Document:

Exhibit 10.26 (Star Transportation Stock Purchase Agreement)

    
      

    

     

    Exhibit
      10.26

    

    

    

    STOCK
      PURCHASE AGREEMENT

    

    

    

    

    By
      and Among

    

    

    

    

    COVENANT
      TRANSPORT, INC.

    

    STAR
      TRANSPORTATION, INC.

    

    BETH
      D.
      FRANKLIN

    

    DAVID
      D.
      DORTCH

     

    ROSE
      D.
      SHIPP

    

    DAVID
      W.
      DORTCH

    

    and

    

    JAMES
      F.
      BROWER, JR.

    

    

    

    

    

    

    

    

    

    

    

    Dated
      as of September 14, 2006

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

          

        

      

    

    TABLE
      OF CONTENTS

    

    
      	 	 	
              Page

            
	 	 	 
	
              ARTICLE
                1

            	
              SALE
                AND TRANSFER OF SHARES, CLOSING

            	
              2

            
	 	
              Section
                1.1

            	
              Sale
                and Transfer of Shares

            	
              2

            
	 	
              Section
                1.2

            	
              Purchase
                Price

            	
              2

            
	 	
              Section
                1.3

            	
              Closing

            	
              3

            
	 	
              Section
                1.4

            	
              Closing
                Deliveries

            	
              3

            
	 	
              Section
                1.5

            	
              Adjustments
                and Procedures

            	
              4

            
	 	
              Section
                1.5

            	
              Adjustments
                and Procedures

            	
              4

            
	 	
              Section
                1.6

            	
              Transfer
                Taxes

            	
              6

            
	 	
              Section
                1.7

            	
              Lease
                Purchase Conversion Adjustment

            	
              6

            
	
              ARTICLE
                II

            	
              REPRESENTATIONS
                AND WARRANTIES OF THE STOCKHOLDERS

            	
              7

            
	 	
              Section
                2.1

            	
              Organization
                and Good Standing

            	
              7

            
	 	
              Section
                2.2

            	
              Authorization
                and Validity

            	
              8

            
	 	
              Section
                2.3

            	
              Capitalization

            	
              8

            
	 	
              Section
                2.4

            	
              Subsidiaries

            	
              8

            
	 	
              Section
                2.5

            	
              No
                Violation

            	
              8

            
	 	
              Section
                2.6

            	
              Finder's
                Fee

            	
              9

            
	 	
              Section
                2.7

            	
              Consents

            	
              9

            
	 	
              Section
                2.8

            	
              Financial
                Statements

            	
              9

            
	 	
              Section
                2.9

            	
              Books
                and Records; Internal Controls

            	
              9

            
	 	
              Section
                2.10

            	
              Properties;
                Encumbrances

            	
              10

            
	 	
              Section
                2.11

            	
              Condition
                and Sufficiency of Assets

            	
              11

            
	 	
              Section
                2.12

            	
              Accounts
                Receivable

            	
              11

            
	 	
              Section
                2.13

            	
              No
                Undisclosed Liabilities

            	
              11

            
	 	
              Section
                2.14

            	
              Taxes

            	
              11

            
	 	
              Section
                2.15

            	
              No
                Materially Adverse Change

            	
              13

            
	 	
              Section
                2.16

            	
              Employee
                Benefits

            	
              13

            
	 	
              Section
                2.17

            	
              Compliance
                with Legal Requirements; Governmental Authorizations

            	
              15

            
	 	
              Section
                2.18

            	
              Legal
                Proceedings; Orders

            	
              16

            
	 	
              Section
                2.19

            	
              Absence
                of Certain Changes and Events

            	
              17

            
	 	
              Section
                2.20

            	
              Contracts;
                No Defaults

            	
              18

            
	 	
              Section
                2.21

            	
              Insurance

            	
              20

            
	 	
              Section
                2.22

            	
              Environmental
                Matters

            	
              22

            
	 	
              Section
                2.22

            	
              Employees;
                Independent Contractors

            	
              22

            
	 	
              Section
                2.24

            	
              Labor
                Relations; Compliance

            	
              23

            
	 	
              Section
                2.25

            	
              Trade
                Rights; Intellectual Property

            	
              24

            
	 	
              Section
                2.26

            	
              Tractors
                and Trailers; Compliance

            	
              24

            
	 	
              Section
                2.27

            	
              Relationships
                with Related Persons

            	
              25

            
	 	
              Section
                2.28

            	
              Prepayment
                of Indebtedness

            	
              25

            
	 	
              Section
                2.29

            	
              Bank
                Accounts

            	
              25

            
	 	
              Section
                2.30

            	
              Officers
                and Directors; Powers of Attorney

            	
              25

            
	 	
              Section
                2.31

            	
              Stock
                Options and Warrants

            	
              25

            
	 	
              Section
                2.32

            	
              Interest
                Rate Swap

            	
              25

            
	 	
              Section
                2.33

            	
              Stockholder
                Liabilities

            	
              25

            
	
              ARTICLE
                III 

            	
              REPRESENTATIONS
                AND WARRANTIES OF COVENANT

            	
              26

            
	 	
              Section
                3.1

            	
              Organization
                and Good Standing

            	
              26

            
	 	
              Section
                3.2

            	
              Authorization
                and Validity

            	
              26

            
	 	
              Section
                3.3

            	
              No
                Violation

            	
              26

            

    

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

    

    
      	 	
              Section
                3.4

            	
              Finder's
                Fee

            	
              26

            
	 	
              Section
                3.5

            	
              Consents

            	
              26

            
	
              ARTICLE
                IV

            	
              OTHER
                AGREEMENTS

            	
              26

            
	 	
              Section
                4.1

            	
              Guaranties

            	
              26

            
	 	
              Section
                4.2

            	
              Certain
                Tax Matters

            	
              27

            
	 	
              Section
                4.3

            	
              Use
                of Office Space and Assistant

            	
              29

            
	
              ARTICLE
                V

            	
              INDEMNIFICATION;
                REMEDIES

            	
              30

            
	 	
              Section
                5.1

            	
              Survival;
                Right to Indemnification not Affected by Knowledge

            	
              30

            
	 	
              Section
                5.2

            	
              Indemnification
                and Payment of Damages by the Stockholders

            	
              31

            
	 	
              Section
                5.3

            	
              Indemnification
                and Payment of Damages by Covenant

            	
              31

            
	 	
              Section
                5.4

            	
              Procedure
                for Indemnification - Third Party Claims

            	
              31

            
	 	
              Section
                5.5

            	
              Procedure
                for Indemnification - Other Claims

            	
              32

            
	 	
              Section
                5.6

            	
              Limitations
                on Claims

            	
              32

            
	 	
              Section
                5.7

            	
              Exclusive
                Remedy

            	
              34

            
	
              ARTICLE
                XI

            	
              MISCELLANEOUS

            	
              34

            
	 	
              Section
                6.1

            	
              Amendment
                and Waiver

            	
              34

            
	 	
              Section
                6.2

            	
              Assignment;
                Third-Party Rights

            	
              34

            
	 	
              Section
                6.3

            	
              Notice

            	
              34

            
	 	
              Section
                6.4

            	
              Public
                Announcements

            	
              35

            
	 	
              Section
                6.5

            	
              Confidentiality

            	
              35

            
	 	
              Section
                6.6

            	
              Entire
                Agreement

            	
              36

            
	 	
              Section
                6.7

            	
              Transaction
                Expenses

            	
              36

            
	 	
              Section
                6.8

            	
              Further
                Assurances

            	
              36

            
	 	
              Section
                6.9

            	
              Severability

            	
              36

            
	 	
              Section
                6.10

            	
              Governing
                Law

            	
              36

            
	 	
              Section
                6.11

            	
              Captions

            	
              36

            
	 	
              Section
                6.12

            	
              Counterparts

            	
              36

            
	 	
              Section
                6.13

            	
              Number
                and Gender

            	
              37

            
	 	
              Section
                6.14

            	
              Time
                of Essence

            	
              37

            
	 	
              Section
                6.15

            	
              Waiver;
                Remedies Cumulative

            	
              37

            
	 	
              Section
                6.16

            	
              Stockholder
                Representative

            	
              37

            

    

    

    

    Exhibits

    

    
      	 	
              Exhibit
                A

            	
              Definitions

            	 
	 	
              Exhibit
                B

            	
              Form
                of Escrow Agreement

            	 
	 	
              Exhibit
                C

            	
              Form
                of Transition Services Agreement

            	 
	 	
              Exhibit
                D

            	
              Form
                of Noncompetition Agreements

            	 
	 	
              Exhibit
                E

            	
              Form
                of Stockholder Releases

            	 
	 	
              Exhibit
                F

            	
              Form
                of Spousal Consent

            	 
	 	
              Exhibit
                G

            	
              Form
                of Opinion of Waller Lansden Dortch & Davis, LLP

            	 
	 	
              Exhibit
                H

            	
              Form
                of Opinion of Scudder Law Firm, P.C., L.L.O.

            	 

    

    

    

    

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

        
          

        

      

    

    STOCK
      PURCHASE AGREEMENT

    

    

    THIS
      STOCK PURCHASE AGREEMENT (this "Agreement"),
      dated
      as of September 14, 2006, is made and entered into by and among Covenant
      Transport, Inc., a Nevada corporation ("Covenant"),
      Star
      Transportation, Inc., a Tennessee corporation (the "Company"),
      and
Beth
      D.
      Franklin, David D. Dortch, Rose D. Shipp, David W. Dortch, and James F. Brower,
      Jr. (collectively the "Stockholders,"
      and
      each, a "Stockholder").
      Covenant, the Company, and the Stockholders are sometimes individually referred
      to herein as a "Party"
      and
      together as the "Parties."
      Capitalized terms used herein shall have the meanings ascribed to such terms
      in
Exhibit
      A
      attached
      hereto or as elsewhere defined in this Agreement.

    

    RECITALS

    

    WHEREAS,
      the Stockholders own all of the issued and outstanding shares of capital stock
      of the Company (the "Shares");
      and

    

    WHEREAS,
      Covenant desires to purchase from the Stockholders, and the Stockholders desire
      to sell and transfer to Covenant, the Shares, subject to the terms and
      conditions set forth in this Agreement.

    

    NOW,
      THEREFORE, in consideration of the mutual representations, warranties, and
      covenants herein contained, and on the terms and subject to the conditions
      herein set forth, the Parties hereto, intending to be legally bound, hereby
      covenant and agree as follows:

    

    ARTICLE
      I

    SALE
      AND TRANSFER OF SHARES; CLOSING

    Section
      1.1   Sale
      and Transfer of Shares.
      Subject
      to and upon the terms and conditions of this Agreement, at the Closing, the
      Stockholders will sell and transfer the Shares to Covenant, and Covenant will
      purchase the Shares from the Stockholders.

    

    Section
      1.2   Purchase
      Price.

    

    (a)   The
      purchase price (the "Purchase
      Price")
      for
      the Shares will be an amount equal to (i) Forty Million Three Hundred Thousand
      Dollars ($40,300,000) (the "Closing
      Amount")
      plus
      (ii) the
      Debt Adjustment Amount (as defined in Section 1.5(a) below), if any,
minus
      (iii)
      the Working Capital Adjustment Amount (as defined in Section 1.5(a) below),
      if
      any. 

    

    (b)   The
      Closing Amount shall be payable by Covenant at the Closing as
      follows:

    

    (i)        
      Four
      Million Dollars ($4,000,000) (the "Indemnity
      Escrow Amount")
      shall
      be delivered at the Closing to an escrow agent mutually acceptable to Covenant
      and the Company (the "Escrow
      Agent"),
      to be
      held in escrow to secure the Stockholders' indemnification obligations under
      this Agreement, pursuant to an escrow agreement substantially in the form
      attached hereto as Exhibit
      B
      (the
      "Escrow
      Agreement").

    

    (ii)   Two
      Million Dollars ($2,000,000) (the "Waller
      Escrow")
      shall
      be delivered to Waller Lansden Dortch & Davis, LLP ("Waller")
      to be
      held and disbursed as directed by such agreement as may exist between Waller
      and
      the Stockholders.

    

    (ii)   The
      balance of the
      Closing Amount shall be paid by Covenant at the Closing to or on behalf of
      the
      Stockholders by wire transfer in accordance with the Proceeds
      Schedule. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)   The
      Debt Adjustment
      Amount and the Working Capital Adjustment Amount, if any, shall be payable
      as
      set forth in Section 1.5(e) below.

    

    (d)   In
      connection with Covenant's purchase of the Shares pursuant to this Agreement,
      at
      or prior to Closing and subject to Section 1.5, the Company shall pay an
      amount of cash as determined by the Company to the Stockholders in redemption
      of
      a portion of their capital stock of the Company; provided, that the amount
      of
      cash paid by the Company hereunder shall not cause the Company to incur
      additional Debt.

    

    Section
      1.3   Closing.
      Subject
      to and upon the terms and conditions of this Agreement, the closing of the
      purchase and sale of the Shares (the "Closing")
      is
      taking place at the offices of Waller Lansden Dortch & Davis, LLP, 511 Union
      Street, Suite 2700, Nashville, Tennessee 37219, at
      12:00 p.m. Central Daylight Time on the date hereof, concurrently with the
      execution and delivery of this Agreement by the Parties. The Closing shall
      be
      effective as of 11:59pm on the date hereof.

    

    Section
      1.4   Closing
      Deliveries. 

    

    (a)   Documents
      to be
      Delivered by the Company and the Stockholders.
      The
      Company and the Stockholders, as the case may be, shall deliver the following
      documents to Covenant at the Closing, each in form and substance reasonably
      satisfactory to Covenant:

    

    (i)          
      A
      certificate of the secretary or assistant secretary of the Company, certifying
      as to (i) a copy of the charter of the Company, certified by an appropriate
      authority of the jurisdiction of its incorporation and dated not earlier than
      ten (10) days prior to the Closing, (ii) a copy of the bylaws of the
      Company, (iii) a copy of the resolutions of the board of directors and
      stockholders of the Company, approving and authorizing the execution, delivery
      and performance of this Agreement and all other Transaction Documents and the
      consummation of the Contemplated Transactions, (iv) incumbency and
      signatures of each of the Company's officers who is authorized to execute and
      deliver this Agreement and any of the other Transaction Documents,
      (v) certificates of good standing and legal existence of the Company in
      each jurisdiction set forth on Schedule
      2.1(a)
      of the
      Stockholder Disclosure Schedule, dated not earlier than ten (10) days prior
      to
      the Closing, and (vi) the accuracy of the list of Stockholders set forth on
      Schedule
      2.3
      of the
      Stockholder Disclosure Schedule; 

    

    (ii)        
      Copies
      of
      all third party Consents that are required under Material Contracts and
      Governmental Authorizations that the Company is required to obtain in order
      to
      effect the Contemplated Transactions; 

    

    (iii)   The
      Escrow Agreement,
      executed by each of the Stockholders;

    

    (iv)   A
      transition services
      agreement, in the form attached hereto as Exhibit
      C
      (the
      "Transition
      Services Agreement"),
      executed by Beth D. Franklin;

    

    (v)   Noncompetition
      agreements, in the form attached hereto as Exhibit
      D
      (the
      "Noncompetition
      Agreements"),
      executed by each of the Stockholders;

    

    (vi)  General
      releases of
      claims arising prior to the Closing against the Company and Covenant, in the
      form attached hereto as Exhibit
      E
      (the
      "Stockholder
      Releases"),
      executed by each of the Stockholders of the Company;

    

    (vii)    
      Spousal
      consents, in the form attached hereto as Exhibit F
      (the
      "Spousal
      Consents"),
      executed by the spouse, if any, of each of the Stockholders;

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (viii)  An
      opinion of Waller Lansden Dortch & Davis, LLP, counsel to the Company and
      the Stockholders, in the form attached hereto as Exhibit G
      (the
      "Waller
      Opinion");
      and

     

    (ix)    
      Such
      other documents as Covenant may reasonably request in connection with the
      Contemplated Transactions.

    

    (b)   Documents
      to be
      Delivered by Covenant.
      Covenant shall deliver the following documents to the Stockholders at Closing,
      each in form and substance satisfactory to the Stockholders:

    

    (i)   A
      certificate of the secretary or assistant secretary of Covenant, certifying
      as
      to (i) a copy of the resolutions of the board of directors of Covenant,
      approving and authorizing the execution, delivery and performance of this
      Agreement and the other Transaction Documents to which it is a party and the
      consummation of the Contemplated Transactions, and (ii) incumbency and
      signatures of each of the Company's officers who is authorized to execute and
      deliver this Agreement and such other Transaction Documents; 

    

    (ii)   Copies
      of all material
      third party Consents and Governmental Authorizations that Covenant is required
      to obtain in order to effect the Contemplated Transactions; 

    (iii)  The
      Escrow Agreement, executed by and on behalf of Covenant;

    

    (iv)     The
      Transition Services Agreement, executed by and on behalf of
      Covenant;

     

    (v)     
      The
      Noncompetition Agreements, executed by and on behalf of Covenant;

     

    (vi)    
      An
      opinion of the Scudder Law Firm, P.C., L.L.O., counsel to Covenant, in the
      form
      attached hereto as Exhibit H
      (the
      "Scudder
      Opinion");
      and

    

    (vii)   
      Such
      other documents as the Stockholders may reasonably request in connection with
      the Contemplated Transactions. 

    

    Section
      1.5   Adjustments
      and Procedures.

    

    (a)   Definitions.
      The
      following terms shall have the meanings set forth below:

    

    (i)   "Adjusted
      Working Capital"
      means,
      as of a given date, an amount equal to the difference of (A) the current assets
      of the Company, excluding cash, set forth on the applicable balance sheet of
      the
      Company as of such date, minus
      (B) the
      current liabilities of the Company, excluding debt, set forth on the applicable
      balance sheet of the Company as of such date, in each case prepared in
      accordance with GAAP consistently applied.

    

    (ii)     
      "Benchmark
      Adjusted Working Capital"
      means
      $4,404,886.00.

    

    (iii)    
      "Closing
      Debt"
      means
      the aggregate amount of Debt reflected on the Closing Balance Sheet prepared
      pursuant to Section 1.5(b) below.

    

    (iv)   
      "Closing
      Adjusted Working Capital"
      means
      an amount equal to (A) the Adjusted Working Capital reflected on the Closing
      Balance Sheet prepared pursuant to Section 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    1.5(b)
      below, plus
      (B) the
      amount of cash, net of any checks written by the Company but not yet recorded,
      reflected on such Closing Balance Sheet.

    

    (v)    
      "Debt
      Adjustment Amount"
      (which
      may be a positive or negative number) means an amount equal to the difference
      of
      (A) Forty Two Million Dollars ($42,000,000), minus
      (B) the Closing Debt, plus
      (C) the Actual Additional Debt (determined pursuant to Section 1.7
      below) if any, minus
      (D) the Actual Debt Paydown (determined pursuant to Section 1.7
      below), if any.

    

    (vi)   "Working
      Capital Adjustment Amount"
      (which
      may be zero or a positive number) means an amount equal to the greater of
      (A) zero and (B) an amount equal to the difference of (1) the
      Benchmark Adjusted Working Capital, minus
      (2) the Closing Adjusted Working Capital.

    

    (b)   Closing
      Date Balance
      Sheet.
      Within
      thirty (30) days after Closing, Covenant and the Company shall prepare, or
      cause
      to be prepared, a balance sheet for the Company as of the Closing Date in
      accordance with GAAP consistent with the methodology used by the Company in
      the
      preparation of the Interim Balance Sheet (the "Closing
      Balance Sheet").
      Covenant shall then determine the Debt Adjustment Amount and Working Capital
      Adjustment Amount based upon the Closing Balance Sheet and shall deliver the
      Closing Balance Sheet and its determination of the Debt Adjustment Amount and
      Working Capital Adjustment Amount (together with sufficient documentation and
      working papers to explain how such calculations were performed) to the
      Stockholder Representative within thirty (30) days after the Closing
      Date.

    

    (c)   Notice
      of Objections.
      If,
      within twenty (20) days following delivery of the Closing Balance Sheet and
      Covenant's determinations of the Debt Adjustment Amount and the Working Capital
      Adjustment Amount, the Stockholder Representative has not given Covenant written
      notice of its objection ("Objection
      Notice")
      as to
      such calculations and determinations, then the Debt Adjustment Amount and the
      Working Capital Adjustment Amount calculated by Covenant shall be binding and
      conclusive on the Parties and shall be deemed finally determined for purposes
      of
      Section 1.5(e) below.

    

    (d)   Resolution
      of Objections.
      If the
      Stockholder Representative duly gives Covenant such Objection Notice, and if
      the
      Stockholder Representative and Covenant fail to resolve the issues set forth
      in
      such Objection Notice within thirty (30) days of Covenant's receipt of the
      Objection Notice, the Stockholder Representative and Covenant shall submit
      the
      issues remaining in dispute to the Nashville office of Crowe, Chizek and
      Company, LLC, or such other independent accountants as the Stockholder
      Representative and Covenant may mutually identify (the "Independent
      Accountants")
      for
      resolution. If issues are submitted to the Independent Accountants for
      resolution:

    

    (i)   the
      Stockholders and Covenant shall furnish, or cause to be furnished, to the
      Independent Accountants such work papers and other documents and information
      relating to the disputed issues as the Independent Accountants may request
      and
      are available to that Party or its agents; 

    

    (ii)     
      the
      Stockholder Representative and Covenant shall each be afforded the opportunity
      to present to the Independent Accountants any material relating to the disputed
      issues and to discuss the issues with the Independent Accountants;

    

    (iii)   
      the
      determination by the Independent Accountants, as set forth in a written notice
      to be delivered to both the Stockholder Representative and Covenant within
      sixty
      (60) days of the submission to the Independent Accountants of the issues
      remaining in dispute, 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    shall
      be
      final, binding, and conclusive on the Parties and shall be used in the
      calculation of the Debt Adjustment Amount and the Working Capital Adjustment
      Amount; and

    

    (iv)  
      the
      Stockholders, on one hand, and Covenant, on the other hand, will each bear
      fifty
      percent (50%) of the fees and costs of the Independent Accountants for such
      determination.

    

    (e)   Payment
      Procedures.
      As
      promptly as practicable and in any event within five (5) business days
      following final determination of the Debt Adjustment Amount and the Working
      Capital Adjustment Amount pursuant to Section 1.5(c) or 1.5(d)
      above:

    

    (i)   if
      the Purchase Price (as
      calculated pursuant to Section 1.2(a)) is greater than the Closing Amount paid
      to the Stockholders at the Closing (such excess, the "Stockholder
      Adjustment Amount"),
      then
      the Stockholder Adjustment Amount shall be paid to the Stockholders, in
      accordance with the Proceeds Schedule, through payment by Covenant to the
      Stockholders by wire transfer; and

    

    (ii)    
      if
      the
      Purchase Price (as calculated pursuant to Section 1.2(a)) is less than the
      Closing Amount paid to the Stockholders at the Closing (such difference, the
      "Covenant
      Adjustment Amount"),
      then
      the Covenant Adjustment Amount shall be paid to Covenant through payments by
      cash, check, or wire transfer to Covenant from each of the Stockholders of
      their
      respective pro rata share of the Covenant Adjustment Amount (calculated based
      upon their respective pro rata share of the Closing Payment set forth in the
      Proceeds Schedule).

    

    Section
      1.6   Transfer
      Taxes.
      All
      transfer Taxes incurred in connection with the sale and transfer of the Shares
      under this Agreement will be borne and paid by the Stockholders, and the
      Stockholders shall promptly reimburse Covenant and the Company for any such
      transfer Tax which Covenant or the Company is required to pay under applicable
      Legal Requirements.

