only if a positive  number) for each completed  fiscal year,
         beginning with the fiscal year ended 1999.

10.7.    Limitation on Total Debt; Limitation on Funded Debt Incurrence.

(a)      The Company  and the Parent  will not permit the ratio of  Consolidated
         Total Debt to Consolidated EBITDAR to exceed 3.0 to 1.0 at any time.

(b)      The Company and the Parent will not, and will not permit any Subsidiary
         to,  incur any  Funded  Debt for  borrowed  money  unless the lender or
         holder  of  such   Funded  Debt  shall  have  become  a  party  to  the
         Intercreditor  Agreement,  provided that the  restriction  set forth in
         this clause (b) shall not apply to Funded Debt  evidenced by a purchase
         money security  interest in property  acquired with such Funded Debt or
         to any Capital Leases of revenue equipment or other property.

10.8.    Restricted Payments.

(a)      The Company and the Parent will not, and will not permit any Subsidiary
         to, at any time,  declare or make, or incur any liability to declare or
         make, any Restricted Payment, unless immediately after giving effect to
         such action:

(i)      the aggregate amount of Restricted  Payments of the Company, the Parent
         and the Subsidiaries  declared or made during the period  commencing on
         the date of Closing,  and ending on the date such Restricted Payment is
         declared or made, inclusive, would not exceed the sum of

(A)      $25,000,000, plus

(B)      50%  of  Consolidated  Net  Income  for  each  fiscal  quarter
         commencing  after December 31, 1999 (or minus 100% of Consolidated  Net
         Income  for such  fiscal  quarter if  Consolidated  Net Income for such
         fiscal quarter is a loss); and

(ii)     no Default or Event of Default would exist.

(b)      The  Company  and the  Parent  will  not,  nor  will  they  permit  any
         Subsidiary  to,  authorize  a  Restricted  Payment  that is not payable
         within 60 days of authorization.

10.9.    Restricted Investments.

         The Company and the Parent will not, and will not permit any Subsidiary
to,  make any  Restricted  Investment,  except  that the  Parent  may  invest in
Transplace.com,  directly or through a  newly-created  Subsidiary of the Parent,
not  more  than  $7,000,000  in  the  form  of  cash  and  the  non-asset  based
transportation   logistics  business   (consisting  of  customer  lists,  office
furniture,  computer  hardware and  software,  lease,  trade names,  trademarks,
goodwill, know-how and employee relationships) of Terminal Truck Broker, Inc., a
Wholly-Owned Subsidiary of Parent.

10.10.   Fixed Charges Coverage.

         The Company and the Parent will not permit the Fixed  Charges  Coverage
Ratio to be less than 2.0 to 1.0 at any time.

10.11.   Liens.

         The Company and the Parent will not, and will not permit any Subsidiary
to, directly or indirectly  create,  incur,  assume or permit to exist (upon the
happening  of a  contingency  or  otherwise)  any Lien on or with respect to any
property or asset  (including  any document or instrument in respect of goods or
accounts receivable) of the Company, the Parent or any such Subsidiary,  whether
now owned or held or  hereafter  acquired,  or any income or  profits  therefrom
(whether  or not  provision  is made for the equal and  ratable  securing of the
Notes in accordance with the last paragraph of this Section 10.11), or assign or
otherwise convey any right to receive income or profits, except:

(a)       Liens  existing  on the  date  of  this  Agreement  and  securing Debt
         of the Parent and its Subsidiaries  referred to in item (a) of Schedule
         10.11;

(b)      Liens for taxes, assessments or other  governmental charges the payment
         of which is not at the time required by Section 9.4;

(c)      statutory  Liens of  landlords  and  Liens of  carriers,  warehousemen,
         mechanics,  materialmen and other similar Liens, in each case, incurred
         in the ordinary  course of business for sums not yet due or the payment
         of which is not at the time required by Section 9.4;

(d)      Liens (other than any Lien  imposed by ERISA) incurred or deposits made
         in the ordinary  course of business  (i) in  connection  with  workers'
         compensation, unemployment insurance and other types of social security
         or  retirement  benefits,  or (ii) to secure  (or to obtain  letters of
         credit that secure) the performance of tenders,  statutory obligations,
         surety bonds, appeal bonds (not in excess of $2,500,000),  bids, leases
         (other than Capital Leases), performance bonds, purchase,  construction
         or sales  contracts  and other  similar  obligations,  in each case not
         incurred  or made in  connection  with  the  borrowing  of  money,  the
         obtaining of advances or credit or the payment of the deferred purchase
         price of property;

(e)      any  attachment  or judgment  Lien,  unless the judgment it secures (i)
         shall not, within 30 days after the entry thereof, have been discharged
         or execution  thereof  stayed  pending  appeal,  or shall not have been
         discharged within 30 days after the expiration of any such stay or (ii)
         exceeds $2,500,000;

(f)      leases  or  subleases  granted  to  others,  easements,  rights-of-way,
         restrictions  and other similar charges or  encumbrances,  in each case
         incidental to, and not  interfering  with, the ordinary  conduct of the
         business  of the  Company,  the  Parent  or  any  of the  Subsidiaries,
         provided that such Liens do not, in the aggregate,  materially  detract
         from the value of such property;

(g)      Liens on property or assets of the Company or the Parent or any
         Subsidiary  securing  Debt owing to the  Company,  the Parent or to any
         Wholly-Owned Subsidiary;

(h)      any  Lien  existing on  property of  a  Person immediately prior to its
         being  consolidated  with or merged into the  Company,  the Parent or a
         Subsidiary  or its becoming a  Subsidiary,  or any Lien existing on any
         property  acquired by the Company,  the Parent or any Subsidiary at the
         time such  property  is so acquired  (whether  or not the Debt  secured
         thereby shall have been assumed),  provided that (i) no such Lien shall
         have been created or assumed in contemplation of such  consolidation or
         merger or such Person's  becoming a Subsidiary or such  acquisition  of
         property,  and (ii) each such Lien shall  extend  solely to the item or
         items of  property  so  acquired  and,  if required by the terms of the
         instrument  originally  creating such Lien,  other property which is an
         improvement to or is acquired for specific use in connection  with such
         acquired property;

(i)      any  Lien  renewing,  extending  or  refunding  any Lien  permitted  by
         paragraphs  (a) or (h) of this  Section  10.11,  provided  that (i) the
         principal amount of Debt secured by such Lien immediately prior to such
         extension,  renewal  or  refunding  is not  increased  or the  maturity
         thereof reduced,  (ii) such Lien is not extended to any other property,
         and (iii)  immediately  after such  extension,  renewal or refunding no
         Default or Event of Default would exist;

(j)      a Lien on the headquarters building and the real estate upon which such
         building is situated  which Lien is confined  solely to such assets and
         secures Debt  permitted to be incurred as  Headquarters  Financing Debt
         pursuant to Section 10.7(a); and

(k)      other Liens not  otherwise  permitted  by  paragraphs  (a) through (j),
         provided that  immediately  after giving effect to any such other Lien,
         the sum of (i) the amount  secured by the  additional  Liens under this
         paragraph  (k) plus (ii) the  amount of Debt  then  outstanding  of the
         Subsidiaries  (exclusive of Debt of any Subsidiary owed to the Company,
         the Parent or to any Wholly-Owned  Subsidiary),  shall not at such time
         exceed 40% of Consolidated Tangible Net Worth.

For the purposes of this Section 10.11,  any Person becoming a Subsidiary  after
the date of this  Agreement  shall be  deemed to have  incurred  all of its then
outstanding Liens at the time it becomes a Subsidiary, and any Person extending,
renewing  or  refunding  any Debt  secured  by any Lien  shall be deemed to have
incurred such Lien at the time of such extension, renewal or refunding.

         If,  notwithstanding  the  prohibition  contained  herein,  either  the
Company or the Parent shall create,  assume or permit to exist any Lien upon any
of its property or assets, or the property or assets of any Subsidiary,  whether
now owned or hereafter acquired, other than those permitted by the provisions of
paragraphs  (a) through (j) of this Section  10.11,  it will make or cause to be
made effective  provision  whereby the Notes will be secured equally and ratably
with any and all other obligations thereby secured, such security to be pursuant
to agreements  reasonably  satisfactory to the Required Holders and, in any such
case,  the Notes shall have the benefit,  to the fullest  extent that,  and with
such priority as, the holders of the Notes may be entitled under applicable law,
of an equitable Lien on such property. Such violation of this Section 10.11 will
constitute  an Event of Default,  whether or not  provision is made for an equal
and ratable Lien  pursuant to this Section  10.11,  provided,  however,  that an
Event of  Default  shall not occur if the  holder of such Lien is a party to the
Intercreditor  Agreement  and provision for an equal and ratable Lien shall have
been  made  to  the  holders  of  Notes  as  contemplated  by the  terms  of the
Intercreditor Agreement.

10.12.   Line of Business.

         Each of the Company and the Parent will not, and will not permit any of
the Subsidiaries to, engage in any business if, as a result,  the general nature
of the business in which the Company, the Parent and the Subsidiaries,  taken as
a whole,  would then be engaged would be substantially  changed from the general
nature of the  business in which the Company,  the Parent and the  Subsidiaries,
taken as a whole, are engaged on the date of this Agreement.

10.13.   Subsidiary Guaranty.

         The  Company  will  not  create  or  acquire  any  Subsidiary   unless,
immediately  upon  such  creation  or  acquisition,   the  Company  causes  such
Subsidiary to become a signatory to the Subsidiary Guaranty.

