REVOLVING CREDIT FACILITY AGREEMENT


         THIS REVOLVING  CREDIT FACILITY  AGREEMENT  ("this  Agreement"),  to be
effective  March 27,  1997,  is entered  into by and between  MORGAN DRIVE AWAY,
INC., an Indiana  corporation  ("Morgan"),  TDI,  INC.,  an Indiana  corporation
("TDI"),  INTERSTATE INDEMNITY COMPANY, a Vermont Corporation ("Interstate") and
KEYBANK NATIONAL ASSOCIATION, a national banking association ("Bank").

         In  consideration  of the covenants and  agreements  contained  herein,
Morgan, Interstate and TDI and the Bank hereby mutually agree as follows:

                             ARTICLE I. DEFINITIONS

         Section 1.1.  General.  Any accounting  term used but not  specifically
defined herein shall be construed in accordance with GAAP.

         The definition of each agreement, document, and instrument set forth in
Section 1.2 hereof shall be deemed to mean and include such agreement, document,
or instrument as amended, restated, or modified from time to time.

         Interstate  is a party  to this  Agreement  as it will be  entitled  to
request  letters  of  credit  in  accordance  with the  terms,  conditions,  and
restrictions set forth herein.  The liability of Interstate under this Agreement
is limited at any given time to the then  aggregate  dollar amount of letters of
credit  which have been  issued at  Interstate's  request or for the  benefit of
Interstate, plus related interest, fees and costs hereunder.

         Section 1.2.  Defined Terms.  As used in this Agreement:

         "Affiliate" shall mean any Person (other than a Subsidiary):

         (a)      which   directly   or   indirectly   through   one   or   more
                  intermediaries  controls,  or is  controlled  by,  or is under
                  common control with, the Companies; or

         (b)      Five percent  (5%) or more of the equity  interest of which is
                  held   beneficially  or  of  record  by  the  Companies  or  a
                  Subsidiary. The term "control" means the possession,  directly
                  or  indirectly,  of the  power to cause the  direction  of the
                  management  and  policies  of a Person,  whether  through  the
                  ownership of voting securities, by contract or otherwise.

         "Affiliate  Bank" shall mean any one or more bank  subsidiaries  (other
than the Bank) of KeyCorp and its successors.

         "Bank"  shall mean KeyBank  National  Association,  a national  banking
association with an office at 127 Public Square,  Cleveland, Ohio 44114, and its
successors and assigns.

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         "Beneficiary"  shall mean one or more insurance companies or regulatory
bodies which are, or may become,  beneficiaries of standby  letter(s) of credit.
Companies  have  entered  into  and/or may enter into  agreements  with  various
insurance   companies   (each,   "Beneficiary")   under  which   Beneficiary  is
contingently  liable for or may  initially  pay on behalf of  Companies  amounts
attributable  to the  deductible  portion of Companies'  insurance  program with
Beneficiary,  and under which  Companies are obligated to repay  Beneficiary for
any such payments made by  Beneficiary on behalf of Companies.  Beneficiary  has
required  Companies to provide a standby  payment  facility for payments made by
Beneficiary on behalf of Companies  attributable  to the  deductible  portion of
Companies'  insurance program with Beneficiary.  Additionally,  Companies are or
may be  obligated  to deposit  money or pledge  some other form of  guaranty  of
payment with various state  authorities  wherein Companies are liable for excise
or use taxes as a result of their use of the public roads for  commercial  trans
portation  in said  states.  To the extent  Companies  are or may be required to
deposit money or pledge some other form of guaranty of payment,  the appropriate
state agency  responsible  for  collection of such use taxes or bonding  company
shall be deemed to be a Beneficiary herein.

         "Business  Day" means a day of the year on which banks are not required
or authorized to close in Cleveland,  Ohio and, if the  applicable  Business Day
relates to any Libor Rate Loan,  on which  dealings are carried on in the London
interbank Eurodollar market.

         "Companies" shall mean Morgan Drive Away, Inc., an Indiana corporation,
with its principal  office  located at Elkhart,  Indiana;  TDI, Inc., an Indiana
corporation,  with  its  principal  office  located  in  Elkhart,  Indiana;  and
Interstate Indemnity Company and their successors.

         "Consolidated  Net  Worth" is  defined  as the net book value of Morgan
Group's assets less all  liabilities  as determined on a consolidated  basis for
the Morgan Group and its Subsidiaries in accordance with GAAP.

         "Consolidated  Pre-Tax  Earnings"  is defined as  earnings  (or losses)
experienced  by the  Morgan  Group  and  its  subsidiaries  as  determined  on a
consolidated  basis and as determined  by GAAP.  Consolidated  Pre-Tax  Earnings
shall not include any  extraordinary  gains  experienced by the Morgan Group and
its subsidiaries.

         "EBIT"  shall mean  Consolidated  Pre-Tax  Earnings  plus Net  Interest
Expense.

         "Environmental  Law" means any federal,  state or local  statute,  law,
ordinance, code, rule, regulation,  order or decree regulating,  relating to, or
imposing liability upon a Person in connection with the use, release or disposal
of any hazardous, toxic or dangerous substance, waste or material.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.

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         "ERISA Affiliate" means each Person (whether or not incorporated) which
together with Companies would be treated as a single employer under ERISA.

         "Event  of  Default"  shall  mean  any one or  more of the  occurrences
described in Article VII hereof.

         "Expiration  Date" as to a Standby  Letter of Credit means the earliest
of: (1) 4:45 p.m.  (Elkhart,  Indiana  time) on the Expiry Date of that  Standby
Letter of Credit;  or (2) when the full stated  amount of the Standby  Letter of
Credit has been drawn upon in a single drawing or aggregate of drawings;  or (3)
the day on which the Standby Letter of Credit is surrendered.

         "Funded Debt" is defined as the sum of funds provided by KeyBank to the
Morgan Group and its  Subsidiaries and the sum of all other borrowed debt of the
Morgan Group and its subsidiaries,  including  capitalized lease obligations and
corporate guaranties.

         "GAAP" shall mean generally accepted  accounting  principles as then in
effect,  which  shall  include  the  official  interpretations  thereof  by  the
Financial Accounting Standards Board, consistently applied.

         "Guarantor" shall mean each Person that now or hereafter guarantees any
portion of the  Companies'  Indebtedness  payable to the Bank, and such Person's
successors  and shall  include  Morgan  Group and all existing and to be created
operating Subsidiaries of Morgan Group.

         "Indebtedness"  shall mean for any Person: (1) all obligations to repay
borrowed money,  direct or indirect,  incurred,  assumed or guaranteed;  (2) all
obligations  for the deferred  purchase price of capital assets  excluding trade
payables;  (3) all obligations  under conditional sales or other title retention
agreements;  and (4)  all  lease  obligations  which  have  been  or  should  be
capitalized on the books of such Person.

         "Interest  Coverage"  shall  mean  the  ratio of  Consolidated  Pre-Tax
Earnings plus Net Interest Expense divided by Net Interest Expense.

         "Interest  Period"  means,  with  respect to any Libor  Rate Loan,  the
period  commencing  on the date such Loan is made,  continued,  or converted and
ending on the last day of such period as selected by Morgan or TDI (for purposes
of this  definition  ("the  Company")  pursuant  to the  provisions  below  and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding  Interest Period and ending on the last day of such period as selected
by the Company  pursuant to the provisions  below. The duration of each Interest
Period for any Libor Rate Loan shall be one (1) month, two (2) months, three (3)
months,  or six (6) months,  in each case as the Company may select upon notice,
as set forth in Section 2.1(b), provided that:


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         (1)      whenever the last day of any Interest  Period would  otherwise
                  occur on a day other than a Business Day, the last day of such
                  Interest  Period shall occur on the next  succeeding  Business
                  Day,  provided that if such  extension of time would cause the
                  last day of such  Interest  Period  for a Libor  Rate  Loan to
                  occur in the next following  calendar  month,  the last day of
                  such  Interest  Period  shall  occur  on  the  next  preceding
                  Business Day;

         (2)      if the Company fails to so select the duration of any Interest
                  Period,  the duration of such  Interest  Period shall be three
                  (3) months in the case of a Libor Rate Loan; and

         (3)      the  Company  may not select any  Interest  Period  which both
                  begins before and ends after the principal installment payment
                  date set forth in Section 2.1(c).

         "Interstate" shall mean Interstate Indemnity Company, also a subsidiary
of Morgan Group.

         "Leasing  Company"  shall  mean  Key  Corp  Leasing  Company,  and  its
successors.

         "Leverage"  is defined as Funded Debt divided by the sum of Funded Debt
plus Consolidated Net Worth.

         "Libor Rate" means, for any Interest Period for any Libor Rate Loan, an
interest rate per annum  (rounded  upwards to the next higher whole  multiple of
1/16%  if such  rate is not such a  multiple)  equal at all  times  during  such
Interest  Period to the quotient of: (1) the rate per annum (rounded  upwards to
the next higher whole  multiple of 1/16% if such rate is not such a multiple) at
which  deposits in United  States  dollars  are  offered at 11:00 a.m.  (London,
England  time) (or as soon  thereafter as is  reasonably  practicable)  by prime
banks in the London interbank  Eurodollar  market two (2) Business Days prior to
the first day of such  Interest  Period in an amount and  maturity of such Libor
Rate Loan,  divided by: (2) a number equal to 1.00 minus the aggregate  (without
duplication) of the rates (expressed as a decimal fraction) of the Libor Reserve
Requirements current on the date two (2) Business Days prior to the first day of
such Interest Period.

         "Libor Rate Loan" means any Loan that bears  interest with reference to
the Libor Rate.

         "Libor Reserve  Requirements"  means,  for any Interest  Period for any
Libor Rate Loan, the maximum reserves  (whether basic,  supplemental,  marginal,
emergency  or  otherwise)  prescribed  by the Board of  Governors of the Federal
Reserve  System  (or any  successor)  with  respect  to  liabilities  or  assets
consisting of or including "Eurocurrency  liabilities" (as defined in Regulation
D of the Board of Governors of the Federal  Reserve  System) having a term equal
to such Interest Period.

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         "Lien"  shall  mean any  mortgage,  security  interest,  lien,  charge,
encumbrance  on,  pledge or  deposit  of,  or  conditional  sale or other  title
retention agreement with respect to any property or asset.

         "Loan" or "Loans" shall mean the Revolving Loans.

         "Loan  Documents"  shall mean this  Agreement,  the Note,  the Security
Agreements of even date herewith, and any other documents relating thereto.

         "Margin Stock" shall have the meaning given to it under Regulation U of
the Board of Governors of the Federal  Reserve  System,  as amended from time to
time.

         "Morgan   Group"  shall  mean  The  Morgan  Group,   Inc.,  a  Delaware
corporation, of which the Companies are a subsidiary.

         "Multiemployer  Plan"  means a plan  described  in ERISA  which  covers
employees of the Companies or an ERISA Affiliate.

         "Net  Interest  Expense"  is  interest  expense as defined by GAAP less
interest income as defined by GAAP.

         "Note"  shall mean the  Promissory  Note,  in the form of  Exhibit  "A"
attached  hereto,  signed and  delivered  by the  Companies  to  evidence  their
obligation  to the Bank in  accordance  with Section 2.1 hereof  (including  all
extensions, renewals, and modifications).

         "Other  Collateral  Documents"  shall  mean  each  and  every  document
executed and delivered by any third person or entity in favor of Bank, pledging,
securing or guaranteeing any indebtedness  owed to Bank or otherwise  obligating
such third person or entity to Bank on behalf of Companies.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation  established
pursuant to Title IV of ERISA.

         "Person"  shall mean any natural  person,  corporation  (which shall be
deemed to include  business  trust),  association,  partnership,  joint venture,
political entity or political subdivision thereof.

         "Plan" shall mean any plan (other than a Multiemployer Plan) defined in
ERISA in which the  Companies  or any  subsidiary  are,  or has been at any time
during the preceding two (2) years, an "employer" or a "substantial employer" as
such terms are defined in ERISA.


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         "Potential Default" shall mean any condition,  action or failure to act
which, with the passage of time,  service of notice, or both, will constitute an
Event of Default under this Agreement.