    

    Section
      1.7   Lease
      Purchase Conversion Adjustment.
      The
      parties desire to provide for an additional adjustment to the Debt Adjustment
      Amount if the Lease Purchase Conversion has not been completed prior to the
      Closing Date.

    

    (a)   Not
      less than
      three (3) days prior to the anticipated Closing Date, the Stockholders
      shall have provided to Covenant a certificate in the form of Schedule 1.7
      to the
      Stockholder Disclosure Schedule (the "Lease
      Purchase Conversion Certificate")
      setting forth either (i) a statement to the effect that the Lease Purchase
      Conversion has been completed prior to the Closing Date; or (ii) the
      following: (A) the number and purchase price (including FET, delivery
      charges, and all other amounts capable of being capitalized under GAAP) of
      the
      tractors and trailers included in the Lease Purchase Conversion that are not
      expected to have been accepted for delivery and paid for by the Company, and
      the
      related financing recorded on the Company's balance sheet prior to the Closing
      Date (such information, the "Projected
      Undelivered Equipment"
      and the
      "Projected
      Undelivered Equipment Debt");
      (B) the unit or VIN numbers of all tractors and trailers included in the
      Lease Purchase Conversion and identified for sale therein that are not expected
      to have been sold, the proceeds recorded, and the receipt of such proceeds
      applied against the related debt prior to the Closing Date (the "Projected
      Unsold Equipment");
      (C) the expected net proceeds (after all sale preparation costs, sales
      commissions, and all turn-in, reconditioning, mileage penalty, and other costs
      associated with lease expiration or termination and return of leased equipment,
      and all other related costs) of the Projected Unsold Equipment (the
      "Projected
      Unsold Equipment Proceeds");
      (D) the anticipated timeframe for disposal of the Projected Unsold
      Equipment and receipt of the net proceeds of disposal in the Ordinary Course
      of
      Business; and (E) a calculation showing the Projected Unsold Equipment
      Proceeds minus the Projected Undelivered 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Equipment
      Debt, with the difference being referred to as the "Projected
      Debt Paydown"
      if a
      positive number or the "Projected
      Additional Debt"
      if a
      negative number.

    

    (b)   Within
      two (2) days
      after receipt of the Projected Lease Purchase Conversion Schedule, Covenant
      shall have given written notice of (i) its acceptance of the Projected Debt
      Paydown or Projected Additional Debt, as applicable, or (ii) any
      adjustments reasonably necessary, in Covenant's good faith judgment, to properly
      estimate the Projected Debt Paydown or Projected Additional Debt as applicable,
      such written notice to have been delivered to the Stockholder Representative
      and
      to be binding for purposes of the Closing, subject, however, to post-Closing
      adjustment as described below.

    

    (c)   In
      connection with the preparation of the Closing Balance Sheet, the parties shall
      also determine (i) the actual number and purchase price (including FET,
      delivery charges, and all other amounts capable of being capitalized under
      GAAP)
      of the tractors and trailers included in the Lease Purchase Conversion that,
      in
      fact, had not been accepted for delivery and paid for by the Company and the
      related financing recorded on the Company's balance sheet prior to the Closing
      Date (the "Actual
      Undelivered Equipment"
      and
      "Actual
      Undelivered Equipment Debt");
      (ii) the actual tractors and trailers included in the Lease Purchase
      Conversion and identified for sale therein that, in fact, had not been sold,
      the
      proceeds recorded, and the receipt of such proceeds applied against the related
      debt prior to the Closing Date (the "Actual
      Unsold Equipment");
      (iii) the actual net proceeds (after all sale preparation costs, sales
      commissions, and all other related costs) of the Actual Unsold Equipment (the
      "Actual
      Unsold Equipment Proceeds")
      and
      (iv) a calculation showing the Actual Unsold Equipment Proceeds minus the
      Actual Unsold Equipment Debt, with the difference being referred to as the
      "Actual
      Debt Paydown"
      if a
      positive number or the "Actual
      Additional Debt"
      if a
      negative number. These calculations shall be subject to the same procedures
      as
      the Closing Balance Sheet.

    

    (d)   For
      purposes of determining the Debt Adjustment Amount, the Closing Debt shall
      be
      increased by the Actual Additional Debt or decreased by the Actual Debt Paydown,
      as the case may be.

     

    ARTICLE
      II

    REPRESENTATIONS
      AND WARRANTIES OF THE
      STOCKHOLDERS

    

    As
      of the
      Closing Date, each of the Stockholders jointly and severally represents and
      warrants Covenant as follows:

    

    Section
      2.1   Organization
      and
      Good Standing.
      

    

    (a)   The
      Company is duly
      organized, validly existing, and in good standing
      under the laws of the State of Tennessee, with all requisite power and authority
      to carry on the business in which it is engaged, own the properties it owns,
      and
      execute, deliver and perform this Agreement and the other Transaction Documents
      to which it is a party. The Company is duly qualified or registered to do
      business and is in good standing as a foreign corporation in each jurisdiction
      in which the character of the properties owned, operated, or leased by the
      Company, or the nature of its activities, is such that qualification or
      registration by the Company as a foreign corporation in such jurisdiction is
      required by applicable Legal Requirements, except where failure to be so
      registered would not have a Materially Adverse Effect. Schedule
      2.1(a)
      of the
      Stockholder Disclosure Schedule contains a list of all jurisdictions in which
      the Company is so qualified or registered or required to be so qualified or
      registered.

    

    (b)   The
      Stockholders have delivered to Covenant copies of the Organizational Documents
      of the Company as currently in effect.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    Section
      2.2   Authorization
      and Validity.
      The
      execution, delivery, and performance of this Agreement and the other Transaction
      Documents by the Company and the Stockholders, and the consummation of the
      Contemplated Transactions, have been duly authorized, and no other proceedings
      or approvals are necessary to authorize the execution, delivery, and performance
      of this Agreement or consummation of the Contemplated Transactions by the
      Company or the Stockholders. This Agreement and each of the other Transaction
      Documents has been duly and validly executed and delivered by the Company and
      the Stockholders (as appropriate) and constitutes, as of the Closing, legal,
      valid, and binding obligations of the Company and the Stockholders, enforceable
      against each of them in accordance with their respective terms, except as
      limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
      other laws of general application affecting enforcement of creditors' rights
      generally, and as limited by laws relating to the availability of specific
      performance, injunctive relief, or other equitable remedies.

    

    Section
      2.3   Capitalization.

    

    (a)   Schedule
      2.3
      of the
      Stockholder Disclosure Schedule contains (a) a true and complete description
      of
      the
      number
      of authorized, issued, and outstanding shares of capital
      stock and other securities or equity interests
      of the
      Company, and (b) a
      true
      and complete list of all holders of capital stock and other securities or equity
      interests of the Company. The Shares constitute all of the issued and
      outstanding shares of capital stock of the Company, have
      been
      duly authorized and validly issued, and are fully paid and nonassessable. Except
      for this Agreement and the other Transaction Documents, there are no outstanding
      warrants, options, Contracts, subscriptions, convertible or exchangeable
      securities, or other commitments pursuant to which the Company is or may become
      obligated to issue any shares of capital stock of the Company or any other
      securities convertible, exchangeable, or exercisable for any such shares of
      capital stock, and no equity securities of the Company are reserved for issuance
      for any purpose. None of the Shares was issued in violation of the Securities
      Act or any other Legal Requirement.

    

    (b)   Each
      Stockholder owns all
      of the Shares to be transferred by him or her hereunder (as set forth on
Schedule
      2.3
      of the
      Stockholder Disclosure Schedule), free and clear of all Liens or other
      restrictions. No Stockholder is a party to, or
      has
      Knowledge of, any Contracts or commitments relating to the voting, purchase,
      or
      sale of the Shares, other than this Agreement and the other Transaction
      Documents. Upon delivery to Covenant at the Closing of certificates representing
      the Shares duly endorsed for transfer to Covenant, and receipt by the
      Stockholders of the consideration therefor, Covenant will acquire the Shares
      free and clear of any Liens and restrictions.

    

    Section
      2.4   Subsidiaries.
      The
      Company does not have any subsidiaries and does not, directly or indirectly,
      beneficially own, and is not a party to or bound by any Contract to acquire,
      any
      capital stock of, or any other security, equity, ownership interest, debt
      investment or similar interest in, any other Person.

    

    Section
      2.5   No
      Violation.
      Except
      as set forth in Schedule
      2.5
      of the
      Stockholder Disclosure Schedule, neither the execution and performance of this
      Agreement and the other Transaction Documents, nor the consummation or
      performance of all of the transactions contemplated hereby or thereby
      (collectively, the "Contemplated
      Transactions")
      will,
      directly or indirectly (with or without notice or lapse of time or both): (a)
      contravene, conflict with, or result in a violation of (i) any provision of
      the Organizational Documents of
      the
      Company, or (ii) any resolution adopted by the board of directors or
      stockholders of the Company; (b) contravene, conflict with, or result in a
      violation of, or give any Governmental Body or other Person the right to
      challenge any of the Contemplated Transactions or to exercise any remedy or
      obtain any relief under, any Legal Requirement or any Order to which the Company
      or any Stockholder may be subject; (c) contravene, conflict with, or result
      in a
      violation of any of the terms or requirements of, or give any Governmental
      Body
      the right to revoke, withdraw, suspend, 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    cancel,
      terminate, or modify, any Governmental Authorization that is held by the
Company
      or that
      otherwise relates to the business and operations of the Company; (d) contravene,
      conflict with, or result in a violation or breach of any provision of, or give
      any Person the right to declare a default or exercise any remedy under, or
      to
      accelerate the maturity or performance of, or to cancel, terminate, or modify,
      any Material Contract other than for which a Consent permanently and irrevocably
      waiving such violation, breach, default or other right or remedy that is
      identified on Schedule
      2.7
      has been
      obtained prior to Closing; (e) result in the imposition or creation of any
      material Lien upon or with respect to any of the assets owned by the Company
      or
      used in the business and operations of the Company.
      The
      Company is not in violation of any term or provision of any Organizational
      Document, Material Contract, Legal Requirement, Governmental Authorization,
      or
      Order. 

    

    Section
      2.6   Finder's
      Fee.
      Except
      for the agreements between the Stockholders and the Persons listed on
Schedule
      2.6
      of the
      Stockholder Disclosure Schedule, a complete and accurate copy of each of which
      is set forth in such Schedule
      2.6
      of the
      Stockholder Disclosure Schedule, neither the Company nor any Stockholder has
      incurred any obligation, contingent or otherwise, for any finder's, broker's
      or
      agent's fee in connection with the Contemplated Transactions.

    

    Section
      2.7   Consents.
      Except
      as set forth in Schedule
      2.7
      of the
      Stockholder Disclosure Schedule, no Consent of, or filing with, any Person,
      including, without limitation, under any Material Contract or Governmental
      Authorization or from any Governmental Body, is required to authorize, or is
      required in connection with, the execution, delivery, and performance of this
      Agreement or the other Transaction Documents or the consummation of any of
      the
      Contemplated Transactions.

    

    Section
      2.8   Financial
      Statements.
      The
      Stockholders have delivered to Covenant audited balance sheets of the Company
      as
      at December 31 for each of the years 2003 and 2004, and the related audited
      statements of income, changes in equity, and cash flows for each of the fiscal
      years then ended (the "Historical
      Financial Statements").
      Schedule
      2.8
      of the
      Stockholder Disclosure Schedule sets forth (together with the related notes)
      (a)
      the audited balance sheet of the Company as at December 31, 2005 (the
      "Year-End
      Balance Sheet"
      and
      December 31, 2005 being the "Balance
      Sheet Date"),
      (b)
      the related audited statements of income, changes in equity, and cash flows
      for
      the fiscal year then ended (together with the Year-End Balance Sheet, the
      "Year-End
      Financial Statements"),
      (c) the unaudited balance sheet of the Company as at August 31,
      2006 (the
      "Interim
      Balance Sheet"),
      and
      (d) the related unaudited statements of income, changes in equity, and cash
      flows for the year-to-date period then ended (together with the Interim Balance
      Sheet, the "Interim
      Financial Statements").
      The
      Historical Financial Statements, the Year-End Financial Statements, and the
      Interim Financial Statements (collectively, the "Financial
      Statements")
      fairly
      present in all material respects the financial condition and the results of
      operations, changes in stockholders' equity, and cash flows of the Company
      as at
      the respective dates of and for the periods referred to in such Financial
      Statements, all in accordance with GAAP, subject, in the case of the Interim
      Financial Statements, to normal recurring year-end adjustments (the effect
      of
      which will not, individually or in the aggregate, be materially adverse) and
      the
      absence of notes (which, if presented, would not differ materially from those
      included in the Year-End Financial Statements). The Financial Statements reflect
      the consistent application of GAAP throughout the periods involved, except
      as
      disclosed in the notes to such Financial Statements. The Financial Statements
      have been prepared from and are in accordance with the books and records of
      the
      Company, and represent bona fide transactions. No financial statements of any
      Person are required by GAAP to be consolidated with the Financial
      Statements.

    

    Section
      2.9   Books
      and Records;
      Internal Controls. 

    

    (a)   The
      books
      of account, minute books, corporate record books, and other records of the
      Company have been made available to Covenant. The minute books of the Company
      contain records of all meetings held of, and action taken by, the board of
      directors, all committees of the board of 

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    directors,
      and stockholders of the Company that are accurate in all material respects,
      and
      no meeting or action of the board of directors and committee of the board of
      directors or stockholders has been held or taken that is not reflected in such
      minute books. 

    

    (b)   To
      the Company's
      Knowledge, the Company maintains a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific authorizations;
      (ii) transactions are recorded as necessary to permit preparation of
      financial statements in conformity with GAAP and to maintain asset
      accountability; (iii) access to assets is permitted only in accordance with
      management’s general or specific authorization; and (iv) the recorded
      accountability for assets is compared with the existing assets at reasonable
      intervals and appropriate action is taken with respect to any
      differences.

    

    Section
      2.10   Properties;
      Encumbrances. 

    

    (a)   Schedule
      2.10
      of the
      Stockholder Disclosure Schedule contains a complete and accurate list of all
      real property owned by the Company (the "Owned
      Real Property"),
      all
      leases ("Real
      Property Leases")
      of
      real property by the Company (the "Leased
      Real Property"
      and,
      together with the Owned Real Property, the "Real
      Property"),
      or
      other interests therein owned by the Company or used in the business and
      operations of the Company. 

    

    (b)   Except
      as
      set forth on Schedule 2.10(b)
      of the
      Stockholder Disclosure Schedule, the Company owns, with good and marketable
      title, or has valid and binding leaseholds in, all of the Real Property and
      all
      other properties and assets (whether real, personal, or mixed and whether
      tangible or intangible) that it purports to own or lease, including but not
      limited to all of the properties and assets reflected in the Interim Financial
      Statements (except for properties and assets sold since the date of the Interim
      Balance Sheet in the Ordinary Course of Business and consistent with past
      practice). All of the owned properties and assets are free and clear of all
      Liens other than Permitted Liens and are not, in the case of Real Property,
      subject to any rights of way, building use restrictions, exceptions, variances,
      reservations, or limitations of any nature, except, with respect to all such
      properties and assets, (i) mortgages or security interests shown in the
      Interim Financial Statements as securing specified liabilities or obligations,
      with respect to which no default (or event that, with notice or lapse of time
      or
      both, would constitute a default) exists, (ii) mortgages or security
      interests incurred in connection with the purchase of property or assets after
      the date of the Interim Balance Sheet (such mortgages and security interests
      being limited to the property or assets so acquired), with respect to which
      no
      default (or event that, with notice or lapse of time or both, would constitute
      a
      default) exists, and (iii) with respect to Real Property, (A) minor
      imperfections of title, if any, none of which is substantial in amount,
      materially detracts from the value or impairs the present use of the property
      subject thereto, or impairs the business or operations of the Company, and
      (B) other land use restrictions that do not impair the present use of the
      property subject thereto. 

    

    (c)   All
      buildings and
      structures on the Owned Real Property lie wholly within the boundaries of such
      Owned Real Property and do not encroach upon the property of, or otherwise
      conflict with the property rights of, any other Person.

    

    (d)   The
      Company enjoys
      peaceful and undisturbed possession of the Real Property sufficient for the
      current operations and use of such Real Property by the Company. 

    

    (e)   Regarding
      all Contracts,
      Real Property Leases, deeds and other instruments that evidence, secure, or
      otherwise relate to the Real Property (collectively, the "Real
      Property Documents"),
      (i) to the Company’s Knowledge, there is no material default thereunder by
      any of the other parties thereto, nor has any event occurred which, with the
      passage of time or notice, or both, would constitute a material default
      thereunder or a violation of the terms (or permit the termination) thereof;
      and
      (ii) none 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    of
      the
      Contemplated Transactions will constitute or create a default, event of default,
      or right of termination thereunder.

    

    (f)   The
      Company has not
      leased or sublet, and no other Person is in possession of, or has the right
      of
      use or occupancy of any portion of, any of the Real Property, and no part of
      any
      of the Real Property has been condemned, requisitioned, or otherwise taken
      by
      any Governmental Body and, to the Company’s Knowledge, no such condemnation,
      requisition, or taking is threatened or contemplated.

    

    (g)  Since
      January 1, 2006, no written notice of any increase in the assessed valuation
      of
      the Real Property, and no written notice of any contemplated special assessment,
      has been received by the Company or the Stockholders, and, to the Company’s
      Knowledge, there is no threatened special assessment pertaining to any of the
      Real Property.

    

    Section
      2.11   Condition
      and Sufficiency of Assets. Except
      as
      set forth on Schedule
      2.11
      or as
      covered by Section 2.26 hereof, the buildings, structures, equipment, and other
      material tangible assets owned or leased by the Company are in reasonable
      operating condition and repair, ordinary wear and tear excepted, and are
      adequate for the uses to which they are being put. The Company owns, leases,
      or
      otherwise possesses a vested right to use all of such buildings, structures,
      equipment, and other material assets, and all Material Contracts related to
      such
      buildings, structures, material equipment, and other material assets are listed
      in Schedule
      2.20(a)
      of the
      Stockholder Disclosure Schedule. The buildings, structures, equipment, and
      other
      assets owned or leased by the Company include all of the fixed assets used
      in
      the business and operations of the Company and are sufficient for the continued
      conduct of the business and operations of the Company after the Closing in
      substantially the same manner as conducted prior to the Closing.

    

    Section
      2.12   Accounts
      Receivable.
      All
      accounts receivable of the Company that are reflected in the Interim Financial
      Statements or on the accounting records of the Company as of the Closing Date
      (collectively, the "Accounts
      Receivable")
      arose
      from sales actually made or services actually performed by the Company in the
      Ordinary Course of Business. To the Company’s Knowledge, there is no contest,
      claim, or right of set-off, other than returns in the Ordinary Course of
      Business, relating to the amount or validity of such Account Receivable except
      as reflected by the reserves shown on the Interim Balance Sheet. 

    

    Section
      2.13  No
      Undisclosed
      Liabilities.
      Except
      as set forth in Schedule
      2.13
      of the
      Stockholder Disclosure Schedule, the Company has no Liabilities which are
      required by GAAP to be reflected in the Interim Financial Statements (or would
      be required by GAAP to be reflected on, or disclosed in the notes of, audited
      financial statements if the Interim Financial Statements were audited) except
      for (a) Liabilities reflected or reserved against in the Interim Financial
      Statements, (b) Liabilities incurred after the date of the Interim
      Financial Statements in the Ordinary Course of Business which do not have,
      individually or in the aggregate, a Materially Adverse Effect, and
      (c) Liabilities incurred pursuant to this Agreement and the Contemplated
      Transactions.

    

    Section
      2.14   Taxes. 

    

    (a)   Tax
      Returns Filed and Taxes Paid.
      Except
      as set forth in Schedule 2.14(a)
      of the
      Stockholder Disclosure Schedule, the
      Company has filed
      or
      caused to be filed on a timely basis all tax returns and all reports with
      respect to Taxes (the "Tax
      Returns")
      that
      are or were required to be filed by the Company. All Tax Returns filed by
the
      Company are
      true,
      correct and complete in all material respects. The Company has
      paid,
      or made provision for the payment of, all Taxes that have or may have become
      due
      for all periods covered by the Tax Returns or otherwise, or pursuant to any
      assessment received by the
      Company,
      except
      such Taxes, if any, identified in Schedule 2.14(a)
      of the
      Stockholder Disclosure Schedule as being contested in good faith and as to
      which
      adequate reserves (determined in 

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    accordance
      with GAAP) have been provided in
      the
      Interim Financial Statements.
      Except
      as provided in Schedule 2.14(a)
      of the
      Stockholder Disclosure Schedule, the Company currently is not the beneficiary
      of
      any extension of time within which to file any Tax Return. No claim has ever
      been made, or, to the Company’s Knowledge, is expected to be made, nor, to the
      Company’s Knowledge, is there a reasonable basis upon which such a claim might
      be made, by any Governmental Body in a jurisdiction where the Company does
      not
      file Tax Returns that the Company is or may be subject to taxation by that
      jurisdiction. There are no Liens on any of the assets owned by the Company
      or
      used in the business and operations of the Company that arose in connection
      with
      any failure (or alleged failure) to pay any Tax (other than Taxes not yet due
      and payable), and to the Company’s Knowledge, there is no basis for the
      assertion of any claims attributable to Taxes which, if adversely determined,
      would result in any such Lien.

    

    (b)   Delivery
      of Tax Returns and Information Regarding Audits and Potential
      Audits.
      The
      Company and the Stockholders have delivered to Covenant copies of, and
Schedule 2.14(b)
      of the
      Stockholder Disclosure Schedule contains a complete and accurate list of, all
      federal and state income Tax Returns filed since January 1, 2001.
Schedule 2.14(b)
      of the
      Stockholder Disclosure Schedule contains a complete and accurate list of all
      Tax
      Returns of the Company that have been audited or are currently under audit
      and
      accurately describes any deficiencies or other amounts that were paid or are
      currently being contested. To the Company’s Knowledge, no undisclosed
      deficiencies are expected to be asserted with respect to any such audit. All
      deficiencies proposed as a result of such audits have been paid, reserved
      against, settled or are being contested in good faith by appropriate proceedings
      as described in Schedule 2.14(b)
      of the
      Stockholder Disclosure Schedule. The Stockholders have delivered to Covenant
      copies of any examination reports, statements or deficiencies, or similar items
      with respect to such audits. Except as provided in Schedule 2.14(b)
      of the
      Stockholder Disclosure Schedule, neither the Company nor the Stockholders has
      received written notice from any Governmental Body alleging any amount of Taxes
      due or otherwise contesting or investigating any Taxes or Tax Returns that
      may
      be due from the Company, and the Stockholders have no Knowledge that any
      Governmental Body is likely to assess any additional Taxes for any period for
      which Tax Returns have been filed. Except as described in Schedule 2.14(b)
      of the
      Stockholder Disclosure Schedule, the Company has not given or been requested
      to
      give waivers or extensions (or is or would be subject to a waiver or extension
      given by any other Person) of any statute of limitations relating to the payment
      of Taxes of the Company or for which the Company may be liable.