11.      EVENTS OF DEFAULT.

         An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:

(a)      the  Company  defaults in the payment of any  principal  or  Make-Whole
         Amount,  if any,  on any Note when the same  becomes  due and  payable,
         whether at maturity or at a date fixed for prepayment or by declaration
         or otherwise;

(b)      the Company defaults in the  payment of any  interest on  any Note  for
         more than five days after the same becomes due and payable;

(c)      the  Company or the Parent (as the case may be)  defaults  in the
         performance of or compliance with any term contained in Sections 7.1(d)
         and 10.1 through 10.13 (inclusive);

(d)      the  Company  or the  Parent  (as  the  case  may be)  defaults  in the
         performance of or compliance with any term contained herein (other than
         those  referred to in  paragraphs  (a), (b) and (c) of this Section 11,
         but including  Section 9.6) and such default is not remedied  within 30
         days after the earlier of (i) a Responsible  Officer  obtaining  actual
         knowledge of such default and (ii) the Company or the Parent  receiving
         written  notice  of such  default  from any  holder of a Note (any such
         written  notice to be  identified as a "notice of default" and to refer
         specifically to this paragraph (d) of Section 11);

(e)      any  representation  or warranty made in writing by or on behalf of the
         Company,  the  Parent  or  any  Subsidiary,  or by any  officer  of the
         Company, the Parent or any Subsidiary in this Agreement, the Subsidiary
         Guaranty  or  in  any  writing   furnished  in   connection   with  the
         transactions contemplated hereby proves to have been false or incorrect
         in any material respect on the date as of which made;

(f)      (i) the  Company,  the Parent or any  Subsidiary  is in default (as
         principal  or as  guarantor  or other  surety)  in the  payment  of any
         principal  of or  premium  or  make-whole  amount  or  interest  on any
         Indebtedness that is outstanding in an aggregate principal amount of at
         least  $2,500,000  beyond any  period of grace  provided  with  respect
         thereto,  or (ii) the  Company,  the  Parent  or any  Subsidiary  is in
         default  in the  performance  of or  compliance  with  any  term of any
         evidence of any  Indebtedness  in an  aggregate  outstanding  principal
         amount of at least  $2,500,000 or of any  mortgage,  indenture or other
         agreement  relating  thereto or any other  condition  exists,  and as a
         consequence of such default or condition such  Indebtedness has become,
         or has been  declared  (or one or more  Persons are entitled to declare
         such Indebtedness to be), due and payable before its stated maturity or
         before  its  regularly  scheduled  dates  of  payment,  or  (iii)  as a
         consequence of the occurrence or continuation of any event or condition
         (other  than  the  passage  of  time  or the  right  of the  holder  of
         Indebtedness to convert such Indebtedness into equity  interests),  (x)
         the  Company,  the Parent or any  Subsidiary  has become  obligated  to
         purchase or repay  Indebtedness  before its regular  maturity or before
         its regularly  scheduled  dates of payment in an aggregate  outstanding
         principal  amount of at least  $2,500,000,  or (y) one or more  Persons
         have the right to require the Company,  the Parent or any Subsidiary so
         to purchase or repay such Indebtedness;

(g)      the Company,  the Parent or any Subsidiary (i) is generally not paying,
         or admits in writing  its  inability  to pay,  its debts as they become
         due,  (ii)  files,  or consents  by answer or  otherwise  to the filing
         against it of, a petition for relief or  reorganization  or arrangement
         or any  other  petition  in  bankruptcy,  for  liquidation  or to  take
         advantage of any bankruptcy, insolvency, reorganization,  moratorium or
         other similar law of any  jurisdiction,  (iii) makes an assignment  for
         the benefit of its  creditors,  (iv) consents to the  appointment  of a
         custodian,  receiver, trustee or other officer with similar powers with
         respect to it or with respect to any substantial  part of its property,
         (v) is  adjudicated  as  insolvent or to be  liquidated,  or (vi) takes
         corporate action for the purpose of any of the foregoing;

(h)      a court or governmental authority of competent  jurisdiction  enters an
         order  appointing,  without  consent by the Company,  the Parent or any
         Subsidiary,  a  custodian,  receiver,  trustee  or other  officer  with
         similar  powers with respect to it or with  respect to any  substantial
         part of its property,  or constituting an order for relief or approving
         a  petition  for  relief or  reorganization  or any other  petition  in
         bankruptcy or for liquidation or to take advantage of any bankruptcy or
         insolvency  law of  any  jurisdiction,  or  ordering  the  dissolution,
         winding-up  or  liquidation  of  the  Company,  the  Parent  or  any of
         Subsidiary,  or any such  petition  shall be filed against the Company,
         the Parent or any  Subsidiary  and such petition shall not be dismissed
         within 60 days;

(i)      a final  judgment or judgments for the payment of money  aggregating in
         excess of $2,500,000  are rendered  against one or more of the Company,
         the Parent and the  Subsidiaries and which judgments are not, within 30
         days after entry thereof, bonded,  discharged or stayed pending appeal,
         or are not discharged within 30 days after the expiration of such stay;
         or

(j)      if (i) any Plan shall fail to satisfy  the  minimum  funding  standards
         of ERISA or the Code for any plan year or part  thereof  or a waiver of
         such  standards or extension  of any  amortization  period is sought or
         granted  under  section  412 of the  Code,  (ii) a notice  of intent to
         terminate  any Plan shall  have been or is  reasonably  expected  to be
         filed with the PBGC or the PBGC shall have instituted proceedings under
         ERISA section 4042 to terminate or appoint a trustee to administer  any
         Plan or the PBGC shall have  notified  the  Company,  the Parent or any
         ERISA  Affiliate  that  a  Plan  may  become  a  subject  of  any  such
         proceedings,   (iii)  the   aggregate   "amount  of  unfunded   benefit
         liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
         all Plans,  determined  in  accordance  with  Title IV of ERISA,  shall
         exceed $2,500,000,  (iv) the Company, the Parent or any ERISA Affiliate
         shall have  incurred or is  reasonably  expected to incur any liability
         pursuant  to  Title I or IV of  ERISA  or the  penalty  or  excise  tax
         provisions  of the Code  relating to employee  benefit  plans,  (v) the
         Company,   the  Parent  or  any  ERISA  Affiliate  withdraws  from  any
         Multiemployer  Plan, or (vi) the Company,  the Parent or any Subsidiary
         establishes or amends any employee  welfare  benefit plan that provides
         post-employment  welfare  benefits in a manner that would  increase the
         liability of the Company, the Parent or any Subsidiary thereunder;  and
         any such event or events  described  in clauses (i) through (vi) above,
         either  individually  or together  with any other such event or events,
         could reasonably be expected to have a Material Adverse Effect.
(k)      any Subsidiary  defaults in the  performance of or compliance  with any
         term  contained in the Subsidiary  Guaranty or the Subsidiary  Guaranty
         ceases to be in full  force and effect as a result of acts taken by the
         Company,  the Parent or any  Subsidiary  or is  declared to be null and
         void in whole or in material part by a court or other  governmental  or
         regulatory   authority   having   jurisdiction   or  the   validity  or
         enforceability  thereof  shall be contested by any of the Company,  the
         Parent or any  Subsidiary  or any of them  renounces any of the same or
         denies that it has any or further liability thereunder.

As used in  Section  11(j),  the terms  "employee  benefit  plan" and  "employee
welfare benefit plan" shall have the respective  meanings assigned to such terms
in Section 3 of ERISA.

12.      REMEDIES ON DEFAULT, ETC.

12.1.    Acceleration.

(a)      If an Event of  Default  with  respect  to the  Company  or the  Parent
         described in paragraph (g) or (h) of Section 11 (other than an Event of
         Default described in clause (i) of paragraph (g) or described in clause
         (vi)  of  paragraph  (g)  by  virtue  of  the  fact  that  such  clause
         encompasses  clause (i) of paragraph  (g)) has occurred,  all the Notes
         then  outstanding  shall  automatically   become  immediately  due  and
         payable.

(b)      If any other  Event of Default  has  occurred  and is  continuing,  any
         holder or holders of more than 50% in principal  amount of the Notes at
         the time outstanding may at any time at its or their option,  by notice
         or notices to the  Company or the  Parent,  declare  all the Notes then
         outstanding to be immediately due and payable.

(c)      If any Event of Default described in paragraph (a) or (b) of Section 11
         has occurred and is  continuing,  any holder or holders of Notes at the
         time outstanding  affected by such Event of Default may at any time, at
         its or their option, by notice or notices to the Company or the Parent,
         declare  all the  Notes  held by it or them to be  immediately  due and
         payable.

        Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes,  plus (x) all accrued and unpaid interest
thereon and (y) the  Make-Whole  Amount  determined in respect of such principal
amount  (to  the  full  extent  permitted  by  applicable  law),  shall  all  be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice,  all of which are hereby waived.  Each of the Company
and the Parent acknowledges, and the parties hereto agree, that each holder of a
Note has the right to maintain its  investment in the Notes free from  repayment
by the Company or the Parent  (except as herein  specifically  provided for) and
that the  provision  for  payment of a  Make-Whole  Amount by the Company or the
Parent  (as the case may be) in the  event  that the Notes  are  prepaid  or are
accelerated  as a  result  of an  Event  of  Default,  is  intended  to  provide
compensation for the deprivation of such right under such circumstances.

12.2.    Other Remedies.

         If any Default or Event of Default has occurred and is continuing,  and
irrespective of whether any Notes have become or have been declared  immediately
due and  payable  under  Section  12.1,  the  holder  of any  Note  at the  time
outstanding  may  proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate  proceeding,  whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof,  or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.

12.3.    Rescission.

         At any time after any Notes have been declared due and payable pursuant
to  clause  (b) or (c) of  Section  12.1,  the  holders  of not less than 51% in
principal  amount  of the  Notes  then  outstanding,  by  written  notice to the
Company,  may rescind and annul any such declaration and its consequences if (a)
the Company or the Parent (as the case may be) has paid all overdue  interest on
the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are
due and payable and are unpaid other than by reason of such declaration, and all
interest on such overdue  principal and Make-Whole  Amount,  if any, and (to the
extent  permitted  by  applicable  law) any  overdue  interest in respect of the
Notes,  at the Default Rate, (b) all Events of Default and Defaults,  other than
non-payment   of  amounts  that  have  become  due  solely  by  reason  of  such
declaration, have been cured or have been waived pursuant to Section 17, and (c)
no  judgment  or decree  has been  entered  for the  payment  of any  monies due
pursuant  hereto or to the Notes. No rescission and annulment under this Section
12.3 will  extend to or affect  any  subsequent  Event of  Default or Default or
impair any right consequent thereon.

12.4.    No Waivers or Election of Remedies, Expenses, etc.

         No course of dealing and no delay on the part of any holder of any Note
in exercising  any right,  power or remedy shall operate as a waiver  thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy  conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right,  power or remedy  referred to herein or therein
or now or  hereafter  available  at law,  in equity,  by  statute or  otherwise.
Without limiting the obligations of the Company and the Parent under Section 15,
the Company will pay to the holder of each Note on demand such further amount as
shall be  sufficient to cover all  reasonable  costs and expenses of such holder
incurred in any  enforcement  or  collection  under this Section 12,  including,
without limitation, reasonable attorneys' fees, expenses and disbursements.

