US XPRESS ENTERPRISES INC, S-1, 1997-07-10

US XPRESS ENTERPRISES INC
S-1, 1997-07-10
TRUCKING (NO LOCAL)

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 10, 1997
REGISTRATION NO. 33-

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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U.S. XPRESS ENTERPRISES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

NEVADA 4213 62-1378182
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)

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2931 SOUTH MARKET STREET
CHATTANOOGA, TENNESSEE 37410
(423) 697-7377
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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RAY M. HARLIN
CHIEF FINANCIAL OFFICER
U.S. XPRESS ENTERPRISES, INC.
2931 SOUTH MARKET STREET
CHATTANOOGA, TENNESSEE 37410
(423) 697-7377
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

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COPIES TO:
A. ALEXANDER TAYLOR, II, ESQ. RICHARD C. TILGHMAN, JR., ESQ.
MILLER & MARTIN PIPER & MARBURY L.L.P.
1000 VOLUNTEER BUILDING 36 SOUTH CHARLES STREET
CHATTANOOGA, TENNESSEE 37402 BALTIMORE, MARYLAND 21201
(423) 756-6600 (410) 539-2530

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_] _____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering: [_] __________________________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
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<S> <C> <C> <C> <C>
Class A Common Stock,
$0.01 par value....... 3,910,000 shares $18.56 $72,569,600 $21,991
</TABLE>
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(1) Includes 510,000 shares that the Underwriters have the option to purchase
solely to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION AND AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE +
+WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES +
+LAWS OF ANY SUCH JURISDICTION. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
JULY 10, 1997

3,400,000 Shares

[LOGO OF U.S. XPRESS ENTERPRISES, INC. APPEARS HERE]
Class A Common Stock

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Of the 3,400,000 shares of Class A Common Stock offered hereby, 2,500,000
shares are being sold by U.S. Xpress Enterprises, Inc. (the "Company") and
900,000 shares are being sold by certain of the Company's stockholders (the
"Selling Stockholders"). See "Principal and Selling Stockholders." The Company
will not receive any proceeds from the sale of the Class A Common Stock by the
Selling Stockholders. The Company's Class A Common Stock is traded on The
Nasdaq National Market under the symbol "XPRSA." On July 9, 1997, the last
reported sale price of the Company's Class A Common Stock, as reported by The
Nasdaq National Market, was $18.75 per share.

The Class A Common Stock offered hereby is entitled to one vote per share,
while the Class B Common Stock is entitled to two votes per share so long as it
is held by its existing holders or certain members of their immediate families.
The rights of the holders of the Class A and Class B Common Stock are otherwise
identical. See "Description of Capital Stock."
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SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
CLASS A COMMON STOCK OFFERED HEREBY.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

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<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS PROCEEDS TO
TO DISCOUNTS AND TO SELLING
PUBLIC COMMISSIONS COMPANY(1) STOCKHOLDERS
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<S> <C> <C> <C> <C>
Per Share........................ $ $ $ $
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Total(2)......................... $ $ $ $
</TABLE>
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(1) Before deducting estimated expenses of $250,000 payable by the Company.
(2) The Company and certain of the Selling Stockholders have granted the
Underwriters a 30-day option to purchase up to 510,000 additional shares of
Class A Common Stock solely to cover over-allotments, if any. To the extent
that the option is exercised, the Underwriters will offer the additional
shares to the public at the Price to Public shown above. If the option is
exercised in full, the Price to Public, Underwriting Discounts and
Commissions, Proceeds to Company and Proceeds to Selling Stockholders will
be $ , $ , $ and $ , respectively. See "Underwriting."

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The shares of Class A Common Stock are offered by the several Underwriters,
subject to prior sale, when, as and if delivered to and accepted by them, and
subject to the right of the Underwriters to reject any order in whole or in
part. It is expected that delivery of the shares will be made at the offices of
Alex. Brown & Sons Incorporated, Baltimore, Maryland, on or about , 1997.

Alex. Brown & Sons
INCORPORATED
Morgan Stanley Dean Witter
Morgan Keegan & Company, Inc.
Schroder & Co. Inc.