    

    (c)   Specific
      Potential Tax
      Liabilities and Tax Situations.
      Except
      as set forth in Schedule 2.14(c)
      of the
      Stockholder Disclosure Schedule:

    

    (i)   All
      material Taxes that the Company is or was required by Legal Requirements to
      withhold, deduct, or collect have been duly withheld, deducted, and collected
      and, to the extent required, have been paid to the proper Governmental Body
      or
      other Person;

    

    (ii)    
      There
      is
      no tax sharing agreement, tax allocation agreement, tax indemnity obligation,
      or
      similar written agreement, arrangement, understanding, or practice with respect
      to Taxes (including any advance pricing agreement, closing agreement, or other
      arrangement relating to Taxes) that will require any payment by the Company;
      

    

    (iii)  
      The
      Company (A) has not been a member of an affiliated group within the meaning
      of Code § 1504(a)
      (or any similar group defined under a similar provision of any state, local,
      or
      foreign Legal Requirement) and (B) has no Liability for Taxes of any Person
      under Treasury Regulation Section 1.1502-6 (or any similar provision of any
      state, local, or foreign Legal Requirement), as a transferee or successor by
      Contract or otherwise; and

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (iv) 
      To
      the
      Company’s Knowledge, the Company has disclosed on its federal income Tax Returns
      all positions taken therein that could give rise to a substantial understatement
      of federal income tax within the meaning of Code § 6662.
      

    

    (d)   S
      Corporation.
      The
      Company is a domestic corporation that has elected since January 1, 1989 and
      continues to elect and properly maintains its status as an "S" corporation
      within the meaning of Code § 1361.
      The
      Company does not have any "built-in gain" under Section 1374 of the
      Code.

    

    Section
      2.15   No
      Materially Adverse Change.
      Since
      June 30, 2006, there has not been any Materially Adverse Change
      and no
      event has occurred or circumstance exists that reasonably would be expected
      to
      result in a Materially Adverse Change.

    

    Section
      2.16   Employee
      Benefits. 

    

    (a)   Schedule
      2.16(a)
      of the
      Stockholder Disclosure Schedule sets forth a list of all Plans, Pension Plans,
      deferred compensation, stock or stock option plans or arrangements, severance,
      change-in-control, and other Benefit Arrangements (i) of which the Company
      or an ERISA Affiliate of the Company is or was a Plan Sponsor at any time during
      the six (6) years prior to the Closing Date, (ii) under which any
      employee or former employee of the Company has any present or future right
      to
      benefits, (iii) under which the Company or an ERISA Affiliate of the
      Company has or may have any Liability for present or future payment of benefits,
      (iv) in which the Company or an ERISA Affiliate of the Company contributes
      or has contributed at any time during the six (6) years prior to the
      Closing Date, or (v) in which the Company or an ERISA Affiliate of the
      Company otherwise participates or has participated at any time during the
      six (6) years prior to the Closing Date (collectively, the "Benefit
      Plans").

    

    (b)   Schedule
      2.16(b)
      of the
      Stockholder Disclosure Schedule (i) sets forth a list of all ERISA
      Affiliates of the Company, and (ii) identifies each of the Benefit Plans
      (A) of which any such ERISA Affiliate is or was a Plan Sponsor at any time
      during the six (6) years prior to the Closing Date, (B) under which
      any such ERISA Affiliate has or may have any Liability for present or future
      payment of benefits, (C) in which any such ERISA Affiliate contributes or
      has contributed at any time during the six (6) years prior to the Closing
      Date, or (D) in which any such ERISA Affiliate otherwise participates or
      has participated at any time during the six (6) years prior to the Closing
      Date.

    

    (c)   As
      applicable with
      respect to each Benefit Plan, the Company has delivered to Covenant copies
      of
      (i) each current Benefit Plan document, including any amendments, (ii) any
      summary plan description provided under a Benefit Plan, (iii) the most recent
      IRS determination letter, if any, and (iv) all other documents that set forth
      the material terms of any of the Benefit Plans.

    

    (d)   Except
      as set forth in
Schedule
      2.16(d)
      of the
      Stockholder Disclosure Schedule:

    

    (i)         
      Each
      Benefit Plan has been maintained, operated, and administered in material
      compliance with its terms and the applicable provisions of ERISA, the Code,
      and
      other Legal Requirements.

    

    (ii)       
      With
      respect to any Benefit Plan, no Proceedings or claims (other than routine claims
      for benefits in the Ordinary Course of Business or investigations by any
      Governmental Body are pending or, to the Company’s Knowledge,
      threatened.

    

    (iii)      
      The
      execution, delivery, and performance by the Company of this Agreement and the
      Contemplated Transactions will not constitute an event under any Benefit

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    Plan
      that
      will result in any payment (whether as severance pay or otherwise),
      acceleration, vesting, or increase in benefits with respect to any employee
      of
      the Company.

    

    (iv)     
      Since
      the
      Balance Sheet Date, there has been no establishment or amendment of any Benefit
      Plan other than as required by applicable Legal Requirements or in the Ordinary
      Course of Business.

    

    (v)      
      The
      Company has received no notice of any future material increase in premium costs
      of Benefit Plans that are insured or of any future material increase in benefit
      costs of such Benefit Plans.

    

    (vi)      
      No
      Benefit Plan is a Title IV Plan.

    

    (vii)    
      Neither
      the Company nor any ERISA Affiliate of the Company has filed a notice of intent
      to terminate any Benefit Plan or has adopted any amendment or taken any other
      action to terminate a Benefit Plan or to treat a Benefit Plan as
      terminated.

    

    (viii)   
      To
      the
      Company’s Knowledge, there are no facts or circumstances that may give rise to
      any liability of any Stockholder, the Company, or Covenant to the PBGC under
      Title IV of ERISA.

    

    (ix)     
      Neither
      the Company nor any ERISA Affiliate of the Company has ever established,
      maintained, or contributed to or otherwise participated in, or had any
      obligation to maintain, contribute to, or otherwise participate in, any
      Multi-Employer Plan.

    

    (x)      
      Except
      to
      the extent required under ERISA § 601 et. seq. and Code § 4980B
      or as otherwise required in this Agreement, the Company does not provide health
      or welfare benefits to any retired or former employee and is not obligated
      to
      provide health or welfare benefits to any active employee following such
      employee's retirement or other termination of service.

    

    (xi)    
      No
      payment that is owed or may become due to any director, officer, employee,
      or
      agent of the Company will be non-deductible to the Company or subject to Tax
      under Code § 280G or § 4999, nor will the Company be required to "gross up" or
      otherwise compensate any such Person because of the imposition of any excise
      Tax
      on a payment to such Person.

    

    (xii) 
      With
      respect to any Benefit Plan, neither the Company nor any ERISA Affiliate has
      within the past six years incurred or reasonably expects to incur (A) any
      withdrawal liabilities as defined in ERISA § 4201 or any actual or contingent
      liability under ERISA § 4204 (collectively, "Withdrawal
      Liability")
      and no
      event
      has
      occurred which could result in Withdrawal Liabilities. Neither Covenant nor
      its
      Affiliates (including the Company) will have any Withdrawal Liability, with
      respect to any Benefit Plan, as a result of the execution, delivery, and
      performance by Covenant, the Company, and the Stockholders of this Agreement
      and
      the Contemplated Transactions.

    

    (e)   With
      respect to Humboldt Express, Inc. ("Humboldt")
      and
      any Plan, Pension Plan or other Benefit Arrangement sponsored or contributed
      to
      by Humboldt (each a, "Humboldt
      Plan"),
      neither the Company nor any ERISA Affiliate has incurred or reasonably expects
      to incur Withdrawal Liability or other Liabilities with respect to any Humboldt
      Plan or any collective bargaining agreement to which Humboldt was a party,
      and
      no event has occurred which could result in such Liabilities. Neither Covenant
      nor its Affiliates (including the Company) will have any Withdrawal Liabilities
      or 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    other
      Liabilities with respect to any Humboldt Plan or any collective bargaining
      agreement to which Humboldt was a party, as a result of the execution, delivery,
      and performance by Covenant, the Company, and the Stockholders of this Agreement
      and the Contemplated Transactions. Humboldt ceased to be an ERISA Affiliate
      on
      or before May 6, 1994. Since such date, no other Person has been an ERISA
      Affiliate of the Company.

    

    Section
      2.17   Compliance
      with Legal
      Requirements; Governmental Authorizations.

    

    (a)   Since
      January 1, 2001, except as set forth in Schedule
      2.17(a)
      of the
      Stockholder Disclosure Schedule, and except for matters relating to
      Environmental Laws, Benefit Plans, ERISA and Taxes:

     

    (i)    To
      the Company’s
      Knowledge, the Company is, and at all times has been, in compliance in all
      material respects with each Legal Requirement that is or was applicable to
      it or
      to the conduct or operation of its business or the ownership or use of any
      of
      its assets;

    

    (ii)   To
      the
      Company’s Knowledge, no event has occurred or circumstance exists that (with or
      without notice or lapse of time) (A) may constitute or result in a material
      violation by the Company of, or a material failure on the part of the Company
      to
      comply with, any Legal Requirement, or (B) may give rise to any obligation
      on the part of the Company to undertake, or to bear all or any portion of the
      cost of, any remedial action of any nature; and

    

    (iii)    
       The
      Company has not received any notice or other communication (whether oral or
      written) from any Governmental Body regarding (A) any actual, alleged, possible,
      or potential material violation of, or material failure to comply with, any
      Legal Requirement, or (B) any actual, alleged, possible, or potential obligation
      on the part of the Company to undertake, or to bear all or any portion of the
      material cost of, any remedial action of any nature.

    

    (b)   Schedule
      2.17(b)
      of the
      Stockholder Disclosure Schedule contains a complete and accurate list of each
      Governmental Authorization that is held by the Company or that otherwise relates
      to the business and operations of the Company or to any of the assets owned
      or
      used by the Company. Each Governmental Authorization listed on Schedule
      2.17(b)
      of the
      Stockholder Disclosure Schedule is valid and in full force and effect. Except
      as
      set forth in Schedule
      2.17(b)
      of the
      Stockholder Disclosure Schedule:

     

    (i)   The
      Company is, and at all times has been, in compliance in all material respects
      with all of the terms and requirements of each Governmental
      Authorization identified
      on Schedule
      2.17(b)
      of the
      Stockholder Disclosure Schedule;

    

    (ii)  To
      the
      Company’s Knowledge, no event has occurred or circumstance exists that may (with
      or without notice or lapse of time, or both) (A) constitute or result
      directly or indirectly in a material violation of, or a failure to comply in
      all
      material respects with, any term or requirement of any Governmental
      Authorization identified
      on Schedule
      2.17(b)
      of the
      Stockholder Disclosure Schedule, or (B) result directly or indirectly in
      the revocation, withdrawal, suspension, cancellation, or termination of, or
      any
      modification to, any Governmental
      Authorization identified
      on Schedule
      2.17(b)
      of the
      Stockholder Disclosure Schedule;

    

    (iii)    The
      Company has not received any notice or other communication (whether oral or
      written) from any Governmental Body or any other Person regarding (A) any
      actual, alleged, possible, or potential violation of or failure to comply with
      any term or 

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    requirement
      of any Governmental
      Authorization,
      or
      (B) any actual, proposed, possible, or potential revocation, withdrawal,
      suspension, cancellation, termination of, or modification to any Governmental
      Authorization;
      and

    

    (iv)  
      All
      applications required to have been filed for the renewal of the Governmental
      Authorizations listed on Schedule
      2.17(b)
      of the
      Stockholder Disclosure Schedule have
      been
      duly filed on a timely basis with the appropriate Governmental Bodies, and
      all
      other filings required to have been made with respect to such Governmental
      Authorizations
      have
      been duly made on a timely basis with the appropriate Governmental
      Bodies.

    

    (c)   The
      Governmental
      Authorizations listed in Schedule
      2.17(b)
      of the
      Stockholder Disclosure Schedule collectively constitute all of the Governmental
      Authorizations necessary to permit the Company to lawfully conduct and operate
      its business and operations in the manner currently conducted and operated,
      and
      to permit the Company to own and use its assets in the manner in which it
      currently owns and uses such assets.

    

    Section
      2.18   Legal
      Proceedings;
      Orders.

    

    (a)   Except
      as
      set forth in Schedule
      2.18(a)
      of the
      Stockholder Disclosure Schedule, there is no pending Proceeding:

    

    (i)   that
      has
      been commenced by or against the Company or that otherwise relates to or may
      affect the business and operations of the Company or any of the assets owned
      or
      used by the Company; or 

    

    (ii)      that
      challenges, or that may have the effect of preventing, delaying, making illegal,
      or otherwise interfering with, any of the Contemplated
      Transactions.

    

    (b)   The
      Proceedings listed or
      required to be listed in Schedule
      2.18(a)
      of the
      Stockholder Disclosure Schedule will not, individually or in the aggregate,
      have
      a Materially Adverse Effect. To the Company’s Knowledge, no Proceeding such as
      is described in Section 2.18(a) has been threatened, and no event has occurred
      or circumstance exists that may give rise to or serve as a basis for the
      commencement of any such Proceeding.

    

    (c)   Except
      as set forth in
Schedule
      2.18(c)
      of the
      Stockholder Disclosure Schedule, there is no Order to which the Company, or
      any
      of the assets owned or used in the business and operations of the Company,
      is
      subject.

    

    (d)   Except
      as
      set forth in Schedule
      2.18(d)
      of the
      Stockholder Disclosure Schedule:

    

    (i)     
      the
      Company is, and at all times has been, in full compliance with all of the terms
      and requirements of each Order to which it, or any of the assets owned or used
      by it, is or has been subject;

    

    (ii)    
      no
      event
      has occurred or circumstance exists that may constitute or result in (with
      or
      without notice or lapse of time) a violation of or failure to comply with any
      term or requirement of any Order to which the Company, or any of the assets
      owned or used in the business and operations of the Company, is subject;
      and

    

    (iii)   
      the
      Company has not received any notice or other communication (whether oral or
      written) from any Governmental Body or any other Person regarding any actual,
      alleged, possible, or potential violation of, or failure to comply with, any
      term or requirement of 

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    any
      Order
      to which the Company, or any of the assets owned or used in the business and
      operations of the Company, is subject.

    

    Section
      2.19   Absence
      of Certain Changes and Events.
      Except
      as contemplated hereby or as set forth in Schedule
      2.19
      of the
      Stockholder Disclosure Schedule,
      since
      June 30, 2006, there have not been any of the following
      occurrences:

    

    (a)   purchase,
      redemption, retirement, or other acquisition by the Company of any equity
      securities, or declaration or payment of any dividend or other distribution
      or
      payment in respect of its equity securities, other than the Pre-Closing Cash
      Redemption and actions in the Ordinary Course of Business;

     

    (b)   amendment
      to the Organizational Documents of the Company;

    

    (c)   merger,
      consolidation with, or acquisition of the business of any other corporation
      or
      business organization, or acquisition of any material property or assets of
      any
      other Person;

    (d)   increase
      by the Company of any bonuses, salaries, or other compensation to any officer,
      director, or employee that constitutes a material increase in such Person's
      bonus, salary or compensation, or entry into any employment, severance, or
      similar Contract with any officer, director, or employee other than in the
      Ordinary Course of Business;

    

    (e)   adoption
      of, or increase
      in the payments to or benefits under, any Benefit Plan for or with any employees
      of the Company other than as required by applicable Legal Requirements or in
      the
      Ordinary Course of Business;

    

    (f)   incurrence
      of any additional indebtedness for borrowed money other than in the Ordinary
      Course of Business or, issuance of any debt securities, or assumption,
      guarantee, or endorsement of the obligations of any Person;

    

    (g)  discharge
      or satisfaction of any Liens or payment of any material Liabilities (whether
      individually or in the aggregate) other than in the Ordinary Course of
      Business;

    

    (h)  failure
      to pay or discharge any material Liability when due;

    

    (i)
        reduction
      or cancellation of any amounts owed to the Company, or settlement of any claims
      or Proceedings against the Company, other than in the Ordinary Course of
      Business;

    

    (j)  damage
      to
      or destruction or loss of any asset or property of the Company, whether or
      not
      covered by insurance, which, individually or in the aggregate reasonably would
      be expected to exceed $100,000 or may otherwise have a Materially Adverse
      Effect; 

    

    (k)  entry
      into, termination
      of, or receipt of notice of termination of (i) any license, distributorship,
      dealer, sales representative, joint venture, credit, or similar agreement,
      or
      (ii) any Contract or transaction involving a total remaining commitment by
      or to
      the Company of at least $100,000, other than in the Ordinary Course of
      Business;

    

    (l)  sale,
      lease, or other disposition of any asset or property of the Company or mortgage,
      pledge, or imposition of any other Lien on any asset or property of the Company,
      except in the Ordinary Course of Business;

    

    (m)   
      labor
      unrest or union organizing activity;

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (n)
        Contract,
      transaction, or arrangement with any Stockholder, officer, director, or
      Affiliate of the Company, or any Affiliate or Related Person of any of the
      foregoing;

    

    (o)   
      material
      change in the accounting methods used by the Company; or

    

    (p)   
      agreement,
      whether oral or written, by the Company to do any of the foregoing.

    

    Section
      2.20    Contracts;
      No Defaults.

    

    (a)   Schedule
      2.20(a)
      of the
      Stockholder Disclosure Schedule contains a complete list of all Material
      Contracts. For purposes of this Agreement, "Material
      Contract"
      means
      all Contracts that are material to the business and operations of the Company,
      including but not limited to all of the following types of Contracts to which
      the Company is a party or by which the Company or any of its properties is
      bound:

     

    (i)         
      Contracts,
      other than transportation or carrier agreements, that involve performance of
      services or delivery of goods or materials by the
      Company of
      an
      amount or value in excess of $100,000
      within a six-month period and are not terminable on less than sixty (60) days
      notice;

    

    (ii)       
      Contracts
      that involve performance of services or delivery of goods or materials to
the
      Company of
      an
      amount or value in excess of $100,000
      within a six-month period and are not terminable on less than sixty (60) days
      notice;

    

    (iii)       
      Contracts
      that were not entered into in the Ordinary Course of Business;

    

    (iv)      
      Real
      Property Leases or other Real Property Documents;

    

    (v)      
      mortgages,
      indentures, loan or credit agreements, security agreements, and other agreements
      and instruments relating to the borrowing of money or extension of
      credit;

    

    (vi)     
      leases
      for machinery, equipment, motor vehicles, furniture, office equipment, or other
      personal property, having aggregate remaining lease payments in excess of
$100,000;

    

    (vii)   
      Contracts
      with any of the Company's 15 largest customers, based on the Company's 2006
      revenues year-to-date, as well as any Contracts for "dedicated" or similar
      services;

    

    (viii)  
      licensing
      agreements or other Contracts with respect to patents, trademarks, copyrights,
      or other intellectual property, including agreements with current or former
      employees, consultants, or contractors regarding the appropriation or the
      non-disclosure of any intellectual property assets;

    

    (ix)     
      collective
      bargaining agreements or other Contracts to or with any labor union or other
      employee representative of a group of employees;

    

    (x)      joint
      venture, partnership, or other Contracts (however named) involving a sharing
      of
      profits, losses, costs, or liabilities by the
      Company with
      any
      other Person;

    

    (xi)   
      Contracts
      containing covenants that in any way purport to restrict the business activity
      of the
      Company or any of its key employees or
      limit
      the freedom of the
      

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    Company
      or any of its key employees to
      engage
      in any line of business or to compete with any Person;

    

    (xii)     
      Contracts
      providing for payments to or by any Person based on sales, purchases, or
      profits, other than direct payments for goods or services;

    

    (xiii)    
      powers
      of
      attorney;

    

    (xiv)   
      guaranties,
      performance, bid or completion bonds, surety or appeal bonds, return of money
      bonds, and surety or indemnification agreements involving at least $100,000;

    

    (xv)    
      custom
      bonds and standby letters of credit involving at least $100,000;

    

    (xvi)  
      Contracts
      where the consequences of a breach or default thereunder, or the termination,
      expiration, or cancellation thereof, would reasonably be expected to have a
      Materially Adverse Effect;

    

    (xvii)  
      employment,
      independent contractor, and consulting Contracts listed on Schedule
      2.16(a);

    

    (xviii) 
      Contracts
      entered into other than in the Ordinary Course of Business that contains or
      provides for an express undertaking by the
      Company to
      be
      responsible for consequential damages;

    

    (xix)    
      Contracts
      for capital expenditures in excess of $100,000;

    

    (xx)    
      any
      written warranty or other similar undertaking with respect to contractual
      performance extended by the
      Company other
      than in the Ordinary Course of Business; 

    

    
      
        (xxi)   
          any
          Contract between the Company and one or more Related
          Person(s);

      

    

    

    (xxii)  
      Applicable
      Equipment Documents; and 

    

    (xxiii) 
      any
      amendment, supplement, and modification (whether oral or written) in respect
      of
      any of the foregoing.

    

    (b)   Except
      as
      set forth in Schedule
      2.20(b)
      of the
      Stockholder Disclosure Schedule, each Material Contract identified or required
      to be identified in Schedule
      2.20(a)
      of the
      Stockholder Disclosure Schedule is in full force and effect and is valid and
      enforceable in accordance with its terms.

    

    (c)   Except
      as
      set forth in Schedule
      2.20(c)
      of the
      Stockholder Disclosure Schedule:

    

    (i)    The
      Company is and at all times has been in compliance in all material respects
      with
      all applicable terms and requirements of each Material Contract under which
      the
      Company has or had any obligation or liability or by which the Company or any
      of
      the assets owned or used by the Company is or was bound;

    

    
      (ii)       
        to
        the
        Company's Knowledge, no event has occurred or circumstance exists that (with
        or
        without notice or lapse of time, or both) may contravene, conflict with,
        or
        result in a violation or breach of, or give the Company or any other Person
        the
        right to declare a 

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    default
      or exercise any remedy under, or to accelerate the maturity or performance
      of,
      or to cancel, terminate, or modify, any Material Contract. The Company has
      not
      given to or received from any other Person any written notice or other written
      communication regarding any actual, alleged, possible, or potential violation
      or
      breach of, or default under, any Material Contract; and

    

    (iii)    
      neither
      the execution and delivery of this Agreement, nor the consummation of the
      Contemplated Transactions, will result in a violation or breach of, or give
      the
      Company or any other Person the right to declare a default or exercise any
      remedy under, or to accelerate the maturity or performance of, or to cancel,
      terminate, or modify, any Material Contract.

    

    (d)   There
      are
      no renegotiations of, attempts to renegotiate, or outstanding rights to
      renegotiate any material amounts paid or payable to the
      Company under
      current or completed Material Contracts with any Person and no such Person
      has
      made written demand for such renegotiation.

    

    (e)   The
      Material Contracts to which the Company
      is a party have
      been
      entered into in the Ordinary Course of Business and have been entered into
      without the commission of any act, alone or in concert with any other Person,
      or
      any consideration having been paid or promised, that is or would be in violation
      of any Legal Requirement.

    

    Section
      2.21   Insurance.

    

    (a)   Schedule
      2.21(a)
      of the
      Stockholder Disclosure Schedule
      describes each policy of insurance to which the Company is a party or that
      provides coverage to the Company. The Company and the Stockholders have
      delivered to Covenant:

    

    (i)    true
      and
      complete copies of all policies of insurance to which the Company is a party
      or
      under which the Company is or has been covered at any time within the five
      years
      preceding the date of this Agreement;

    

    (ii)      
      true
      and
      complete copies of all pending applications for policies of insurance;
      and

    

    (iii)     
      any
      review by any actuary, and any statement by any auditor of the Financial
      Statements, with regard to the adequacy of coverage or of the reserves for
      claims.