13.      REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

13.1.    Registration of Notes.

         The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each  transferee of one or more Notes shall be  registered in such  register.
Prior to due presentment for registration of transfer,  the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes  hereof,  and the Company  shall not be affected by any
notice or knowledge to the  contrary.  The Company shall give to any holder of a
Note  that is an  Institutional  Investor  promptly  upon  request  therefor,  a
complete and correct copy of the names and addresses of all  registered  holders
of Notes.

13.2.   Transfer and Exchange of Notes.

        Upon  surrender  of any Note at the  principal  executive  office of the
Company for registration of transfer or exchange (and in the case of a surrender
for  registration  of  transfer,  duly  endorsed  or  accompanied  by a  written
instrument of transfer duly  executed by the  registered  holder of such Note or
his  attorney  duly  authorized  in writing and  accompanied  by the address for
notices of each  transferee  of such Note or part  thereof),  the Company  shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor,  in an
aggregate  principal  amount  equal  to  the  unpaid  principal  amount  of  the
surrendered  Note.  Each such new Note shall be  payable to such  Person as such
holder may request and shall be  substantially  in the form of Exhibit 1.2. Each
such new Note shall be dated and bear interest  from the date to which  interest
shall  have  been  paid  on the  surrendered  Note  or  dated  the  date  of the
surrendered  Note if no interest  shall have been paid thereon.  The Company may
require  payment  of a sum  sufficient  to cover any  stamp tax or  governmental
charge  imposed in respect of any such  transfer  of Notes.  Notes  shall not be
transferred in denominations of less than $1,000,000, provided that if necessary
to enable the  registration  of  transfer  by a holder of its entire  holding of
Notes,  one  Note  may  be  in a  denomination  of  less  than  $1,000,000.  Any
transferee,  by its acceptance of a Note  registered in its name (or the name of
its  nominee),  shall be deemed to have  made the  representations  set forth in
Section 6.2.

13.3.    Replacement of Notes.

         Upon receipt by the Company of evidence  reasonably  satisfactory to it
of the ownership of and the loss,  theft,  destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor,  notice from
such Institutional Investor of such ownership and such loss, theft,  destruction
or mutilation), and

(a)      in the case of loss,  theft or  destruction,  of  indemnity  reasonably
         satisfactory  to it (provided that if the holder of such Note is, or is
         a nominee for, an original Purchaser or another holder of a Note with a
         minimum net worth of at least $50,000,000,  such Person's own unsecured
         agreement of indemnity shall be deemed to be satisfactory), or

(b)      in the case of mutilation, upon surrender and cancellation thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost,  stolen,  destroyed or mutilated  Note if no interest shall have been paid
thereon.

14.      PAYMENTS ON NOTES.

14.1.    Place of Payment.

         Subject to Section 14.2,  payments of principal,  Make-Whole Amount, if
any,  and  interest  becoming  due and payable on the Notes shall be made in New
York,  New York at the  offices  of the  Purchasers  in such  jurisdiction.  The
Company may at any time, by notice to each holder of a Note, change the place of
payment  of the  Notes so long as such  place of  payment  shall be  either  the
principal office of the Company in such  jurisdiction or the principal office of
a bank or trust company in such jurisdiction.

14.2.    Home Office Payment.

         So long as you or your  nominee  shall be the  holder of any Note,  and
notwithstanding  anything  contained  in  Section  14.1 or in  such  Note to the
contrary,  the  Company  or the  Parent  (as the  case may be) will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and interest
by the method and at the address  specified  for such purpose below your name in
Schedule A, or by such other  method or at such other  address as you shall have
from time to time  specified  to the  Company or the Parent in writing  for such
purpose, without the presentation or surrender of such Note or the making of any
notation  thereon,  except  that  upon  written  request  of  the  Company  made
concurrently with or reasonably  promptly after payment or prepayment in full of
any Note, you shall surrender such Note for  cancellation,  reasonably  promptly
after any such request,  to the Company at its principal  executive office or at
the place of payment most recently designated by the Company pursuant to Section
14.1.  Prior to any sale or other  disposition  of any Note  held by you or your
nominee  you will,  at your  election,  either  endorse  thereon  the  amount of
principal paid thereon and the last date to which interest has been paid thereon
or  surrender  such  Note to the  Company  in  exchange  for a new Note or Notes
pursuant to Section  13.2.  The Company will afford the benefits of this Section
14.2 to any Institutional  Investor that is the direct or indirect transferee of
any  Note  purchased  by you  under  this  Agreement  and that has made the same
agreement relating to such Note as you have made in this Section 14.2.

15.      EXPENSES, ETC.

15.1.    Transaction Expenses.

         Whether or not the  transactions  contemplated  hereby are consummated,
the Company will pay all costs and  expenses  (including  reasonable  attorneys'
fees of a special counsel and, if reasonably  required,  local or other counsel)
incurred  by you and each  Other  Purchaser  or  subsequent  holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents  under or in respect of this  Agreement or the Notes (whether or not
such amendment,  waiver or consent becomes effective),  including: (a) the costs
and expenses  incurred in enforcing or defending (or determining  whether or how
to enforce or defend) any rights under this Agreement, the Notes, the Subsidiary
Guaranty or the  Security  Documents or in  responding  to any subpoena or other
legal process or informal  investigative  demand issued in connection  with this
Agreement,  the Notes, the Subsidiary Guaranty or the Security Documents,  or by
reason of being a holder of any Note, and (b) the costs and expenses,  including
financial  advisors'  fees,  incurred  in  connection  with  the  insolvency  or
bankruptcy of the Company or any  Subsidiary or in connection  with any work-out
or restructuring of the transactions  contemplated  hereby and by the Notes. The
Company  will pay,  and will save you and each other  holder of a Note  harmless
from,  all claims in respect of any fees,  costs or  expenses if any, of brokers
and finders (other than those retained by you).

15.2.    Survival.

         The  obligations  of the Company under this Section 15 will survive the
payment or transfer of any Note,  the  enforcement,  amendment  or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.

16.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

         All representations  and warranties  contained herein shall survive the
execution and delivery of this Agreement, the Notes, the Subsidiary Guaranty and
the Security  Documents,  the purchase or transfer by you of any Note or portion
thereof or interest  therein and the payment of any Note, and may be relied upon
by any subsequent holder of a Note,  regardless of any investigation made at any
time by or on  behalf  of you or any  other  holder  of a Note.  All  statements
contained in any  certificate or other  instrument  delivered by or on behalf of
the  Company  or  the  Parent   pursuant  to  this  Agreement  shall  be  deemed
representations and warranties of the Company or the Parent (as the case may be)
under this Agreement.  Subject to the preceding sentence, this Agreement and the
Notes embody the entire agreement and  understanding  among you, the Company and
the Parent and supersede all prior agreements and understandings relating to the
subject matter hereof.

17.      AMENDMENT AND WAIVER.

17.1.    Requirements.

         This Agreement,  the Subsidiary  Guaranty and the Notes may be amended,
and the observance of any term hereof or of the Subsidiary Guaranty or the Notes
may be waived (either retroactively or prospectively),  with (and only with) the
written consent of the Company, the Parent and the Required Holders, except that
(a) no amendment or waiver of any of the  provisions of Section 1, 2, 3, 4, 5, 6
or 21 hereof, or any defined term (as it is used therein),  will be effective as
to you unless  consented  to by you in writing,  and (b) no  amendment or waiver
may,  without  the  written  consent  of the  holder  of each  Note at the  time
outstanding  affected  thereby,  (i)  subject  to the  provisions  of Section 12
relating  to  acceleration  or  rescission,  change  the  amount  or time of any
prepayment  or payment of principal of, or reduce the rate or change the time of
payment or method of computation of interest or of the Make-Whole Amount on, the
Notes,  (ii)  change the  percentage  of the  principal  amount of the Notes the
holders of which are  required to consent to any such  amendment  or waiver,  or
(iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.

17.2.    Solicitation of Holders of Notes.

(a)      Solicitation.   The  Company  will  provide  each holder of  the  Notes
         (irrespective  of the amount of Notes then owned by it) with sufficient
         information,  sufficiently  far in advance  of the date a  decision  is
         required,  to enable  such holder to make an  informed  and  considered
         decision with respect to any proposed  amendment,  waiver or consent in
         respect of any of the provisions hereof or of the Notes. The Company or
         the Parent (as  applicable)  will deliver  executed or true and correct
         copies of each amendment,  waiver or consent  effected  pursuant to the
         provisions  of this  Section  17 to each  holder of  outstanding  Notes
         promptly  following  the date on which it is executed and delivered by,
         or receives the consent or approval of, the requisite holders of Notes.

(b)      Payment. Neither the Company nor the Parent will directly or indirectly
         pay  or  cause  to  be  paid  any  remuneration,   whether  by  way  of
         supplemental  or additional  interest,  fee or otherwise,  or grant any
         security,  to  any  holder  of  Notes  as  consideration  for  or as an
         inducement to the entering into by any holder of Notes or any waiver or
         amendment  of  any of the  terms  and  provisions  hereof  unless  such
         remuneration is concurrently paid, or security is concurrently granted,
         on the same  terms,  ratably to each  holder of Notes then  outstanding
         even if such holder did not consent to such waiver or amendment.

17.3.    Binding Effect, etc.

         Any  amendment  or waiver  consented  to as provided in this Section 17
applies  equally to all holders of Notes and is binding  upon them and upon each
future holder of any Note and upon the Company and the Parent  without regard to
whether such Note has been marked to indicate such amendment or waiver.  No such
amendment  or  waiver  will  extend  to  or  affect  any  obligation,  covenant,
agreement, Default or Event of Default not expressly amended or waived or impair
any right  consequent  thereon.  No course of dealing between the Company or the
Parent  and the  holder  of any Note  nor any  delay in  exercising  any  rights
hereunder  or under any Note  shall  operate  as a waiver  of any  rights of any
holder of such Note. As used herein,  the term "this  Agreement"  and references
thereto  shall  mean this  Agreement  as it may from time to time be  amended or
supplemented.