THE DATE OF THIS PROSPECTUS IS JULY , 1997
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AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission ("the
Commission") a Registration Statement on Form S-1 (together with all amendments
and exhibits thereto, the "Registration Statement") under the Securities Act of
1933 with respect to the Common Stock offered hereby. This Prospectus, which
constitutes part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Company and the Common Stock, reference
is made to the Registration Statement and the exhibits and schedules filed as a
part thereof. Statements made in this Prospectus as to the contents of any
contract, agreement or other document are not necessarily complete, and, in
each instance, reference is made to the copy of such contract, agreement or
document. The Registration Statement and the exhibits thereto filed by the
Company with the Commission may be inspected and copies may be obtained (at
prescribed rates) at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at
the Commission's Regional Offices located at Suite 1400, Northwestern Atrium
Center, 500 West Madison Street, Chicago, Illinois 60661 and 7 World Trade
Center, Suite 1300, New York, New York 10048 and at the website maintained by
the Commission at http://www.sec.gov.

Statements made in this Prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.

The Company is subject to the information requirements of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Commission. These reports, proxy statements and other information also are
available from the Commission's public reference facilities and its website. So
long as the Company is subject to periodic reporting requirements of the
Exchange Act, it will continue to furnish the reports, proxy statements and
other information required thereby to the Commission. The Company furnishes its
shareholders annual reports containing financial statements audited by its
independent auditors and quarterly reports for the first three quarters of each
fiscal year containing unaudited financial information.

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CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE COMMON
STOCK OFFERING AND PURCHASE COMMON STOCK TO COVER SYNDICATE SHORT POSITIONS.
FOR A DESCRIPTION OF THE ACTIVITIES, SEE "UNDERWRITING."

IN CONNECTION WITH THIS OFFERING, CERTAIN PERSONS PARTICIPATING IN THIS
OFFERING MAY ENGAGE IN PASSING MARKET MAKING TRANSACTIONS IN THE COMMON STOCK
ON NASDAQ IN ACCORDANCE WITH RULE 103 OF REGULATION M OF THE SECURITIES AND
EXCHANGE COMMISSION. SEE "UNDERWRITING."

2
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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements, including the notes
thereto, appearing elsewhere in this Prospectus. Unless otherwise indicated,
all information in this Prospectus assumes no exercise of the Underwriters'
over-allotment option. Unless the context otherwise requires, references in
this Prospectus to the "Company" refer to U.S. Xpress Enterprises, Inc. and
each of its consolidated subsidiaries.

THE COMPANY

U.S. Xpress Enterprises, Inc. (the "Company") is one of the ten largest
truckload carriers in the United States. The Company provides transportation
and logistics services throughout the United States and in parts of Canada and
Mexico, specializing in time-definite and expedited longhaul and regional
truckload services. The Company is a leader in the adoption of proven new
technologies as a means of reducing costs and providing better service. The
Company has two operating subsidiaries, U.S. Xpress, Inc. ("U.S. Xpress") and
CSI/Crown, Inc. ("CSI/Crown"). U.S. Xpress, which accounted for 82% of the
Company's fiscal 1997 revenues, provides time-definite and expedited longhaul
and regional truckload services as well as transportation and logistics
services to the air freight industry. CSI/Crown is the leader in providing
logistics services to manufacturers and retailers in the floorcovering
industry. The Company's top 50 customers, most of which have designated the
Company as a core carrier, include Federal Express, Carrier, Amana, Hewlett
Packard, DuPont, Compaq and Armstrong.

The Company has increased its revenues at a compounded annual growth rate of
18.2% over the past five fiscal years to $363 million for fiscal 1997 through
the expansion of business from existing customers, the development of
relationships with new customers and strategic acquisitions. The Company's
strategy for future revenue growth is to continue to establish strategic
alliances with its top customers, target high-service market segments, make
strategic acquisitions and leverage its technological advantage. The Company
also seeks to sustain growth through programs designed to recruit and retain
quality drivers for its expanding fleet.