    

    (b)   Schedule
      2.21(b)
      of the
      Stockholder Disclosure Schedule
      describes:

    

    (i)   any
      self-insurance arrangement by or affecting the Company, including any reserves
      established thereunder;

    

    (ii)     
      any
      contract or arrangement, other than a policy of insurance or general risk
      allocation provision in transportation or carrier agreements, for the transfer
      or sharing of any risk by the Company; and

    

    (iii)     all
      obligations of the Company to third parties with respect to insurance (including
      such obligations under leases and service agreements but excluding general
      insurance provisions in transportation or carrier agreements) and identifies
      the
      policy under which such coverage is provided.

    

    (c)   The
      Stockholders have
      delivered to Covenant a summary report of the loss experience under each policy
      for the five preceding policy years, and a copy of the last page of each such
      

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    loss
      experience summary report for each of the five preceding policy years is set
      forth in Schedule
      2.21(c)
      of the
      Stockholder Disclosure Schedule. Schedule
      2.21(c)
      of the
      Stockholder Disclosure Schedule
      also
sets
      forth, by year, for the current policy year and each of the five preceding
      policy years:

    

    (i)    a
      summary
      of all open claims under each insurance policy;

    

    (ii)       
      a
      statement describing each claim under an insurance policy for an amount in
      excess of $100,000, which sets forth:

    

    (A)    the
      name
      of the claimant;

    

    (B)    a
      description of the
      policy by insurer, type of insurance, and period of coverage; and

    

    (C)    the
      amount and a brief
      description of the claim; and

    

    (iii)         
      a
      statement describing the loss experience for all claims that were self-insured,
      including the number and aggregate cost of such claims.

    

    (d)  Except
      as
      set forth on Schedule
      2.21(d)
      of the
      Stockholder Disclosure Schedule:

     

    (i)   All
      policies to which the Company is a party or that provide coverage to the
      Company:

    

    (A)    are
      valid, outstanding, and enforceable;

    

    (B)    are
      issued by an insurer
      that is financially sound and reputable;

    

    (C)    taken
      together, provide
      adequate insurance coverage for the assets and the operations of the Company
      for
      all risks to which the Company are normally exposed;

    

    (D)    are
      sufficient for compliance with all material Legal Requirements involving the
      retention of insurance coverage and Material Contracts to which the Company
      are
      parties or by which any of them is bound;

    

    (E)    will
      continue in full
      force and effect following the consummation of the Contemplated Transactions;
      and

    

    (F)    do
      not provide for any
      retrospective premium adjustment or other experienced-based liability on the
      part of the Company.

    

    (ii)    
      The
      Company has not received (A) any refusal of coverage or any notice that a
      defense will be afforded with reservation of rights, or (B) any notice of
      cancellation or any other indication that any insurance policy is no longer
      in
      full force or effect or will not be renewed or that the issuer of any policy
      is
      not willing or able to perform its obligations thereunder.

    

    (iii)   
      The
      Company has paid all premiums due, and has otherwise performed all of its
      obligations, under each policy to which it is a party or that provides coverage
      to the Company.

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (iv)    The
      Company has given notice to the insurer of all claims that may be insured
      thereby.

    

    Section
      2.22   Environmental
      Matters.
      Except
      as set forth in Schedule
      2.22
      of the
      Stockholder Disclosure Schedule:

    

    (a)  The
      Company (including the Real Property) is and at all times has been operated
      in
      material compliance with applicable Environmental Laws, which compliance
      includes but is not limited to the possession by the Company of all permits
      and
      governmental authorizations required under applicable Environmental Laws for
      the
      operations and activities of the Company as such operations and activities
      are
      conducted on the date of this Agreement, and compliance with the terms and
      conditions thereof.

    

    (b)  The
      Company has not treated, stored, managed, disposed of, transported, handled,
      released, or used any Materials of Environmental Concern except in the Ordinary
      Course of Business and in compliance with all applicable Environmental Laws,
      and
      to the Company’s Knowledge, no third party has treated, stored, managed,
      disposed of, transported, handled, released or used any Materials of
      Environmental Concern on any premises used in the conduct of the Company’s
      business except in the Ordinary Course of Business and in compliance with all
      applicable Environmental Laws;

    

    (c)  There
      are
      no Environmental Claims pending or, to the Company’s Knowledge, threatened
      against the Company, and to the Company’s Knowledge, no circumstances exist
      which could reasonably be expected to lead to the assertion of an Environmental
      Claim against the Company.

     

    (d)  (i) There
      are no underground storage tanks located on any Owned Real Property, Leased
      Real
      Property, or any Facilities operated by the Company, or, to the Company's
      Knowledge, on any property adjacent thereto; (ii) to the Company's
      Knowledge, there is no asbestos-containing material (as defined under
      Environmental Laws) contained in or forming part of any building, building
      component, structure, office space or other Facility owned, leased or operated
      by the Company; and (iii) to the Company's Knowledge, there are no PCBs or
      PCB-containing items contained in or forming part of any building, building
      component, structure, office space or other Facility owned, leased or operated
      by the Company.

    

    (e)   The
      Company and the
      Stockholders have delivered to Covenant true and complete copies and results
      of
      any reports, studies, analyses, tests, or monitoring possessed or initiated
      by
      or on behalf of the Company pertaining to Materials of Environmental Concern
      or
      the treatment, storage, management, disposal, transportation, handling, release
      or use of Materials of Environmental Concern, or concerning compliance by the
      Company, or any other Person for whose conduct the Company is or may be held
      responsible, with Environmental Laws.

    

    Section
      2.23   Employees;
      Independent Contractors.

    

    (a)   Schedule
      2.23(a)
      of the
      Stockholder Disclosure Schedule contains a complete and accurate list of the
      following information for each non-driver employee, officer, or director of
      the
      Company, including each employee on leave of absence or layoff status: name;
      job
      title; current compensation paid or payable and any change in compensation
      since
      January 1, 2005; vacation accrued; and service credited for purposes of
      vesting and eligibility to participate under any Benefit Plan.

    

    (b)   Unless
      otherwise disclosed on Schedule
      2.23(b)
      of the
      Stockholder Disclosure Schedule, to the Company's Knowledge, no employee,
      officer, or director of the Company is a party to, or is otherwise bound by,
      any
      agreement or arrangement, including any confidentiality, noncompetition, or
      proprietary rights agreement, between such employee, officer, or director and
      any other Person that in 

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    any
      way
      adversely affects or will affect (i) the performance of his or her duties as
      an
      employee, officer, or director of the Company, or (ii) the ability of the
      Company to conduct its business and operations. 

    

    (c)
         Schedule
      2.23(c)
      of the
      Stockholder Disclosure Schedule contains a complete and accurate list of the
      following information for each retired employee, officer, or director of the
      Company, or their dependents, receiving benefits or scheduled to receive
      benefits in the future under any Benefit Plan: name, description of benefits,
      start and end date for benefits, and recipient contribution toward
      benefits.

    

    (d)
        Except
      as
      set forth in Schedule
      2.23(d)
      of the
      Stockholder Disclosure Schedule, there are no Contracts, Benefit Plans, or
      other
      arrangements which would give rise to any severance, termination,
      change-in-control, or other similar payment to any employee, officer, director,
      or independent contractor of the Company as a result of the execution and
      delivery of this Agreement and the consummation of the Contemplated
      Transactions, and the Company is not a party to any employment agreement,
      whether written or oral, with any employee.

    

    (e)   The
      Company maintains accurate and up-to-date files and records for all employee
      and
      independent contractor drivers, and all such driver files contain all
      information and materials required under applicable Legal Requirements. Each
      employee and independent contractor driver of the Company meets all DOT
      requirements.

    

    (f)   Each
      independent contractor providing equipment and/or services to the Company have
      been retained under a valid Contract, and a copy of each standard form of
      Contract used by the Company for independent contractors has been delivered
      to
      Covenant.

    

    (g)   The
      Company has not taken any action in respect of its employees that would require
      notice or create any Liability under the Worker Adjustment and Retraining
      Notification Act, and the Company does not have any present plans to take such
      action.

    

    Section
      2.24   Labor
      Relations; Compliance.
      The
      Company has not ever been a party to any collective bargaining or other labor
      Contract, and has never been part of a consolidated or controlled group of
      companies that was a party to any collective bargaining or other labor Contract.
      Since January 1, 2001, there has not been, there is not presently pending or
      existing, and, to the Company’s Knowledge, there is not threatened, (a) any
      strike, slowdown, picketing, work stoppage, or employee grievance process,
      (b) any Proceeding against or affecting the
      Company relating
      to the alleged violation of any Legal Requirement pertaining to labor relations
      or employment matters, including any charge or complaint filed by an employee
      or
      union with the National Labor Relations Board, the Equal Employment Opportunity
      Commission, or any comparable Governmental Body, organizational activity, or
      other labor or employment dispute against or affecting the Company or any of
      its
      premises, or (c) any application for certification of a collective bargaining
      agent. No event has occurred or circumstance exists that reasonably could
      provide the basis for any work stoppage or other labor dispute. There is no
      lockout of any employees by the
      Company,
      and no
      such action is contemplated by the
      Company.
      The
      Company has
      complied in all material respects with all Legal Requirements relating to
      employment, equal employment opportunity, nondiscrimination, immigration, wages,
      hours, benefits, collective bargaining, the payment of social security and
      similar taxes, occupational safety and health, and plant closing. The Company
      is
      not liable for the payment of any compensation, damages, taxes, fines,
      penalties, or other amounts, however designated, for failure to comply with
      any
      of the foregoing Legal Requirements.

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    Section
      2.25   Trade
      Rights;
      Intellectual Property.

    

    (a)   For
      purposes of this Agreement, "Trade
      Rights"
      means
      the trade name "Star Transportation" and any other trademarks, trade names
      or
      service marks used in the business and operations of the Company. "Intellectual
      Property"
      means
      all mailing lists, all customer lists, all prospect lists, all advertising
      materials used in the business and operations of the Company, all logos used
      in
      the business and operations of the Company, all telephone and facsimile numbers
      used in the business and operations of the Company, and all intellectual
      property used or useful in connection with or relating to the business and
      operations of the Company or under development, including without limitation
      all
      copyrights, patents, trade secrets, proprietary and technical information,
      research and development, processes, formulas, and know-how, together with
      all
      rights to, and all applications, registrations, and licenses for, any of the
      foregoing, in any form or media, and any other intangible assets of the Company
      used in the business and operations of the Company. 

    

    (b)   The
      Trade Rights and
      Intellectual Property used in the business and operations of the Company are,
      individually and in the aggregate, in all material respects valid, subsisting,
      and in full force and effect and are owned by the Company free and clear of
      any
      material Liens or adverse claims of any Person. The Company has not and does
      not
      infringe upon or unlawfully or wrongfully use any U.S. patent, trademark, trade
      name, service mark, copyright, trade secret or other intellectual property
      owned
      or claimed by any other Person. To the Company’s Knowledge, no
      other
      Person is making unauthorized use of any of the Trade Rights or Intellectual
      Property. The Company has not granted any licenses or other rights to any Person
      to use any of the Trade Rights or Intellectual Property. To the Company’s
      Knowledge, it is not in default under any notice of any claim of infringement
      or
      any other claim or proceeding relating to, any patent, trademark, trade name,
      service mark, copyright, trade secret, domain name, web site or other
      intellectual property. As of the Closing, Covenant will have the right to use
      all Trade Rights and Intellectual Property. 

    

    Section
      2.26   Tractors
      and Trailers;
      Compliance.

    

    (a)   Except
      as
      set forth in Schedule 2.26(a)
      of the
      Stockholder Disclosure Schedule, each of the tractors and trailers owned,
      operated, or leased by the Company (i) is in reasonable operating condition
      and repair, ordinary wear and tear excepted, and adequate for use in the
      Ordinary Course of Business of the Company as conducted as of the Closing Date,
      (ii) has been adequately maintained in accordance with the internal
      maintenance schedules of the Company; (iii) is in material compliance with
      all applicable manufacturer's specifications and warranty requirements; and
      (iv) meets all applicable operating condition requirements of the
      DOT. Schedule
      2.26(a)
      identifies each tractor and trailer owned, operated, or leased by the Company
      that is not currently in operable condition as of the Closing Date.

    

    (b)   Schedule
      2.26(b)
      of the
      Stockholder Disclosure Schedule sets forth a list of all tractors and trailers
      that are owned, leased, or operated by the Company. All tractors and trailers
      have been operated at all times in material compliance with applicable leases,
      other financing documents, tradeback, buyback and other Contracts or
      arrangements with manufacturers, distributors, dealers, or their Affiliates,
      and
      all other applicable Contracts (collectively, "Applicable
      Equipment Documents").
      Each
      leased tractor and leased trailer has been operated within the mileage allowance
      (subject in each case to mileage aggregation agreements with third parties),
      if
      any, of the Applicable Equipment Document, prorated for the portion of the
      period that has expired. There are no late fees, penalties, or other amounts
      owing under any Applicable Equipment Document, other than any current month
      payment that is not yet due. The Company possesses good and marketable title
      to
      its owned tractors and trailers, and a valid leasehold interest in its leased
      tractors and trailers,
      subject
      to Permitted Liens.

    

    (c)  Each
      of
      the tractors and trailers owned, operated, or leased by the Company is properly
      licensed and registered with applicable authorities in accordance with
      permissible practices. 

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    Such
      licenses and registrations are current, all current license plates and stickers
      are properly affixed to such equipment, and all fees have been paid. The Company
      has never received an unsatisfactory or conditional safety and fitness rating
      from the Federal Motor Carrier Safety Administration ("FMCSA"),
      or
      its predecessor the Federal Highway Administration ("FHWA"),
      as a
      result of a compliance review for any of the factors that are considered by
      the
      FMCSA or FHWA, and there is no Proceeding pending that could result in an
      unsatisfactory or conditional safety and fitness rating. The Company is and
      at
      all times has been in compliance in all material respects with all FMCSA
      regulations. 

    

    Section
      2.27  Relationships
      with Related Persons.
      Except
      as set forth on Schedule
      2.27
      of the
      Stockholder Disclosure Schedule,
      none of
the
      Company's Stockholders, former stockholders, directors, officers, and employees
      of the Company, and none of their respective Related Persons and Affiliates,
      have any interest in any of the properties or assets of or used by the Company
      and do not own, of record or as a beneficial owner, an equity interest or any
      other financial or profit interest in any Person that (i) has had business
      dealings or a material financial interest in any transaction with the Company,
      or (ii) has engaged or is engaged in competition with the business and
      operations of the Company. Except as set forth in Schedule
      2.27
      of the
      Stockholder Disclosure Schedule, neither the Stockholders, nor any director
      or
      officer of the Company, and none of their Related Persons or Affiliates, is
      a
      party to any Contract with, or has any claim or right against, the
      Company.

    

    Section
      2.28   Prepayment
      of
      Indebtedness.
      Except
      as set forth in Schedule
      2.28
      of the
      Stockholder Disclosure Schedule, all indebtedness of the Company may be prepaid
      at any time without penalty.

    

    Section
      2.29   Bank
      Accounts.
      Schedule
      2.29
      of the
      Stockholder Disclosure Schedule sets forth a list of all banks or other
      financial institutions with which the Company has an account, lock box, safe
      deposit box, or borrowing authority, specifying with respect to each, the name
      and address of the bank or other financial institution, the account number,
      and
      the names of the Persons authorized as signatories thereon or to act or deal
      in
      connection therewith.

    

    Section
      2.30   Officers
      and
      Directors; Powers of Attorney.
      Schedule
      2.30
      of the
      Stockholder Disclosure Schedule sets forth a list of all officers and directors
      of the Company, and all Persons having power of attorney, authority as agent,
      or
      other authority to act on behalf of the Company or on behalf of any officer
      or
      director of the Company (in their capacity as an officer or
      director).

    

    Section
      2.31   Certain
      Actions and Payments Prior to Closing.
      Prior
      to the Closing, the Company and the Stockholders have, (a) taken all
      actions necessary to cause the cancellation and termination of all options,
      warrants, other rights to acquire capital stock or other equity securities
      of
      the Company, and any other derivative or equity-linked rights held by any
      employee, officer, director, Stockholder, any of their Affiliates, or any other
      Person; (b) paid in full any severance,
      termination, change-in-control, or other similar payment to any employee,
      officer, director, Stockholder, any of their Affiliates, or any other
      Person,
      which
      results from the execution and delivery of this Agreement or the consummation
      of
      the Contemplated Transactions (other than the payments of the Purchase Price
      to
      the Stockholders contemplated herein), all of which are set forth in
Schedule
      2.23(d)
      of the
      Stockholder Disclosure Schedule; and (c) paid in full all Transaction
      Expenses of the Company and the Stockholders.

    

    Section
      2.32   Interest
      Rate Swap.
      The
      interest rate swaps or similar Contracts to which the Company is a party, copies
      of each of which are attached hereto as Schedule
      2.32
      of the
      Stockholder Disclosure Schedule (the "Interest
      Rate Swaps"),
      are
      in full force and effect as of the Closing.

    

    Section
      2.33   Stockholder
      Liabilities.
      Prior
      to the Closing, the Stockholders have paid in full all obligations (including
      interest) owed by them to the Company.
      As of
      the Closing Date, no Stockholder has any Liability or Debt owed by such
      Stockholder to the Company.

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES OF COVENANT

    

    As
      of the
      Closing Date, Covenant represents and warrants to the Stockholders as
      follows:

    

    Section
      3.1   Organization
      and Good Standing.
      Covenant is a corporation duly organized, validly existing, and in good standing
      under the laws of the State of Nevada with all requisite corporate power and
      authority to carry on the business in which it is engaged, own the properties
      it
      owns, and execute, deliver, and perform this Agreement and the other Transaction
      Documents to which it is a Party. 

    

    Section
      3.2   Authorization
      and
      Validity.
      The
      execution, delivery, and performance of this Agreement and the other Transaction
      Documents by Covenant, and the consummation of the Contemplated Transactions,
      have been duly authorized, and no other proceedings or approval are necessary
      to
      authorize the execution, delivery, and performance of this Agreement by
      Covenant. This Agreement has been, and each of the other Transaction Documents
      at or prior to the Closing will be, duly and validly executed and delivered
      by
      Covenant and constitute or will constitute, as of the Closing, the legal, valid
      and binding obligations of Covenant, enforceable against Covenant in accordance
      with their respective terms, except as limited by applicable bankruptcy,
      insolvency, reorganization, moratorium, and other laws of general application
      affecting enforcement of creditors' rights generally, and as limited by laws
      relating to the availability of specific performance, injunctive relief, or
      other equitable remedies. 

    

    Section
      3.3   No
      Violation.
      Neither
      the execution and performance by Covenant of this Agreement or the Transaction
      Documents nor the consummation or performance by Covenant of the Contemplated
      Transactions will,
      directly or indirectly (with or without notice or lapse of time):
      (a) contravene, conflict with, or result in a violation of (i) any
      provision of the Organizational Documents of Covenant,
      (ii) any resolution adopted by the board of directors of Covenant,
      (iii) any Order applicable to Covenant, or (iv) any Legal Requirement
      applicable to Covenant;
      or
      (b) contravene, conflict with, or result in a violation of, or give any
      Governmental Body or other Person the right to challenge any of the Contemplated
      Transactions.  

    

    Section
      3.4   Finder's
      Fee.
      Covenant has not incurred any obligation, contingent or otherwise, for any
      finder's, broker's or agent's fee in connection with the Contemplated
      Transactions, other than Covenant's agreement to pay a portion of the fees
      under
that
      certain finder's fee arrangement identified on Schedule
      2.6
      of the
      Stockholder Disclosure Schedule,
      as
      specifically set forth in Section 6.7 hereof.

    

    Section
      3.5   Consents.
      Except
      as
      set forth in Schedule
      3.5
      of the
      Covenant Disclosure Schedule, no Consent of, or filing with, any Governmental
      Body or any other Person is required to authorize, or is required in connection
      with, the execution, delivery, and performance by Covenant of this Agreement
      or
      consummation by Covenant of the Contemplated Transactions.

    ARTICLE
      IV

    OTHER
      AGREEMENTS

    

    Section
      4.1   Guaranties.
      Covenant shall use commercially reasonable efforts to obtain the full release
      of
      the Stockholders from any liability with respect to the personal guaranties
      by
      the Stockholders of the obligations of the Company, including those identified
      on Schedule 4.1
      of the
      Stockholder Disclosure Schedule (the "Stockholder
      Guaranties").
      From
      and after the Closing, Covenant shall indemnify and hold the Stockholders
      harmless from and against any liability under the Stockholder Guaranties to
      the
      extent expressly set forth herein.

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    Section
      4.2   Certain
      Tax
      Matters.

    

    (a)   Tax
      Returns.
      The
      Stockholders
      shall
      prepare or cause to be prepared, and file or cause to be filed all Tax Returns
      or claims for refund of the Company for all taxable periods of the Company
      ending on or prior to the Closing Date (the "Pre-Closing
      Tax Returns").
      For
      clarification, if no Section 338(h)(10) Election is made, the Company’s
      final federal Form 1120S for the taxable period ended the day prior to the
      Closing Date will be considered a Pre-Closing Tax Return to be filed by the
      Stockholders and, if a Section 338(h)(10) Election is made, the Company's
      final Form 1120S for the taxable period ended on the Closing Date will be
      considered a Pre-Closing Tax Return to be filed by the Stockholders. To the
      extent permitted by applicable Legal Requirements, the Stockholders shall
      include any income, gain, loss, deduction or other tax items for such periods
      on
      their Tax Returns in a manner consistent with the Schedule K-1s furnished by
      the
      Company to the Stockholders for such period. Covenant shall timely prepare
      and
      file (or cause to be prepared and filed) all Tax Returns of the Company for
      taxable periods ending after the Closing Date (the "Post-Closing
      Tax Returns").
      For
      clarification, pursuant to Treasury Regulations
      Section 1.1502-76(b)(1)(ii)(A)(2), if no Section 338(h)(10) Election
      is made, the Company will become a member of Covenant’s consolidated group at
      the beginning of the Closing Date, with any Closing Date income of the Company
      included in the applicable federal Form 1120 of the Covenant consolidated group.
      Covenant shall timely pay or cause to be paid all Taxes relating to any
      Post-Closing Tax Returns.

    

    (b)   Cooperation
      and Information.
      The
      Stockholders, the Company and Covenant
      shall
      provide each other with such cooperation and information as either of them
      reasonably may request of the other in filing any Tax Return, determining a
      liability for Taxes or a right to a refund of Taxes or participating in or
      conducting any audit or other proceeding in respect of Taxes. Such cooperation
      and information shall include providing copies of relevant Tax Returns or
      portions thereof, together with related work papers and documents relating
      to
      rulings or other determinations by taxing authorities. Notwithstanding anything
      to the contrary in this Agreement, each party shall retain all Tax Returns,
      work
      papers and all material records or other documents relating to Tax matters
      of
      the Company for the taxable period that includes the Closing Date and for all
      prior taxable periods until the date that is six (6) months after the
      expiration of the statute of limitations applicable to such Tax.