17.4.    Notes held by Company, etc.

         Solely  for the  purpose  of  determining  whether  the  holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement  or the Notes,  or have  directed  the  taking of any action  provided
herein  or in the  Notes to be taken  upon the  direction  of the  holders  of a
specified   percentage  of  the  aggregate   principal   amount  of  Notes  then
outstanding,  Notes directly or indirectly  owned by the Company,  the Parent or
any of their Affiliates shall be deemed not to be outstanding.

18.      NOTICES.

         All notices  and  communications  provided  for  hereunder  shall be in
writing  and  sent  (a) by  telecopy  if the  sender  on the  same  day  sends a
confirming  copy of such  notice  by a  recognized  overnight  delivery  service
(charges  prepaid),  or (b) by registered or certified  mail with return receipt
requested (postage prepaid),  or (c) by a recognized  overnight delivery service
(with charges prepaid). Any such notice must be sent:

(i)      if to you or your  nominee,  to you or it at the address  specified for
         such  communications  in Schedule A, or at such other address as you or
         it shall have specified to the Company in writing,

(ii)     if to any other  holder of any Note,  to such holder at such address as
         such other holder shall have specified to the Company in writing, or

(iii)    if to the Company or the  Parent,  to the address set forth at  the
         beginning hereof to the attention of the Chief Financial Officer, or at
         such other  address  as the  Company or the Parent (as the case may be)
         shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

19.      REPRODUCTION OF DOCUMENTS.

         This  Agreement  and all  documents  relating  thereto,  including  (a)
consents,  waivers  and  modifications  that  may  hereafter  be  executed,  (b)
documents received by you at the Closing (except the Notes themselves),  and (c)
financial statements, certificates and other information previously or hereafter
furnished to you, may be  reproduced  by you by any  photographic,  photostatic,
microfilm,  microcard,  miniature  photographic or other similar process and you
may destroy any  original  document so  reproduced.  Each of the Company and the
Parent agrees and stipulates  that, to the extent  permitted by applicable  law,
any such reproduction  shall be admissible in evidence as the original itself in
any  judicial or  administrative  proceeding  (whether or not the original is in
existence  and whether or not such  reproduction  was made by you in the regular
course of business) and any  enlargement,  facsimile or further  reproduction of
such  reproduction  shall  likewise be admissible  in evidence.  This Section 19
shall not  prohibit  the  Company,  the Parent or any other holder of Notes from
contesting  any such  reproduction  to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.

20.      CONFIDENTIAL INFORMATION.

         For the purposes of this Section 20,  "Confidential  Information" means
information  delivered to you by or on behalf of the Company,  the Parent or any
Subsidiary  in connection  with the  transactions  contemplated  by or otherwise
pursuant to this  Agreement  that is  proprietary in nature and that was clearly
marked or labeled or otherwise  adequately  identified  when  received by you as
being confidential information of the Company or such Subsidiary,  provided that
such term does not include  information that (a) was publicly known or otherwise
known to you  prior to the time of such  disclosure,  (b)  subsequently  becomes
publicly  known  through no act or omission by you or any person  acting on your
behalf,  (c) otherwise becomes known to you other than through disclosure by the
Company,  the Parent or any Subsidiary or (d) constitutes  financial  statements
delivered to you under Section 7.1 that are otherwise  publicly  available.  You
will maintain the confidentiality of such Confidential information in accordance
with procedures adopted by you in good faith to protect confidential information
of third  parties  delivered to you,  provided  that you may deliver or disclose
Confidential  Information to (i) your directors,  officers,  employees,  agents,
attorneys and affiliates (to the extent such  disclosure  reasonably  relates to
the  administration  of the  investment  represented  by your Notes),  (ii) your
financial   advisors  and  other   professional   advisors  who  agree  to  hold
confidential the Confidential  Information  substantially in accordance with the
terms  of this  Section  20,  (iii)  any  other  holder  of any  Note,  (iv) any
Institutional  Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this  Section  20), (v) any Person from which you offer to purchase any security
of the Company or the Parent (if such Person has agreed in writing  prior to its
receipt of such  Confidential  Information to be bound by the provisions of this
Section 20), (vi) any federal or state regulatory  authority having jurisdiction
over you,  (vii) the  National  Association  of Insurance  Commissioners  or any
similar  organization,  or any nationally recognized rating agency that requires
access to information about your investment portfolio or (viii) any other Person
to which such  delivery or  disclosure  may be necessary or  appropriate  (w) to
effect compliance with any law, rule, regulation or order applicable to you, (x)
in response to any subpoena or other legal process,  (y) in connection  with any
litigation  to which you are a party or (z) if an Event of Default has  occurred
and is continuing,  to the extent you may reasonably determine such delivery and
disclosure  to be  necessary  or  appropriate  in the  enforcement  or  for  the
protection of the rights and remedies under your Notes and this Agreement.  Each
holder of a Note, by its acceptance of a Note,  will be deemed to have agreed to
be bound by and to be entitled to the  benefits of this  Section 20 as though it
were a party to this  Agreement.  On  reasonable  request by the  Company or the
Parent in  connection  with the delivery to any holder of a Note of  information
required to be  delivered  to such holder  under this  Agreement or requested by
such  holder  (other  than a  holder  that is a party to this  Agreement  or its
nominee),  such  holder  will enter into an  agreement  with the  Company or the
Parent (as the case may be) embodying the provisions of this Section 20.

21.      SUBSTITUTION OF PURCHASER.

         You shall have the right to  substitute  any one of your  Affiliates as
the  purchaser  of the Notes  that you have  agreed to  purchase  hereunder,  by
written notice to the Company, which notice shall be signed by both you and such
Affiliate,  shall  contain  such  Affiliate's  agreement  to be  bound  by  this
Agreement and shall  contain a  confirmation  by such  Affiliate of the accuracy
with respect to it of the  representations  set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21),  such word shall be deemed to refer to such  Affiliate in lieu
of you.  In the event  that such  Affiliate  is so  substituted  as a  purchaser
hereunder and such Affiliate  thereafter  transfers to you all of the Notes then
held by such Affiliate,  upon receipt by the Company of notice of such transfer,
wherever  the word "you" is used in this  Agreement  (other than in this Section
21), such word shall no longer be deemed to refer to such  Affiliate,  but shall
refer to you,  and you shall  have all the rights of an  original  holder of the
Notes under this Agreement.

22.      MISCELLANEOUS.

22.1.    Successors and Assigns.

         All covenants and other agreements contained in this Agreement by or on
behalf  of any of the  parties  hereto  bind and inure to the  benefit  of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.

22.2.    Payments Due on Non-Business Days.

         Anything   in   this   Agreement   or  the   Notes   to  the   contrary
notwithstanding, any payment of principal of or Make-whole Amount or interest on
any Note that is due on a date other  than a  Business  Day shall be made on the
next  succeeding  Business Day without  including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.

22.3.    Severability.

         Any provision of this Agreement that is prohibited or  unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such  prohibition  or  unenforceability   without   invalidating  the  remaining
provisions  hereof,  and  any  such  prohibition  or   unenforceability  in  any
jurisdiction  shall (to the full  extent  permitted  by law) not  invalidate  or
render unenforceable such provision in any other jurisdiction.

22.4.    Construction.

         Each  covenant  contained  herein  shall be construed  (absent  express
provision to the contrary) as being independent of each other covenant contained
herein,  so that  compliance  with any one  covenant  shall not (absent  such an
express  contrary  provision)  be  deemed to  excuse  compliance  with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which  such  Person  is  prohibited  from  taking,  such  provision  shall be
applicable whether such action is taken directly or indirectly by such Person.

22.5.    Counterparts.

         This Agreement may be executed in any number of  counterparts,  each of
which  shall be an  original  but all of which  together  shall  constitute  one
instrument.  Each  counterpart  may consist of a number of copies  hereof,  each
signed by less than all, but together signed by all, of the parties hereto.

22.6.    Governing Law.

         This Agreement shall be construed and enforced in accordance  with, and
the rights of the parties  shall be governed  by, the law of the State of Nevada
excluding  choice-of-law  principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.


                                    * * * * *

                   REMAINDER OF PAGE INTENTIONALLY BLANK



<PAGE>

         If you are in  agreement  with the  foregoing,  please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company,  whereupon the foregoing shall become a binding  agreement between you,
the Company and the Parent.

                                Very truly yours,

                                COMPANY:

                                COVENANT ASSET MANAGEMENT, INC.,
                                a Nevada corporation


                                By: /s/  Joey B. Hogan
                                    Name:  Joey B. Hogan
                                    Title:  Chief Financial Officer & Treasurer


                                PARENT:

                                COVENANT TRANSPORT, INC.,
                                a Nevada corporation

                                By: /s/  Joey B. Hogan
                                    Name:  Joey B. Hogan
                                    Title:  Chief Financial Officer & Treasurer


<PAGE>

The foregoing is agreed to as of the date thereof.


CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS

By:  CIGNA Investments, Inc.


     By:  /s/  Stephen A. Osborn
          Name:  Stephen A. Osborn
          Title:  Managing Director


CONNECTICUT GENERAL LIFE INSURANCE COMPANY

By:  CIGNA Investments, Inc.


     By:  /s/  Stephen A. Osborn
          Name:  Stephen A. Osborn
          Title:  Managing Director


 LIFE INSURANCE COMPANY OF NORTH AMERICA

 By: CIGNA Investments, Inc.


     By:  /s/  Stephen A. Osborn
          Name:  Stephen A. Osborn
          Title:  Managing Director


<PAGE>


SCHEDULE A                 --       Information Relating To Purchasers

SCHEDULE B                 --       Defined Terms

SCHEDULE 4.9               --       Changes in Corporate Structure

SCHEDULE 5.3               --       Disclosure Materials

SCHEDULE 5.4               --       Subsidiaries of the Company and Ownership of
                                    Subsidiary Stock

SCHEDULE 5.5               --       Financial Statements

SCHEDULE 5.8               --       Certain Litigation

SCHEDULE 5.11              --       Patents, etc.