         "Prime Rate" shall mean that  interest  rate  established  from time to
time by the Bank as the Bank's Prime Rate,  whether or not such rate is publicly
announced;  the Prime Rate may not be the lowest  interest  rate charged by Bank
for commercial or other extensions of credit.

         "Prime Rate Loan" means any Loan that bears  interest with reference to
the Prime Rate.

         "Prohibited  Transaction" shall mean any prohibited transaction as that
term is defined for purposes of ERISA.

         "Reportable  Event"  shall  mean any  reportable  event as that term is
defined for purposes of ERISA.

         "Revolving  Loan(s)"  means the revolving  credit  extended by the Bank
under the Master Revolving Loan Note pursuant to Article II hereof.

         "Security  Agreement"  shall  mean  each and every  security  agreement
related to this Agreement, executed and delivered by Companies in favor of Bank,
including,  but not  limited  to, the  Security  Agreements  dated this date and
executed and delivered by Companies to Bank, and any and all security agreements
ratified pursuant to Section 4.4.

         "Standby  Letter of Credit" shall mean a letter of credit issued by the
Bank  pursuant to this  Agreement and shall include the letters of credit issued
by the Bank that are listed on Exhibit  "B," and shall also  include any amended
Standby Letter of Credit or any  replacement  Standby Letter of Credit,  and any
other Standby Letter of Credit issued by Bank under this Agreement.

         "Subordinated  Debt"  shall  mean  Indebtedness  of a  Person  which is
subordinated  in  writing,  in  a  manner  satisfactory  to  the  Bank,  to  all
Indebtedness owing to the Bank.

         "Subsidiary" shall mean any corporation  fifty-one percent (51%) of the
outstanding voting stock of which is at the time directly or indirectly owned by
Companies or by one or more of their Subsidiaries, or by the Morgan Group.

         "Termination  Date" shall mean April 30, 1999,  or such earlier date on
which the commitment of the Bank to make loans pursuant to Section 2.1(a) hereof
shall have been terminated pursuant to Article VIII of this Agreement.


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         "Total  Indebtedness" shall mean the total of all items of indebtedness
or  liability  which in  accordance  with GAAP would be included in  determining
total  liabilities  on the liability side of the balance sheet as of the date of
determination.

         The  foregoing  definitions  shall be  applicable  to the singulars and
plurals of the fore going defined terms.

                          ARTICLE II. REVOLVING CREDIT
                      AND STANDBY LETTER OF CREDIT FACILITY

                                REVOLVING CREDIT

         Section  2.1.  Amount of  Revolving  Credit.  The Bank  hereby  agrees,
subject to the terms and conditions of this Agreement,  to make,  continue,  and
convert Revolving Loans to Morgan and TDI as follows:

         (a)      The Bank  will,  subject to the terms and  conditions  of this
                  Agreement,  make one or more Revolving Loans to Morgan and TDI
                  from  time to time on and  after  the  date of this  Agreement
                  through and  including the  Termination  Date, in an aggregate
                  principal   amount   not  to  exceed   Ten   Million   Dollars
                  ($10,000,000.00)   outstanding  at  any  one  time  (Revolving
                  Credit). All issued Standby Letters of Credit,  whether issued
                  at the request of Morgan, Interstate or TDI, shall be included
                  in  the   calculation  of  the  unpaid   aggregate   principal
                  outstanding and shall reduce the amount of the Revolving Loans
                  available  dollar  for  dollar.  Morgan  and TDI  may  borrow,
                  prepay, and reborrow such maximum amount of credit;  provided,
                  however,  that except as otherwise provided in this Agreement,
                  Morgan and TDI may prepay any Libor Rate Loan only on the last
                  day of the  applicable  Interest  Period  for such  Loan.  The
                  Companies may from time to time,  upon not less than three (3)
                  Business  Days'  prior  notice  made by  telegraph,  Telex  or
                  telephone  and  confirmed in a writing  delivered to the Bank,
                  terminate or reduce permanently, the commitment of the Bank to
                  make Revolving Loans pursuant to this Section 2.1(a) hereof by
                  the amount of Five Hundred Thousand  Dollars  ($500,000.00) or
                  any integral  multiple  thereof;  provided that Morgan and TDI
                  shall immediately pay to the Bank the amount, if any, by which
                  the  aggregate   principal  amount  of  such  Revolving  Loans
                  outstanding  plus the stated amount of the Standby  Letters of
                  Credit  exceeds  such reduced  commitment  of the Bank at that
                  time. If, however, after giving effect to any such payment any
                  Libor  Rate Loans  would be prepaid  prior to the end of their
                  respective Interest Periods,  the notice of the termination or
                  permanent  reduction  in the  commitment  of the  Bank to make
                  Revolving  Loans pursuant to Section 2.1(a) shall be deemed to
                  be Morgan and TDI's request that such termination or reduction
                  be effective on the last day of such Interest Periods.


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         (b)      Each  Revolving Loan that is made as or converted into a Prime
                  Rate Loan shall be made or converted on such  Business Day and
                  in  such  amount  (equal  to  One  Hundred   Thousand  Dollars
                  ($100,000.00) or any integral  multiple  thereof) as Morgan or
                  TDI, jointly or individually,  shall request by written notice
                  given to the Bank no later than 11:00  a.m.  (Cleveland,  Ohio
                  time) on the date of  disbursement  of or conversion  into the
                  requested  Prime Rate Loan;  provided,  however,  that a Libor
                  Rate Loan may be  converted  into a Prime  Rate Loan only upon
                  the expiration of the Libor Rate Loan's Interest Period except
                  in  situations  covered  by  Sections  2.7  and  2.8  of  this
                  Agreement. Each Revolving Loan that is made or continued as or
                  converted into a Libor Rate Loan shall be made, continued,  or
                  converted on such  Business  Day, in such amount (equal to One
                  Hundred Thousand Dollars ($100,000.00) or an integral multiple
                  thereof),  and with such an  Interest  Period as Morgan or TDI
                  shall  request  by written  notice  given to the Bank no later
                  than 11:00 a.m.  (Cleveland,  Ohio time) on the third Business
                  Day prior to the date of  disbursement  or  continuation of or
                  conversion  into the requested  Libor Rate Loan.  Each written
                  notice of any Libor Rate Loan shall be irrevocable and binding
                  on Morgan and TDI and Morgan and TDI shall  indemnify the Bank
                  against  any loss or expense  incurred by the Bank as a result
                  of any failure by Morgan or TDI to consummate  such  Revolving
                  Loan, including,  without limitation, any loss (including loss
                  of  anticipated  profits)  or  expense  incurred  by reason of
                  liquidation  or  re-employment  of  deposits  or  other  funds
                  acquired by the Bank to fund the Revolving Loan. A certificate
                  as to the amount of such loss or expense submitted by the Bank
                  to Morgan  and TDI shall be  conclusive  and  binding  for all
                  purposes,  absent  manifest error. In the event that Morgan or
                  TDI  fails to  provide  the Bank  with  the  required  written
                  notice,  Morgan or TDI shall be deemed to have given a written
                  notice that such  Revolving Loan shall be converted to a Prime
                  Rate Loan on the last day of the applicable  Interest  Period.
                  All  Revolving  Loans under this Section shall be evidenced by
                  the Master  Revolving  Note,  dated the date hereof.  The Note
                  shall  be a  master  note,  and the  principal  amount  of all
                  Revolving Loans  outstanding shall be evidenced by the Note or
                  any  ledger  or  other  record  of the  Bank,  which  shall be
                  presumptive  evidence of the principal owing and unpaid on the
                  Note.

         (c)      Morgan  and TDI  shall  repay to the  Bank on the  Termination
                  Date, the principal amount of all Revolving Loans evidenced by
                  the  Master   Revolving  Note  that  are  outstanding  on  the
                  Termination Date.

         Section 2.2.  Interest Rate.

         (a)      Each  Revolving  Loan  that is a Libor  Rate Loan  shall  bear
                  interest during each Interest Period at a fixed rate per annum
                  equal to the  Libor  Rate for such  Interest  Period  plus the
                  Libor  Margin.  The  Libor  Margin  as of  the  date  of  this
                  Agreement  shall be one hundred fifty (150) basis points.  The
                  Libor Margin

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                  shall  be  adjusted  on a  quarterly  basis as  follows:  Upon
                  submission of Morgan Group's consolidated  quarterly financial
                  statements  the  Libor  Margin  shall  be  determined  for the
                  succeeding quarter by KeyBank using the following matrix:

                  EBIT                                             Libor Margin
                  Less than $3,000,000.00                      150 basis points

                  Greater than or equal to $3,000,000.00
                  but less than $4,500,000.00                  125 basis points

                  Greater than or equal to $4,500,000.00       100 basis points

                  This  matrix is based upon  certain  levels of Morgan  Group's
                  EBIT on a rolling four (4) quarter basis.

                  The special  charges  included in the 1996  audited  financial
                  statements  related to the closing of the Truckaway segment of
                  the specialized transport division of Morgan shall be excluded
                  for testing  purposes in an amount not to exceed Three Million
                  Five  Hundred  Thousand  Dollars  ($3,500,000.00)  for special
                  charges and Seven Hundred Fifty Thousand Dollars ($750,000.00)
                  for insurance claim reserves.

                  Each  Revolving  Loan  that is a Prime  Rate Loan  shall  bear
                  interest at a floating rate per annum equal to the Prime Rate.
                  In the  event of any  change in the  Prime  Rate,  the rate of
                  interest  upon each  Prime  Rate  Loan  shall be  adjusted  to
                  immediately  correspond with such change, except such interest
                  rate shall not exceed the highest rate permitted by law.

         (b)      After the maturity of any Revolving Loan, the unpaid principal
                  amount of the Revolving Loan, and accrued interest thereon, or
                  any fees or any other sum payable hereunder,  shall thereafter
                  until paid in full bear  interest at a rate per annum equal to
                  three  percent (3%) in excess of the Prime Rate in effect from
                  time to time,  which  rate  shall be  adjusted  in the  manner
                  described in Section 2.2(a) above.

         Section 2.3.  Interest  Payments.  Morgan and TDI shall pay to the Bank
interest  on the  unpaid  principal  balance of each Prime Rate Loan on: (1) the
date such Loan is  converted  to a Libor Rate  Loan;  and (2) on the last day of
each  month  hereafter  and at  maturity.  Morgan  and TDI shall pay to the Bank
interest  on the  unpaid  principal  balance of each Libor Rate Loan on: (1) the
date  such  Loan is  converted  to a Prime  Rate  Loan;  (2) the last day of the
applicable  Interest  Period of such Loan;  or (3) each date an  installment  of
principal  becomes  due and  payable in  accordance  with  Section  2.1  hereof,
whichever is earlier. Additionally, if the

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applicable Interest Period exceeds three (3) months, interest shall also be paid
at quarterly intervals during the course of the applicable Interest Period.

         Section  2.4.  Payment.  Morgan and TDI may pay any Prime Rate Loans in
whole,  or in part,  in the  principal  amount of One Hundred  Thousand  Dollars
($100,000.00) or any integral multiple  thereof,  at any time or times upon same
day by 11:00 a.m.  Cleveland  time notice made by telephone to the Bank.  Morgan
and TDI may pay any Libor Rate Loan in whole or in part, in the principal amount
of One Hundred Thousand Dollars  ($100,000.00) or any integral  multiple thereof
only on the last day of the  Interest  Period  applicable  to such Loan upon not
less than three (3) Business Days' prior written notice given to the Bank.

         Section 2.5. Fees.  Morgan and TDI shall pay to the Bank a total yearly
fee of one-fourth  percent  (1/4%) of the total amount of the  Revolving  Credit
($10,0000,000.00)  set forth in Section 2.1 whether or not the entire  amount of
the Revolving Credit is available or used. This fee shall be paid quarterly,  in
advance.

         Morgan and TDI shall also pay to the Bank;  prior to maturity  (whether
by  acceleration  or  otherwise),  for each payment of principal or interest not
paid when due,  a late fee equal to the  greater  of five  percent  (5%) of such
payment or One Hundred Dollars ($100.00).