    

    (c)   Contests.
      After
      the Closing, Covenant shall promptly notify the Stockholders in writing of
      the
      proposed assessment or the commencement of any Tax audit or administrative
      or
      judicial proceeding or of any demand or claim on Covenant or the Company which,
      if determined adversely to the taxpayer or after the lapse of time, could be
      grounds for payment of Taxes or indemnification by the Stockholders under this
      Agreement. Such notice shall contain factual information (to the extent known
      to
      Covenant or the Company) describing the asserted Tax liability in reasonable
      detail and shall include copies of any notice or other document received from
      any taxing authority in respect of any such asserted Tax liability. If Covenant
      fails to give the Stockholders prompt notice of an asserted Tax liability as
      required by this section, then the Stockholders shall not have any obligation
      to
      indemnify for any loss arising out of such asserted Tax liability under this
      Agreement; provided,
      however,
      that
      failure to give such notification shall not affect the indemnification provided
      hereunder except to the extent that the Indemnifying Party shall have been
      prejudiced as a result of such failure (except that the Indemnifying Party
      shall
      not be liable for any expenses incurred during the period in which the
      Indemnified Person failed to give such notice). In the case of a Tax audit
      or
      administrative or judicial proceeding (a "Contest")
      that
      relates to periods ending on or before the Closing Date, the Stockholders shall
      have the sole right to direct and control the conduct of such Contest. With
      respect to any Contest for any period beginning before the Closing Date and
      ending after the Closing Date, the Party which would bear the burden of the
      greater portion of the sum of the adjustments that may reasonably be anticipated
      for such period may elect to direct and control, through counsel of its own
      choosing, such Contest. If the Stockholders elect to direct any Contest or
      portion of a Contest, the Stockholders shall promptly notify Covenant of its
      intent to do so, and Covenant shall cooperate and shall cause the Company to
      fully 

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    cooperate
      in each phase of such Contest. If the Stockholders elect not to direct the
      Contest, Covenant shall assume control of such Contest and such Contest shall
      be
      subject to indemnification in accordance with Article V hereof. Covenant
      shall keep the Stockholder Representative reasonably informed of the status
      of
      such Contest. In any case, neither Covenant and the Company on the one hand,
      or
      the Stockholders, on the other hand, may settle or compromise any asserted
      liability without prior written consent of the other affected party, which
      consent may not be unreasonably withheld, conditioned, or delayed. In any event,
      any party may participate, at their own expense, in the Contest.

    

    (d)   Section
      338(h)(10)
      Election.
      

    

    (i)   As
      soon
      after the Closing Date as practicable and in any event not later than December
      31, 2006, Covenant shall give the Stockholder Representative written notice
      as
      to whether Covenant will make an election under Code §
      338(h)(10) (and any corresponding elections under state, local or foreign tax
      law) (a "Section
      338(h)(10) Election")
      with
      respect to the purchase and sale of the Shares of the Company
      hereunder.

    

    (ii)     
      In
      the
      event of a Section 338(h)(10) Election by Covenant, the Stockholders agree
      that the Purchase Price and the liabilities of the Company (and other relevant
      items) will be allocated to the Company's assets for all purposes (including
      Tax
      and financial accounting purposes) in accordance with Code § 338(h)(10)
      and pursuant to an allocation schedule determined and prepared by Covenant
      in
      its discretion and consistent with applicable Legal Requirements (the
      "Allocation
      Schedule").
      Such
      Allocation Schedule shall be provided by Covenant to the Stockholder
      Representative at the same time it provides written notice of the Section
      338(h)(10) Election. In the event of a Section 338(h)(10) Election by
      Covenant, the Parties agree that Covenant, the Company, and the Stockholders
      will file all Tax Returns (including amended Tax Returns and claims for refund
      as appropriate) and information returns in a manner consistent with the
      Section 338(h)(10) Election and the Allocation Schedule. In such event,
      Covenant shall prepare, and the Stockholders agree to sign and to promptly
      take
      all actions necessary to join Covenant in filing, Internal Revenue Service
      Form
      8023, all required attachments thereto, and all comparable state forms and
      schedules, consistent with the Allocation Schedule and within the time limits
      required by applicable Legal Requirements. Each Stockholder agrees to provide
      Covenant with any information required to complete Form 8023. If any changes,
      supplements, or amendments are required to be made to any such forms,
      attachments and schedules, the Stockholders shall promptly take all actions
      necessary to enable Covenant to effect such changes, supplements, or amendments.
      

    

    (iii)    
      In
      the
      event of a Section 338(h)(10) Election by Covenant, any income, gain, loss,
      deduction, or other Tax item resulting from the Section 338(h)(10) Election
      shall be included by the Stockholders in the Stockholders' Tax Returns in a
      manner consistent with the Schedule K-1s furnished by the Company to the
      Stockholders to the extent required by applicable Legal Requirements. In such
      event, Covenant shall pay to each Stockholder, in cash, the amount of additional
      consideration necessary, including any incremental amount further grossing
      up
      such additional consideration for any Taxes arising from such payment, to cause
      such Stockholder's aggregate after-Tax net proceeds from the sale of such
      Stockholder's Shares with the Section 338(h)(10) Election to be equal to
      the aggregate after-Tax net proceeds that such Stockholder would have received
      had the Section 338(h)(10) Election not been made, taking into account all
      appropriate state, federal, local, and foreign Tax implications (the
      "Tax
      Adjustment").
      Each
      Stockholder shall provide Covenant with a schedule computing the amount of
      the
      Tax Adjustment (the "Tax
      Adjustment Schedule")
      within
      ten (10) days after Covenant provides notice to such Stockholder of the
      Section 338(h)(10) Election. If Covenant shall dispute any Tax Adjustment
      Schedule, the Parties shall negotiate in good faith to determine the proper
      adjustment for a period of thirty (30) days. If the parties do not reach
      agreement within such period, then the 

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    disputed
      portion of the adjustment shall be referred to the Independent Accountants
      for
      determination. The Party whose proposed adjustment was most different from
      the
      Independent Accountant's shall bear the cost of the Independent Accountants.
      The
      amount of the Tax Adjustment as finally determined shall be paid by Covenant
      to
      each Stockholder at or prior to the later of (i) the time such Stockholder
      signs Form 8023 to make the federal Section 338(h)(10) Election and
      (ii) five (5) days after final determination of such Stockholder's Tax
      Adjustment Schedule; but in any event no later than January 15,
      2007.

    

    (iv)    
      In
      the
      event of a Section 338(h)(10) Election by Covenant, the Parties agree to be
      bound by the Allocation Schedule and shall take no action inconsistent with
      the
      Section 338(h)(10) Election or the Allocation Schedule for the purpose of all
      Tax Returns filed by them, and shall not voluntarily take any action
      inconsistent therewith unless required by applicable Legal Requirements. In
      the
      event of any Contest which impacts the Section 338(h)(10)
      Election and the Tax Adjustments, the Party receiving notice of such Contest
      shall promptly notify the other Parties thereof, and such Contest shall be
      subject to the procedures set forth in Section 4.2(c) above. If any such
      Contest, upon final determination, results in a change in the Tax Adjustment
      previously agreed or determined as to any Stockholder, then (A) any
      increase in such Tax Adjustment resulting from such Contest shall be paid by
      Covenant to such Stockholder and (B) any decrease in such Tax Adjustment
      resulting from such Contest shall be paid by such Stockholder to
      Covenant.

    

    Section
      4.3   Use
      of
      Office Space and Assistant.
      The
      Company will provide Beth D. Franklin and her father with continuing use of
      their offices at the Company's headquarters in Nashville, Tennessee, and
      exclusive access to their current assistant, Mandee Johnson, for a period of
      one (1) year following the Closing. During such period, the Company shall
      continue to pay Ms. Johnson's current salary as of the Closing, and shall
      continue to provide Ms. Johnson with her existing benefits as of the
      Closing Date.

    

    Section
      4.4   Group
      Health
      Coverage.
      Each of
      the Stockholders shall be entitled to continuing group health coverage under
      the
      Company's group health insurance plan in effect as of the date hereof (the
      "Company
      Group Health Plan")
      for a
      period of up to three years following the Closing Date pursuant to the
      continuing coverage requirements of ERISA §
601
      e.
      seq. and Code § 4980B ("COBRA"),
      solely to the extent such COBRA coverage is permissible under the Group Health
      Plan and applicable Legal Requirements. Except as may be otherwise provided
      in a
      separate written agreement with any Stockholder, any such COBRA coverage shall
      be provided solely at the expense of the participating Stockholders. Nothing
      in
      this Section 4.4 shall be deemed to provide to any Stockholder any rights
      beyond such Stockholder's rights pursuant to the Company Group Health Plan
      and
      COBRA, provided, however, that nothing in this Section 4.4 shall be deemed
      to affect or alter any contrary agreement for the Company to provide continuing
      coverage under COBRA or otherwise to a Stockholder as may be provided in a
      separate written agreement with such Stockholder, copies of each of which are
      attached hereto as Schedule 4.4
      of the
      Stockholder Disclosure Schedule.

    

    Section
      4.5   Lenoir
      City Property.
      

    

    (a)   The
      Parties acknowledge that (i) Star Development, Inc., a Tennessee corporation
      ("Star
      Development"),
      a
      corporation controlled by one or more of the Stockholders, is the owner of
      that
      certain real property located at 14700 El Camino Lane, Lenoir City, Tennessee,
      as more specifically described on Schedule
      2.10
      of the
      Stockholder Disclosure Schedule (the "Lenoir
      City Property"),
      and
      (ii) prior to the Closing, the Company has used and operated on the Lenoir
      City
      Property pursuant to an oral understanding, as more fully described on
Schedule
      2.10
      of the
      Stockholder Disclosure Schedule.

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    (b)   The
      Stockholders shall
      cause Star Development to, and Covenant, the Company, and the Stockholders
      shall, use good faith reasonable efforts to promptly negotiate and enter into
      a
      written lease of the Lenoir City Property on substantially the following terms:
      (i) an initial term of two (2) years, with automatic annual renewals thereafter;
      (ii) monthly rent in the amount of $2,000 during the initial term and any
      renewal term; (iii) the Company shall be responsible for all Taxes and insurance
      related to the Lenoir City Property; and (iv) Star Development shall not sell
      or
      transfer the Lenoir City Property prior to the end of the initial term, and
      shall provide Covenant and the Company with a right of first refusal for any
      proposed sale or transfer of the Lenoir City Property after the initial
      term.

    

    ARTICLE
      V

    INDEMNIFICATION;
      REMEDIES

    

    Section
      5.1   Survival.
      The
      representations and warranties of the Company and the Stockholders contained
      in
      this Agreement (including the Schedules attached hereto), except for
      Sections 2.2 [Authorization and Validity], 2.3 [Capitalization], 2.14
      [Taxes], 2.16 [Employee Benefits], and 2.22 [Environmental Matters], and in
      the
      certificate delivered pursuant to Section 1.4(a)(i), shall terminate on the
      first anniversary of the Closing Date (the "Basic
      Representation Survival Period").
      The
      representations and warranties of the Company and the Stockholders set forth
      in
      Sections 2.14 [Taxes], 2.16 [Employee Benefits], and 2.22 [Environmental
      Matters] shall survive for a period of three (3) years following the
      Closing Date, and the representations and warranties of the Company and the
      Stockholders set forth in Sections 2.2 [Authorization and Validity] and 2.3
      [Capitalization] shall survive until the expiration of the relevant statute
      of
      limitation (the "Extended
      Representation Survival Periods"
      and,
      together with the Basic Representation Survival Period, the "Survival
      Periods").
      The
      obligations to indemnify and hold harmless any Covenant Indemnified Person
      or
      Stockholder Indemnified Person under this Article V shall terminate when
      the applicable Survival Period set forth in this Section 5.1 terminates;
provided,
      however,
      that
      (a) such indemnification rights shall not terminate with respect to any
      item as to which a Covenant Indemnified Person or Stockholder, as applicable,
      shall have, before the expiration of the applicable Survival Period, previously
      made a claim pursuant to Sections 5.4 or 5.5 of this Agreement, and
      (b) the Survival Periods shall not apply to any Breach of any
      representation or warranty which constitutes actual fraud (as distinguished
      from
      an unknowing Breach) or which involves Sections 2.2 [Authorization and
      Validity], or 2.3 [Capitalization], in which event such representation and
      warranty shall survive the Closing. The
      payment of Damages or other
      remedy based on the representations, warranties, covenants, and obligations
      of
      the Parties contained in this Agreement (including the Schedules attached
      hereto) will not be affected by any investigation conducted with respect to,
      or
      any Knowledge acquired (or capable of being acquired) at any time, whether
      before or after the execution and delivery of this Agreement or the Closing
      Date, with respect to the accuracy or inaccuracy of or compliance with, any
      such
      representation, warranty, covenant, or obligation, except for, and to the extent
      of, Covenant's Actual Knowledge of Undisclosed Breach (as defined below) by
      the
      Stockholders as of the Closing Date. Covenant shall be deemed to have
      "Actual
      Knowledge of Undisclosed Breach"
      by the
      Stockholders as of the Closing Date only to the extent that, at the Closing:
      (x) Covenant Executives have Knowledge, based on a written due diligence
      report prepared by Covenant personnel or a third-party advisor engaged by
      Covenant to perform due diligence in connection with the Contemplated
      Transactions (a "Diligence
      Report"),
      of
      facts or circumstances that, taken together, represent a Breach by the
      Stockholders as of the Closing Date, (y) Covenant Executives have
      Knowledge, based on such Diligence Report, that such facts or circumstances
      in
      fact constitute such a Breach by the Stockholders as of the Closing Date, and
      (z) the Stockholders did not have Knowledge, and there was no Company Knowledge,
      of any such Breach. In the event of such Actual Knowledge of Undisclosed Breach
      by the Stockholders as of the Closing Date, Covenant shall be deemed to waive
      its right to indemnification pursuant to this Article V for Damages resulting
      from such Breach only to the extent of, and up to any specific dollar amount
      identified in, the applicable Diligence Report. Covenant represents and warrants
      to the 

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    Stockholders
      that the Diligence Reports set forth all facts and circumstances of which
      Covenant Executives have Knowledge that, taken together, represent a Breach
      by
      the Stockholders as of the Closing Date and that, to the Knowledge of the
      Covenant Executives, in fact constitute such a Breach by the Stockholders as
      of
      the Closing Date. Notwithstanding any provision to the contrary set forth
      herein, the Stockholders shall bear the burden of proof that Covenant had Actual
      Knowledge of Undisclosed Breach as of the Closing Date. Except as specifically
      set forth above, the waiver of any condition based on the accuracy of any
      representation or warranty, or on the performance of or compliance with any
      covenant or obligation,
      will
      not affect the right to indemnification, payment of Damages, or other remedy
      based on such representations, warranties, covenants and
      obligations.

    

    Section
      5.2   Indemnification
      and Payment of Damages by the Stockholders.
      The
      Stockholders, severally, will indemnify, defend, and hold harmless Covenant,
      the
      Company, and their respective Representatives (collectively, the "Covenant
      Indemnified Persons")
      for,
      and will pay to the Indemnified Persons the amount of, any and all costs,
      losses, liabilities, obligations, claims, damages (including incidental and
      consequential damages), deficiencies, expenses, diminution of value, whether
      or
      not involving a third-party claim, and all interest, penalties, reasonable
      attorneys' fees, and all reasonable amounts paid in investigation, defense,
      or
      settlement of any of the foregoing (collectively, "Damages"),
      arising, directly or indirectly, from or in connection with:

    

    (a)   any
      Breach of any representation or warranty made by the Company or the Stockholders
      in this Agreement, the Stockholder Disclosure Schedule, or any other certificate
      or document delivered by the Company or the Stockholders pursuant to this
      Agreement; 

    

    (b)   any
      Breach by the Company
      or any of the Stockholders of any of its covenants or obligations in this
      Agreement;
      and

    

    (c)   any
      failure by the
      Company, prior to the Closing, to file any state Tax Return that is or was
      required to be filed by the Company, and any failure to pay any state Taxes
      that
      have or may have become due for any period prior to the Closing
      Date.

    

    Section
      5.3   Indemnification
      and Payment of Damages by Covenant.
      Covenant will indemnify, defend, and hold harmless the Stockholders and their
      heirs, executors, and personal representatives (collectively, the "Stockholder
      Indemnified Persons")
      for,
      and will pay to the Stockholders the amount of, any Damages arising, directly
      or
      indirectly, from or in connection with:

    

    (a)   any
      Breach of any representation or warranty made by Covenant in this Agreement
      or
      any other certificate or document delivered by Covenant pursuant to this
      Agreement;

    

    (b)   any
      Breach by Covenant of
      any of its covenants or obligations in this Agreement; 

    

    Section
      5.4   Procedure
      for
      Indemnification - Third Party Claims.

    

    (a)   In
      order
      for a Covenant Indemnified Person or a Stockholder Indemnified Person (the
      "Indemnified
      Person")
      to be
      entitled to any indemnification provided for under Section 5.2 or
      Section 5.3 of this Agreement in respect of, or arising out of, a Third
      Party Claim, such Indemnified Person must notify the Party from whom
      indemnification is sought (the "Indemnifying
      Party")
      in
      writing of the Third Party Claim within ten (10) business days after receipt
      by
      the Indemnified Person of written notice of the Third Party Claim; provided,
      however,
      that
      failure to give such notification shall not affect the indemnification provided
      hereunder except to the extent that the Indemnifying Party shall have been
      prejudiced as a result of such failure (except that the Indemnifying Party
      shall
      not be liable for any expenses incurred during the period in which the
      Indemnified Person failed to give such notice). 

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    Thereafter,
      the Indemnified Person shall deliver to the Indemnifying Party, within five
      (5)
      business days after receipt thereof, copies of all notices and documents
      (including court papers) received by the Indemnified Person relating to the
      Third Party Claim.

    

    (b)   If
      a
      Third Party Claim is made against an Indemnified Person, the Indemnifying Party
      will be entitled to participate in the related Proceeding and, if it so chooses,
      assume and control the defense of such Third Party Claim with counsel
      satisfactory to the Indemnified Person; provided,
      however,
      that
      the Indemnifying Party shall not be entitled to assume and control the defense
      of such Proceeding if (i) the Indemnifying Party is also a party to such
      Proceeding and the Indemnified Person determines in good faith that joint
      representation would be inappropriate, or (ii) the Indemnifying Party fails
      to
      provide reasonable assurance to the Indemnified Person of its financial capacity
      and willingness to actively and appropriately defend such Proceedings and
      provide indemnification with respect to such Third Party Claim. If the
      Indemnifying Party assumes the defense of such Third Party Claim, (i) it will
      be
      conclusively established for purposes of this Agreement that the Third Party
      Claim is within the scope of and subject to indemnification; (ii) no compromise
      or settlement of the Third Party Claim may be effected by the Indemnifying
      Party
      without the Indemnified Person's consent; and (iii) the Indemnified Person
      will
      have no liability with respect to any compromise or settlement of such Third
      Party Claim effected without its consent. If notice is given to an Indemnifying
      Party of the commencement of a Third Party Claim and the Indemnifying Party
      does
      not, within twenty (20) days after such notice is given, give notice to the
      Indemnified Person of its election to assume the defense of such Third Party
      Claim (to the extent permitted pursuant to Section 5.4(a)), the Indemnifying
      Party will be bound by any determination made in any related Proceeding or
      any
      compromise or settlement effected by the Indemnified Person.

    

    (c)   Notwithstanding
      the foregoing, if an Indemnified Person determines in good faith that there
      is a
      reasonable probability that a Third Party Claim may adversely affect it or
      its
      Affiliates other than as a result of monetary damages for which it would be
      entitled to indemnification under this Agreement, the Indemnified Person may,
      by
      notice to the Indemnifying Party, assume the exclusive right to defend,
      compromise, or settle such Third Party Claim at the sole cost and expense of
      the
      Indemnifying Party.

    

    (d)   The
      Stockholders hereby
      consent to the non-exclusive jurisdiction of any court in which a Third Party
      Claim is brought against any Indemnified Person for purposes of any claim that
      an Indemnified Person may have under this Agreement with respect to such Third
      Party Claim or the matters alleged therein, and agree that process may be served
      on the Stockholders with respect to such Third Party Claim anywhere in the
      world.

    

    Section
      5.5   Procedure
      for Indemnification - Other Claims.
      A claim
      for indemnification for any matter not involving a Third Party Claim may be
      asserted by notice to the Party from whom indemnification is
      sought.

    

    Section
      5.6   Limitations
      on Claims.

    

    (a)   The
      maximum aggregate liability of the Stockholders to the Covenant Indemnified
      Persons under Section 5.2(a) shall not exceed Four Million Dollars
      ($4,000,000) (the "General
      Cap"),
      and
      Covenant, on behalf of itself and the other Covenant Indemnified Persons, agrees
      not to seek, and shall not be entitled to recover, any Damages under
      Section 5.2(a) in excess of the General Cap. Notwithstanding the foregoing,
      the General Cap shall not limit any recovery by the Covenant Indemnified Persons
      (i) in the case of fraud, (ii) in any action involving a Breach of
Section 2.2
      [Authorization and Validity], or 2.3 [Capitalization], or (iii) in any
      claim for Damages under Sections 5.2(b) or 5.2(c). The Stockholders’
liability for Damages under Section 5.2(a) in excess of the General Cap shall
      be
      several, and not joint.

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    (b)   No
      Covenant Indemnified
      Persons shall be entitled to recover any Damages pursuant to Section 5.2(a)
      unless the aggregate amount of all Damages for which Covenant Indemnified
      Persons would, but for this sentence, be entitled to receive indemnification
      pursuant to Section 5.2(a) exceeds Two Hundred Fifty Thousand Dollars
      ($250,000) (the "Damage
      Threshold"),
      and
      then only for such Damages in excess of the Damage Threshold. Notwithstanding
      the foregoing, the limitation in this Section 5.5(b) shall not apply (i) in
      the case of fraud, (ii) in any claim for Breach of Section 2.2
      [Authorization and Validity] or 2.3 [Capitalization] or (iii) in any claim
      for Damages under Sections 5.2(b) or 5.2(c).

    

    (c)   The
      maximum aggregate liability of the Stockholders to the Covenant Indemnified
      Persons under Sections 5.2(c) shall not exceed One Hundred Thirty Thousand
      Dollars ($130,000) (the "Special
      Cap"),
      and
      Covenant, on behalf of itself and the other Covenant Indemnified Persons, agrees
      not to seek, and shall not be entitled to recover, any Damages under
      Sections 5.2(c) in excess of the Special Cap. Notwithstanding the
      foregoing, the Special Cap shall not limit recovery by the Covenant Indemnified
      Persons in any case based on fraud.

    

    (d)   During
      the term of the Escrow Agreement, all claims for indemnification of the Covenant
      Indemnified Persons pursuant to Sections 5.2(a) and 5.2(c) shall be paid
      first out of the Indemnity Escrow Funds in accordance with the terms of the
      Escrow Agreement and subject to the other limitations set forth in this
      Article V.

    

    (e)   Calculation
      of
      Damages.

    

    (i)   To
      the
      extent that any claim for indemnification for Damages under this
      Article V is covered by insurance held by the Indemnified Person, such
      Indemnified Person shall use its commercially reasonable efforts to seek
      recovery from the applicable insurer, provided that the Indemnifying Party
      agrees to reimburse the Indemnified Person for any reasonable out-of-pocket
      costs incurred by the Indemnified Person in connection with such recovery.
      Further, to the extent that any claim for indemnification for Damages under
      this
      Article V is covered by insurance held by the Indemnified Person, such
      Indemnified Person shall be entitled to indemnification pursuant to this
      Article V only with respect to the amount of the Damages that are in excess
      of (x) the cash proceeds received by such Indemnified Person pursuant to
      such insurance, minus (y) any costs of collecting such proceeds and any
      increased insurance costs related thereto (such increased insurance costs to
      include but not be limited to self-insured retention amounts, retrospective
      premium adjustments, increases in future premiums, indemnification obligations,
      and all other costs or detriments experienced by the Indemnified Person as
      a
      direct result of the claim or Damages). If such Indemnified Person receives
      such
      net cash insurance proceeds prior to the time such claim is paid, then the
      amount payable by the Indemnifying Party pursuant to such claim shall be reduced
      by the amount of such proceeds. If such Indemnified Person receives such net
      cash insurance proceeds after such claim has been paid, then upon the receipt
      by
      the Indemnified Person of any net cash proceeds pursuant to such insurance
      up to
      the amount of Damages incurred by such Indemnified Person with respect to such
      claim, such Indemnified Person shall promptly repay any portion of such amount
      which was previously paid by the Indemnifying Party to such Indemnified Person
      in satisfaction of such claim.