In addition to its focus on internal growth, the Company maintains an active
acquisition program. Competitive pressures within the truckload industry and
high levels of service demanded by customers require today's carriers to
demonstrate financial stability, critical mass and technological capabilities.
Carriers that do not possess these characteristics have begun to exit the
truckload industry through liquidation or through continued industry
consolidation. The Company has capitalized on this industry consolidation by
successfully making strategic acquisitions focusing on high-service providers,
air freight service providers and regional carriers in specific geographic
areas. Since 1990, the Company has completed the following key acquisitions:

. JTI, Inc. ("JTI"), a Midwest regional truckload carrier, in May 1997;

. the Midwest and East Coast floorcovering and logistics operations of
Rosedale Transport, Inc. ("Rosedale"), in April 1997;

. the West Coast air freight service operations of Michael Lima
Transportation, in July 1996;

. CSI/Reeves, Inc. ("CSI/Reeves"), a floorcovering logistics provider, in
August 1995;

. Hall Systems, Inc. ("Hall Systems"), a Southeast regional truckload
carrier, completed in October 1995; and

. Southwest Motor Freight, Inc. ("Southwest"), a medium and longhaul
truckload carrier, in November 1990.

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The Company has initiated a strategy to enhance profitability and sustain
growth by improving efficiency, reducing costs and introducing technologies to
improve service. The Company realigned its operations into two subsidiaries to
combine various operating, marketing, maintenance and administrative functions,
thereby reducing costs and improving equipment utilization. The Company has
improved the predictability of and reduced costs by eliminating five
maintenance facilities and outsourcing some maintenance activities, revising
insurance programs, modifying its revenue equipment acquisition strategy and
improving fuel economy. These initiatives increased profitability in fiscal
1997, and management believes that these strategies will have a more
significant effect on results of operations in the future.

The Company is a leader in the innovation and adoption of proven new
technologies as a means of reducing costs and enhancing customer service. For
example, the newly-introduced Xpress Connect(TM) Internet connection, a fully
integrated customer-to-truck communications system, enables customers to trace
freight, tender loads and exchange invoice information via the Internet as well
as communicate with the Company via e-mail.

The Company was incorporated in Nevada in 1989. The Company's principal
offices are located at 2931 South Market Street, Chattanooga, Tennessee 37410;
and its telephone number is (423) 697-7377. Internet: www.usxpress.com.

THE OFFERING

Class A Common Stock offered by the Company .....
2,500,000 shares

Class A Common Stock offered by the Selling
Stockholders ...................................
900,000 shares

Common Stock to be outstanding after the
offering:
Class A Common Stock .......................... 11,587,007 shares(1)

Class B Common Stock .......................... 3,040,262 shares

Total ....................................... 14,627,269 shares(1)

Use of proceeds ................................. To acquire revenue
equipment currently leased
by the Company and reduce
indebtedness.

Nasdaq National Market symbol ................... XPRSA
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(1) Excludes currently outstanding options to acquire 218,509 shares of Class A
Common Stock, at a weighted average exercise price of $8.78 per share. See
"Management--Stock Incentive Plan."

4
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

<TABLE>
<CAPTION>
MARCH 31, 1997
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ACTUAL AS ADJUSTED(3)
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<S> <C> <C>
BALANCE SHEET DATA:
Working capital....................................... $ 33,829 $ 33,829
Total assets.......................................... 178,084 218,084
Long-term debt, net of current portion(2)............. 59,318 55,037
Stockholders' equity.................................. 63,162 107,443
</TABLE>
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(1) Includes the results of operations of the following acquired businesses
from dates of acquisition: the air freight service operations of Michael
Lima Transportation from July 1996 and CSI/Reeves from August 1995. The
Company's 50% acquisition of Hall Systems in March 1994 was accounted for
under the equity method until the remaining 50% of Hall Systems was
acquired in October 1995.
(2) Does not include $20 million of indebtedness incurred subsequent to March
31, 1997 in connection with the Rosedale and JTI acquisitions.
(3) Adjusted to give effect to the sale of the 2,500,000 shares of Class A
Common Stock offered by the Company hereby at an assumed public offering
price of $18.75 per share and application of the estimated net proceeds
therefrom as described in "Use of Proceeds."