         Section 2.6.  Computation of Interest and Fees. Interest on Loans shall
be  computed on the basis of a year of three  hundred  sixty (360) days and paid
for the  actual  number  of days  elapsed.  Interest  on  unpaid  fees,  if any,
hereunder  shall be computed on the basis of a year of three hundred sixty (360)
days and paid for the actual number of days elapsed.

         Section 2.7.  Additional Costs.

         (a)      If, due to either:  (1) the introduction of, or any change in,
                  or in the interpre  tation of, any law or  regulation;  or (2)
                  the compliance  with any guideline or request from any central
                  bank or other  governmental  authority  (whether or not having
                  the force of law),  there shall be any increase in the cost to
                  the Bank of making,  funding or maintaining Loans, then Morgan
                  and TDI shall from time to time,  upon demand by the Bank, pay
                  to the Bank  additional  amounts  sufficient  to reimburse the
                  Bank for any such additional  costs. A certificate of the Bank
                  submitted  to  Morgan  and  TDI  as  to  the  amount  of  such
                  additional  costs,  shall be  conclusive  and  binding for all
                  purposes,  absent manifest  error.  Upon notice from Morgan or
                  TDI to the Bank within five (5)  Business  Days after the Bank
                  notifies Morgan and TDI of any such additional  costs pursuant
                  to this Section 2.8(a),  Morgan and TDI may either: (1) prepay
                  in full all Loans of any types so affected  then  outstanding,
                  together  with  interest  accrued  thereon to the date of such
                  prepayment;  or (2) convert all Loans of any types so affected
                  then out standing into Loans of any other type not so affected
                  upon not less than four (4) Business Days' notice to the Bank.
                  If any such prepayment or conversion of

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                  any Libor Rate Loan  occurs on any day other than the last day
                  of the applicable  Interest  Period for such Loan,  Morgan and
                  TDI  also  shall  pay  to the  Bank  such  additional  amounts
                  sufficient  to indemnify  the Bank  against any loss,  cost or
                  expense incurred by the Bank as a result of such prepayment or
                  conversion, including, without limitation, any loss (including
                  loss of  anticipated  profits),  cost or expense  incurred  by
                  reason of the  liquidation  or  re-employment  of  deposits or
                  other funds  acquired by the Bank to fund any such Loan, and a
                  certificate as to the amount of any such loss, cost or expense
                  submitted  by the Bank to Morgan  and TDI shall be  conclusive
                  and binding for all purposes, absent manifest error.

         (b)      If either:  (1) the  introduction  of, or any change in, or in
                  the  interpretation  of,  any  law or  regulation;  or (2) the
                  compliance with any guideline or request from any central bank
                  or other  governmental  authority  (whether  or not having the
                  force of law),  affects or would  affect the amount of capital
                  required  or  expected  to be  maintained  by the  Bank or any
                  corporation  controlling the Bank and the Bank determines that
                  the amount of such  capital is  increased by or based upon the
                  existence of the Loans (or  commitment  to make the Loans) and
                  other  extensions of credit (or  commitments to extend credit)
                  of similar type, then, upon demand by the Bank, Morgan and TDI
                  shall pay to the Bank from  time to time as  specified  by the
                  Bank additional  amounts  sufficient to compensate the Bank in
                  the light of such  circumstances,  to the extent that the Bank
                  reasonably determines such increase in capital to be allocable
                  to the  existence of the Bank's Loans (or  commitment  to make
                  the Loans).  A certificate of the Bank submitted to Morgan and
                  TDI as to such amounts shall be conclusive and binding for all
                  purposes,  absent manifest  error.  Upon notice from Morgan or
                  TDI to the Bank within five (5)  Business  Days after the Bank
                  notifies Morgan or TDI of any such  additional  costs pursuant
                  to this Section 2.8(b),  Morgan or TDI may either:  (1) prepay
                  in full all Loans of any types so affected  then  outstanding,
                  together  with  interest  accrued  thereon to the date of such
                  prepayment;  or (2) convert all Loans of any types so affected
                  then  outstanding into Loans of any other type not so affected
                  upon not less than four (4) Business Days' notice to the Bank.
                  If any such  prepayment  or  conversion of any Libor Rate Loan
                  occurs  on any day other  than the last day of the  applicable
                  Interest  Period for such Loan,  Morgan and TDI also shall pay
                  to the Bank such  additional  amounts  sufficient to indemnify
                  the Bank  against  any loss,  cost or expense  incurred by the
                  Bank as a result of such prepayment or conversion,  including,
                  without  limitation,  any loss  (including loss of anticipated
                  profits),   cost  or  expense   incurred   by  reason  of  the
                  liquidation  or   reemployment  of  deposits  or  other  funds
                  acquired by the Bank to fund any such Loan,  and a certificate
                  as to the amount of any such loss,  cost or expense  submitted
                  by the Bank to Morgan or TDI shall be  conclusive  and binding
                  for all purposes, absent manifest error.


                                                        11

<PAGE>



         Section 2.8.  Illegality.  Notwithstanding  any other provision of this
Agreement,  if the introduction of or any change in or in the  interpretation of
any law or  regulation  shall make it  unlawful,  or any  central  bank or other
governmental authority shall assert that it is unlawful, for the Bank to perform
its  obligations  hereunder  to make,  continue  or  convert  Libor  Rate  Loans
hereunder,  then:  (1) on  notice  thereof  by the Bank to  Morgan  or TDI,  the
obligation  of the Bank to make or  continue a Loan of a type so  affected or to
convert any type of Loan into a Loan of a type so affected  shall  terminate and
the Bank shall  thereafter  be obligated  to make Prime Rate Loans  whenever any
written  notice  requests  any type of Loans so  affected;  and (2) upon  demand
therefor  by the Bank to Morgan or TDI,  Morgan or TDI shall  either,  (a) forth
with prepay in full all Loans of the type so affected then outstanding, together
with  interest  accrued  thereon,  or (b) request  that the Bank,  upon four (4)
Business  Days'  notice,  convert  all  Loans  of  the  type  so  affected  then
outstanding  into Loans of a type not so  affected.  If any such  prepayment  or
conversion  of any Libor Rate Loan  occurs on any day other than the last day of
the applicable  Interest Period for such Loan,  Morgan and TDI also shall pay to
the Bank such  additional  amounts  sufficient to indemnify the Bank against any
loss,  cost or expense  incurred by the Bank as a result of such  prepayment  or
conversion,   including,   without  limitation,  any  loss  (including  loss  of
anticipated  profits),  cost or expense incurred by reason of the liquidation or
re-employment  of deposits or other funds  acquired by the Bank to fund any such
Loan,  and a  certificate  as to the  amount of any such  loss,  cost or expense
submitted by the Bank to Morgan or TDI shall be  conclusive  and binding for all
purposes, absent manifest error.

         Section 2.9. Renewals/Extensions.  In 1998 and in each year thereafter,
Morgan and TDI may request in writing an extension of the  Termination  Date for
an additional  one-year period.  Such written request must be accompanied by the
Morgan  Group's  preceding  fiscal year's audited  financial  statements and any
other  financial  information  reasonably  requested by Bank. Any such extension
shall  be in each  instance,  made in the  Bank's  sole  discretion.  Upon  such
extension, the Termination Date shall be changed to reflect the extension.

         Section 2.10. Liability of Morgan and TDI. Morgan and TDI shall each be
jointly,  severally, and unconditionally liable for all payments owing under the
Revolving Credit without regard to which of the Companies actually draws down or
received the proceeds from the Revolving Loan.

                        STANDBY LETTER OF CREDIT FACILITY

         Section 2.11.  Amount and Terms of Standby  Letter of Credit  Facility.
The Bank hereby agrees,  subject to the terms and conditions of this  Agreement,
to issue one or more standby letters of credit as follows:

         (a)      The Bank agrees,  subject to the terms and  conditions of this
                  Agreement,  to issue one or more standby  letters of credit to
                  the  Beneficiary  for  account of the  Companies  from time to
                  time,  to cover  payments  made by  Beneficiary  on  behalf of
                  Companies  and  attributable  to  the  deductible  portion  of
                  Companies' insurance

                                                        12

<PAGE>



                  program with the Beneficiary;  provided, however, the total of
                  all issued Standby Letters of Credit shall not exceed,  in the
                  aggregate,  Seven Million Dollars  ($7,000,000.00) (the stated
                  amount). Of the Seven Million Dollar ($7,000,000.00) aggregate
                  amount, Bank agrees, subject to all other terms and provisions
                  of this Agreement to issue up to Five Hundred Thousand Dollars
                  ($500,000.00) in Standby Letters of Credit  outstanding at any
                  one time at the request of or for use by Interstate.

                  As set forth in Section 2.1,  issued Standby Letters of Credit
                  shall  reduce the  amount of the  Revolving  Credit  available
                  hereunder  by the  stated  amount  of the  Standby  Letter  of
                  Credit, dollar for dollar.

         (b)      Drawings under the Standby Letter of Credit shall be made only
                  by  Beneficiary  pursuant to the terms and  provisions of, and
                  subject to the  conditions set forth in, the Standby Letter of
                  Credit.

         (c)      No  Standby  Letter of Credit  shall be issued for a period of
                  time  exceeding one year and no Standby Letter of Credit shall
                  be issued with an expiration date which is later than the date
                  which is fifteen (15) business  days prior to the  Termination
                  Date.

         Section 2.12.  Reimbursement and Other Payment Obligations.

         (a)      Companies  shall pay  Bank,  on  demand  and in lawful  United
                  States  funds,  the amount paid by Bank on each draft or other
                  order,  instrument  or  demand  drawn or  presented  under the
                  Letter of Credit.

         (b)      Companies shall pay Bank interest at a floating rate per annum
                  equal to the Bank's  Prime Rate on all amounts paid by Bank in
                  connection  with a  Letter  of  Credit  from  the date of such
                  payment until Bank receives Companies' reimbursement therefor.
                  In the  event of any  change in the  Prime  Rate,  the rate of
                  interest  upon each  Prime  Rate  Loan  shall be  adjusted  to
                  immediately  correspond  to such change,  except such interest
                  rate shall not  exceed  the  highest  rate  permitted  by law.
                  Interest  shall be  calculated on the basis of a three hundred
                  sixty  (360) day year and paid for  actual  days  elapsed  and
                  shall be paid on the last day of each month beginning with the
                  first month  following a payment by Bank in connection  with a
                  Letter of Credit.

         (c)      No interest  shall be payable on drawings which are reimbursed
                  on or prior to 1:00 p.m. (Cleveland,  Ohio time) on the day on
                  which the Bank honors such drawings. After such time, interest
                  shall be payable by the Companies on such reimbursable amounts
                  at a floating rate per annum equal to the Bank's Prime Rate.

                                                        13

<PAGE>



         Section 2.13.  Increased  Cost.  If any law or  regulation  hereinafter
enacted or, any change in any law or regulation,  or any  interpretation  by any
court or administrative,  banking or governmental  authority charged or claiming
to be charged with the administration applicable to the Bank, shall:

         (a)      impose,  modify  or  make  applicable  any  reserve,   special
                  deposit,  risk/capital  ratio or similar  requirement  against
                  letters of credit issued by the Bank;

         (b)      impose  on  the  Bank  any  other  condition   regarding  this
                  Agreement or the Standby Letter of Credit; or

         (c)      subject the Bank to any tax (other than taxes based upon gross
                  revenues or income),  charge,  deduction or withholding of any
                  kind whatsoever;

and the result of any event referred to in clause (a), (b) or (c) above shall be
to increase the cost to the Bank issuing or  maintaining  the Standby  Letter of
Credit (which increase in cost shall be the result of a reasonable allocation of
the aggregate of such cost increase as resulting from such events), or to reduce
the amount of principal,  interest or any fee or  compensation to be paid to the
Bank under this Agreement or the Standby Letter of Credit or the Note, then, not
later than five (5) business days following  demand for payment by the Bank, the
Companies  shall pay to the Bank,  from time to time as  specified  by the Bank,
additional  amounts which shall be  sufficient  to compensate  the Bank for such
increased  cost or reduction.  Any such amounts that remain unpaid as of the end
of said fifth  business day shall accrue  interest after such date at a floating
rate of the prime rate plus one percent  (1%). A  certificate  setting  forth in
reasonable  detail such  increased  cost or reduction  incurred by the Bank as a
result of any event  referred to in clause (a),  (b) or (c) above,  submitted by
the Bank to the Companies, shall be conclusive, absent manifest error, as to the
amount.  The  obligations of the Companies  under this section shall survive the
termination of this Agreement.