SCHEDULE 5.14              --       Use of Proceeds

SCHEDULE 5.15              --       Existing Indebtedness

SCHEDULE 10.9              --       Restricted Investments

SCHEDULE 10.11             --       Liens

EXHIBIT 1.2                --       Form of 7.39% Guaranteed Senior Note due
                                    October 1, 2005

EXHIBIT 4.4(a)             --       Form of Opinion of Counsel for the Company
                                    and the Parent

EXHIBIT 4.4(b)             --       Form of Opinion of Special Counsel for the
                                    Purchasers

EXHIBIT 4.11               --       Form of Subsidiary Guaranty

EXHIBIT 4.12               --       Form of Intercreditor Agreement

EXHIBIT 9.6                --       Parent Guarantee

<PAGE>




                                                                      SCHEDULE A

                       INFORMATION RELATING TO PURCHASERS

                                                           Principal Amount of
Name and Address of Purchaser                              Notes to be Purchased
-----------------------------                              ---------------------

CONNECTICUT GENERAL LIFE INSURANCE                                    $5,000,000
  COMPANY, on behalf of one or more separate accounts                  5,000,000
Nominee Name in which Notes are to be issued:  CIG & Co.

(1)      All payments by Federal Funds wire transfer  of  immediately  available
         funds to:

                  Chase NYC/CTR/
                  BNF=CIGNA Private Placements/AC=9009001802
                  ABA# 021000021

         with the following accompanying information:

                  OBI=Covenant  Asset  Management,  Inc. 7.39% Guaranteed Senior
                  Notes due October 1, 2005;  PPN 22283# AA 6; [and  application
                  (as among principal, premium and interest of the payment being
                  made); contact name and phone]

(2)      Notices related to payments:

                  CIG & Co.
                  c/o CIGNA Investments, Inc.
                  Attention:  Securities Processing - S-206
                  900 Cottage Grove Road
                  Hartford, CT  06152-2309

         with a copy to:

                  Chase Manhattan Bank
                  Private Placement Servicing
                  P.O. Box 1508
                  Bowling Green Station
                  New York, NY 10081
                  Attention:  CIGNA Private Placements
                  Fax:  (212) 552-3107/1005

(3)      All other communications:

                  CIG & Co.
                  c/o CIGNA Investments, Inc.
                  Attention:  Private Securities Division - S-307
                  900 Cottage Grove Road
                  Hartford, CT 06152-2307
                  Fax:  (860) 726-7203


Tax ID #13-3574027


<PAGE>


                                                                      SCHEDULE A

                       INFORMATION RELATING TO PURCHASERS

                                                           Principal Amount of
Name and Address of Purchaser                              Notes to be Purchased
-----------------------------                              ---------------------

CONNECTICUT GENERAL LIFE INSURANCE                                    $5,000,000
  COMPANY                                                              5,000,000

Nominee Name in which Notes are to be issued:  CIG & Co.

(1)      All payments by Federal  Funds wire  transfer  of immediately available
         funds to:

                  Chase NYC/CTR/
                  BNF=CIGNA Private Placements/AC=9009001802
                  ABA# 021000021

         with the following accompanying information:

                  OBI=Covenant  Asset  Management,  Inc. 7.39% Guaranteed Senior
                  Notes due October 1, 2005;  PPN 22283# AA 6; [and  application
                  (as among principal, premium and interest of the payment being
                  made); contact name and phone]

(2)      Notices related to payments:

                  CIG & Co.
                  c/o CIGNA Investments, Inc.
                  Attention:  Securities Processing - S-206
                  900 Cottage Grove Road
                  Hartford, CT  06152-2309

         with a copy to:

                  Chase Manhattan Bank
                  Private Placement Servicing
                  P.O. Box 1508
                  Bowling Green Station
                  New York, NY 10081
                  Attention:  CIGNA Private Placements
                  Fax:  (212) 552-3107/1005

(3)      All other communications:

                  CIG & Co.
                  c/o CIGNA Investments, Inc.
                  Attention:  Private Securities Division - S-307
                  900 Cottage Grove Road
                  Hartford, CT 06152-2307
                  Fax:  (860) 726-7203


Tax ID #13-3574027


<PAGE>


                                                                      SCHEDULE A

                       INFORMATION RELATING TO PURCHASERS

                                                           Principal Amount of
Name and Address of Purchaser                              Notes to be Purchased
-----------------------------                              ---------------------

LIFE INSURANCE COMPANY OF NORTH AMERICA                               $5,000,000

Nominee Name in which Notes are to be issued:  CIG & Co.

(1)      All payments  by  Federal  Funds wire transfer of immediately available
         funds to:

                  Chase NYC/CTR/
                  BNF=CIGNA Private Placements/AC=9009001802
                  ABA# 021000021

         with the following accompanying information:

                  OBI=Covenant  Asset  Management,  Inc. 7.39% Guaranteed Senior
                  Notes due October 1, 2005;  PPN 22283# AA 6; [and  application
                  (as among principal, premium and interest of the payment being
                  made); contact name and phone]

(2)      Notices related to payments:

                  CIG & Co.
                  c/o CIGNA Investments, Inc.
                  Attention:  Securities Processing - S-206
                  900 Cottage Grove Road
                  Hartford, CT  06152-2309

         with a copy to:

                  Chase Manhattan Bank
                  Private Placement Servicing
                  P.O. Box 1508
                  Bowling Green Station
                  New York, NY 10081
                  Attention:  CIGNA Private Placements
                  Fax:  (212) 552-3107/1005

(3)      All other communications:

                  CIG & Co.
                  c/o CIGNA Investments, Inc.
                  Attention:  Private Securities Division - S-307
                  900 Cottage Grove Road
                  Hartford, CT 06152-2307
                  Fax:  (860) 726-7203


Tax ID #13-3574027




<PAGE>
                                                                      SCHEDULE B

                                  DEFINED TERMS

                  As used  herein,  the  following  terms  have  the  respective
meanings set forth below or set forth in the Section hereof following such term:

                  "Affiliate"  means,  at any  time,  and  with  respect  to any
Person,  (a) any other Person that at such time directly or  indirectly  through
one or more  intermediaries  Controls,  or is Controlled by, or, is under common
Control  with,  such first  Person,  and (b) any Person  beneficially  owning or
holding,  directly or  indirectly,  10% or more of any class of voting or equity
interests  of the  Company or any  Subsidiary  or any  corporation  of which the
Company  and  its  Subsidiaries  beneficially  own or  hold,  in the  aggregate,
directly or indirectly,  10% or more of any class of voting or equity interests.
As used  in  this  definition,  "Control"  means  the  possession,  directly  or
indirectly,  of the power to direct or cause the direction of the management and
policies of a Person,  whether  through the ownership of voting  securities,  by
contract  or  otherwise.  Unless the context  otherwise  clearly  requires,  any
reference to an "Affiliate" is a reference to an Affiliate of the Company.

                  "Bank Loan  Agreement"  means the Amended and Restated  Credit
Agreement,  dated as of June 18,  1999  between  the  Company,  CTI,  the  banks
signatory  thereto  and ABN AMRO Bank N.V as Agent,  as  further  amended  by an
Amendment to Amended and Restated Credit  Agreement dated as of June 6, 2000, as
such agreement may hereafter be amended or modified.

                  "Bank  Lenders" means the banks from time to time party to the
Bank Loan Agreement.

                  "Business Day" means (a) for the purposes of Section 8.6 only,
any day other than a Saturday,  a Sunday or a day on which  commercial  banks in
New York City are required or authorized to be closed,  and (b) for the purposes
of any other  provision  of this  Agreement,  any day other than a  Saturday,  a
Sunday or a day on which commercial banks in New York, Connecticut or Nevada are
required or authorized to be closed.

                  "Capital  Lease"  means,  at any time, a lease with respect to
which the lessee is required  concurrently  to recognize the  acquisition  of an
asset and the incurrence of a liability in accordance with GAAP.

                  "Capital Lease  Obligation"  means, with respect to any Person
and a Capital  Lease,  the amount of the obligation of such Person as the lessee
under such  Capital  Lease which would,  in  accordance  with GAAP,  appear as a
liability on a balance sheet of such Person.

                  "Change in Control" has the meaning set forth in Section 8.7.

                  "Closing" is defined in Section 3.

                  "Code"  means the Internal  Revenue  Code of 1986,  as amended
from time to time, and the rules and  regulations  promulgated  thereunder  from
time to time.

                  "Collateral" is defined in the Intercreditor Agreement.

                  "Company"  means  Covenant  Asset  Management,  Inc., a Nevada
corporation.

                  "Consolidated Assets" means the total assets of the Parent and
its Subsidiaries  that would be shown as assets on a consolidated  balance sheet
of the Company and its  Subsidiaries  prepared in  accordance  with GAAP,  after
eliminating all amounts properly attributable to minority interests,  if any, in
the stock and surplus of Subsidiaries.

                  "Consolidated  Income  Available for Fixed Charges" means, for
any period, Consolidated Net Income for such period plus all amounts deducted in
the computation thereof on account of (a) Fixed Charges and (b) taxes imposed on
or measured by income or excess profits.

                  "Confidential Information" is defined in Section 20.

                  "Consolidated  Net  Income"  means,  for any  period,  the net
income (or loss) of the Parent and its  Subsidiaries for such period (taken as a
cumulative  whole), as determined in accordance with GAAP, after eliminating all
offsetting  debits and credits between the Parent and its  Subsidiaries  and all
other  items  required  to be  eliminated  in the course of the  preparation  of
consolidated  financial  statements  of  the  Parent  and  its  Subsidiaries  in
accordance with GAAP, provided that there shall be excluded:

                  (a) the income (or loss) of any  Person  accrued  prior to the
date it becomes a Subsidiary or is merged into or  consolidated  with the Parent
or a Subsidiary,  and the income (or loss) of any Person,  substantially  all of
the assets of which have been  acquired  in any  manner,  realized by such other
Person prior to the date of acquisition,

                  (b)  the  income  (or  loss)  of  any  Person  (other  than  a
Subsidiary)  in which the Parent or any  Subsidiary  has an ownership  interest,
except to the extent  that any such  income has been  actually  received  by the
Company  or such  Subsidiary  in the  form of cash  dividends  or  similar  cash
distributions,

                  (c) the undistributed earnings of any Subsidiary to the extent
that the  declaration or payment of dividends or similar  distributions  by such
Subsidiary  is not at the time  permitted  by the  terms of its  charter  or any
agreement,  instrument,  judgment,  decree, order, statute, rule or governmental
regulation applicable to such Subsidiary,

                  (d) any  restoration  to  income of any  contingency  reserve,
except to the extent  that  provision  for such  reserve  was made out of income
accrued during such period,

                  (e) excepted as permitted by GAAP, any aggregate net gain (but
not  any  aggregate  net  loss)  during  such  period  arising  from  the  sale,
conversion,  exchange  or other  disposition  of  capital  assets  (such term to
include,   without   limitation,   (i)  all  non-current   assets  and,  without
duplication,  (ii) the  following,  whether or not  current:  all fixed  assets,
whether  tangible or  intangible,  all inventory  sold in  conjunction  with the
disposition of fixed assets, and all Securities),

                  (f) except as permitted by GAAP, any gains  resulting from any
write-up of any assets (but not any loss  resulting  from any  write-down of any
assets),

                  (g) any net gain from the  collection  of the proceeds of life
insurance policies,

                  (h) any gain arising from the acquisition of any Security,  or
the extinguishment, under GAAP, of any Debt, of the Parent or any Subsidiary,

                  (i) any deferred credit  representing  the excess of equity in
any  Subsidiary at the date of  acquisition  over the cost of the  investment in
such Subsidiary,

                  (j) in the case of a successor to the Parent by  consolidation
or merger or as a  transferee  of its  assets,  any  earnings  of the  successor
corporation prior to such consolidation, merger or transfer of assets, and

                  (k) any  portion  of such net  income  that  cannot  be freely
converted into United States Dollars.