    

    (ii)   Any
      calculation of Damages for purposes of this Article V shall be reduced to
      take account
      of any
      Tax benefit (including, but not limited to, any Tax refund or credit but net
      of
      the Tax cost or detriment, if any, including but not limited to a reduction
      in
      basis of assets, reduction in net book value, loss of depreciation or
      amortization or similar deductions, or increase in gain upon a sale as a result
      of a reduction in or reallocation of the purchase price) actually realized
      by
      the Indemnified Person as a result of any such Damages. Any payment

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    hereunder
      shall initially be made without regard to this Section 5.6(e)(ii) and shall
      be reduced to reflect any such net Tax benefit only after the Indemnified Person
      has actually realized such benefit. If such Indemnified Person actually realizes
      such net Tax benefit after such claim has been paid, then upon the actual
      realization by the Indemnified Person of such net Tax benefit up to the amount
      of Damages incurred by such Indemnified Person with respect to such claim,
      such
      Indemnified Person shall promptly repay any portion of such amount which was
      previously paid by the Indemnifying Party to such Indemnified Person in
      satisfaction of such claim. For purposes of this Section 5.6(e)(ii), the
      Indemnified Person shall be deemed to have "actually realized" a net Tax benefit
      to the extent that, and at such time as, the amount of Taxes required to be
      paid
      by the Indemnified Person is reduced below the amount of Taxes that it would
      have been required to pay but for deductibility of such Damages. The amount
      of
      any reduction hereunder shall be adjusted to reflect any final determination
      with respect to the Indemnified Person's liability for Taxes.

    

    (iii)   Any
      calculation of Damages for purposes of this Article V shall be reduced to
      take account of any amounts actually recovered by the Indemnified Person
      pursuant to any indemnification by or under any indemnification agreements
      with
      any third party (net of any costs incurred to obtain such recovered amounts).
      If
      such Indemnified Person receives such net recovery prior to the time such claim
      is paid, then the amount payable by the Indemnifying Party pursuant to such
      claim shall be reduced by the amount of such net recovery. If such Indemnified
      Person receives such net recovery after such claim has been paid, then upon
      the
      receipt by the Indemnified Person of any net recovery up to the amount of
      Damages incurred by such Indemnified Person with respect to such claim, such
      Indemnified Person shall promptly repay any portion of such amount which was
      previously paid by the Indemnifying Party to such Indemnified Person in
      satisfaction of such claim.

    

    (f)   Tax
      Treatment.
      Any
      indemnification payments under this Article V shall be treated, for Tax
      purposes, as adjustment to the Purchase Price.

    

    Section
      5.7   Exclusive
      Remedy.
      The
      exclusive remedy of each Party in connection with this Agreement and the
      transactions contemplated hereby shall be as provided in this
      Article V.

    

    ARTICLE
      VI

    MISCELLANEOUS

    

    Section
      6.1   Amendment
      and Waiver.
      No
      provision of this Agreement may be amended, modified, supplemented or waived
      except by an instrument in writing executed by all of the Parties hereto or,
      in
      the case of an asserted waiver, executed by the Party against which enforcement
      of the waiver is sought. The rights and remedies of the Parties to this
      Agreement are cumulative and not alternative.

    

    Section
      6.2   Assignment;
      Third-Party Rights.
      Neither
      this Agreement nor any right created hereby shall be assignable by any Party
      hereto, except by Covenant to any Person that is an Affiliate of Covenant.
      Nothing expressed or referred to in this Agreement will be construed to give
      any
      Person other than the parties to this Agreement any legal or equitable right,
      remedy or claim under or with respect to this Agreement or any provision of
      this
      Agreement, except such rights as shall inure to a successor or permitted
      assignee pursuant to this Section 6.2.

    

    Section
      6.3   Notice.
      Any
      notice or communication must be in writing and given by depositing the same
      in
      the United States mail, addressed to the Party to be notified, postage prepaid
      and registered or
      certified with return receipt requested, or by delivering the same by hand
      delivery (including by a nationally recognized overnight carrier) or by fax.
      Such notice shall be deemed received on the date 

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    on
      which
      it is delivered or faxed (with confirmation received). For purposes of notice,
      the addresses of the Parties shall be:

    

    
      	
              If
                to the Stockholders

              or
                the Stockholder Representative:

            	
              At
                the respective addresses set 

              forth
                on the signature pages 

              hereto.

            
	 	 
	
              With
                a copy to:

            	
              Waller
                Lansden Dortch & Davis, LLP

              511
                Union Street

              Suite
                2700

              Nashville,
                Tennessee 37219

              Fax:
                (615) 244-6804

              Attention:
                Chase Cole

            
	 	 
	
              If
                to Covenant or the Company:

            	
              Covenant
                Transport, Inc.

              400
                Birmingham Highway

              Chattanooga,
                Tennessee 37419

              Fax:
                (423) 821-5442

              Attention:
                Chief Financial Officer

            
	 	 
	
              With
                a copy to:

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

              411
                South 13th Street

              Suite
                200

              Lincoln,
                Nebraska 68508

              Fax:
                (402) 435-4239

              Attention:
                Mark Scudder

            

    

    

    Any
      Party
      may change its address for notice by written notice given to the other Parties
      in accordance with this Section 6.3. Notwithstanding the foregoing, any
      notice required to be delivered to any of the Stockholders may be delivered
      to
      the Stockholder Representative in accordance with Section 6.16 in the
      manner set forth in this Section 6.3, and any such notice shall be deemed
      received by all Stockholders on the date on which it is delivered or faxed
      (with
      confirmation received) to the Stockholder Representative.

    

    Section
      6.4   Public
      Announcements.
      Covenant will consult with the Stockholder Representative regarding the contents
      of the public announcement of the Contemplated Transactions and will take into
      consideration the reasonable requests of the Stockholder Representative with
      respect to such public announcement, subject, however, to all Legal
      Requirements, stock exchange requirements, and prudent disclosure requirements
      applicable to Covenant. Unless consented to by Covenant in advance or required
      by applicable Legal Requirements, prior to the Closing, the Stockholders and
      the
      Company shall keep this Agreement strictly confidential and may not make any
      disclosure of this Agreement to any Person. The Stockholder Representative,
      the
      Company and Covenant will consult with each other concerning the means by which
      the Company's employees, customers, and suppliers and others having dealings
      with the Company will be informed of the Contemplated Transactions.

    

    Section
      6.5   Confidentiality.
      Prior
      to
      the Closing Date, the Parties will maintain in confidence, and will cause their
      respective Representatives to maintain in confidence, all written, oral, or
      other information obtained from another Party in connection with this Agreement
      or the Contemplated Transactions ("Confidential
      Information"),
      including, without limitation, customer and employment information, unless
      and
      only to the extent that such Confidential Information (a) becomes generally
      available to the public other than as a result of a breach of any
      confidentiality obligation, (b) was available to the Party receiving the
      information on a non-confidential basis prior to disclosure, (c) is

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    independently
      developed by a Party, (d) becomes lawfully available to a Party on a
      non-confidential basis from a source other than the Party disclosing the
      Confidential Information, provided that such source is not known by the Party
      receiving the Confidential Information to be subject to a confidentiality
      obligation in favor of the Party disclosing the information, or (e) the Party
      disclosing the Confidential Information expressly approves in writing such
      other
      Party's disclosure. The Parties will not disclose Confidential Information
      to
      others except for Representatives who have a need to know such Confidential
      Information for the purpose of effecting the Contemplated Transactions or as
      may
      be required by applicable Legal Requirements.

    

    Section
      6.6   Entire
      Agreement.
      This
      Agreement supersedes all prior agreements between the Parties with respect
      to
      its subject matter (including the Letter of Intent between Covenant and the
      Stockholders dated July 31, 2006), and constitutes (together with the Schedules
      and Exhibits hereto and the other Transaction Documents) a complete and
      exclusive statement of the terms of the agreement between the Parties with
      respect to its subject matter.

    

    Section
      6.7   Transaction
      Expenses.
      Except
      as
      otherwise expressly provided in this Agreement, each Party to this Agreement
      will bear its respective Transaction Expenses. Notwithstanding the foregoing
      or
      any other provision of this Agreement to the contrary, the Parties agree that
      Covenant will pay Fifty Thousand Dollars ($50,000) of any fee due under that
      certain finder's fee arrangement identified on Schedule
      2.6
      of the
      Stockholder Disclosure Schedule (and only that certain arrangement) as a result
      of the consummation of the Contemplated Transactions, and the Stockholders
      individually (and not the Company) shall be solely responsible for any other
      fees due thereunder. In the event of any termination of this Agreement, the
      obligation of each Party to pay its own expenses will be subject to any rights
      of such Party arising from a Breach of this Agreement by another
      Party.

    

    Section
      6.8   Further
      Assurances.
      The
      Stockholders, the Company, and Covenant, from time to time after the Closing
      at
      the request of any other Party hereto, and without further consideration, shall
      execute and deliver further instruments of transfer and assignment and take
      such
      other action as a Party may reasonably require to more effectively transfer
      and
      assign to, and vest in, Covenant, the Shares and all rights thereto, and to
      fully implement the provisions of this Agreement and the other Transaction
      Documents.

    

    Section
      6.9   Severability.
      If any
      provision of this Agreement is held to be illegal, invalid or unenforceable
      under present or future laws effective during the term hereof, such provision
      shall be fully severable and this Agreement shall be construed and enforced
      as
      if such illegal, invalid or unenforceable provision never comprised a part
      hereof; and the remaining provisions hereof shall remain in full force and
      effect and shall not be affected by the illegal, invalid or unenforceable
      provision or by its severance herefrom. Furthermore, in lieu of such illegal,
      invalid or unenforceable provision, there shall be added automatically as part
      of this Agreement a provision as similar in its terms to such illegal, invalid
      or unenforceable provision as may be possible and be legal, valid and
      enforceable.

    

    Section
      6.10   Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the
      substantive laws of the State of Tennessee without reference or regard to the
      conflicts of law rules thereof. 

    

    Section
      6.11   Captions.
      The
      captions in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect any of the terms or provisions hereof.

    

    Section
      6.12   Counterparts.
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, and all of which together shall constitute one and the same
      instrument. The exchange of copies of this Agreement and of signature pages
      by
      facsimile transmission shall constitute effective execution and delivery of
      this
      Agreement as to the parties and may be used in lieu of the original

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    Agreement
      for all purposes. Signatures of the parties transmitted by facsimile shall
      be
      deemed to be their original signatures for all purposes.

    

    Section
      6.13   Number
      and
      Gender.
      Whenever the context requires, references in this Agreement to the singular
      number shall include the plural, the plural number shall include the singular
      and words denoting gender shall include the masculine, feminine and
      neuter.

    

    Section
      6.14   Time
      of Essence.
      With
      regard to all dates and time periods set forth or referred to in this Agreement,
      time is of the essence. 

    

    Section
      6.15   Waiver;
      Remedies
      Cumulative.
      The
      rights and remedies of the parties to this Agreement are cumulative and not
      alternative. Neither any failure nor any delay by any party in exercising any
      right, power or privilege under this Agreement or any of the documents referred
      to in this Agreement will operate as a waiver of such right, power or privilege,
      and no single or partial exercise of any such right, power or privilege will
      preclude any other or further exercise of such right, power or privilege or
      the
      exercise of any other right, power or privilege. To the maximum extent permitted
      by applicable law, (a) no claim or right arising out of this Agreement or any
      of
      the documents referred to in this Agreement can be discharged by one party,
      in
      whole or in part, by a waiver or renunciation of the claim or right unless
      in
      writing signed by the other party; (b) no waiver that may be given by a party
      will be applicable except in the specific instance for which it is given; and
      (c) no notice to or demand on one party will be deemed to be a waiver of any
      obligation of that party or of the right of the party giving such notice or
      demand to take further action without notice or demand as provided in this
      Agreement or the documents referred to in this Agreement.

    

    Section
      6.16   Stockholder
      Representative.
      Each of
      the Stockholders hereby irrevocably authorizes and appoints Beth D. Franklin
      (the "Stockholder
      Representative")
      as his
      or her representative and true and lawful attorney-in-fact and agent to act
      in
      his or her name, place, and stead and to execute any agreement, certificate,
      instrument, or document to be delivered by the Stockholders in connection with
      this Agreement and the Contemplated Transactions. The Stockholder Representative
      shall serve as the agent of the Stockholders for all purposes related to this
      Agreement, including without limitation any notice required to be delivered
      to
      the Stockholders under this Agreement or any of the other Transaction Documents.
      The Stockholder Representative shall have the full power, authority, and right
      to perform, do, and take any and all actions they deem necessary or advisable
      to
      carry out the purposes of this Agreement and the other Transaction Documents,
      including, without limitation, the power to amend or modify this Agreement
      and
      the other Transaction Documents and to waive any provision herein or therein.
      All decisions of the Stockholder Representative shall be binding upon the
      Stockholders. Covenant and each other Party shall be entitled to rely upon
      such
      authorization and designation and shall be fully protected in dealing with
      the
      Stockholder Representative with respect to any and all matters concerning the
      Stockholders; provided,
      however,
      that
      nothing set forth herein shall require Covenant to accept the signature or
      action of the Stockholder Representative in lieu of the signature or action
      of
      any Stockholder.

    

    [REMAINDER
      OF PAGE LEFT INTENTIONALLY BLANK]

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Parties hereto, intending to be legally bound, have caused
      this Agreement to be executed by their duly authorized representatives as of
      the
      date first above written.

    

    
      	 	
              COVENANT
                TRANSPORT, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                David R. Parker

            
	 	 	
              David
                R. Parker

            
	 	 	
              Chairman,
                President and CEO

            
	 	 	 
	 	 	 
	 	
              STAR
                TRANSPORTATION, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Beth D. Franklin

            
	 	 	
              Beth
                D. Franklin

            
	 	 	
              Chief
                Executive Officer

            
	 	 	 
	 	 	 
	 	
              STOCKHOLDERS:

            
	 	 	 
	 	 	
              /s/
                Beth D. Franklin

            
	 	 	
              Beth
                D. Franklin

            
	 	 	
              515
                Jackson Boulevard

            
	 	 	
              Nashville,
                Tennessee 37205

            
	 	 	 
	 	 	 
	 	 	
              /s/
                David D. Dortch

            
	 	 	
              David
                D. Dortch

            
	 	 	
              The
                Rokeby

            
	 	 	
              3901
                West End Avenue

            
	 	 	
              Nashville,
                Tennessee 37205

            
	 	 	 
	 	 	 
	 	 	
              /s/
                Rose D. Shipp

            
	 	 	
              Rose
                D. Shipp

            
	 	 	
              4303
                Lillywood Road

            
	 	 	
              Nashville,
                Tennessee 37205

            
	 	 	 
	 	 	 
	 	 	
              /s/
                David W. Dortch

            
	 	 	
              David
                W. Dortch

            
	 	 	
              601
                North Mobile Street

            
	 	 	
              Fairhope,
                Alabama 36532

            
	 	 	 
	 	 	 
	 	 	
              /s/
                James F. Brower, Jr.

            
	 	 	
              Jim
                Brower

            
	 	 	
              222
                31st
                Avenue North

            
	 	 	
              Nashville,
                Tennessee 37203

            

    

    

    STOCK
      PURCHASE AGREEMENT SIGNATURE PAGE

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A

    

    Definitions

    

    

    "Accounts
      Receivable"
      shall
      have the meaning set forth in Section 2.12 hereof.

    

    "Actual
      Additional Debt"
      shall
      have the meaning set forth in Section 1.7(c) hereof.

    

    "Actual
      Debt Paydown"
      shall
      have the meaning set forth in Section 1.7(c) hereof.

    

    "Actual
      Knowledge of Undisclosed Breach"
      shall
      have the meaning set forth in Section 5.1 hereof.

    

    "Actual
      Undelivered Equipment"
      shall
      have the meaning set forth in Section 1.7(c) hereof.

    

    "Actual
      Undelivered Equipment Debt"
      shall
      have the meaning set forth in Section 1.7(c) hereof.

    

    "Actual
      Unsold Equipment"
      shall
      have the meaning set forth in Section 1.7(c) hereof.

    

    "Actual
      Unsold Equipment Debt"
      shall
      have the meaning set forth in Section 1.7(c) hereof.

    

    "Adjusted
      Working Capital"
      shall
      have the meaning set forth in Section 1.5(a)(i) hereof.

    

    "Agreement"
      shall
      have the meaning set forth in the preamble of this Agreement. 

    

    "Affiliate"
      means,
      with respect to any Person, any other Person or group of affiliated Persons
      directly or indirectly controlling (including without limitation all directors
      and executive officers of such Person), controlled by or under direct or
      indirect common control with such Person. For purposes of this definition,
      (i) a
      Person shall be deemed to control another Person if such Person possesses,
      directly or indirectly, the power to direct or cause the direction of the
      management or policies of such other Person, and (ii) a Related Person shall
      be
      deemed to be an Affiliate of that Person.
      

    

    "Allocation
      Schedule"
      shall
      have the meaning set forth in Section 4.2(d)(ii).

    

    "Applicable
      Equipment Documents"
      shall
      have the meaning set forth in Section 2.26(b) hereof.

    

    "Balance
      Sheet Date"
      shall
      have the meaning set forth in Section 2.8 hereof.

    

    "Basic
      Representation Survival Period"
      shall
      have the meaning set forth in Section 5.1 hereof.

    

    "Benchmark
      Adjusted Working Capital"
      shall
      have the meaning set forth in Section 1.5(a)(ii) hereof.

    

    "Benefit
      Arrangements"
      include
      each "employee benefit plan", as defined in Section 3(3) of ERISA, and all
      other
      material fringe benefit, cafeteria, welfare, and retirement plans and
      arrangements established, maintained, contributed to, or obligated to be
      contributed to by the Company or any ERISA Affiliate thereof, whether or not
      any
      such plan or arrangement is otherwise exempt from some or all of the provisions
      of ERISA. 

    

    "Benefit
      Plan"
      shall
      have the meaning set forth in Section 2.16(a) hereof.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    "Best
      Efforts"
      shall
      mean the commercially reasonable efforts that a prudent Person desirous of
      achieving a result would use in similar circumstances to ensure that such result
      is achieved as expeditiously as possible; provided, however, that an obligation
      to use Best Efforts under this Agreement does not require the Person subject
      to
      that obligation to take actions that would result in a materially adverse change
      in the benefits to such Person of this Agreement and the Contemplated
      Transactions.

    

    "Breach"
      shall
      mean any inaccuracy in or breach of, or any failure to perform or comply with,
      any representation, warranty, covenant, obligation, or other provision of this
      Agreement or any instrument delivered pursuant to this Agreement. 

     

    "Closing"
      shall
      have the meaning set forth in Section 1.3 hereof.

    

    "Closing
      Adjusted Working Capital"
      shall
      have the meaning set forth in Section 1.5(a)(iv) hereof.

     

    "Closing
      Amount"
      shall
      have the meaning set forth in Section 1.2(a) hereof.

    

    "Closing
      Balance Sheet"
      shall
      have the meaning set forth in Section 1.5(b) hereof.

    

    "Closing
      Date"
      means
      the date on which the Closing occurs.

    

    "Closing
      Debt"
      shall
      have the meaning set forth in Section 1.5(a)(iii) hereof.

    

    "Code"
      means
the
      Internal Revenue Code of 1986, as amended.

    

    "Company"
      shall
      have the meaning set forth in the preamble of this Agreement.

    

    "Company’s
      Knowledge"
      means
      (i) the actual knowledge of the Stockholders other than Beth Franklin, and
      (ii)
      the actual knowledge, after reasonable inquiry, of Beth Franklin and the other
      executive officers of the Company.

    

    "Confidential
      Information"
      shall
      have the meaning set forth in Section 6.5 hereof.

    

    "Consent"
      means
      any approval, consent, ratification, waiver, or other authorization (including
      any Governmental Authorization).

    

    "Contest"
      shall
      have the meaning set forth in Section 4.2(c) of this
      Agreement.

     

    "Contract"
      shall
      mean any agreement, contract, obligation, promise, or undertaking (whether
      written or oral and whether express or implied) that is legally
      binding.

    

    "Contemplated
      Transactions"
      shall
      have the meaning set forth in Section 2.5 hereof.

    

    "Contingent
      Obligation"
      means,
      as to any Person, any direct or indirect liability of such Person with respect
      to any indebtedness, lease, dividend, guaranty, letter of credit or other
      obligation (each a "primary obligation") of another Person (the "primary
      obligor"), whether or not contingent, (i) to purchase, repurchase or otherwise
      acquire any such primary obligation or any property constituting direct or
      indirect security therefor, or (ii) to advance or provide funds (A) for the
      payment or discharge of any such primary obligation, or (B) to maintain working
      capital or equity capital of the primary obligor in respect of any such primary
      obligation or otherwise to maintain the net worth or solvency or any balance
      sheet item, level of income or financial condition of such primary obligor,
      or
      (iii) to purchase property, 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    securities
      or services primarily for the purpose of assuring the owner of any such primary
      obligation of the ability of the primary obligor thereof to make payment of
      such
      primary obligation, or (iv) otherwise to assure or hold harmless the owner
      of
      any such primary obligation against loss or failure or inability to perform
      in
      respect thereof

    

    "Covenant"
      shall
      have the meaning set forth in the preamble of this Agreement. 

    

    "Covenant
      Adjustment Amount"
      shall
      have the meaning set forth in Section 1.5(e)(ii) hereof.

    

    "Covenant
      Executives"
      means
      David Parker and Joey Hogan, Covenant's Chief Executive Officer and Chief
      Financial Officer, respectively.

    

    "Covenant
      Indemnified Person"
      shall
      have the meaning set forth in Section 5.2 hereof.

    

    "Covenant
      Survival Period"
      shall
      have the meaning set forth in Section 5.1 hereof.

    

    "Damage
      Threshold"
      shall
      have the meaning set forth in Section 5.6(b) hereof.

    

    "Damages"
      shall
      have the meaning set forth in Section 5.2 hereof.