         Section  2.14.  Note and  Payments.  As soon as  practicable  under the
circumstances  (which  sometimes may be after a draw under the Standby Letter of
Credit  is  honored  by the  Bank)  the Bank  will  make an  attempt  to  notify
telephonically the appropriate  Company (Morgan,  TDI or Interstate) that it has
received a demand for a draw under the Standby Letter of Credit and in any event
the Bank will notify the Company forthwith after a draw under the Standby Letter
of Credit is honored by the Bank. Upon demand,  all payments by the Companies to
the Bank with  respect to the Standby  Letters of Credit shall be made in lawful
currency  of the  United  States in  immediately  available  funds at the Bank's
office  at 127  Public  Square,  Cleveland,  Ohio.  In the  event  that the date
specified  for any payment is not a business day, such payment shall be made not
later than the next  following  business day and  interest  shall be paid at the
rate  provided  for in  this  Agreement  on any  such  payment.  Obligations  of
Companies  to Bank shall be  evidenced by the Note or any ledger or other record
of the Bank,  which shall be  presumptive  evidence of the  principal  owing and
unpaid on the Note.


                                                        14

<PAGE>



         Section 2.15. Letter of Credit Fee.  Companies shall pay Bank an annual
fee based on the stated amount of each Standby Letter of Credit on or before the
date of issuance  and on each  anniversary  date of the date of issuance of that
Standby Letter of Credit.

         The fee for the entire year shall be determined and paid on the date of
issuance  based upon the Letter of Credit fee in effect on the date of issuance,
and on each  anniversary  date.  The fee for Standby  Letters of Credit shall be
adjusted on a quarterly  basis as follows:  Upon  submission  of Morgan  Group's
consolidated  quarterly financial  statements,  the Standby Letter of Credit fee
shall be determined  for Letters of Credit issued in the  succeeding  quarter by
KeyBank using the following matrix:

         EBIT                                              Letter of Credit Fee
         Less than $3,000,000.00                           150 basis points

         Greater than or equal to $3,000,000.00
         but less than $4,500,000.00                       125 basis points

         Greater than or equal to $4,500,000.00            100 basis points

         This matrix is based upon  certain  levels of Morgan  Group's EBIT on a
         rolling four (4) quarter basis.

         The special charges included in the 1996 audited  financial  statements
         related to the  closing  of the  Truckaway  segment of the  specialized
         transport  division of Morgan shall be excluded for testing purposes in
         an amount not to exceed Three  Million Five  Hundred  Thousand  Dollars
         ($3,500,000.00)  for special  charges and Seven Hundred Fifty  Thousand
         Dollars ($750,000.00) for insurance claim reserves.

Also,  Companies  agree to pay an  issuance  fee  equal to the  Bank's  standard
issuance fee at the time of issuance and the Bank's  standard  amendment fee for
each amendment. Companies shall also pay the fees of Bank for review of any draw
of a letter of credit.

         Section 2.16. Indemnification. In addition to any other amounts payable
by the Companies  under this  Agreement,  the Companies  hereby agree to pay and
indemnify  the Bank from and against any and all  claims,  liabilities,  losses,
costs, and expenses (including, without limitation,  reasonable attorney's fees)
which  the Bank  may  incur  or be  subject  to as a  consequence,  directly  or
indirectly, of:

         (a)      the  issuance  of,  or  payment  or  failure  to pay under the
                  Standby Letter of Credit;

         (b)      any breach by the  Companies of any warranty term or condition
                  in, or the  occurrence of any default under,  this  Agreement,
                  including all reasonable fees

                                                        15

<PAGE>



                  or expenses  resulting  from the  settlement or defense of any
                  claim or liabilities arising as a result of any such breach or
                  default; and

         (c)      any suit,  investigation or proceeding as to which the Bank is
                  involved as a consequence, direct or indirect, of its issuance
                  of the  Standby  Letter  of Credit  or its  execution  of this
                  Agreement or any other event or  transaction  contemplated  by
                  any of these matters.  The  obligations of the Companies under
                  this section shall survive the termination of this Agreement.

         Section 2.17.  Nature of Bank's Duties.  The Companies assume all risks
of the acts,  omissions or misuse of the Standby Letter of Credit by Beneficiary
or any  successor;  and except for instances of willful  misconduct by Bank, the
Bank shall not be responsible:

         (a)      for the form, validity, sufficiency,  accuracy, genuineness or
                  legal effect of any document  submitted in connection with the
                  application  for and  issuance  of, or the making of a drawing
                  under, the Standby Letter of Credit, even if it should in fact
                  prove  to be in  any or all  respects  invalid,  insufficient,
                  inaccurate, fraudulent or forged;

         (b)      for the validity or sufficiency of any instrument transferring
                  or assigning or  purporting  to transfer or assign the Standby
                  Letter  of  Credit  or the  rights  or  benefits  under  it or
                  proceeds  of it,  in whole or in part,  which  may prove to be
                  invalid or ineffective for any reason;

         (c)      for failure of the Beneficiary to comply fully with conditions
                  required in order to effect a drawing;

         (d)      for errors, omissions, interruptions or delays in transmission
                  or delivery of any  messages,  by mail,  telecopier,  Telex or
                  otherwise;

         (e)      for any loss or delay in the  transmission or otherwise of any
                  document or draft required in order to make a drawing; and

         (f)      for any consequences arising from causes beyond the control of
                  the Bank. Any action taken or omitted by the Bank, under or in
                  connection  with the  Standby  Letter of Credit or any related
                  certificates or other  documents,  if taken or omitted in good
                  faith,  shall be binding upon the  Companies and shall not put
                  the Bank under any resulting liability to the Companies.

         Section  2.18.  Liability  of  Companies.  Morgan and TDI shall each be
jointly,  severally and unconditionally  liable for all reimbursements under any
Letter  of Credit  without  regard as to which of the  Companies  requested  the
Letter of Credit. The liability of Interstate  hereunder is limited at any given
time to the then aggregate Letters of Credit which have been

                                                        16

<PAGE>



issued at  Interstate's  request,  or for the benefit of Interstate plus related
interest, fees and costs hereunder.

                             ARTICLE III. WARRANTIES

         The Companies represent and warrant to the Bank (which  representations
and warran ties will  survive the  delivery  of the Note and all  extensions  of
credit under this Agreement) that:

         Section 3.1.  Organization; Corporate Power.

         (a)      The  Companies  are  corporations   duly  organized,   validly
                  existing,   and  in  good  standing  under  the  laws  of  the
                  jurisdiction in which they are incorporated;

         (b)      The Companies  have the  corporate  power and authority to own
                  their  properties and assets and to carry on their business as
                  now being conducted;

         (c)      The   Companies   are   qualified  to  do  business  in  every
                  jurisdiction  in  which  the  ownership  or  leasing  of their
                  property or the doing of business requires such qualification;
                  and

         (d)      The Companies  have the corporate  power to execute,  deliver,
                  and perform their Loan Documents and to borrow hereunder.

         Section 3.2. Authorization of Borrowing.  The execution,  delivery, and
performance  of the Loan  Documents  have been duly  authorized by all requisite
corporate action.

         Section 3.3. No Conflict.  The execution,  delivery, and performance of
the Loan  Documents  will not: (1) violate any provision of law, the Articles of
Incorporation,  the Code of Regulations or Bylaws of the Companies;  (2) violate
any order of any court or other agency of any federal or state government or any
provision  of any  indenture,  agreement,  or  other  instrument  to  which  the
Companies are parties or by which they or any of their  properties or assets are
bound; (3) conflict with,  result in a breach of, or constitute (with passage of
time or  delivery  of  notice,  or both),  a default  under any such  indenture,
agreement or other  instrument;  or (4) result in the creation or  imposition of
any  Lien  or  other  encumbrance  of  any  nature  whatsoever  upon  any of the
properties or assets of the Companies except in favor of the Bank.

         Section 3.4. Execution of Loan Documents.  The Loan Documents have been
duly  executed  and are valid and binding  obligations  of the  Companies  fully
enforceable in accor dance with their respective terms.

         Section 3.5. Financial  Condition.  The Companies have furnished to the
Bank true and  correct  financial  statements  of  Morgan  Group  prepared  by a
certified public accountant as

                                                        17

<PAGE>



of the end of the Companies'  calendar year which ended December 31, 1996, which
audited financial  statements present fairly Morgan Group's financial  condition
at such date,  and there has been no material  adverse  change in Morgan Group's
financial condition since that date.

         Section 3.6. Liabilities;  Liens. The Companies have made no investment
in,  advance  to, or  guarantee  of, the  obligations  of any Person nor are the
Companies' assets and properties  subject to any claims,  liabilities,  Liens or
other encumbrances, except as disclosed in the finan cial statements and related
notes thereto referred to in Section 3.5 hereof.

         Section 3.7. Litigation. There is no action, suit, examination,  review
or  proceeding  by or before  any  governmental  instrumentality  or agency  now
pending or, to the knowledge of the Companies,  threatened against the Companies
or  against  any  property  or  rights of the  Companies,  which,  if  adversely
determined,  would  materially  impair  the right of the  Companies  to carry on
business as now being conducted or which would  materially  adversely affect the
financial  condition  of the  Companies,  except  for  the  litigation,  if any,
described in the notes to the  financial  statements  referred to in Section 3.5
hereof.

         Section  3.8.  Payment  of Taxes.  Federal  income  tax  returns of the
Companies have been examined by the Internal Revenue Service for all years prior
to and  including  their  calendar year which ended  December 31, 1993,  and all
deficiencies  finally  resulting from such  examinations have been discharged or
proper  amounts  have  been set  aside  on the  Companies'  books to cover  such
deficiencies.  The  Companies  have filed,  or caused to be filed,  all federal,
state,  local,  and foreign tax returns  required to be filed,  and has paid, or
caused to be paid, all taxes as are shown on such returns,  or on any assessment
received by the Companies,  to the extent that such taxes become due,  except as
otherwise  contested in good faith.  The Companies have set aside proper amounts
on their books, determined in accordance with GAAP, for the payment of all taxes
for the years that have not been audited by the  respective  tax  authorities or
for taxes being contested by the Companies.

         Section  3.9.  Agreements.  The  Companies  are not in  default  in the
performance,  observance, or fulfillment of any of the obligations, covenants or
conditions  contained  in any  agreement or  instrument  to which it is a party,
which default materially adversely affects the business,  properties,  assets or
financial condition of the Companies.

         Section 3.10. Regulatory Status. Neither the making nor the performance
of this Agreement,  nor any extension of credit hereunder,  requires the consent
or  approval  of  any  governmental  instrumentality  or  political  subdivision
thereof,  any  other  regulatory  or  adminis  trative  agency,  or any court of
competent jurisdiction.

         Section 3.11. Federal Reserve  Regulations;  Use of Loan Proceeds.  The
Companies are not engaged principally,  or as one of their important activities,
in the business of extending  credit for the purpose of  purchasing  or carrying
any Margin Stock. No part of the proceeds of the Loans will be used, directly or
indirectly, for a purpose which violates any law, rule or

                                                        18

<PAGE>



regulation  of  any  governmental  body,  including,   without  limitation,  the
provisions  of  Regulations  G, U or X of the Board of  Governors of the Federal
Reserve System,  as amended.  No part of the proceeds of the Loans will be used,
directly  or  indirectly,  to  purchase  or carry any Margin  Stock or to extend
credit to others for the purpose of  purchasing  or carrying  any Margin  Stock.
Following  application  of the proceeds of each Loan,  not more than ten percent
(10%) of the value of the assets of the  Companies and their  subsidiaries  on a
consolidated basis will be Margin Stock.