RECENT RESULTS

On July 10, 1997, the Company reported preliminary first quarter 1998
operating results. Operating revenues for the quarter ending June 30, 1997
totaled $107.9 million, an increase of 22.9% over first quarter 1997 revenues
of $87.8 million. Income from operations for the first quarter 1998 totaled
$8.0 million compared to $2.2 million for the same period in 1997, an increase
of 263.6%. The Company generated net income of $3.9 million for the quarter,
compared to $552,000 for the same period in 1997. Earnings per share for the
first quarter of fiscal 1998 were $0.32 compared to $0.05 for the first quarter
of fiscal 1997.

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<PAGE>

RISK FACTORS

In addition to the other information contained in this Prospectus, the
following factors should be carefully considered in evaluating an investment
in the shares of Class A Common Stock offered hereby.

ECONOMIC FACTORS

The trucking industry has historically been highly cyclical as a result of
various economic factors, such as excess capacity in the industry, the
availability of qualified drivers, changes in fuel prices and the supply of
fuel, increases in fuel or energy taxes, interest rate fluctuations, insurance
costs, fluctuations in the resale value of revenue equipment, economic
recessions and downturns in customers' business cycles and shipping
requirements. The Company has little or no control over these economic
factors. Significant increases or rapid fluctuations in fuel or other
operating costs and interest rates, to the extent not offset by increases in
freight rates, would reduce the Company's profitability. Economic recessions
or downturns in customers' business cycles also could have a materially
adverse effect on the operating results of the Company. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

AVAILABILITY OF DRIVERS

Competition for drivers is intense within the trucking industry, and the
Company periodically experiences difficulties in attracting and retaining
qualified drivers. There can be no assurance that the Company's operations
will not be affected by a shortage of qualified drivers in the future which
could result in temporary under-utilization of revenue equipment, difficulty
in meeting shipper demands and increased compensation levels for drivers.
Difficulty in attracting or retaining qualified drivers could require the
Company to limit its growth and could have a materially adverse effect on the
Company's operations. See "Business--Drivers."

COMPETITION

The trucking industry is highly competitive and fragmented and includes
numerous regional, inter-regional and national truckload carriers, none of
which dominates the market. The Company also competes with logistics providers
and alternative forms of surface transportation, such as intermodal
transportation, railroads and air freight carriers, particularly in the longer
haul segments of its business. Historically, this competition has created
downward pressure on the truckload industry's pricing structure. Competition
for the freight transported by the Company is based on service, efficiency,
the ability to meet shipping deadlines and freight rates. Prolonged weakness
in the freight markets or downward pressure on freight rates could adversely
affect the Company's results of operations or financial condition. Some
truckload carriers and many railroad companies do have greater financial
resources, operate more equipment and transport more freight than the Company.
See "Business--Competition."

RISKS RELATED TO COMPANY'S GROWTH STRATEGY

The Company's growth strategy includes the acquisition and deployment of
additional revenue equipment and the expansion and development of its national
operations and of its regional operations beyond the Midwestern, Western and
Southeastern United States. These expanded operations will require the
commitment of additional revenue equipment and personnel, as well as
management resources, for future development.

The Company's strategy for continued growth also includes the continued
acquisition of small and medium-sized transportation companies. The Company
will face competition from various transportation companies or other third
parties for future acquisition opportunities. There can be no assurance that
the Company can successfully acquire additional companies in the future. Any
future acquisitions by the Company are likely to result in additional debt and
amortization of goodwill and intangible assets, which

6
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could adversely affect the Company's profitability, or could involve the
potentially dilutive issuance of additional equity securities. In addition,
acquisitions involve numerous risks, including difficulties in assimilating
the acquired company's operations, the diversion of management's attention
from other business concerns, risks of entering markets in which the Company
has little or no direct experience and the potential loss of customers, key
employees and drivers of the acquired company, any of which could have a
materially adverse effect on the Company's business and operating results. The
Company does not have any commitments with respect to any acquisitions as of
the date of this Prospectus. See "Business--Strategy."

SEASONALITY

In the trucking industry, revenue generally shows a seasonal pattern as
customers reduce shipments during and after the winter holiday season and its
inherent weather variations. While the Company has reduced the seasonality of
its business by obtaining new customers with more balanced shipping patterns,
the Company's operating expenses have historically been higher in the winter
months, due primarily to decreased fuel efficiency and increased maintenance
costs for revenue equipment in colder weather. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Seasonality."