    

    "Debt"
      means,
      as to any Person, without duplication (including all such items incurred by
      any
      partnership or joint venture as to which such Person is liable as a general
      partner or joint venturer):

    

    (a)   all
      indebtedness in respect of money borrowed, including, without limitation, all
      obligations under capitalized leases, all amounts outstanding under accounts
      receivable securitizations (including all obligations of special purpose
      entities utilized to effect such securitizations), all obligations under
      synthetic leases, all subordinated indebtedness, the deferred purchase price
      of
      any property or services, the aggregate face amount of all surety bonds, letters
      of credit, and bankers’ acceptances, and (without duplication) all payment and
      reimbursement obligations in respect thereof whether or not matured, evidenced
      by a promissory note, bond, debenture or similar written obligation for the
      payment of money (including reimbursement agreements and conditional sales
      or
      similar title retention agreements), any past due interest amounts or penalties
      related to any of the foregoing, other than trade payables and accrued expenses
      incurred in the ordinary course of business; 

    

    (b)   any
      and
      all obligations of such Person, whether absolute or contingent and howsoever
      and
      whensoever created, arising, evidenced or acquired (including all renewals,
      extensions and modifications thereof and substitutions therefor), under (i)
      any
      and all agreements, devices or arrangements designed to protect at least one
      of
      the parties thereto from the fluctuations of interest rates, exchange rates
      or
      forward rates, including fuel prices, applicable to such party’s assets,
      liabilities or exchange transactions, including, but not limited to,
      Dollar-denominated or cross-currency interest rate exchange agreements, forward
      currency exchange agreements, interest rate cap or collar protection agreements,
      forward rate currency or interest rate options, puts, warrants and those
      commonly known as interest rate "swap" agreements and forward fuel purchase
      contracts, commitments, or options; (ii) all other "derivative instruments"
      as
      defined in FASB 133 and which are subject to the reporting requirements of
      FASB
      133; and (iii) any and all cancellations, buybacks, reversals, terminations
      or
      assignments of any of the foregoing; 

    

    (c)   all
      indebtedness secured by any Lien on any property or asset owned or held by
      such
      Person regardless or whether the indebtedness secured thereby shall have been
      assumed by such Person or is non-recourse to the credit of such Person; and
      

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (d)   any
      and
      all Contingent Obligations of such Person. 

    

    "Debt
      Adjustment Amount"
      shall
      have the meaning set forth in Section 1.5(a)(v) hereof.

    

    "Diligence
      Report"
      shall
      have the meaning set forth in Section 5.1 hereof.

    

    "DOT"
      means
      the U.S. Department of Transportation, including the FHWA and
      FMCSA.

    

    "Environmental
      Claim"
      means
      any investigation or written claim, action, cause of action, or notice by any
      Person alleging potential liability (including potential liability for
      investigatory costs, cleanup costs, governmental response costs, natural
      resources damages, property damages, personal injuries, or penalties), or any
      Lien or other restriction of any nature, arising out of, based on or resulting
      from: (a) the presence, or release or threat of release into the
      environment, of any Materials of Environmental Concern at any location owned
      or
      operated by the Company; or (b) circumstances forming the basis of any
      violation or alleged violation of any Environmental Law applicable to the
      Company or the Company’s business.

    

    "Environmental
      Laws"
      means,
      as they exist on the date hereof and as of the Closing Date, all applicable
      Legal Requirements relating to pollution or protection of human health (as
      relating to the environment or the workplace) and the environment (including
      ambient air, surface water, ground water, land surface or sub-surface strata),
      including Legal Requirements relating to emissions, discharges, releases or
      threatened releases of Materials of Environmental Concern, or otherwise relating
      to the use, treatment, storage, disposal, transport or handling of Materials
      of
      Environmental Concern, including, but not limited to Comprehensive Environmental
      Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.,
      Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., Toxic
      Substances Control Act, 15 U.S.C. § 2601 et seq., Occupational Safety and
      Health Act, 29 U.S.C. § 651 et seq., the Clean Air Act, 42 U.S.C.
§ 7401 et seq., the Clean Water Act, 33 U.S.C. § 1251 et seq., each as may
      have been amended or supplemented, and any applicable environmental transfer
      statutes or Legal Requirements.

    

    "ERISA"
      shall
      mean the Employee Retirement Income Security Act of 1974 or any successor law,
      and regulations and rules issued pursuant to that Act or any successor
      law.

    

    "ERISA
      Affiliate"
      shall
      mean, with respect to a Party, any other person that, together with that Party,
      would be treated as a single employer under Code § 414.

    

    "Escrow
      Agent"
      shall
      have the meaning set forth in Section 2.4(d) hereof.

    

    "Escrow
      Agreement"
      shall
      have the meaning set forth in Section 2.4(d) hereof.

    

    "Extended
      Representation Survival Period"
      shall
      have the meaning set forth in Section 5.1 hereof.

    

    "Facilities"
      means
      any real property, leaseholds, or other interests currently or formerly owned
      or
      operated by the Company and any buildings, plants, structures, or equipment
      (including motor vehicles, trucks, tractors, trailers, tank cars, and other
      rolling stock) currently or formerly owned or operated by the Company.

    

    "FASB
      133"
      means
      Statement of Financial Accounting Standards No. 133.

    

    "Financial
      Statements"
      shall
      have the meaning set forth in Section 2.8 hereof. 

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    "FHWA"
      shall
      have the meaning set forth in Section 2.26(b) hereof.

    

    "FMCSA"
      shall
      have the meaning set forth in Section 2.26(b) hereof.

    

    "GAAP"
      means
      generally accepted accounting principles in the United States, consistently
      applied throughout all relevant periods.

    

    "General
      Cap"
      shall
      have the meaning set forth in Section 5.6(a) hereof.

    

    "Governmental
      Authorizations"
      shall
      mean all permits, authorizations, certificates, approvals, registrations,
      variances, exemptions, rights of way, franchises, privileges, immunities,
      grants, ordinances, licenses and other rights of every kind and character
      relating to the business and operations of the Company or all or any of the
      assets of the Company, including but not limited to permits and authorizations
      granted by the DOT and FHWA.
      

    

    "Governmental
      Body"
      means
any
      (i) nation,
      state, county, city, town, village, district, or other jurisdiction of any
      nature; (ii) federal, state, local, municipal, foreign, or other
      government; (iii) governmental or quasi-governmental authority of any
      nature (including any governmental agency, branch, department, official, or
      entity and any court or other tribunal); (iv) multi-national organization
      or body; or (v) body exercising, or entitled to exercise, any
      administrative, executive, judicial, legislative, police, regulatory, or taxing
      authority or power of any nature.

    

    "Historical
      Financial Statements"
      shall
      have the meaning set forth in Section 2.8 hereof.

    

    "Humboldt"
      shall
      have the meaning set forth in Section 2.16(e).

    

    "Humboldt
      Plan"
      shall
      have the meaning set forth in Section 2.16(e).

    

    "Independent
      Accountants"
      shall
      have the meaning set forth in Section 1.5(d) hereof.

    

    "Indemnified
      Person"
      shall
      have the meaning set forth in Section 5.4(a) hereof.

    

    "Indemnifying
      Party"
      shall
      have the meaning set forth in Section 5.4(a) hereof.

    

    "Indemnity
      Escrow Amount"
      shall
      have the meaning set forth in Section 1.2(b)(i) hereof.

    

    "Intellectual
      Property"
      shall
      have the meaning set forth in Section 2.25(a) hereof. 

    

    "Interest
      Rate Swaps"
      shall
      have the meaning set forth in Section 2.32 hereof.

    

    "Interim
      Balance Sheet"
      shall
      have the meaning set forth in Section 2.8 hereof.

    

    "Interim
      Financial Statements"
      shall
      have the meaning set forth in Section 2.8 hereof.

    

    "IRS"
      means
      the Internal Revenue Service or any successor agency.

    

    "Knowledge"
      means
      actual knowledge.

    

    "Lease-Purchase
      Conversion"
      means
      the Company's process since January 1, 2006 of purchasing 225 new trailers
      and 135 new tractors and disposing of 135 tractors formerly financed under
      operating leases.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    "Lease-Purchase
      Conversion Certificate"
      shall
      have the meaning set forth in Section 1.7(a) hereof.

    

    "Leased
      Real Property"
      shall
      have the meaning set forth in Section 2.10(a) hereof.

    

    "Lenoir
      City Property"
      shall
      have the meaning set forth in Section 4.5(a) hereof.

    

    "Legal
      Requirement"
      shall
      mean for any Person any law, treaty, regulation, rule, order, judgment, or
      decree, or any other determination or requirement of an governmental authority
      or arbitrator applicable to or binding on such Person or any of its property
      or
      to which such Person or any of its property is subject.

    

    "Liability"
      means
      any and all Debts, liabilities, obligations, and commitments, whether known
      or
      unknown, asserted or unasserted, fixed, absolute, or contingent, matured or
      unmatured, accrued or unaccrued, liquidated or unliquidated, due or to become
      due, whenever or however arising (including, without limitation, whether arising
      out of any contract or tort based on negligence, strict liability, or
      otherwise). 

    

    "Lien"
      shall
      mean any mortgage, lien, pledge, claim, charge, security interest or encumbrance
      of any kind, including without limitation the interest of a vendor or lessor
      under any conditional sale agreement, capital lease obligation or other title
      retention agreement, or any agreement to create or grant any of the foregoing
      or
      prohibiting the
      Company from
      granting Liens on their respective assets.

    

    "Material
      Contract"
      shall
      have the meaning set forth in Section 2.20(a) hereof.

    

    "Materially
      Adverse Effect"
      or
      "Materially
      Adverse Change"
      means
      any change, circumstance, or effect that does have, or is reasonably likely
      to
      have, a materially adverse effect on the business, operations,
      financial condition
      of the Company taken as a whole, or the ability of the Company or the
      Stockholders to consummate the Contemplated Transactions; provided,
      however,
      that
      Materially Adverse Effect and Materially Adverse Change shall not include any
      adverse changes or conditions as and to the extent such changes or conditions
      result from or relate to (i) general business or economic conditions,
      including such conditions related to the business of the Company,
      (ii) national or international political or social conditions, including
      the engagement by the United States in hostilities, whether or not pursuant
      to
      the declaration of a national emergency or war, or the occurrence
      of
      any military or terrorist attack upon the United States, or any of its
      territories, possessions, or diplomatic or consular offices, or upon any
      military installation, equipment, or personnel of the United States,
      (iii) financial, banking, or securities markets (including any disruption
      thereof any decline in prevailing interest rates or any market index),
      (iv) changes in GAAP, (v) changes in Legal Requirements issued by any
      Governmental Body, or (vi) the taking of any action contemplated by this
      Agreement and the other Transaction Documents.

    

    "Materials
      of Environmental Concern"
      means
      chemicals, pollutants, contaminants, hazardous materials, hazardous substances
      and hazardous wastes, medical waste, toxic substances, petroleum and petroleum
      products and by-products, asbestos-containing materials, PCBs, and any other
      chemicals, pollutants, substances or wastes, in each case so defined,
      identified, or regulated under any Environmental Law.

     

    "Multi-Employer
      Plan"
      shall
      have the meaning set forth in ERISA §
      3(37)(A).

    

    "Noncompetition
      Agreements"
      shall
      have the meaning set forth in Section 1.4(a)(v) hereof.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    "Objection
      Notice"
      shall
      have the meaning set forth in Section 1.5(c) hereof.

    

    "Order"
      means
      any award, decision, injunction, judgment, order, ruling, subpoena, or verdict
      entered, issued, made, or rendered by any court, administrative agency,
      Governmental Body, or by any arbitrator.

    

    "Ordinary
      Course of Business"
      shall
      mean an action taken by a Person only if: (a) such action is consistent
      with the past practices of such Person and is taken in the ordinary course
      of
      the normal day-to-day operations of such Person; (b) such action is not
      required to be authorized by the board of directors of such Person (or by any
      Person or group of Persons exercising similar authority); and (c) such
      action is similar in nature and magnitude to actions customarily taken, without
      any authorization by the board of directors (or by any Person or group of
      Persons exercising similar authority), in the ordinary course of the normal
      day-to-day operations of other Persons that are in the same line of business
      as
      such Person.

    

    "Organizational
      Documents"
      shall
      mean (a) the articles or certificate of incorporation and the bylaws of a
      corporation; (b) the partnership agreement and any statement of partnership
      of a general partnership; (c) the limited partnership agreement and the
      certificate of limited partnership of a limited partnership; (d) any
      charter or similar document adopted or filed in connection with the creation,
      formation, or organization of a Person; and (e) any amendment to any of the
      foregoing.

    

    "Owned
      Real Property"
      shall
      have the meaning set forth in Section 2.10(a) hereof.

    

    "Party"
      and
      "Parties"
      shall
      have the meanings set forth in the preamble of this Agreement. 

    

    "PBGC"
      means
      the Pension Benefit Guaranty Corporation, or any successor thereto.

    

    "Pension
      Plan"
      shall
      have the meaning given in ERISA §
      3(2)(A).

    

    "Permitted
      Lien"
      means
      (a) any Lien approved in writing by Covenant, (b) any Lien for Taxes or
      other governmental charges or assessments which are not delinquent or which
      are
      being contested in good faith through appropriate proceedings and adequate
      reserves to pay the same have been established in the Financial Statements
      to
      the extent required by GAAP, (c) any Lien of any landlord, carrier,
      warehouseman, mechanic or materialman and any like Lien arising in the Ordinary
      Course of Business for sums that are not delinquent or which are being contested
      in good faith through appropriate proceedings and adequate reserves to pay
      the
      same have been established in the Financial Statements to the extent required
      by
      GAAP, (d) any Lien of the lender, lessor or other financing source
      (i) securing indebtedness for borrowed money, or (ii) on assets leased
      under a capitalized lease obligation, each to the extent (in either case) that
      such indebtedness for borrowed money or capital lease is reflected in the
      Financial Statements to the extent required by GAAP and is included in the
      calculation of the Debt Adjustment Amount, (e) recorded easements and
      recorded rights of way; (f) Legal Requirements regulating the use or
      enjoyment of the applicable property, or (g) with respect to Leased Real
      Property, Liens which encumber the fee interest in such property.

    

    "Person"
      means
      any individual, corporation, partnership, limited liability company, trust,
      joint venture, unincorporated association or other enterprise or any
      governmental authority.

    

    "Plan"
      shall
      have the meaning given in ERISA § 3(3).

    

    "Plan
      Sponsor"
      shall
      have the meaning given in ERISA § 3(16)(B).

    

    "Post-Closing
      Tax Returns"
      shall
      have the meaning set forth in Section 4.2(a) hereof.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    "Pre-Closing
      Cash Redemption"
      means
      the payment of cash by the Company to the Stockholders at or prior to the
      Closing, in redemption of capital stock.

    

    "Pre-Closing
      Tax Returns"
      shall
      have the meaning set forth in Section 4.2(a) hereof.

    

    "Proceeding"
      means
any
      action, arbitration, mediation, audit, hearing, investigation, litigation or
      suit (whether civil, criminal, administrative, judicial or investigative,
      whether formal or informal, whether public or private) commenced, brought,
      conducted or heard by or before, or otherwise involving, any Governmental Body,
      arbitrator, or mediator.

    

    "Projected
      Additional Debt"
      shall
      have the meaning set forth in Section 1.7(a) hereof.

    

    "Projected
      Debt Paydown"
      shall
      have the meaning set forth in Section 1.7(a) hereof.

    

    "Projected
      Undelivered Equipment"
      shall
      have the meaning set forth in Section 1.7(a) hereof.

    

    "Projected
      Undelivered Equipment Debt"
      shall
      have the meaning set forth in Section 1.7(a) hereof.

    

    "Projected
      Unsold Equipment"
      shall
      have the meaning set forth in Section 1.7(a) hereof.

    

    "Projected
      Unsold Equipment Proceeds"
      shall
      have the meaning set forth in Section 1.7(a) hereof.

    

    "Property
      Transfer Election"
      shall
      have the meaning set forth in Section 4.5(c)(i) hereof.

    

    "Purchase
      Price"
      shall
      have the meaning set forth in Section 1.2(a) hereof.

    

    "Real
      Property"
      shall
      have the meaning set forth in Section 2.10(a) hereof.

    

    "Real
      Property Documents"
      shall
      have the meaning set forth in Section 2.10(e) hereof.

    

    "Real
      Property Leases"
      shall
      have the meaning set forth in Section 2.10(a) hereof.

    

    "Regulatory
      Change"
      means,
      with respect to any Person, any change after the date of this Agreement in
      United States federal or state Legal Requirements, or in any other Legal
      Requirement promulgated by any Governmental Body, or the entry, adoption or
      making after such date of any Order, interpretation, directive or request of
      or
      under any United States federal or state Legal Requirements (whether or not
      having the force of law) by any court or Governmental Body charged with the
      interpretation or administration thereof, applying to a class of Persons
      including such Person.

    

    "Related
      Person"
      shall
      have the following meaning: 

    

    (a)   With
      respect to a particular individual: (i) each other member of such
      individual's Family; (ii) any Person that is directly or indirectly
      controlled by such individual or one or more members of such individual's
      Family; (iii) any Person in which such individual or members of such
      individual's Family hold (individually or in the aggregate) a Material Interest;
      and (iv) any Person with respect to which such individual or one or more
      members of such individual's Family serves as a director, officer, partner,
      executor, or trustee (or in a similar capacity).

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (b)   With
      respect to a
      specified Person other than an individual: (i) any Person that directly or
      indirectly controls, is directly or indirectly controlled by, or is directly
      or
      indirectly under common control with such specified Person; (ii) any Person
      that holds a Material Interest in such specified Person; (iii) each Person
      that serves as a director, officer, partner, executor, or trustee of such
      specified Person (or in a similar capacity); (iv) any Person in which such
      specified Person holds a Material Interest; (v) any Person with respect to
      which such specified Person serves as a general partner or a trustee (or in
      a
      similar capacity); and (vi) any Related Person of any individual described
      in clause (b) or (c).

    

    For
      purposes of this definition, (a) the "Family" of an individual includes
      (i) the individual, (ii) the individual's spouse, (iii) any
      other
      natural person who is related to the individual or the individual's spouse
      within the second degree, and (iv) any other natural person who resides
      with such individual, and (b) "Material Interest" means direct or indirect
      beneficial ownership (as defined in Rule 13d-3 under the Securities
      Exchange Act of 1934) of voting securities or other voting interests
      representing at least 5% of the outstanding voting power of a Person or equity
      securities or other equity interests representing at least 5% of the outstanding
      equity securities or equity interests in a Person.

    

    "Representatives"
      means,
      with respect to a particular Person, any director, officer, manager, employee,
      agent, consultant, advisor, accountant, financial advisor, legal counsel or
      other representative of that Person.

    

    "Scudder
      Opinion"
      shall
      have the meaning set forth in Section 1.4(b)(vi) hereof.

    

    "Section
      338(h)(10) Election"
      shall
      have the meaning set forth in Section 4.2(d)(i).

    

    "Securities
      Act"
      means
      the Securities Act of 1933, as amended.

    

    "Shares"
      shall
      have the meaning set forth in the recitals of this Agreement.

    

    "Special
      Cap"
      shall
      have the meaning set forth in Section 5.6(c) hereof.

    

    "Spousal
      Consent"
      shall
      have the meaning set forth in Section 1.4(a)(viii) hereof.

    

    "Star
      Development"
      shall
      have the meaning set forth in Section 4.5(a) hereof.

    

    "Stockholder
      Adjustment Amount"
      shall
      have the meaning set forth in Section 1.5(e)(i) hereof.

    

    "Stockholder
      Disclosure Schedule"
      shall
      mean the disclosure document delivered by the Stockholders pursuant to the
      terms
      of this Agreement and attached hereto as Exhibit H.

    

    "Stockholder"
      shall
      have the meaning set forth in the preamble of this Agreement.

    

    "Stockholder
      Guaranties"
      shall
      have the meaning set forth in Section 4.1 hereof.

    

    "Stockholder
      Indemnified Persons"
      shall
      have the meaning set forth in Section 5.3 hereof.

    

    "Stockholder
      Releases"
      shall
      have the meaning set forth in Section 1.4(a)(vi) hereof.

    

    "Stockholder
      Representative"
      shall
      have the meaning set forth in Section 6.16 hereof.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    "Survival
      Period"
      shall
      have the meaning set forth in Section 5.1 hereof.

    

    "Surviving
      Corporation"
      shall
      have the meaning set forth in Section 2.1 hereof.

    

    "Tax
      Adjustment"
      shall
      have the meaning set forth in Section 4.2(d)(iii) hereof.

    

    "Tax
      Adjustment Notice"
      shall
      have the meaning set forth in Section 4.2(d)(iii) hereof.

    

    "Tax
      Returns"
      shall
      have the meaning set forth in Section 2.14(a) hereof.

    

    "Taxes"
      shall
      mean any federal, state, local or foreign taxes, assessments, interest,
      penalties, deficiencies, fees and other governmental charges or impositions,
      including without limitation all income tax, unemployment compensation, social
      security, payroll, sales and use, highway use, fuel, excise, privilege,
      property, ad valorem, franchise, license, school and any other tax or similar
      governmental charge or imposition under any Legal Requirement.

    

    "Third
      Party Claims"
      means
any
      claim
      against any Indemnified Person by a Third Party, whether or not involving a
      Proceeding.

    

    "Title
      IV Plan"
      means a
      Pension Plan that is subject to Title IV of ERISA, other than Multi-Employer
      Plans.

    

    "Trade
      Rights"
      shall
      have the meaning set forth in Section 2.25(a) hereof.

    

    "Transaction
      Documents"
      means,
      collectively, this Agreement, the Escrow Agreement, the Transition Services
      Agreement, the Noncompetition Agreements, the Stockholder Releases, the Spousal
      Consents, and all other documents and instruments executed in connection
      herewith, as any or all of the foregoing may be renewed, amended, extended,
      modified, supplemented, replaced or rearranged from time to time. 

    

    "Transaction
      Expenses"
      means
      all out-of-pocket costs and expenses that are incurred by the designated Party
      or Parties in connection with the negotiation and execution of this Agreement
      and the consummation of the Contemplated Transactions, including, without
      limitation, fees for the services of brokers, attorneys, accountants,
      consultants, and other like professionals. 

    

    "Transition
      Services Agreement"
      shall
      have the meaning set forth in Section 1.4(a)(vi) hereof.

    

    "Waller"
      shall
      have the meaning set forth in Section 1.2(b)(ii) hereof.

    

    "Waller
      Escrow"
      shall
      have the meaning set forth in Section 1.2(b)(ii) hereof.

    

    "Waller
      Opinion"
      shall
      have the meaning set forth in Section 1.4(a)(viii) hereof.

    

    "Withdrawal
      Liability"
      shall
      have the meaning set forth in Section 2.16(d)(xii) hereof.

    

    "Working
      Capital Adjustment Amount"
      shall
      have the meaning set forth in Section 1.5(a)(vi) hereof.

    

    "Year-End
      Balance Sheet"
      shall
      have the meaning set forth in Section 2.8 hereof.

    

    "Year-End
      Financial Statements"
      shall
      have the meaning set forth in Section 2.8 hereof.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    Back
      to Form 10-QExhibit 10.27 (Amendment No. 3 to Limited Waiver to Amended and Restated Credit
      Agreement - Star Transaction)

    
      

    

     

    Exhibit
      10.27

    
 

    AMENDMENT
      NO. 3 AND LIMITED WAIVER TO AMENDED AND RESTATED CREDIT
      AGREEMENT

    

    This
      Amendment No. 3 and Limited Waiver to Amended and Restated Credit Agreement
      (this “Agreement”)
      dated
      as of August 11, 2006 is made by and among COVENANT ASSET MANAGEMENT, INC.,
      a
      Nevada corporation (the “Borrower”),
      COVENANT TRANSPORT, INC., a Nevada corporation and the owner of 100% of the
      issued and outstanding common stock of the Borrower (the “Parent”),
      BANK
      OF AMERICA, N.A., a national banking association organized and existing under
      the laws of the United States (“Bank
      of America”),
      in
      its capacity as administrative agent for the Lenders (as defined in the Credit
      Agreement (as defined below)) (in such capacity, the “Agent”),
      each
      of the Lenders signatory hereto and each of the Guarantors (as defined in the
      Credit Agreement) signatory hereto.