         Section  3.12.   Subsidiaries.   Morgan  has  three  (3)  subsidiaries,
Transport  Services  Unlimited,   Inc.,   Advertising   Associates,   Inc.,  MDA
Corporation and Interstate and TDI have no  subsidiaries  and neither will form,
purchase,  or otherwise hold additional  subsidiaries without written consent of
the Bank. The Morgan Group has four (4)  subsidiaries,  Morgan Drive Away, Inc.,
Interstate  Indemnity  Company,  Morgan  Finance,  Inc., TDI, Inc., and will not
form, purchase or otherwise hold additional subsidiaries without written consent
of Bank.

         Section 3.13.  Licenses.  The Companies have all licenses,  franchises,
consents, approvals or authorizations required in connection with the conduct of
the  business  of the  Companies,  the  absence  of which  would have a material
adverse affect on the conduct of the Companies' business, and all such licenses,
franchises,  consents,  approvals,  and  authorizations  are in full  force  and
effect.

         Section 3.14. ERISA. No Reportable Event or Prohibited  Transaction has
occurred and is  continuing  with respect to any Plan,  and the  Companies  have
incurred no "accumulated  funding deficiency" (as that term is defined by ERISA)
since the effective date of ERISA.

         Section 3.15.  Environmental  Matters.  The Companies are in compliance
with all Environmental Laws and all applicable federal,  state, and local health
and safety laws, regula tions, ordinances or rules.

         Section 3.16. Solvency. The Companies have received consideration which
is the reasonable  equivalent  value of the obligations and liabilities that the
Companies  have incurred to Bank.  The Companies are not insolvent as defined in
any  applicable  state or federal  statute,  nor will the  Companies be rendered
insolvent by the execution  and delivery of this  Agreement or the Note to Bank.
The Companies are not engaged or about to engage in any business or  transaction
for which the assets  retained  by it shall be an  unreasonably  small  capital,
taking into  consideration  the  obligations  to Bank  incurred  hereunder.  The
Companies  do not intend to, nor do they  believe  that they will,  incur  debts
beyond their ability to pay them as they mature.

                ARTICLE IV. CONDITIONS OF LENDING AND COLLATERAL

         Section 4.1. Credit Facility. The obligation of the Bank to make a Loan
or issue a Standby  Letter of Credit  shall be  subject to  satisfaction  of the
following conditions, unless

                                                        19

<PAGE>



waived in writing by the Bank: (1) all legal matters and Loan Documents incident
to the trans  actions  contemplated  hereby shall be  satisfactory,  in form and
substance, to Bank's counsel; (2) the Bank shall have received, (a) certificates
by an authorized officer of the Companies,  upon which the Bank may conclusively
rely until superseded by similar certificates delivered to the Bank, certifying,
(i) all requisite action taken in connection with the transactions  contemplated
hereby,  and  (ii)  the  names,  signatures,  and  authority  of the  Companies'
authorized signers executing the Loan Documents; and (b) such other documents as
the Bank may  reasonably  require to be executed  by, or delivered on behalf of,
the  Companies;  (3) the Bank  shall  have  received  the Note  with all  blanks
appropriately completed,  executed by an authorized signer of the Companies; (4)
the  Companies  shall have paid to the Bank the fee(s)  then due and  payable in
accordance with Article II and Article IX of this Agreement and a closing fee of
Thirty Thousand  Dollars  ($30,000.00);  (5) all existing  credit  facilities to
Morgan  Group  and its  Subsidiaries  are  canceled  ; (6)  there is no Event of
Default or  Potential  Event of Default;  (7) the Bank shall have  received  the
written opinion of legal counsel  selected by the Companies and  satisfactory to
the Bank, dated the date of this Agreement,  in form and substance  satisfactory
to the Bank, to the effect that:

                  (i) this  Agreement  has been duly  authorized,  executed  and
                  delivered by the Companies and constitutes a legal,  valid and
                  binding obligation of the Companies  enforceable in accordance
                  with its terms  except to the extent that such  enforceability
                  is limited by  bankruptcy,  insolvency,  moratorium or similar
                  laws or equitable  principles  relating to the  enforcement of
                  creditors' rights;

                  (ii) the Note  delivered  to Bank on the Closing Date has been
                  duly author ized,  executed and delivered by the Companies and
                  is a legal,  valid and  binding  obligation  of the  Companies
                  enforceable in accordance  with its terms except to the extent
                  that such enforceability is limited by bankruptcy, insolvency,
                  moratorium or similar laws or equitable principles relating to
                  the enforcement of creditors' rights;

                  (iii) it is not necessary,  in connection  with the making and
                  delivery of the Note under the  circumstances  contemplated by
                  this Agreement,  to register the Note under the Securities Act
                  of 1933,  as amended,  or to qualify an  indenture  in respect
                  thereof under the Trust Indenture Act of 1939, as amended;

                  (iv) no order, permission,  consent or approval of any federal
                  or  state  com  mission,  board  of  regulatory  authority  is
                  required for the execution and delivery or performance of this
                  Agreement and of the Note;

                  (v) neither the  consummation  of the Agreement nor the use by
                  the Companies of any financial  accommodation  hereunder  will
                  violate the  Securities  Exchange Act of 1934, as amended,  or
                  applicable regulations thereunder;


                                                        20

<PAGE>



                  (vi) the Companies are corporations  duly organized,  existing
                  and in good standing  under the laws of the state as set forth
                  in Section  3.1 with full  corporate  power and  authority  to
                  carry on the business, to enter into this Agreement, to borrow
                  money as  contemplated by them, to issue the Note and to carry
                  out the provisions of this Agreement and the Note;

                  (vii) the Companies are duly qualified as foreign corporations
                  to do business in each of the states,  other than the state of
                  their incorporation,  in which the character of the properties
                  owned by them or the  nature of the  business  trans  acted by
                  them  makes  such  qualification  necessary,  and  is in  good
                  standing in each of such states;

                  (viii) there is no charter, bylaw or preferred or common stock
                  provision,  nor any indenture,  contract or agreement to which
                  the Companies  are to the  knowledge of such counsel  parties,
                  nor any statute,  rule or regulation binding on the Companies,
                  which would be  contravened  by the  execution and delivery of
                  this  Agreement  or of the Note or by the  performance  of any
                  terms,  provisions,   conditions,   agreements,  covenants  or
                  obligations of the Companies contained herein or therein;

                  (ix)  there  are  no   actions,   suits,   investigations   or
                  proceedings  (whether  or not  purportedly  on  behalf  of the
                  Companies)  pending  or, to the  knowledge  and belief of said
                  counsel, threatened against or affecting the Companies, or the
                  business or properties of the  Companies,  or before or by any
                  governmental  agency, or any court,  arbitrator or grand jury,
                  which can  reasonably  be expected  to result in any  material
                  adverse  change in the  business,  operations,  properties  or
                  assets or in the  condition,  financial or  otherwise,  of the
                  Companies  or in the ability of the  Companies to perform this
                  Agreement.  The Companies are not, to the knowledge and belief
                  of said  counsel,  in default  with  respect to any  judgment,
                  order, writ, injunction, decree, demand, rule or regulation of
                  any court, arbitrator,  grand jury, or any of the governmental
                  agency,  default  under  which might have  consequences  which
                  would materially and adversely affect the business, properties
                  or assets or the  condition,  financial or  otherwise,  of the
                  Companies;

                  (x) the  consummation  of the  Agreement and the execution and
                  delivery  of  the  Note  will  not   involve  any   prohibited
                  transaction under the Internal Revenue Code or ERISA; and

(6) the Bank shall have received a guarantee, satisfactory in form and substance
to Bank's counsel, by The Morgan Group, Inc. and Morgan Finance in favor of Bank
guaranteeing  all  indebtedness  of  Companies  to Bank and from  Morgan and TDI
guaranteeing  all  indebtedness  of Interstate to Bank, and an opinion letter of
legal counsel selected by the Guarantor and

                                                        21

<PAGE>



satisfactory  to the Bank in the form of Exhibit "C" attached to this  Agreement
and covering such additional matters as Bank may reasonably require.

         Section 4.2. Each Loan.  The obligation of the Bank to make any Loan or
to issue any  Standby  Letter of Credit  shall be  subject  to  compliance  with
Section 4.1 herein and also subject to satisfaction of the following  conditions
that at the date of making such Loan or issuing  any  Standby  Letter of Credit,
and after giving effect  thereto:  (1) no Event of Default or Potential  Default
shall have  occurred and be then  continuing;  and (2) each  representation  and
warranty set forth in Article III above is true and correct as if then made.

         Section 4.3. Collateral. The obligations of Companies,  hereunder shall
be secured by the Master Revolving Note, and by the collateral  described in the
Security  Agreements  executed on even date  herewith,  and any and all security
agreements  ratified pursuant to Section 4.4 herein, and by the Other Collateral
Documents and by any and all collateral  securing any obligation of Companies to
Bank.

         Section 4.4.  Ratification and Confirmation.  All security  agreements,
financing statements,  evidence of liens, and other security documents, executed
by the  Companies  in favor of Bank,  are hereby  ratified  and  confirmed,  and
adopted by and to the uses of this  Agreement,  and shall continue in full force
and effect, and shall hereafter be related to this Agreement.

                        ARTICLE V. AFFIRMATIVE COVENANTS

         As long as financial accommodation is available hereunder and until the
Expiration  Date of all  Letters  of  Credit  shall  have  passed  and until all
principal of and interest on the Note have been paid in full:

         Section 5.1. Accounting;  Financial Statements;  and Other Information.
The Companies  will maintain a standard  system of accounting,  established  and
administered  in  accordance  with GAAP  consistently  followed  throughout  the
periods involved,  and will set aside on their books for each fiscal quarter the
proper amounts or accruals for  depreciation,  obsolescence,  amortization,  bad
debts, current and deferred taxes,  prepaid expenses,  and for other purposes as
shall be required by GAAP. The Companies will deliver to the Bank:

         (a)      As soon as practicable after the end of each month, and in any
                  event within thirty (30) days  thereafter,  a balance sheet of
                  the Companies as of the end of such month,  and  statements of
                  income,  certified  as complete  and correct by the  principal
                  financial   officer  of  the   Companies,   accompanied  by  a
                  certificate by the chief financial  officer stating whether or
                  not there exists any Event of Default or Potential Default.


                                                        22

<PAGE>



         (b)      Quarterly 10Q reports of Morgan Group within  forty-five  (45)
                  days of the quarter end.

         (c)      As soon as practicable  after the end of each fiscal year, and
                  in any event within one hundred twenty (120) days  thereafter,
                  the Annual 10K Report, and an audited  consolidated  financial
                  statement  for The Morgan Group,  audited by certified  public
                  accountants of recognized standing,  selected by the Companies
                  and satisfactory to the Bank prepared in accordance with GAAP.
                  In addition,  a  consolidating  balance sheet as of the end of
                  such year, and statements of income of Companies,  Interstate,
                  Morgan  Finance,  and the Morgan Group for such year,  setting
                  forth in each case in  comparative  form the  figures  for the
                  previous  fiscal year, all in reasonable  detail  certified as
                  complete  and correct by the  principal  financial  officer of
                  each entity.

         (d)      Annual budgeted  financial  statements within ninety (90) days
                  of year end.

         (e)      Together  with each set of  financial  statements  required by
                  subparagraphs (b) and (c) above and, in addition, upon request
                  of the Bank at any other  times,  a certifi  cate by the chief
                  financial officer or other authorized officer of the Companies
                  stating  whether  or not there  exists any Event of Default or
                  Potential  Default  (including  the  calculations  pursuant to
                  Sections  6.7,  6.10  and 6.11  hereunder)  and if there is an
                  Event of Default or Potential  Default,  specifying the nature
                  and period of existence  thereof and what action,  if any, the
                  Companies are taking or proposes to take with respect thereto.

         (f)      With reasonable promptness, such other data and information as
                  from time to time may be reasonably requested by the Bank.

         (g)      Promptly  and in any  event  within  ten (10)  days  after the
                  occurrence  of a  Reportable  Event  with  respect  to a Plan,
                  copies of any  materials  required  to be filed  with the PBGC
                  with respect to such Reportable Event or those that would have
                  been  required  to be filed  if the  thirty  (30)  day  notice
                  requirement to the PBGC were not waived.