                  "Consolidated Tangible Net Worth" means, at any time,

                  (a) the total assets of the Parent and its  Subsidiaries  that
would be shown as assets on a  consolidated  balance sheet of the Parent and its
Subsidiaries as of such time prepared in accordance with GAAP, after eliminating
all amounts properly  attributable to minority  interests,  if any, in the stock
and surplus of Subsidiaries, minus

                  (b) the total  liabilities of the Parent and its  Subsidiaries
that would be shown as liabilities on a consolidated balance sheet of the Parent
and its Subsidiaries as of such time prepared in accordance with GAAP, minus

                  (c) the net book  amount of all  assets of the  Parent and its
Subsidiaries  (after  deducting any reserves  applicable  thereto) that would be
shown as intangible assets on a consolidated balance sheet of the Parent and its
Subsidiaries as of such time prepared in accordance with GAAP.

                  "Consolidated   Total   Debt"   means,   as  of  any  date  of
determination,  the  total  of all  Debt  of the  Parent  and  its  Subsidiaries
outstanding on such date,  after  eliminating all offsetting  debits and credits
between  the Parent and its  Subsidiaries  and all other  items  required  to be
eliminated in the course of the preparation of consolidated financial statements
of the Parent and its Subsidiaries in accordance with GAAP,  provided,  however,
that  Consolidated  Total Debt shall not  include the first  $13,000,000  of any
Headquarters Financing Debt that may be outstanding at such time.

                  "Control Event" has the meaning set forth in Section 8.7.

                  "CTI" is defined in Section 1.1.

                  "Debt" means, with respect to any Person, without duplication,

                  (a) its liabilities for borrowed money;

                  (b) its liabilities  evidenced by bonds,  debentures,  note or
other similar instruments;

                  (c)  its  liabilities  for  the  deferred  purchase  price  of
property or services acquired by such Person (excluding accounts payable arising
in the ordinary  course of business and payable on  customary  trade terms,  but
including all liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);

                  (d) its Capital Lease Obligations;

                  (e) its  redemption  obligations  in  respect  of  mandatorily
redeemable Preferred Stock;

                  (f) its  obligations to purchase  securities or other property
that arise out of or in  connection  with the sale of the same or  substantially
similar securities or property;

                  (g) its obligations, whether fixed or contingent, to reimburse
any  other  Person  for  amounts  paid  under a  letter  of  credit  or  similar
instrument;

                  (h) its  obligations  in respect of interest rate and currency
swaps  and  similar  obligations   obligating  it  to  make  payments,   whether
periodically  or  upon  the  happening  of a  contingency,  except  that  if any
agreement  relating  to such  obligations  provides  for the  netting of amounts
payable by and to such Person  thereunder or if any such agreement  provides for
the  simultaneous  payment of amounts by and to such  Person,  then in each such
case, the amount of such obligations shall be the net amount thereof;

                  (i) all  liabilities  for borrowed  money  secured by any Lien
with respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);

                  (j) any  Guaranty  of such  Person  of  liabilities  of a type
described in any of clauses (a) through (i) hereof; and

Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (j) to the extent such Person  remains  legally
liable in respect thereof  notwithstanding that any such obligation is deemed to
be extinguished under GAAP.

                  "Default"  means an  event  or  condition  the  occurrence  or
existence  of which  would,  with the  lapse of time or the  giving of notice or
both, become an Event of Default.

                  "Default  Rate"  means  that rate of  interest  that is 2% per
annum above the rate of interest  stated in clause (a) of the first paragraph of
the Notes.

                  "Disposition  Value" means,  at any time,  with respect to any
property

                  (a)  in  the  case  of  property  that  does  not   constitute
         Subsidiary  Stock,  the book value thereof,  valued at the time of such
         disposition in good faith by the Parent, and

                  (b) in the case of property that constitutes Subsidiary Stock,
         an amount equal to that  percentage  of book value of the assets of the
         Subsidiary  that issued such stock as is equal to the  percentage  that
         the book value of such Subsidiary Stock represents of the book value of
         all of the outstanding capital stock of such Subsidiary  (assuming,  in
         making such  calculations,  that all Securities  convertible  into such
         capital   stock  are  so  converted  and  giving  full  effect  to  all
         transactions  that would occur or be required in  connection  with such
         conversion)  determined at the time of the disposition thereof, in good
         faith by the Parent.

                  "Distribution"   means,   in  respect   of  any   corporation,
association or other business entity:

                  (a)  dividends or other  distributions  or payments on capital
         stock or other  equity  interest of such  corporation,  association  or
         other  business  entity  (except  distributions  in such stock or other
         equity interest); and

                  (b) the  redemption  or  acquisition  of such  stock  or other
         equity  interests or of warrants,  rights or other  options to purchase
         such stock or other  equity  interests  (except when solely in exchange
         for   such   stock   or   other   equity    interests)   unless   made,
         contemporaneously,  from the net  proceeds  of a sale of such  stock or
         other equity interests.

                  "EBITDAR" means,  for any period,  Consolidated Net Income for
such period plus, to the extent deducted in determining  such  Consolidated  Net
Income, (i) Interest Charges, (ii) depreciation,  (iii) amortization, (iv) Lease
Rentals and (v)  consolidated tax expense.  In addition,  EBITDAR for any period
shall include the net income plus interest charges, depreciation,  amortization,
lease  rentals  (other  than  Capital  Leases) and tax expense of any entity the
capital  stock,  assets  business  or other  ownership  interests  of which were
acquired by the Parent of any of its  Subsidiaries  during such period (with pro
forma adjustments from the date of such acquisition).

                  "Environmental Laws" means any and all Federal,  state, local,
and foreign statutes, laws, regulations,  ordinances,  rules, judgments, orders,
decrees,  permits,  concessions,  grants,  franchises,  licenses,  agreements or
governmental  restrictions  relating  to  pollution  and the  protection  of the
environment or the release of any materials into the environment,  including but
not limited to those related to hazardous  substances  or wastes,  air emissions
and discharges to waste or public systems.

                  "ERISA" means the Employee  Retirement  Income Security Act of
1974, as amended from time to time,  and the rules and  regulations  promulgated
thereunder from time to time in effect.

                  "ERISA  Affiliate" means any trade or business (whether or not
incorporated)  that is treated  as a single  employer  together  with the Parent
under section 414 of the Code.

                  "Event of Default" is defined in Section 11.

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended.

                  "Excluded Transfer" is defined in Section 10.3.

                  "Fair Market Value" means, at any time and with respect to any
property,  the  sale  value  of such  property  that  would  be  realized  in an
arm's-length  sale at such time  between an informed  and  willing  buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).

                  "Fixed Charges" means, with respect to any period,  the sum of
(a) Interest Charges for such period and (b) Lease Rentals for such period.

                  "Fixed Charges  Coverage  Ratio" means, at any time, the ratio
of (a)  Consolidated  Income  Available for Fixed Charges for the period of four
consecutive  fiscal  quarters of the Parent  ending on, or most  recently  ended
prior to, such time to (b) Fixed Charges for such period.

                  "Funded Debt" means,  with respect to any Person,  all Debt of
such Person  that by its terms or by the terms of any  instrument  or  agreement
relating thereto matures,  or that is otherwise  payable or unpaid,  one year or
more from, or is directly or indirectly renewable or extendible at the option of
the obligor in respect  thereof to a date one year or more  (including,  without
limitation,  an option  of such  obligor  under a  revolving  credit or  similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of the creation thereof,  provided that Funded Debt
shall include,  as at any date of  determination,  current  maturities of Funded
Debt.

                  "GAAP" means generally  accepted  accounting  principles as in
effect from time to time in the United States of America.

                  "Governmental Authority" means

                  (a)      the government of

                           (i) the  United  States  of  America  or any  State
                  or  other political subdivision thereof, or

                           (ii)    any  jurisdiction  in which the Parent or any
                  Subsidiary conducts  all or any part of its business, or whic
                  asserts jurisdiction over any  properties of the Parent or any
                  Subsidiary, or

                  (b) any entity exercising  executive,  legislative,  judicial,
         regulatory or  administrative  functions of, or pertaining to, any such
         government.

                  "Guaranty" means,  with respect to any Person,  any obligation
(except  the  endorsement  in the  ordinary  course of  business  of  negotiable
instruments for deposit or collection) of such Person  guaranteeing or in effect
guaranteeing any Indebtedness,  dividend or other obligation of any other Person
in any manner,  whether directly or indirectly,  including (without  limitation)
obligations  incurred  through an agreement,  contingent  or otherwise,  by such
Person:

                  (a)  to  purchase  such  Indebtedness  or  obligation  or  any
         property constituting security therefor;

                  (b) to advance or supply funds (i) for the purchase or payment
         of such  indebtedness  or  obligation,  or (ii) to maintain any working
         capital  or other  balance  sheet  condition  or any  income  statement
         condition of any other Person or otherwise to advance or make available
         funds for the purchase or payment of such Indebtedness or obligation;

                  (c) to lease properties or to purchase  properties or services
         primarily for the purpose of assuring the owner of such Indebtedness or
         obligation  of the ability of any other  Person to make  payment of the
         Indebtedness or obligation; or

                  (d)  otherwise  to assure  the owner of such  Indebtedness  or
         obligation against loss in respect thereof.