ACQUISITION OF REVENUE EQUIPMENT

The Company's growth is dependent, in part, on its ability to acquire and
deploy additional revenue equipment on a timely basis. Delays in the
availability of equipment could occur due to a number of factors beyond the
Company's control, including equipment and supply shortages and work stoppages
at the equipment supplier. Any delay or interruption in the availability of
equipment in the future could have a materially adverse effect on the
Company's operations and could force it to curtail its plans for growth. See
"Business--Equipment."

CAPITAL REQUIREMENTS

The trucking industry is capital intensive. The Company depends on operating
leases, lines of credit, secured equipment financing and cash flows from
operations to finance the expansion and maintenance of its modern and cost-
efficient revenue equipment and facilities. If the Company were unable in the
future to enter into acceptable operating or capital lease arrangements, raise
additional equity or borrow sufficient funds, it would be forced to limit its
growth and operate its revenue equipment for longer periods, which could
adversely affect the Company's operating results. See "Use of Proceeds" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

FUEL

Fuel is one of the Company's largest operating expenses. Fuel prices tend to
fluctuate, and the Company hedges against such fluctuations only on a limited
basis. Any increase in fuel taxes or in fuel prices, to the extent not offset
by freight rate increases or fuel surcharges to customers, or any interruption
in the supply of fuel, could have a materially adverse effect on the Company's
operating results because the Company bears the risk of changes in operating
costs.

REGULATION

The Company is regulated by the United States Department of Transportation
("DOT") and by various state agencies. These regulatory authorities exercise
broad powers, generally governing activities such as authorization to engage
in motor carrier operations, rates and charges, operations, safety, financial
reporting, and certain mergers, consolidations and acquisitions. The trucking
industry is subject to possible regulatory and legislative changes (such as
increasingly stringent environmental regulations or limits on vehicle weight
and size) that may affect the economics of the industry by requiring changes
in operating practices or by affecting the cost of providing truckload
services. In addition, the Company's operations are subject to various
environmental laws and regulations dealing with underground fuel storage
tanks, the transportation and handling of hazardous materials and discharge of
stormwater. If the

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Company were to be involved in a spill or accident involving hazardous
substances or if the Company were found to be in violation of applicable laws
or regulations, the Company's business and operating results could be
materially adversely affected. See "Business--Regulation."

DEPENDENCE ON CERTAIN CUSTOMERS

For the fiscal year ended March 31, 1997, the Company's 25, 10 and 5 largest
customers accounted for 35.4%, 21.9% and 14.1% of revenues, respectively. The
Company does not have long-term contractual relationships with its customers,
and there can be no assurance that the Company's relationships with its largest
customers will continue. A reduction in or termination of services provided by
the Company to one or more large customers could have a materially adverse
effect on the Company's business and operating results. See "Business--
Marketing and Customers."

CLAIMS EXPOSURE; INSURANCE

Prior to December 31, 1996, the Company was self-insured for personal injury
and property damage in the amount of $500,000 per occurrence and could become
subject to one or more as yet unasserted claims as a result of accidents which
occurred prior to that date, which, if decided adversely to the Company, could
have a materially adverse effect on the Company's operating results. The
Company's effective insurance costs also could increase significantly as a
result of adverse claims experience or as a result of general increases in
insurance premiums. See "Business--Legal Proceedings."

DEPENDENCE ON MANAGEMENT

The success of the Company is highly dependent on the continued services of
the Company's senior management team, particularly Max L. Fuller and Patrick E.
Quinn, the Company's Co-Chairmen of the Board, neither of whom has an
employment agreement with the Company. The loss of either or both of their
services could have a materially adverse effect on the Company. In addition,
the Company's continued growth depends on its ability to attract and retain
skilled management and other employees. There can be no assurance that the
Company will be able to attract and retain additional qualified management or
other employees in the future. See "Management."