         (h)      Promptly  upon  receipt,  and in no event  more than three (3)
                  days after receipt,  of a notice by the Companies or any ERISA
                  Affiliate or any  administrator  of any Plan or  Multiemployer
                  Plan that the PBGC has  instituted  proceedings  to  terminate
                  such Plan or to appoint a trustee to  administer  such Plan, a
                  copy of such notice.

         Section 5.2. Insurance;  Maintenance of Properties.  The Companies will
maintain with financially sound and reputable insurers,  insurance with coverage
and limits as may be  required  by law or as may be  reasonably  required by the
Bank. The Companies will, upon

                                                        23

<PAGE>



request  from time to time,  furnish  to the Bank a  schedule  of all  insurance
carried by it,  setting  forth in detail the amount and type of such  insurance.
The Companies will maintain in good repair,  working order,  and condition,  all
properties used or useful in the business of the Companies.

         Section 5.3. Existence;  Business.  The Companies will cause to be done
all  things  necessary  to  preserve  and keep in full  force and  effect  their
existence and rights, to conduct their business in a prudent manner, to maintain
in full  force and  effect,  and  renew  from  time to time,  their  franchises,
permits,  licenses,  patents, and trademarks that are necessary to operate their
businesses.  The Companies  will comply in all material  respects with all valid
laws and  regulations  now in effect or  hereafter  promulgated  by any properly
constituted governmental authority having jurisdiction;  provided,  however, the
Companies shall not be required to comply with any law or regulation which it is
contesting in good faith by appropriate proceedings as long as either the effect
of such law or regulation is stayed pending the  resolution of such  proceedings
or the effect of not complying  with such law or regulation is not to jeopardize
any  franchise,  license,  permit  patent or trademark  necessary to conduct the
Companies' business.

         Section  5.4.  Payment  of Taxes.  The  Companies  will pay all  taxes,
assessments,  and other governmental charges levied upon any of their properties
or assets or in respect of their franchises,  business, income or profits before
the same become  delinquent,  except that no such taxes,  assessments,  or other
charges  need  be paid if  contested  by the  Companies  in  good  faith  and by
appropriate  proceedings  promptly initiated and diligently conducted and if the
Companies has set aside proper amounts,  determined in accordance with GAAP, for
the payment of all such taxes, charges, and assessments.

         Section 5.5.  Litigation;  Adverse Changes. The Companies will promptly
notify the Bank in writing of: (1) any future event which,  if it had existed on
the  date  of  this  Agreement,   would  have  required   qualification  of  the
representations  and  warranties  set forth in Article III  hereof;  and (2) any
material  adverse change in the condition,  business or prospects,  financial or
otherwise, of the Companies.

         Section 5.6. Notice of Default.  The Companies will promptly notify the
Bank of any Event of Default or Potential Default hereunder and any demands made
upon the Companies by any Person for the acceleration  and immediate  payment of
any Indebtedness owed to such Person.

         Section  5.7.  Inspection.   The  Companies  will  make  available  for
inspection by duly  authorized  representatives  of the Bank, or its  designated
agent, the Companies' books,  records,  and properties when reasonably requested
to do so, and will furnish the Bank such  information  regarding  their business
affairs and financial  condition  within a reasonable time after written request
therefor.


                                                        24

<PAGE>



         Section 5.8.  Environmental  Matters.  The  Companies and each of their
subsidiaries:

         (a)      Shall comply with all Environmental Laws.

         (b)      Shall  deliver  promptly  to Bank notice of the receipt of any
                  document   received  from  the  United  States   Environmental
                  Protection   Agency  or  any   state,   county  or   municipal
                  environmental  or health agency and, upon request of Bank: (1)
                  copies  of any  documents  received  from  the  United  States
                  Environmental  Pro  tection  Agency  or any  state,  county or
                  municipal  environmental  or health agency;  and (2) copies of
                  any   documents   submitted  by  Companies  or  any  of  their
                  Subsidiaries  to the United  States  Environmental  Protection
                  Agency or any  state,  county or  municipal  environmental  or
                  health agency concerning their operations.

         Section 5.9. Depository Accounts. Companies shall maintain all of their
primary depository accounts with the Bank, and Companies grant Bank the right to
offset  Companies' funds on deposit with the Bank against  Indebtedness  owed by
Companies to the Bank.

                         ARTICLE VI. NEGATIVE COVENANTS

         As long as credit is available hereunder and until all principal of and
interest on the Note have been paid in full:

         Section 6.1. Sale or Purchase of Assets. Morgan Group and the Companies
(indivi dually or collectively) will not, nor will they allow any Subsidiary to,
directly or  indirectly:  (1)  purchase,  lease or otherwise  acquire any assets
except in the  ordinary  course of business  or as  otherwise  permitted  by any
provision of this Agreement;  or (2) sell, lease,  transfer or otherwise dispose
of any facility (for purposes of this provision, sales of assets associated with
the  closing of the  Truckaway  segment  shall be  excluded  in an amount not to
exceed Two Million One Hundred Twenty-Five Thousand Dollars ($2,125,000.00);  or
(3) sell,  lease,  transfer or otherwise dispose of in any transaction or series
of related  transactions any of their property or assets (except in the ordinary
course of business) without written consent of Bank.

         Section 6.2.  Liens.  Morgan Group and the Companies  (individually  or
collectively)  will not,  nor will they allow any  Subsidiary  to,  directly  or
indirectly,  create,  incur, assume, or permit to exist any Lien with respect to
any property or asset of the  Companies  now owned or hereafter  acquired  other
than:

         (a)      Liens for taxes or governmental assessments, charges or levies
                  the  payment of which is not at the time  required  by Section
                  5.4 hereof;

         (b)      Liens imposed by law,  such as Liens of  landlords,  carriers,
                  warehousemen,   mechanics,  and  materialmen  arising  in  the
                  ordinary course of business for sums

                                                        25

<PAGE>



                  not yet due or  being  contested  by  appropriate  proceedings
                  promptly  initiated  and  diligently  conducted,  provided the
                  Companies  have  set  aside  proper  amounts,   determined  in
                  accordance with GAAP, for the payment of all such Liens;

         (c)      Liens  incurred or  deposits  made in the  ordinary  course of
                  business   in   connection    with   worker's    compensation,
                  unemployment insurance, and other types of social security, or
                  to secure the performance of tenders,  statutory  obligations,
                  and surety and appeal bonds,  or to secure the performance and
                  return of money,  bonds,  and other similar  obligations,  but
                  excluding Indebtedness; and

         (d)      Liens in respect of  judgments or awards with respect to which
                  the Companies  shall,  in good faith, be prosecuting an appeal
                  or  proceeding  for review and with respect to which a stay of
                  execution upon such appeal or proceeding for review shall have
                  been obtained;

         (e)      Liens that secure the Companies' Indebtedness for the purchase
                  price of any real or personal  property and that only encumber
                  the property  purchased;  provided the aggregate amount of all
                  such purchase money Liens shall not exceed an aggregate amount
                  outstanding  at any  time  of  Two  Hundred  Thousand  Dollars
                  ($200,000.00)  (For purposes of calculating  said  $200,000.00
                  figure,   all  purchase  money  Liens  of  the  Morgan  Group,
                  Companies, Interstate, Morgan Finance, and the Subsidiaries of
                  Companies will be included so that the combined purchase money
                  Liens   shall  not  exceed  Two   Hundred   Thousand   Dollars
                  ($200,000.00);

         (f)      Liens in favor of the Bank or any Affiliate Bank.

         Section 6.3. Indebtedness. Morgan Group and the Companies (individually
or  collectively)  will not, nor will they allow any Subsidiary to,  directly or
indirectly,  create,  incur or assume  Indebtedness,  or otherwise become liable
with respect to, any Indebtedness other than:

         (a)      Indebtedness now or hereafter payable, directly or indirectly,
                  by the Companies to the Bank or any Affiliate Bank;

         (b)      Subordinated Debt of the Companies;

         (c)      To the extent  permitted by this Agreement,  Indebtedness  for
                  the purchase price of any real or personal property,  which is
                  secured only by a Lien on the Property purchased;

         (d)      Unsecured current Indebtedness and deferred liabilities (other
                  than for borrowed  money or represented  by bonds,  notes,  or
                  other securities) incurred in the

                                                        26

<PAGE>



                  ordinary  course of business  (except that Companies may enter
                  into agreements with their insurance  providers for payment of
                  premiums  over a period of time not to exceed  one (1)  year);
                  and

         (e)      Indebtedness  for taxes,  assessments,  governmental  charges,
                  Liens,  or  similar  claims  to the  extent  not  yet  due and
                  payable.

         Section  6.4.  Investments;  Loans.  Morgan  Group  and  the  Companies
(individually or collectively)  will not, nor will they allow any Subsidiary to,
directly or indirectly,  without  written  approval of the Bank: (1) purchase or
otherwise acquire any stock or other securities of any other Person (except that
it shall not be a violation of this agreement if Companies receive,  following a
bankruptcy or other insolvency proceeding by one of Companies' debtors, stock in
exchange for or settlement of the unpaid  account of that debtor to  Companies);
or (2) make or permit to be  outstanding  any loan (other than loans to officers
in relation to or for the purpose of the special  employee  stock purchase plan)
or advance  (other than trade  advances in the  ordinary  course of business and
extensions of credit by Companies or Morgan Finance to  owner-operators  for the
purchase of a piece of equipment so long as the advances do not exceed the value
of the collateral  pledged by the  owner-operator to Companies or Morgan Finance
and assigned by  Companies or Morgan  Finance to Bank) or enter into any arrange
ment to provide funds or credit, to any other Person,  except that the Companies
may purchase or otherwise  acquire and own marketable United States Treasury and
Agency obligations,  and certificates of deposit and bankers' acceptances issued
or created by any domestic commercial bank.

         Section  6.5.  Guaranties.  Except  for the  guarantees  given to Bank,
Morgan Group and the Companies (individually or collectively) will not, nor will
they allow any Subsidiary to,  guarantee,  directly or indirectly,  or otherwise
become surety  (including,  without  limitation,  liability by way of agreement,
contingent or otherwise,  to purchase,  to provide funds for payment,  to supply
funds to, or otherwise invest in, any Person,  or enter into any working capital
maintenance or similar  agreement) in respect of any obligation or  Indebtedness
of any other Person, except guaranties by endorsement of negotiable  instruments
for deposit,  collection,  or similar  transactions  in the  ordinary  course of
business;  provided, however, Morgan Group and/or its Subsidiaries may guarantee
the debt of Persons in an amount not to exceed,  in the aggregate,  Five Hundred
Thousand Dollars ($500,000.00).

         Section 6.6. Mergers; Consolidation; Acquisitions. Morgan Group and the
Companies  (individually  or  collectively)  will not,  nor will they  allow any
Subsidiaries to, merge or consolidate with any Person or sell, assign,  lease or
otherwise   dispose  of  (whether  in  one   transaction   or  in  a  series  of
transactions),  all or  substantially  all of their assets (whether now owned or
hereafter  acquired).  Nor will Morgan Group, or Companies,  or any Subsidiaries
purchase or  otherwise  acquire  (whether in one  transaction  or in a series of
trans  actions) all or  substantially  all of the assets of any Person  (whether
through an asset or stock purchase) without prior written consent of Bank.

                                                        27

<PAGE>



         Section 6.7.  Consolidated  Net Worth.  Morgan Group will not permit at
any time its  Consolidated Net Worth to be less than Twelve Million Five Hundred
Thousand  Dollars  ($12,500,000.00).  The required  Consolidated Net Worth shall
increase  quarterly by an amount equal to fifty percent (50%) of Morgan  Group's
consolidated  quarterly  positive net earnings  beginning with the first quarter
end that occurs following execution of this Agreement. The required Consolidated
Net Worth shall not decrease  below the amount  established in the prior quarter
even if there is a quarter in which the Morgan Group does not have  positive net
earnings.

         The  required  Consolidated  Net Worth shall also be  increased  by the
amount of any equity  issued or  subordinated  debt  converted  to equity by the
Morgan  Group  over  the  term  of this  Revolving  Credit  Facility  Agreement,
excluding stock  offerings under any of the Morgan Group's or its  Subsidiaries'
employee benefit plan.