In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

                  "Hazardous  Material" means any and all  pollutants,  toxic or
hazardous  wastes or any other  substances that might pose a hazard to health or
safety,  the removal of which may be required  or the  generation,  manufacture,
refining, production,  processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be  restricted,  prohibited or penalized by any applicable law
(including, without limitation,  asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).

                  "Headquarters  Financing  Debt"  means  the Debt  incurred  to
finance the Headquarters Transaction:

                  (a)  in  a  single   transaction   (or  series  of  integrated
         transactions),

                  (b)      prior to October 31, 1997,

                  (c)  in an  aggregate  principal  amount  up  to  $15,000,000;
         provided  that only  $13,000,000  of such amount shall be excluded from
         the definition of "Consolidated Total Debt,"

                  (d) that (if unsecured) is subject to a Headquarters Financing
         Intercreditor Agreement, and

                  (e) no Default or Event of Default existed at the time of such
         incurrence or  immediately  after giving  effect to such  incurrence of
         Debt;

provided  that  any  Sale-and-Leaseback   Transaction  in  connection  with  the
Headquarters Transaction shall be deemed to be Headquarters Financing Debt.

                  For  purposes of this  definition  of  Headquarters  Financing
Debt,  the  term  "Headquarters  Financing  Intercreditor  Agreement"  means  an
intercreditor  agreement (in form and substance acceptable to the holders of the
Notes) among the holder(s) of such  Headquarters  Financing Debt and the holders
of  Notes,  the Bank  Lenders  and each  other  party  who may be a party to the
Intercreditor  Agreement at the time of the incurrence of Headquarters Financing
Debt,  provided,   however,  that  such  Headquarters  Financing   Intercreditor
Agreement shall not provide for the sharing of any collateral held by or for the
benefit of the  holders  of Notes,  the Bank  Lenders or any other  party to the
Intercreditor Agreement.

                  "Headquarters Transaction" means the financing of the Parent's
headquarters facility constructed at Highway 11 and New Cummings Road, Tiftonia,
Tennessee.

                  "Holder" means,  with respect to any Note, the Person in whose
name such Note is registered in the register  maintained by the Company pursuant
to Section 13.1.

                  "Indebtedness"  with respect to any Person means, at any time,
without duplication,

                  (a) its  liabilities  for  borrowed  money and its  redemption
         obligations in respect of mandatorily redeemable Preferred Stock;

                  (b)  its  liabilities  for  the  deferred  purchase  price  of
         property acquired by such Person (excluding accounts payable arising in
         the ordinary course of business but including all  liabilities  created
         or  arising  under  any  conditional  sale  or  other  title  retention
         agreement with respect to any such property);

                  (c)  all  liabilities   appearing  on  its  balance  sheet  in
         accordance with GAAP in respect of Capital Leases;

                  (d) all  liabilities  for borrowed  money  secured by any Lien
         with  respect to any property  owned by such Person  (whether or not it
         has assumed or otherwise become liable for such liabilities);

                  (e) all its  liabilities  in  respect  of letters of credit or
         instruments  serving a similar  function  issued  or  accepted  for its
         account  by banks  and other  financial  institutions  (whether  or not
         representing obligations for borrowed money);

                  (f)      Swaps of such Person; and

                  (g) any Guaranty of such Person with respect to liabilities of
         a type described in any of clauses (a) through (f) hereof.

Indebtedness  of any Person shall include all  obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect  thereof  notwithstanding  that any such obligation is
deemed to be extinguished under GAAP.

                  "Institutional Investor" means (a) any original purchaser of a
Note, (b) any holder of a Note holding more than 10% of the aggregate  principal
amount of the Notes then outstanding,  and (c) any bank, trust company,  savings
and loan  association  or other  financial  institution,  any pension plan,  any
investment  company,  any insurance company,  any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.

                  "Intercreditor Agreement" is defined in Section 4.12.

                  "Interest  Charges"  means,  for any period,  the sum (without
duplication) of the following (in each case,  eliminating all offsetting  debits
and credits between the Parent and its Subsidiaries and all other items required
to be  eliminated in the course of the  preparation  of  consolidated  financial
statements of the Parent and its  Subsidiaries in accordance with GAAP): (a) all
interest  in  respect  of Debt of the  Parent  and its  Subsidiaries  (including
imputed  interest  on  Capital  Lease   Obligations)   deducted  in  determining
Consolidated Net Income for such period,  together with all interest capitalized
or deferred during such period and not deducted in determining  Consolidated Net
Income for such  period,  and (b) all debt  discount  and expense  amortized  or
required to be amortized in the  determination  of  Consolidated  Net Income for
such period.

                  "Intergroup Transfer" is defined in Section 10.3.

                  "Investment" means any investment, made in cash or by delivery
of property, by the Parent or any of its Subsidiaries (i) in any Person, whether
by acquisition of stock,  indebtedness  or other  obligation or Security,  or by
loan,  Guaranty,  advance,  capital  contribution  or otherwise,  or (ii) in any
property.

                  "Lease Rentals" means, with respect to any period,  the sum of
the rental and other  obligations  required to be paid during such period by the
Parent or any Subsidiary as lessee under all leases of real or personal property
(other than Capital  Leases),  excluding  any amount  required to be paid by the
lessee  (whether or not therein  designated as rental or  additional  rental) on
account of maintenance and repairs, insurance,  taxes, assessments,  water rates
and similar charges,  provided that, if at the date of  determination,  any such
rental  or  other  obligations  are  contingent  or  not  otherwise   definitely
determinable by the terms of the related lease,  the amount of such  obligations
(i) shall be assumed to be equal to the prorated amount of such  obligations for
the period of 12 consecutive  calendar months immediately  preceding the date of
determination  or (ii)  if the  related  lease  was not in  effect  during  such
preceding  12-month period,  shall be the amount estimated by a Senior Financial
Officer on a reasonable basis and in good faith.

                  "Lien" means, with respect to any Person, any mortgage,  lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor,  lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention  agreement or Capital Lease,  upon
or with respect to any property or asset of such Person  (including  in the case
of stock,  stockholder  agreements,  voting  trust  agreements  and all  similar
arrangements).

                  "Make-Whole Amount" is defined in Section 8.6.

                  "Material"   means  material  in  relation  to  the  business,
operations,  affairs,  financial condition,  assets, properties, or prospects of
the Parent and its Subsidiaries taken as a whole.
                  "Material  Adverse Effect" means a material  adverse effect on
(a) the business, operations, affairs, financial condition, assets or properties
of the Parent and its  Subsidiaries  taken as a whole, or (b) the ability of the
Company or the Parent to perform its  obligations  under this  Agreement and the
Notes, or (c) the ability of any Subsidiary to perform its obligations under the
Subsidiary  Guaranty,  or (d) the validity or  enforceability of this Agreement,
the Notes or the Subsidiary Guaranty.

                  "Multiemployer  Plan" means any Plan that is a  "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).

                  "Notes" is defined in Section 1.

                  "Officer's  Certificate"  means  a  certificate  of  a  Senior
Financial  Officer or of any other  officer of the Company or the Parent (as the
case  may be)  whose  responsibilities  extend  to the  subject  matter  of such
certificate.

                  "Ordinary  Course  Transfer"  has the  meaning  set  forth  in
Section 10.3.

                  "Other Agreements" is defined in Section 2.

                  "Other Purchasers" is defined in Section 2.

                  "Parent" means Covenant Transport, Inc., a Nevada corporation.

                  "Parent  Guarantee"  means  the  guarantee  by the  Parent  in
accordance with the terms specified in Exhibit 9.6 to this Agreement.

                  "Parker Family" is defined in Section 8.7.

                  "PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.

                  "Person"  means  an  individual,   partnership,   corporation,
limited liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.

                  "Plan" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has been established
or  maintained,  or to which  contributions  are or, within the  preceding  five
years,  have  been  made or  required  to be made,  by the  Parent  or any ERISA
Affiliate  or with respect to which the Parent or any ERISA  Affiliate  may have
any liability.

                  "Preferred  Stock"  means  any  class  of  capital  stock of a
corporation  that is  preferred  over any other  class of capital  stock of such
corporation  as to the  payment of  dividends  or the payment of any amount upon
liquidation or dissolution of such corporation.

                  "property"   or   "properties"    means,    unless   otherwise
specifically  limited,  real or  personal  property  of any  kind,  tangible  or
intangible, choate or inchoate.

                  "Property Disposition Date" is defined in Section 10.3.

                  "QPAM Exemption" means Prohibited  Transaction Class Exemption
84-14 issued by the United States Department of Labor.

                  "Required Holders" means, at any time, the holders of at least
51% in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Parent or any of its Affiliates).

                  "Responsible  Officer" means any Senior Financial  Officer and
any other  officer of the Company or the Parent (as the context  requires)  with
responsibility for the administration of the relevant portion of this agreement.

                  "Restricted  Investments"  means all  Investments  except  the
following:

                  (a) property to be used in the ordinary  course of business of
         the Parent and its Subsidiaries;

                  (b) current assets arising from the sale of goods and services
         in the ordinary course of business of the Parent and its Subsidiaries;

                  (c) Investments in one or more Subsidiaries or any Person that
         concurrently with such Investment becomes a Subsidiary;

                  (d)  Investments  existing  on the  date  of the  Closing  and
         disclosed in Schedule 10.9;

                  (e)  Investments  in United  States  Governmental  Securities,
         provided that such obligations  mature within 365 days from the date of
         acquisition thereof;

                  (f)  Investments  in  certificates  of  deposit  issued  by an
         Acceptable Bank,  provided that such obligations mature within 365 days
         from the date of acquisition thereof;

                  (g)  Investments in commercial  paper given the highest rating
         by a credit rating agency of recognized  national standing and maturing
         not more than 270 days from the date of creation thereof;

                  (h)      Investments in Repurchase Agreements;

                  (i) Investments in tax-exempt  obligations of any state of the
         United States of America,  or any  municipality  of any such state,  in
         each case  rated "A" or better by S&P,  "A2" or better by Moody's or an
         equivalent  rating  by any other  credit  rating  agency of  recognized
         national  standing,  provided that such  obligations  mature within 365
         days from the date of acquisition thereof; and

                  (j) Investments in fuel hedging agreements entered into in the
         ordinary course of business solely for the purpose of hedging  exposure
         to fuel costs.