    

    W
      I T N E S S E T H:

    

    WHEREAS,
      the
      Borrower, the Parent, the Agent and the Lenders have entered into that certain
      Amended and Restated Credit Agreement dated as of December 16, 2004, as amended
      by Amendment No. 1 to Amended and Restated Credit Agreement dated as of July
      18,
      2005 and Amendment No. 2 to Amended and Restated Credit Agreement dated as
      of
      March 3, 2006 (as hereby amended and as from time to time hereafter further
      amended, modified, supplemented, restated, or amended and restated, the
“Credit
      Agreement”;
      the
      capitalized terms used in this Agreement not otherwise defined herein shall
      have
      the respective meanings given thereto in the Credit Agreement), pursuant to
      which the Lenders have made available to the Borrower various revolving credit
      facilities, including a letter of credit facility and a swing line facility;
      and

    

    WHEREAS,
      each of
      the Parent and the Guarantors has entered into a Facility Guaranty pursuant
      to
      which it has guaranteed certain or all of the obligations of the Borrower under
      the Credit Agreement and the other Loan Documents, and the Parent, the Borrower
      and the Guarantors have entered into various of the Security Instruments to
      secure their respective obligations and liabilities with respect to the Loans
      and the Loan Documents; and

    

    WHEREAS,
      the
      Parent and the Borrower have advised the Agent and the Lenders that they desire
      to enter into certain agreements relating to the purchase by the Parent (either
      directly or indirectly through its wholly-owned Subsidiary) of 100% of the
      issued and outstanding shares of that certain truckload carrier identified
      by
      the Parent and previously disclosed to the Lenders (“Target”) in accordance with
      the terms and conditions set forth in that certain letter dated as of July
      31,
      2006 among the Parent, Star and the shareholders of Star (the “Proposed
      Transaction”);

    

    WHEREAS,
      in
      connection with the consummation of the Proposed Transaction, the Parent and
      the
      Borrower require waivers to and amendments of certain terms of the Credit
      Agreement;

    

    WHEREAS,
      if the
      Proposed Transaction is consummated, the Agent and the Lenders signatory hereto
      are willing so to effect such amendments to certain provisions of the Credit
      Agreement and waivers of certain covenants under the Credit Agreement, in each
      case as set forth below pursuant to the terms and conditions contained in this
      Agreement;

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      if the
      Proposed Transaction is not consummated upon the terms and conditions set forth
      herein, this Agreement shall be of no force or effect; 

    

    NOW,
      THEREFORE,
      in
      consideration of the premises and further valuable consideration, the receipt
      and sufficiency of which is hereby acknowledged, the parties hereto agree as
      follows:

    

    1.     Amendments
      to Credit Agreement.
      Subject
      to the terms and conditions set forth herein, the Credit Agreement is hereby
      amended as follows:

    

    (a)     The
      following definition of “Proposed
      Transaction”
is
      hereby added to Section
      1.2:

    

    “Proposed
      Transaction”
means
      the purchase by the Parent (either directly or indirectly through its
      wholly-owned Subsidiary) of 100% of the issued and outstanding shares of that
      certain truckload carrier identified by the Parent and previously disclosed
      to
      the Lenders (“Target”) in accordance with the terms and conditions set forth in
      that certain letter dated as of July 31, 2006 among the Parent, Target and
      the
      shareholders of Target.

    

    (b)     The
      following
      definition of “Third
      Amendment”
is
      hereby added to Section
      1.2:

    

    “Third
      Amendment”
means
      that certain Amendment No. 3 and Limited Waiver to Amended and Restated Credit
      Agreement dated as of August 11, 2006 among the Borrower, the Parent, the Agent,
      the Lenders party thereto and each of the Guarantors.

    

    (c)     The
      following definition of “Third
      Amendment Effectiveness Date”
is
      hereby added to Section
      1.2:

    

    “Third
      Amendment Effectiveness Date”
means
      the date upon which the conditions set forth in Sections 3, 4 and 5 of the
      Third
      Amendment are satisfied.

    

    (d)     Section
      10.1(a)
      is
      hereby deleted in its entirety and the following is inserted in lieu
      thereof:

    

    Consolidated
      Tangible Net Worth.
      Permit
      Consolidated Tangible Net Worth to be less than (i) the minimum required amount
      of Consolidated Tangible Net Worth set forth in Line 1.a(d) of the certificate
      of an Authorized Representative in the form of Exhibit H to the Credit Agreement
      most recently delivered prior to the Third Amendment Effectiveness Date (the
      “Third
      Amendment Effectiveness Date Prior Quarter”)
      less
      the amount of intangible assets acquired in connection with the Proposed
      Transaction during the period from and including the Third Amendment
      Effectiveness Date until but excluding the last day of the fiscal quarter of
      the
      Parent ending after the Third Amendment Effectiveness Date Prior Quarter, and
      (ii) as at the last day of each fiscal quarter of the Parent ending after the
      Third Amendment Effectiveness Date Prior Quarter and until (but excluding)
      the
      last day of the next following fiscal quarter of the Parent, the sum of (A)
      the
      amount of Consolidated Tangible Net Worth required to be maintained

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    pursuant
      to this Section
      10.1(a)
      as at
      the end of the immediately preceding fiscal quarter (or, in the case of the
      first fiscal quarter of the Parent ending after the Third Amendment
      Effectiveness Date, required to be maintained as of the Third Amendment
      Effectiveness Date), plus (B) 50% of Consolidated Net Income (with no reduction
      for net losses during any period) for the fiscal quarter of the Parent ending
      on
      such day (including within “Consolidated Net Income” certain items otherwise
      excluded, as provided for in the definition of “Consolidated Net Income”), plus
      (C) 100% of the aggregate amount of all increases in the stated capital and
      additional paid-in capital accounts of the Parent resulting from the issuance,
      sale or exchange of equity securities or other capital investments.

    

    2.     Waivers
      to Credit Agreement.
      Subject
      to the terms and conditions set forth herein, the Administrative Agent and
      the
      Lenders hereby:

    

    (a)     waive
      any
      Default or Event of Default arising from the failure to comply with “the making
      of Acquisitions permitted hereunder” as set forth in Section
      2.2(i)
      of the
      Credit Agreement solely as a result of the Proposed Transaction;

    

    (b)     waive
      any
      Default or Event of Default arising from the failure to comply with Section
      10.2
      of the
      Credit Agreement solely as a result of entering into any agreement, contract,
      or
      binding commitment for the Proposed Transaction, provided that such waiver
      shall
      only apply to the excess of the amount by which the Costs of Acquisition of
      the
      Proposed Transaction, together with all other Costs of Acquisition incurred
      on
      or prior to the date of this Agreement during the current Fiscal Year exceeds
      20% of Consolidated Total Assets as of the end of the immediately preceding
      Fiscal Year;

    

    (c)     waive
      any
      Default or Event of Default arising from the failure to comply with Section
      10.6(a)
      of the
      Credit Agreement solely as a result of the Proposed Transaction;
      and

    

    (d)     waive
      any
      Default or Event of Default arising from the failure to comply with Section
      10.7(b)(iv)
      of the
      Credit Agreement solely as a result of the Proposed Transaction.

    

    The
      waivers set forth in this Section
      2
      are
      limited to the extent specifically set forth above and no other terms, covenants
      or provisions of the Credit Agreement or any other Loan Document are intended to
      be effected hereby.

    

    3.     Condition
      Precedent to Section 2(b) Waiver.
      The
      effectiveness of the limited waiver to the Credit Agreement provided in
      Paragraph 2(b) and of this Agreement other than with respect to Paragraphs
      1(b),
      1(c), 1(d), 2(a), 2(c) and 2(d) hereof shall be effective upon the Agent’s
      receipt of (i) originally executed counterparts of this Agreement, duly executed
      by the Agent, the Required Lenders, and on or before December 31, 2006, the
      Parent, the Borrower and each Guarantor and (ii) originally executed
      counterparts of the letter agreement, dated as of August 11, 2006, duly executed
      by the Parent, the Borrower and the Agent (the “Amendment
      Fee Letter”)
      and
      all fees and expenses payable to the Agent and the Lenders as of the date of
      execution hereof by the Required Lenders as set forth in the Amendment Fee
      Letter.

    

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

          
          

        

      

    

    

    4.     Conditions
      Subsequent to Section 2(b) Waiver.
      The
      continued effectiveness of the limited waiver to the Credit Agreement provided
      in Paragraph 2(b) and of this Agreement other than with respect to Paragraphs
      1(b), 1(c), 1(d), 2(a), 2(c) and 2(d) hereof shall be conditioned upon
      satisfaction of the following conditions:

    

    (a)     The
      purchase agreement and all other documentation for the Proposed Transaction
      (the
“Proposed
      Transaction Documents”)
      which
      would violate Section 10.2 of the Credit Agreement but for the waiver set forth
      in Paragraph
      2(b)
      above
      shall, in the form executed, be consistent with the letter agreement dated
      as of
      July 31, 2006 among the Parent, Target, and the shareholders of Target (the
      “Letter
      of Intent”);
      and

    

    (b)     The
      Agent
      shall have received a certificate executed by an Authorized Representative
      of
      the Parent as to the matters set forth in Paragraph 4(a) above and attaching
      true, correct and complete copies of each of the Proposed Transaction Documents
      as soon as is reasonably practicable on or after the date of execution of the
      Proposed Transaction Documents (but in no event later than the next Business
      Day
      after such date of execution of the Proposed Transaction
      Documents).

    

    5.     Conditions
      Precedent to Amendments and additional Waivers.
      The
      amendments to the Credit Agreement provided in Paragraph
      1(b), 1(c), and 1(d),
      and the
      limited waivers to the Credit Agreement provided in Paragraphs
      2(a), 2(c) and 2(d)
      shall be
      effective upon the satisfaction of the following conditions
      precedent:

    

    (a)     The
      Proposed Transaction (i) is consummated and effective on or before December
      31,
      2006, (ii) is consummated in accordance with all applicable laws following
      receipt of all consents and approvals required to be obtained from any
      Governmental Authority or other Person in connection with the Proposed
      Transaction, and (iii) is consummated pursuant to documentation consistent
      with
      the Letter of Intent.

    

    (b)     Immediately
      upon giving effect to the Proposed Transaction, Target shall be a wholly-owned
      direct or indirect Subsidiary of the Parent.

    

    (c)     The
      Agent
      shall have received each of the following documents or instruments in form
      and
      substance reasonably acceptable to the Agent:

    

    
      	               	
              (i)

            	
              a
                certificate dated as of the Third Amendment Effectiveness Date executed
                by
                an Authorized Representative of each the Borrower and the Parent
                as to the
                matters set forth in Paragraphs
                5(a), 5(b), 8(a), 8(b), 8(c) and 8(e)
                of
                this Agreement;

            

    

    

    
      	               	
              (ii)

            	
              true
                and complete copies of consents to the Proposed Transaction by (x)
                Bank of
                America, N.A., as lender under that certain Loan Agreement dated
                as of
                March 1, 2000 between Target and Bank of America, N.A., as amended
                through
                the date hereof (the “Target/Bank
                of America Loan Agreement”)
                and (y) AmSouth Bank, as lender under that certain Amended and Restated
                Loan Agreement dated as of March 1, 2006 between AmSouth Bank and
                Target,
                as amended through the date hereof (the “Target/AmSouth
                Loan Agreement”);

            

    

    

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

          
          

        

      

    

    

    
      	               	
              (iii)

            	
              a
                duly completed and executed certificate of an Authorized Representative
                dated as of the Third Amendment Effectiveness Date in the form of
                Exhibit
                H to the Credit Agreement, with respect to the fiscal quarter ending
                June 30, 2006, demonstrating compliance with the financial covenants
                contained in Article
                X
                of
                the Credit Agreement, as amended hereby, after giving pro forma effect
                to
                the Proposed Transaction; and

            

    

    

    
      	               	
              (iv)

            	
              such
                other documents, instruments, opinions, certifications, undertakings,
                further assurances and other matters as the Agent shall reasonably
                request.

            

    

    

    (d)     The
      Parent and the Borrower shall have paid the fees in the amounts and at the
      times
      specified in the Amendment Fee Letter.

    

    (e)     all
      fees and
      expenses payable to the Agent and the Lenders (including the fees and expenses
      of counsel to the Agent) accrued to date shall have been paid in full to the
      extent invoiced prior to or on the effective date of this Agreement, but without
      prejudice to the later payment of accrued fees and expenses not so
      invoiced.

    

    6.     Conditions
      Subsequent to Amendments and additional Waivers.
      The
      continued effectiveness of the amendments to the Credit Agreement provided
      in
Paragraph
      1(b), 1(c), and 1(d),
      and the
      limited waivers to the Credit Agreement provided in Paragraphs
      2(a), 2(c) and 2(d)
      shall be
      conditioned upon satisfaction of the following conditions:

    

    (a)     Substantially
      simultaneously with the consummation of the Proposed Transaction or immediately
      thereafter, each of the Parent and the Borrower shall have complied with the
      requirements set forth in Section
      9.19
      of the
      Credit Agreement with respect to Target and the Agent shall have received the
      documents required thereunder.

    

    (b)     Substantially
      simultaneously with the consummation of the Proposed Transaction or immediately
      thereafter, the Agent shall have received true and complete copies of amendments
      to (x) the Target/Bank of America Loan Agreement and (y) the Target/AmSouth
      Loan
      Agreement, in each case as necessary not to violate or conflict with the Credit
      Agreement.

    

    7.     Consent
      of the Parent and the Guarantors.
      Each of
      the Parent and the Guarantors has joined in the execution of this Agreement
      for
      the purposes of consenting hereto and for the further purpose of confirming
      its
      guaranty of the Obligations of the Borrower pursuant to the Facility Guaranty
      to
      which the Parent or such Guarantor is party and its obligations under each
      other
      Loan Document to which it is a party. The Parent and each Guarantor hereby
      consents, acknowledges and agrees to the amendments of the Credit Agreement
      set
      forth herein and hereby confirms and ratifies in all respects the Facility
      Guaranty and each other Loan Document to which the Parent or such Guarantor
      is a
      party and the enforceability of such Facility Guaranty and each such other
      Loan
      Document against the Parent and such Guarantor in accordance with its
      terms

     

    8.     Representations
      and Warranties.
      In
      order to induce the Agent and the Lenders party hereto to enter into this
      Agreement, each of the Parent and the Borrower represent and warrant to the
      Agent and such Lenders as follows:

    

    

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

          
          

        

      

    

    
 

    (a)     The
      representations and warranties made by the Parent and the Borrower in
Article
      VIII
      of the
      Credit Agreement (after giving effect to this Agreement) and by each Loan Party
      in each of the other Loan Documents to which it is a party are true and correct
      in all material respects on and as of the date hereof, except to the extent
      that
      such representations and warranties expressly relate to an earlier
      date;

    

    (b)     Since
      the
      date of the most recent financial reports of the Parent delivered pursuant
      to
Section
      9.1
      of the
      Credit Agreement, no act, event, condition or circumstance has occurred or
      arisen which, singly or in the aggregate with one or more other acts, events,
      occurrences or conditions (whenever occurring or arising), has had or could
      reasonably be expected to have a Material Adverse Effect; 

    

    (c)     The
      Persons appearing as Guarantors on the signature pages to this Agreement
      constitute all Persons who are required (as of the date hereof) to be Guarantors
      pursuant to the terms of the Credit Agreement and the other Loan Documents,
      including without limitation all Persons who became Subsidiaries or were
      otherwise required to become Guarantors after the Closing Date as a result
      of
      any merger, acquisition or other reorganization, and each such Person has
      executed and delivered a Facility Guaranty; 

    

    (d)     This
      Agreement has been duly authorized, executed and delivered by the Parent, the
      Borrower and the Guarantors party hereto and constitutes a legal, valid and
      binding obligation of such parties, except as may be limited by general
      principles of equity or by the effect of any applicable bankruptcy, insolvency,
      reorganization, moratorium or similar law affecting creditors’ rights generally;
      and

    

    (e)     No
      Default or
      Event of Default has occurred and is continuing either immediately prior to
      or
      immediately after the effectiveness of this Agreement. 

    

    9.     Entire
      Agreement.
      This
      Agreement, together with the Amendment Fee Letter and all the Loan Documents
      (collectively, the “Relevant
      Documents”),
      sets
      forth the entire understanding and agreement of the parties hereto in relation
      to the subject matter hereof and supersedes any prior negotiations and
      agreements among the parties relative to such subject matter. No promise,
      condition, representation or warranty, express or implied, not herein set forth
      shall bind any party hereto, and not one of them has relied on any such promise,
      condition, representation or warranty. Each of the parties hereto acknowledges
      that, except as otherwise expressly stated in the Relevant Documents, no
      representations, warranties or commitments, express or implied, have been made
      by any party to the other. None of the terms or conditions of this Agreement
      may
      be changed, modified, waived or canceled orally or otherwise, except as
      permitted pursuant to Section
      13.6
      of the
      Credit Agreement.

    

    10.     Full
      Force and Effect of Agreement.
      Except
      as hereby specifically amended, modified or supplemented, the Credit Agreement
      and all other Loan Documents are hereby confirmed and ratified in all respects
      by each party hereto and shall be and remain in full force and effect according
      to their respective terms.

    

    

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

          
          

        

      

    

    

    11.     Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original as against any party whose signature appears thereon, and
      all
      of which shall together constitute one and the same instrument.

    

    12.     Governing
      Law.
      This
      Agreement shall in all respects be governed by, and construed in accordance
      with, the laws of the state of Tennessee.

    

    13.     Enforceability.
      Should
      any one or more of the provisions of this Agreement be determined to be illegal
      or unenforceable as to one or more of the parties hereto, all other provisions
      nevertheless shall remain effective and binding on the parties
      hereto.

    

    14.     References.
      All
      references in any of the Loan Documents to the “Credit Agreement” shall mean the
      Credit Agreement, as amended hereby.

    

    15.     Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the Parent, the
      Borrower, the Agent and each of the Guarantors and Lenders, and their respective
      successors, assigns and legal representatives; provided,
      however, that neither the Parent, the Borrower nor any Guarantor, without the
      prior consent of the Required Lenders, may assign any rights, powers, duties
      or
      obligations hereunder.

    

    16.     Expenses.
      The
      Parent and the Borrower agree to pay to the Agent all reasonable out-of-pocket
      expenses of the Agent (including the fees and expenses of counsel to the Agent)
      incurred or arising in connection with the negotiation and preparation of this
      Agreement.

    

    

    [Signature
      pages follow.]

    

    

    

    

    

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

          
          

        

      

    

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this instrument to be made, executed and delivered
      by
      their duly authorized officers as of the day and year first above
      written.

    

    
      	 	
              BORROWER:

            
	 	 	 
	 	
              COVENANT
                ASSET MANAGEMENT, INC.,
                a
                

              Nevada
                corporation

            
	 	 	 
	 	
              By:

            	
              /s/
                David Parker

            
	 	
              Name:

            	
              David
                Parker

            
	 	
              Title:

            	
              President

            
	 	 	 
	 	 	 
	 	
              PARENT:

            
	 	 	 
	 	
              COVENANT
                TRANSPORT, INC., a
                Nevada 

              corporation

            
	 	 	 
	 	
              By:

            	
              /s/
                David Parker

            
	 	
              Name:

            	
              David
                Parker

            
	 	
              Title:

            	
              President
                and Chief Executive Officer

            

    

    

    Signature
      Page

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	 	
              GUARANTORS:

            
	 	 	 
	 	
              COVENANT
                TRANSPORT, INC.,

              a
                Tennessee corporation

            
	 	 	 
	 	
              By:

            	
              /s/
                David Parker

            
	 	
              Name:

            	
              David
                Parker

            
	 	
              Title:

            	
              President
                and Chief Executive Officer

            
	 	 	 
	 	 	 
	 	
              HAROLD
                IVES TRUCKING CO.,

              an
                Arkansas corporation

            
	 	 	 
	 	
              By:

            	
              /s/
                David Parker

            
	 	
              Name:

            	
              David
                Parker

            
	 	
              Title:

            	
              President

            
	 	 	 
	 	 	 
	 	
              SOUTHERN
                REFRIGERATED TRANSPORT, 

              INC.,
                an
                Arkansas corporation

            
	 	 	 
	 	
              By:

            	
              /s/
                David Parker

            
	 	
              Name:

            	
              David
                Parker

            
	 	
              Title:

            	
              Chief
                Executive Officer

            
	 	 	 
	 	 	 
	 	
              COVENANT.COM,
                INC.,

              a
                Nevada corporation

            
	 	 	 
	 	
              By:

            	
              /s/
                David Parker

            
	 	
              Name:

            	
              David
                Parker

            
	 	
              Title:

            	
              President
                and Chief Executive Officer

            
	 	 	 
	 	 	 
	 	
              CIP,
                INC.,

              a
                Nevada corporation

            
	 	 	 
	 	
              By:

            	
              /s/
                David Parker

            
	 	
              Name:

            	
              David
                Parker

            
	 	
              Title:

            	
              President

            

    

    

    Signature
      Page

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	 	
              AGENT:

            
	 	 	 
	 	
              BANK
                OF AMERICA, N.A.,
                as Agent

            
	 	 	 
	 	
              By:

            	
              /s/
                Michael Brashler

            
	 	
              Name:

            	
              Michael
                Brashler

            
	 	
              Title:

            	
              Vice
                President

            

    

     

    Signature
      Page

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	 	
              LENDERS:

            
	 	 	 
	 	
              BANK
                OF AMERICA, N.A.

            
	 	 	 
	 	
              By:

            	
              /s/
                Andrew Buunton

            
	 	
              Name:

            	
              Andrew
                Buunton

            
	 	
              Title:

            	
              Vice
                President

            

    

     

    Signature
      Page

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	 	
              NATIONAL
                CITY BANK OF KENTUCKY

            
	 	 	 
	 	
              By:

            	
              /s/
                Kevin L. Anderson

            
	 	
              Name:

            	
              Kevin
                L. Anderson

            
	 	
              Title:

            	
              SVP

            

    

     

    Signature
      Page

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	 	
              BRANCH
                BANKING AND TRUST COMPANY

            
	 	 	 
	 	
              By:

            	
              /s/
                R. Andrew Beam

            
	 	
              Name:

            	
              R.
                Andrew Beam

            
	 	
              Title:

            	
              Senior
                Vice President

            

    

     

    Signature
      Page

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	 	
              FIRST
                TENNESSEE BANK NATIONAL ASSOCIATION

            
	 	 	 
	 	
              By:

            	
              /s/
                Mark A. Stewart

            
	 	
              Name:

            	
              Mark
                A. Stewart

            
	 	
              Title:

            	
              Senior
                Vice President

            

    

     

    Signature
      Page

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	 	
              AMSOUTH
                BANK

            
	 	 	 
	 	
              By:

            	
              /s/
                W. Walter Robinson III

            
	 	
              Name:

            	
              W.
                Walter Robinson III

            
	 	
              Title:

            	
              Vice
                President

            

    

     

    Signature
      Page

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	 	
              BNP
                PARIBAS

            
	 	 	 
	 	
              By:

            	
              /s/
                Brad Ellis

            
	 	
              Name:

            	
              Brad
                Ellis

            
	 	
              Title:

            	
              Vice
                President

            
	 	 	 
	 	
              By:

            	
              /s/
                Becky Ortega

            
	 	
              Name:

            	
              Becky
                Ortega

            
	 	
              Title:

            	
              Vice
                President

            

    

     

    Signature
      Page

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	 	
              SUNTRUST
                BANK

            
	 	 	 
	 	
              By:

            	
              /s/
                J. H. Miles

            
	 	
              Name:

            	
              J.
                H. Miles

            
	 	
              Title:

            	
              Managing
                Director

            

    

    
Signature
      Page

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Back
      to Form 10-Q

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00112-of-00352.parquet"}]]