         Section  6.9.   Subordinated  Debt.  Morgan  Group  and  the  Companies
(individually  or  collectively)  will not, nor will they allow any Subsidiaries
to, make any payment upon outstanding  Subordinated  Debt, except in such manner
and  amounts  as may be  expressly  authorized  in any  subordination  agreement
presently or hereafter held by the Bank.

         Section 6.10. Leverage. Morgan Group will not permit its Leverage, on a
consolidated  basis,  to be at any time  more  than  forty-five  percent  (45%),
calculated at closing and quarterly  thereafter beginning with the first quarter
end that occurs following execution of this Agreement.

         Section  6.11.  Interest  Coverage.  Morgan  Group  will not permit its
Interest  Coverage,  on a  consolidated  basis,  to fall below 2.0 to 1.0.  This
covenant will be measured on a year-to-date  basis for fiscal year 1997, until a
rolling four-quarter period is established.

         Section  6.12.  Transactions  With  Affiliates.  Morgan  Group  and the
Companies  (individually  or  collectively)  will not,  nor will they  allow any
Subsidiary to, enter into any transaction  including,  without  limitation,  the
purchase, sale or exchange of property or the rendering of any service, with any
Affiliate  except in the ordinary  course of business  (or as otherwise  allowed
herein) and pursuant to the reasonable  requirements of the Companies'  business
and upon terms found by the Board of Directors to be fair and  reasonable and no
less favorable to the Companies  than would obtain in a comparable  arm's-length
transaction with a Person not an Affiliate.

         Section 6.13. Name Change. Morgan Group and the Companies (individually
or  collectively)  will  not  change  their  name or  location  without  written
notification to Bank.

         Section 6.14. Use of Proceeds.  Proceeds from the Loans hereunder shall
be used solely for proper corporate purposes.


                                                        28

<PAGE>



                         ARTICLE VII. EVENTS OF DEFAULT

         The  occurrence  of any  one or  more  of the  following  events  shall
constitute an Event of Default under this Agreement:

         Section 7.1.  Principal or Interest.  If the Companies  fail to pay any
installment  of  principal of or interest on the Note or any other sums of money
upon demand or when  otherwise due and payable  under this  Agreement or fail to
pay any  installment  of  principal  of or interest on any other  obligation  of
Companies to Bank, an Affiliate Bank or Leasing Company when due and payable; or

         Section 7.2. Misrepresentation.  If any representation or warranty made
herein by the  Companies  or in any written  statement,  certificate,  report or
financial  statement at any time furnished by, or on behalf of, the Companies in
connection  herewith,  is incorrect or misleading  in any material  respect when
made; or

         Section 7.3. Failure of Performance of this Agreement. If the Companies
or the Morgan Group or any Affiliate or  Subsidiary  fails to perform or observe
any covenant or agreement contained in this Agreement, or in any other agreement
between  Companies and Bank, an Affiliate Bank or Leasing Company other than any
sums of money payable, and such failure remains unremedied for ten (10) calendar
days after the Bank,  Affiliate Bank or Leasing Company shall have given written
notice thereof to the Companies; or

         Section 7.4. Default by Morgan Group. Any action which would constitute
a default by Morgan Group in the  performance  or  observation of any covenants,
conditions or agreements contained in any agreement entered into by Morgan Group
and Bank,  an  Affiliate  Bank or Leasing  Company or in any note,  guaranty  or
mortgage or other security  instrument signed by Morgan Group and given to Bank,
an Affiliate Bank or Leasing Company; or

         Section  7.5.  Default  by  Morgan  Finance.  Any  action  which  would
constitute a default by Morgan Finance in the  performance or observation of any
covenants,  conditions or agreements  contained in any agreement entered into by
Morgan  Finance and Bank, an Affiliate  Bank or Leasing  Company or in any note,
guaranty or mortgage or other security  instrument  signed by Morgan Finance and
given to Bank, an Affiliate Bank or Leasing Company; or

         Section 7.6.  Cross-Default.  If the Companies (or any Guarantor or any
Affiliate  or  Subsidiary):  (1) fails to pay any  Indebtedness  (other  than as
evidenced  by the  Note)  owing  by the  Companies  (or  such  Guarantor  or any
Affiliate or Subsidiary)  when due,  whether at matur ity, by  acceleration,  or
otherwise; or (2) fails to perform any term, covenant or agreement on their part
to be  performed  under  any  agreement  or  instrument  (other  than  the  Loan
Documents)  evidencing,  securing or relating to such Indebtedness when required
to be performed,  or is otherwise in default  thereunder,  if the effect of such
failure is to accelerate, or to permit the holder(s) of such Indebtedness or the
trustee(s) under any such agreement or instrument to

                                                        29

<PAGE>



accelerate, the maturity of such Indebtedness, whether or not such failure shall
be waived by such holder(s) or trustee(s); or

         Section  7.7.  Event of Default  Under Any Security  Agreement.  If any
Event of Default  occurs  (with  passage of time or service of notice,  or both)
under the terms of any Security Agreement; or

         Section 7.8. ERISA. If any of the following  events occur: (1) any Plan
incurs any "accumulated  funding  deficiency" (as such term is defined in ERISA)
whether waived or not; (2) the Companies  engage in any Prohibited  Transaction;
(3) any Plan is terminated;  (4) a trustee is appointed by an appropriate United
States  district  court to  administer  any  Plan;  or (5) the  PBGC  institutes
proceedings  to  terminate  any Plan or to appoint a trustee to  administer  any
Plan; or

         Section 7.9.  Guaranty.  Failure by any Guarantor to maintain in effect
guarantees  of all  obligations  of Companies to Bank,  an Affiliate  Bank,  and
Leasing  Company,   including,  but  not  limited  to,  obligations  under  this
Agreement,  or  failure  of any  Guarantor  to  deliver  to Bank  any  financial
statements or documents required under Section 5.1 hereunder.

         Section 7.10.  Insolvency.  If the Companies (or any  Guarantor)  shall
discontinue business or if the Companies or any Guarantor or Subsidiary:  (1) is
adjudicated  bankrupt or insolvent  under any law of any existing  jurisdiction,
domestic or foreign,  or ceases, is unable, or admits in writing their inability
to pay their debts generally as they mature,  or makes a general  assignment for
the benefit of creditors;  (2) applies for, or consents to, the  appointment  of
any receiver,  trustee or similar officer for it or for any substantial  part of
their  property,  or any such receiver,  trustee or similar officer is appointed
without  the  application  or consent of the  Companies  (or such  Guarantor  or
Subsidiary), and such appointment continues thereafter undischarged for a period
of thirty (30) days;  (3)  institutes,  or consents  to the  institution  of any
bankruptcy,  insolvency,  reorganization,  arrangement,  readjustment  or  debt,
dissolution,  liquidation or similar proceeding relating to it under the laws of
any  jurisdiction;  (4) any such proceeding is instituted  against the Companies
(or such  Guarantor or  Subsidiary)  and remains  thereafter  undismissed  for a
period of thirty (30) days; or (5) any judgment,  writ, warrant of attachment or
execution,  or similar process is issued or levied against a substantial part of
the property of the Companies or any subsidiary (or Guarantor or Subsidiary) and
such judgment,  writ or similar process is not effectively  stayed within thirty
(30) days after its issue or levy, or any Guarantor becomes deceased.

                       ARTICLE VIII. REMEDIES UPON DEFAULT

         Section 8.1.  Optional  Acceleration.  In the event that one or more of
the Events of Default set forth in Sections  7.1 through 7.9 above occurs and is
not waived by the Bank, then, in any such event, and at any time thereafter, the
Bank may,  it its option,  terminate  its  commitment  to issue any Loan and any
Standby Letter of Credit and declare the unpaid

                                                        30

<PAGE>



principal of, and all accrued  interest on, the Note, and any other  liabilities
hereunder, and all other Indebtedness of the Companies to the Bank forthwith due
and payable,  whereupon the same will forthwith  become due and payable  without
presentment,  demand,  protest  or other  notice of any  kind,  all of which the
Companies hereby expressly  waive,  anything  contained herein or in the Note to
the contrary notwithstanding.

         Section 8.2. Automatic Acceleration.  Upon the happening of an Event of
Default  referred to in Section  7.10 above,  the unpaid  principal  of, and all
accrued interest on, the Note, and any other liabilities hereunder and all other
Indebtedness  of the Companies to the Bank then existing will  thereupon  become
immediately due and payable in full and the  commitment,  if any, of the Bank to
issue Loans or any Standby Letter of Credit, if not previously terminated,  will
thereupon immediately terminate without presentment,  demand,  protest or notice
of any kind, all of which are hereby expressly waived by the Companies, anything
contained herein or in the Note to the contrary notwithstanding.

         Section 8.3. Right of Setoff; Security. Upon the occurrence of an Event
of Default, the Bank has the right, in addition to all other rights and remedies
available  to it,  to set off the  unpaid  balance  of the  Note  and any  other
Indebtedness  payable  to the Bank  held by it  against  any  debt  owing to the
Companies by the Bank or by an Affiliate Bank,  including,  without  limitation,
any obligation under a repurchase agreement or any funds held at any time by the
Bank or any Affiliate Bank,  whether  collected or in the process of collection,
or in any time or demand  deposit  account  maintained  by the  Companies at, or
evidenced by any  certificate  of deposit  issued by, the Bank or any  Affiliate
Bank.  The  Companies  hereby grant,  pledge,  and assign to the Bank a security
interest in, or Lien upon, all cash, negotiable instruments, securities, deposit
accounts,  and other cash  equivalents,  whether  collected or in the process of
collection,  whether matured or unmatured, now or hereafter in the possession of
the  Bank or any  Affiliate  Bank  and  upon  which  the  Companies  have or may
hereafter have any claim.  The Companies  acknowledge  and agree that all of the
foregoing shall constitute "cash collateral" for purposes of this Agreement. The
Companies agree, to the fullest extent it may effectively do so under applicable
law,  that any  holder of a  participation  in the Note may  exercise  rights of
setoff or counterclaim  and other rights with respect to such  participation  as
fully  as if such  holder  of a  participation  were a  direct  creditor  of the
Companies pursuant to this Agreement in the amount of such participation.

         Section  8.4.  No Waiver.  The  remedies  in this  Article  VIII are in
addition to, not in limitation of, any other right, power,  privilege or remedy,
either in law, in equity,  or other wise, to which the Bank may be entitled.  No
failure  or  delay on the part of the Bank in  exercising  any  right,  power or
remedy will operate as a waiver thereof, nor will any single or partial exercise
thereof  preclude any other or further  exercise  thereof or the exercise of any
other right hereunder.

         Section  8.5.  Waiver of  Surety  Defenses.  Each and every  guarantor,
surety,  endorser,  and accommodation party of the obligations  contained herein
shall be deemed to and shall have

                                                        31

<PAGE>



irrevocably  waived and  relinquished (1) the benefit of any and all defenses to
enforcement of the Note, any counterclaim,  offset or claim in recoupment, based
upon  contract,  arising at equity,  or under any state or federal law regarding
suretyship or guaranty generally; and (2) any discharge provided in Indiana Code
26-1-3.1-605,  or other state or federal statute of similar  import.  Consistent
with this waiver,  and not by way of limitation,  the person or persons entitled
to  enforce  the Note may,  at any time and  without  notice  to any  guarantor,
surety,  endorser or  accommodation  party of the  obligations  contained in the
Note, (i) extend the maturity date of the Note; (ii) adjust any and all terms of
the Note, even if such adjustment  materially alters the obligation;  (iii) take
any action (or not take any action) with respect to any collateral for the Note,
including  without  limitation,   releasing  or  diminishing  (intentionally  or
otherwise) the extent or value of such collateral.