For purposes of this Agreement,  an Investment  shall be valued at the lesser of
(i) cost and (ii) the value at which such Investment is to be shown on the books
of the Company and its Subsidiaries in accordance with GAAP.

         As used in this definition of "Restricted Investments":

         "Acceptable Bank" means any bank or trust company (i) that is organized
         under the laws of the United  States of  America or any State  thereof,
         (ii) that has capital,  surplus and undivided  profits  aggregating  at
         least   $100,000,000,   and  (iii)  whose   long-term   unsecured  debt
         obligations  (or the long-term  unsecured debt  obligations of the bank
         holding  company  owning all of the capital stock of such bank or trust
         company)  shall have been given a rating of "A" or better by S&P,  "A2"
         or better by Moody's or an equivalent rating by any other credit rating
         agency of recognized national standing.

         "Acceptable Broker-Dealer" means any Person other than a natural person
         (i) which is registered as a broker or dealer  pursuant to the Exchange
         Act and (ii) whose long-term unsecured debt obligations shall have been
         given a rating of "A" or better by S&P, "A2" or better by Moody's or an
         equivalent  rating  by any other  credit  rating  agency of  recognized
         national standing.

         "Moody's" means Moody's Investors Service, Inc.

         "Repurchase Agreement" means any written agreement.

                           (a) that provides for (i) the transfer of one or more
                  United   States   Governmental   Securities  in  an  aggregate
                  principal  amount at least equal to the amount of the transfer
                  price  to  the  Parent  or any of  its  Subsidiaries  from  an
                  Acceptable  Bank  or an  Acceptable  Broker-Dealer  against  a
                  transfer of funds (the "Transfer Price") by the Parent or such
                  Subsidiary   to   such    Acceptable    Bank   or   Acceptable
                  Broker-Dealer, and (ii) a simultaneous agreement by the Parent
                  or such Subsidiary, in connection with such transfer of funds,
                  to   transfer   to  such   Acceptable   Bank   or   Acceptable
                  Broker-Dealer the same or substantially  similar United States
                  Governmental Securities for a price not less than the Transfer
                  Price plus a reasonable  return  thereon at a date certain not
                  later than 365 days after such transfer of funds,

                           (b) in respect of which the Parent or such Subsidiary
                  shall  have the right,  whether by  contract  or  pursuant  to
                  applicable   law,  to  liquidate   such   agreement  upon  the
                  occurrence of any default thereunder, and

                           (c) in  connection  with  which  the  Parent  or such
                  Subsidiary,  or an agent thereof,  shall have taken all action
                  required by applicable law or regulations to perfect a Lien in
                  such United States Governmental Securities.

         "S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc.

         "United States  Governmental  Security" means any direct obligation of,
         or  obligation  guaranteed  by, the United  States of  America,  or any
         agency controlled or supervised by or acting as an  instrumentality  of
         the  United  States of America  pursuant  to  authority  granted by the
         Congress of the United States of America, so long as such obligation or
         guarantee  shall  have the  benefit of the full faith and credit of the
         United  States of America  which  shall have been  pledged  pursuant to
         authority granted by the Congress of the United States of America.

                  "Restricted  Payment" means any Distribution in respect of the
Parent or any  Subsidiary  of the Parent (other than on account of capital stock
or other equity interests of a Subsidiary of Parent), including any Distribution
resulting in the acquisition by the Parent of Securities  that would  constitute
treasury stock, provided that any Distribution of shares of Transplace.com or of
any Subsidiary  Stock (where the only  substantial  asset of such  Subsidiary is
equity interests of  Transplace.com)  to stockholders of the Parent shall not be
deemed a Restricted Payment.  For purposes of this Agreement,  the amount of any
Restricted  Payment made in property shall be the greater of (x) the Fair Market
Value of such  property (as  determined  in good faith by the board of directors
(or equivalent governing body) of the Person making such Restricted Payment) and
(y) the net book  value  thereof  on the  books  of such  Person,  in each  case
determined as of the date on which such Restricted Payment is made.

                  "Sale-and-Leaseback Transaction" means a transaction or series
of  transactions  pursuant to which the Parent or any  Subsidiary  shall sell or
transfer to any Person  (other than the Parent or a  Subsidiary)  any  property,
whether now owned or hereafter acquired, and, as part of the same transaction or
series of  transactions,  the  Parent or any  Subsidiary  shall rent or lease as
lessee (other than pursuant to a Capital Lease),  or similarly acquire the right
to  possession  or use of,  such  property  or one or more  properties  which it
intends to use for the same  purpose or  purposes  as such  property,  provided,
however,  that  the  Headquarters   Transaction  shall  not  be  included  as  a
"Sale-and-Leaseback Transaction".

                  "Securities  Act" means the Securities Act of 1933, as amended
from time to time.

                  "Security(ies)"  has the meaning set forth in section  2(l) of
the Securities Act of 1933, as amended.

                  "Security  Documents" means the Intercreditor  Agreement,  the
Amended and Restated Borrower  Security  Agreement dated as of June 6, 2000 made
by the Company in favor of First Union National Bank, the Consolidating  Amended
and Restated  Guarantor Security Agreement dated as of June 6, 2000 made by each
Subsidiary  in favor of First Union  National  Bank,  the  Amended and  Restated
Parent Stock Pledge and Security  Agreement dated as of June 6, 2000 made by the
Parent in favor of First Union  National  Bank,  the Guarantor  Stock Pledge and
Security  Agreement dated as of June 6, 2000 made by CTI in favor of First Union
National Bank, and the Amended and Restated  Trademark  Security Agreement dated
as of June 6, 2000 made by CIP, Inc.  (formerly known as  Intellectual  Property
Co.), a Nevada corporation, in favor of First Union National Bank.

                  "Senior Financial  Officer" means the chief financial officer,
principal  accounting  officer,  treasurer or  comptroller of the Company or the
Parent (as the context requires).

                  "Subsidiary"   means,  as  to  any  Person,  any  corporation,
association or other business  entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries  owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily,  in the
absence of  contingencies,  to elect a majority  of the  directors  (or  Persons
performing similar functions) of such entity, and any limited liability company,
partnership  or joint  venture  if more than a 50%  interest  in the  profits or
capital  thereof is owned by such Person or one or more of its  Subsidiaries  or
such Person and one or more of its Subsidiaries (unless such partnership can and
does ordinarily  take major business  actions without the prior approval of such
Person or one or more of its Subsidiaries). Unless the context otherwise clearly
requires,  any reference to a "Subsidiary" is a reference to a Subsidiary of the
Company or the Parent.

                  "Subsidiary   Guaranty"  means  the  Subsidiary   Guaranty  in
substantially the form of the Attached Exhibit 4.11.

                  "Subsidiary  Stock"  means,  with  respect to any Person,  the
stock  (or any  options  or  warrants  to  purchase  stock or  other  Securities
exchangeable for or convertible into stock) of any Subsidiary of such Person.

                  "Successor Corporation" is defined in Section 10.2.

                  "Substantial Portion" is defined in Section 10.3.

                  "Swap" means, with respect to any Person,  payment obligations
with  respect to interest  rate swaps,  currency  swaps and similar  obligations
obligating  such  Person  to make  payments,  whether  periodically  or upon the
happening of a contingency.  For the purposes of this  Agreement,  the amount of
the obligation under any Swap shall be the amount  determined in respect thereof
as of the end of the then most  recently  ended  fiscal  quarter of such Person,
based on the assumption  that such Swap had terminated at the end of such fiscal
quarter,  and in making such  determination,  if any agreement  relating to such
Swap  provides  for  the  netting  of  amounts  payable  by and to  such  Person
thereunder or if any such  agreement  provides for the  simultaneous  payment of
amounts  by and to such  Person,  then in each  such  case,  the  amount of such
obligation shall be the net amount so determined.

                  "Transfer" means, with respect to any Person,  any transaction
in which such Person sells, conveys,  transfers or leases (as lessor) any of its
property,  including,  without limitation,  Subsidiary Stock, provided, however,
that the Headquarters Transaction shall not be included as a "Transfer".

                  "Wholly-Owned  Subsidiary" means any Subsidiary of the Parent,
all of the equity securities (except director's  qualifying shares) of which are
owned by the Parent and/or the Parent's other Wholly-Owned Subsidiaries.



</TEXT>
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<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>FDS
<TEXT>

<TABLE> <S> <C>


<ARTICLE>                     5
<CIK>                         0000928658
<NAME>                        COVENANT TRANSPORT, INC.
<MULTIPLIER>                  1,000
<CURRENCY>                    U.S. DOLLARS

<S>                                            <C>
<PERIOD-TYPE>                                  6-MOS
<FISCAL-YEAR-END>                              DEC-31-2000
<PERIOD-START>                                 JAN-01-2000
<PERIOD-END>                                   JUN-30-2000
<EXCHANGE-RATE>                                1.0
<CASH>                                         1,061
<SECURITIES>                                   0
<RECEIVABLES>                                  81,068
<ALLOWANCES>                                   1,112
<INVENTORY>                                    3,189
<CURRENT-ASSETS>                               99,585
<PP&E>                                         353,978
<DEPRECIATION>                                 94,339
<TOTAL-ASSETS>                                 374,835
<CURRENT-LIABILITIES>                          29,449
<BONDS>                                        0
<PREFERRED-MANDATORY>                          0
<PREFERRED>                                    0
<COMMON>                                       118
<OTHER-SE>                                     24
<TOTAL-LIABILITY-AND-EQUITY>                   374,835
<SALES>                                        0
<TOTAL-REVENUES>                               265,879
<CGS>                                          0
<TOTAL-COSTS>                                  252,927
<OTHER-EXPENSES>                               0
<LOSS-PROVISION>                               0
<INTEREST-EXPENSE>                             4,740
<INCOME-PRETAX>                                8,212
<INCOME-TAX>                                   3,280
<INCOME-CONTINUING>                            4,932
<DISCONTINUED>                                 0
<EXTRAORDINARY>                                0
<CHANGES>                                      0
<NET-INCOME>                                   4,932
<EPS-BASIC>                                    .33
<EPS-DILUTED>                                  .33



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