         Section 8.6.  Additional  Waivers.  Each and every  guarantor,  surety,
endorser, and accommodation party of the obligations contained herein, or in the
Note, hereby waives each of the following:

         (a)      presentment,  demand  and  protest,  and  notice of  dishonor,
                  nonpayment  or  other  default  with  respect  to  any  of the
                  obligations hereunder;

         (b)      any and all  defenses,  claims and  discharges of Companies or
                  any other obligor,  except the defense of discharge by payment
                  in  full;  and,   without   limiting  the  generality  of  the
                  foregoing,  will not assert, plead or enforce against the Bank
                  any  defense  of waiver,  release,  discharge  in  bankruptcy,
                  statute  of  limitations,   respondent  judicata,  statute  of
                  frauds, anti-deficiency statute, incapacity,  minority, usury,
                  illegality or  unenforceability  which may be available to the
                  Companies  or any setoff  available  to the  Companies  or any
                  other person against Bank; and

         (c)      any  requirement  that Bank take  action,  realize,  institute
                  suit,  or exercise  or exhaust its rights or remedies  against
                  any of the Companies or against any other person or guarantor,
                  or collateral  securing and/or guaranteeing all or any part of
                  the obligations,  prior to enforcing any rights it has against
                  said guarantor, surety, endorser or accommodation party.

         (d)      the  invalidity of any  instruments  evidencing any obligation
                  hereunder or the disability or legal  incapacity of any person
                  in whole or in part, at any time;

         (e)      the fact  that  the  amount  or  value of any of the  property
                  constituting  a part of the  Collateral,  may at any time have
                  been or be incorrectly estimated;

         (f)      the  deterioration in market or other values,  waste,  loss by
                  fire,  theft,  loss,  non-  existence or  substitution  of any
                  property constituting a part of the Collateral;


                                                        32

<PAGE>



         (g)      relief from valuation and appraisement laws; and

         (h)      any right that a guarantor,  surety, endorser or accommodation
                  party has, or might hereafter have, to recover from any of the
                  Companies the monies that any such guarantor, surety, endorser
                  or accommodation  party is obligated to pay to Bank hereunder.
                  Until Bank is paid in full and until no  commitment by Bank to
                  provide Loans or financial  accommodations  hereunder remains,
                  the  undersigned  will not exercise or enforce,  and expressly
                  waives,    any   right   of    contribution,    reimbursement,
                  indemnification,  recourse  or  subrogation  available  to the
                  undersigned  against  any  person  liable  for  payment of the
                  obligations hereunder,  including, but not limited to, each of
                  the Companies or as to any collateral security therefor.

         Section 8.7.  Information  Concerning Financial Conditions of Borrower.
Each and  every  guarantor,  surety,  endorser  and  accommodation  party of the
obligations  contained  herein  acknowledges  that it is capable  of, and hereby
assumes  responsibility for keeping informed of the financial  conditions of the
Companies, and of all other circumstances bearing upon the risk of nonpayment of
the obligations that diligent  inquiry would reveal,  and hereby agree that Bank
shall have no duty to advise them of  information  known to Bank  regarding such
conditions or any such circumstances.

                            ARTICLE IX. MISCELLANEOUS

         Section 9.1.  Amendments.  No waiver of any provision of this Agreement
or the Note, or consent to departure  therefrom,  is effective unless in writing
and signed by the Bank. No such consent or waiver  extends beyond the particular
case and purpose involved. No amendment to this Agreement is effective unless in
writing and signed by the Companies and the Bank.

         Section 9.2. Expenses;  Documentary Taxes. The Companies shall pay: (1)
all  out-of-pocket  expenses  of the Bank,  including,  but not  limited to, all
filing fees and costs related  thereto and all legal fees and  disbursements  of
special  counsel  for the  Bank,  in  connection  with the  preparation  of this
Agreement and the related documents; (2) any out-of-pocket expenses of the Bank,
including fees and  disbursements of special counsel for the Bank related to any
waiver or  consent  hereunder  or any  amendment  hereof or any Event of Default
hereunder;  and (3) if an Event of  Default or  Potential  Default  occurs,  all
out-of-pocket  expenses  incurred  by the Bank,  including  reasonable  fees and
disbursements of counsel,  in connection with such Event of Default or Potential
Default and collection and other enforcement  proceedings  result ing therefrom.
The Companies  shall  reimburse the Bank for its payment of all transfer  taxes,
documentary taxes,  assessments or charges made by any governmental authority be
reason of the  execution and delivery of this  Agreement or the Note.  Provided,
however,  nothing contained herein shall be construed as requiring  Companies to
pay  income  taxes  of  Bank  incurred  as  a  result  of  the  Revolving   Loan
relationship.

                                                        33

<PAGE>



         Section 9.3.  Indemnification.  The Companies  shall indemnify and hold
the Bank harmless against any and all liabilities,  losses,  damages, costs, and
expenses of any kind  (including,  without  limitation,  the reasonable fees and
disbursements of counsel in connection with any investigative, administrative or
judicial  proceeding,  whether  or not the  Bank  shall  be  designated  a party
thereto)  which may be incurred  by the Bank  relating to or arising out of this
Agreement  or any actual or  proposed  use of  proceeds  of any Loan  hereunder;
provided, however, that the Bank shall have no right to be indemnified hereunder
for its own  bad  faith  or  willful  misconduct  as  determined  by a court  of
competent  jurisdiction.  The  Companies  further  agree to  indemnify  the Bank
against any loss or expense which the Bank may sustain or incur as a consequence
of any default by the  Companies in payment when due of any amount due hereunder
in respect of any Libor Rate Loan,  including,  but not  limited to, any loss of
profit,  premium or penalty incurred by the Bank in respect of funds borrowed by
it for the purpose of making or maintaining  any such Loan, as determined by the
Bank in the exercise of its sole but reasonable discretion.  A certificate as to
any  such  loss or  expense  shall  be  promptly  submitted  by the  Bank to the
Companies and shall, in the absence of manifest error, be conclusive and binding
as to the amount thereof.

         Section 9.4. Construction. This Agreement and the Note will be governed
by and  construed in  accordance  with the laws of the state of Indiana  without
regard to  principles  of conflict of laws.  The several  captions to  different
sections  of this  Agreement  are  inserted  for  convenience  only and shall be
ignored in interpreting the provisions hereof.

         Section 9.5. Extension of Time. Whenever any payment hereunder or under
the Note becomes due on a date which the Bank is not open for the transaction of
business,  such payment will be due on the next succeeding Business Day and such
extension of time will be included in computing interest in connection with such
payment.

         Section  9.6.   Notices.   All  written  notices,   requests  or  other
communications  herein  provided  for  must be  addressed  to the  Companies  as
follows:

         Morgan Drive Away, Inc.
         2746 Old U.S. 20 West
         Elkhart, IN 46514
         Attn:  Richard B. DeBoer, Chief Financial Officer

         TDI, Inc.
         10920 East McKinley
         Osceola, IN 46561-9786
         Attn: Richard B. DeBoer, Chief Financial Officer



                                                        34

<PAGE>



         Interstate Indemnity Company
         2746 Old U.S. 20 West
         Elkhart, IN 46514
         Attn:  Richard B. DeBoer, Chief Financial Officer

to the Bank as follows:

         KeyBank National Association
         127 Public Square
         Cleveland, OH 44114
         Attn:             Mr. Matthew P. Tuohey, Assistant Vice President

Service of all written  notices under this Agreement shall be sufficient if hand
delivered,  or delivered or mailed to the party at its respective address as set
forth above or at such address as such party may provide in writing from time to
time.  Any such notice  shall be  effective  when hand  delivered,  delivered by
overnight  carrier or received by United  States mail,  certified  mail,  return
receipt  requested at the address provided herein or at such address  designated
to the other in writing.

         Section 9.7.  Survival of  Agreements;  Relationship.  All  agreements,
representations,  and warranties  made in this Agreement will survive the making
of the extension of credit hereunder,  and will bind and inure to the benefit of
the  Companies  and the  Bank,  and their  respective  successors  and  assigns;
provided,  that no  subsequent  holder of the Note shall by reason of  acquiring
that Note become  obligated  to make any Loan  hereunder  and no successor to or
assignee  of the  Companies  may borrow  hereunder  without  the Bank's  written
assent. The relationship between the Companies and the Bank with respect to this
Agreement,  the Note and any other Loan  Document is and shall be solely that of
debtor and  creditor,  respectively,  and the Bank has no  fiduciary  obligation
toward the  Companies  with  respect to any such  document  or the  transactions
contemplated thereby.

         Section 9.8.  Severability.  If any provision of this  Agreement or the
Note, or any action taken  hereunder,  or any  application  thereof,  is for any
reason held to be illegal or invalid,  such  illegality or invalidity  shall not
affect any other provision of this Agreement or the Note, each of which shall be
construed and enforced without  reference to such illegal or invalid portion and
shall be deemed to be  effective  or taken in the manner and to the full  extent
permitted by law.

         Section 9.9. Entire Agreement.  This Agreement, the Note, and any other
Loan  Document  integrate  all the  terms  and  conditions  mentioned  herein or
incidental  hereto and supersede all oral  representations  and negotiations and
prior writings with respect to the subject matter hereof.


                                                        35

<PAGE>



         Section  9.10.  Submission  to  Jurisdiction;  Venue.  As  part  of the
consideration  for the  financial  accommodation  extended to Companies by Bank,
Companies  consent to the juris  diction of any  local,  state or federal  court
located within Elkhart County,  Indiana, (or in the case of a federal court, the
jurisdiction  of which includes  Elkhart  County,  Indiana) and consent that all
such service of process be made by  registered  mail  directed to the parties at
the address  stated in this  Agreement and service so made shall be deemed to be
completed five (5) days after such mailing.

         Section 9.11.  Jury Trial Waiver.  COMPANIES  WAIVE ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE,  BETWEEN  BANK AND  COMPANIES  ARISING  OUT OF, IN  CONNECTION  WITH,
RELATED TO, OR  INCIDENTAL  TO THE RELA  TIONSHIP  ESTABLISHED  BETWEEN  THEM IN
CONNECTION  WITH THIS AGREE MENT OR ANY NOTE OR OTHER  INSTRUMENT,  DOCUMENT  OR
AGREEMENT  EXECUTED OR  DELIVERED  IN  CONNECTION  HEREWITH OR THE  TRANSACTIONS
RELATED THERETO.

         IN WITNESS  WHEREOF,  the  Companies and the Bank have each caused this
Agree ment to be executed by their duly  authorized  officers  this 27 day of
March, 1997.

                                   COMPANIES:
                                   MORGAN DRIVE AWAY, INC.

                                   By:/s/ Richard B. DeBoer
                                   ------------------------------------------
                                   (Signature)

                                   Richard B. DeBoer, Chief Financial Officer
                                             and Treasurer
                                   ------------------------------------------
                                   (Typed or Printed Name and Office)

                                   TDI, INC.

                                   By:/s/ Richard B. DeBoer
                                   ------------------------------------------
                                   (Signature)

                                   Richard B. DeBoer, Chief Financial Officer
                                             and Treasurer
                                   ------------------------------------------
                                   (Typed or Printed Name and Office)

                                   INTERSTATE INDEMNITY COMPANY

                                   By:/s/ Richard B. DeBoer
                                   ------------------------------------------
                                   (Signature)

                                   Richard B. DeBoer, Chief Financial Officer
                                             and Treasurer
                                   ------------------------------------------
                                   (Typed or Printed Name and Office)
SIGNATURES CONTINUED ON PAGE 37

                                                        36

<PAGE>



                                   BANK:
                                   KEYBANK NATIONAL ASSOCIATION

                                   By:_________________________________________
                                   (Signature)
                                   ------------------------------------------
                                   (Typed or Printed Name and Office)



         The undersigned, The Morgan Group, Inc. represents and warrants that it
has read and reviewed  this  Agreement  and that it consents to the execution of
this document by Morgan Drive Away,  Inc.,  TDI, Inc., and Interstate  Indemnity
Company and agrees to be bound by the terms and conditions contained herein.

                                  THE MORGAN GROUP, INC.:

                                   By:/s/ Richard B. DeBoer
                                   ------------------------------------------
                                   (Signature)

                                   Richard B. DeBoer, Chief Financial Officer
                                             and Treasurer
                                   ------------------------------------------
                                   (Typed or Printed Name and Office)


                                                        37

<PAGE>


                  LIST OF EXHIBITS TO MORGAN DRIVE AWAY, INC.'S
                       REVOLVING CREDIT FACILITY AGREEMENT


Exhibit "A"
         Promissory Note........................................5
Exhibit "B"
         Letters of Credit......................................6
Exhibit "C"
         Opinion Letter........................................22


                                                        38