VOTING RIGHTS OF CLASS A AND CLASS B COMMON STOCK; VOTING CONTROL BY PRINCIPAL
STOCKHOLDERS

The voting rights of the Class A Common Stock are limited by the Company's
Amended and Restated Articles of Incorporation ("Restated Articles"). On all
matters with respect to which the Company's stockholders have a right to vote,
including the election of directors, each share of Class A Common Stock is
entitled to one vote, while each share of Class B Common Stock is entitled to
two votes. Except as otherwise required by law or expressly provided in the
Restated Articles, the Class A Common Stock and Class B Common Stock vote
together as a single class. Class B Common Stock can be converted into shares
of Class A Common Stock on a share-for-share basis at the election of the
holder and will be automatically converted to shares of Class A Common Stock
upon transfer, except certain transfers among existing holders of Class B
Common Stock and their respective immediate family members. See "Description of
Capital Stock."

Upon completion of this offering, Messrs. Fuller and Quinn will own
approximately 39.9% of the outstanding shares of Class A Common Stock and all
of the outstanding shares of Class B Common Stock, which together will
represent approximately 60.6% of the total voting power of both classes of
Common Stock. As long as Messrs. Fuller and Quinn control a majority of the
voting stock of the Company, they will be able, acting together, to elect the
entire Board of Directors of the Company and to determine the outcome of all
matters involving a stockholder vote. See "Principal and Selling Stockholders"
and "Description of Capital Stock."

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<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Sales of a substantial number of shares of the Class A Common Stock or their
availability for sale in the public market following this offering may have an
adverse effect on prevailing market prices for the Class A Common Stock.
Following this offering, the 3,400,000 shares offered hereby and the 3,335,000
shares sold in the Company's initial public offering will be freely tradeable
unless acquired by affiliates of the Company. The Selling Stockholders, who
after giving effect to this offering will beneficially own 8,059,735 shares of
the Company's outstanding Class A and Class B Common Stock, along with the
Company and its officers and directors as well as certain other principal
stockholders have agreed with the Underwriters that they will not sell, offer
or otherwise dispose of any of their shares for 90 days from the date of this
offering without the prior consent of Alex. Brown & Sons Incorporated. After
this 90-day period, all of such shares will be eligible for sale under,
subject to the limitations of Rule 144 under the Securities Act of 1933, as
amended (the "Securities Act"). See "Shares Eligible for Future Sale."

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements relating to future
events or the future financial performance of the Company. Such forward-
looking statements are within the meaning of that term in Section 27A of the
Securities Act and Section 21E of the Exchange Act. Such statements may
include, but not be limited to, projections of revenues, income or loss,
capital expenditures, acquisitions, plans for growth and future operations,
financing needs or plans or intentions relating to acquisitions by the
Company, as well as assumptions relating to the foregoing. Forward-looking
statements are inherently subject to risks and uncertainties, some of which
cannot be predicted or quantified. Future events and actual results could
differ materially from those set forth in, contemplated by or underlying the
forward-looking statements.

9
<PAGE>

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the
2,500,000 shares of Class A Common Stock offered by the Company are estimated
to be $44.3 million ($52.2 million if the Underwriters' over-allotment option
is exercised in full), assuming a public offering price of $18.75 per share,
after deduction of underwriting discounts and commissions and estimated
offering expenses payable by the Company.

Approximately $40 million of the net proceeds will be used to acquire
revenue equipment leased by the Company under operating leases with current
aggregate monthly lease payments of approximately $787,000. The balance of the
net proceeds will be used to pay installment notes that have a weighted
average interest rate of 8.53% and maturities ranging from March 1998 to
January 1999.

The Company will not receive any proceeds from the sale of shares of Class A
Common Stock by the Selling Stockholders.

PRICE RANGE OF COMMON STOCK

The Company's Common Stock is traded on The Nasdaq National Market under the
symbol "XPRSA." The following table sets forth, for the periods indicated, the
high and low last sale prices for the Class A Common Stock, as reported by The
Nasdaq National Market:

<TABLE>
<CAPTION>
HIGH LOW
------ -----
<S> <C> <C>
FISCAL 1996:
First quarter............................................. $11.13 $8.125
Second quarter............................................ 11.13 7.00
Third quarter............................................. 9.50 6.75
Fourth quarter............................................ 8.75 6.63
FISCAL 1997:
First quarter............................................. 8.50 6.63
Second quarter............................................ 9.75 5.75
Third quarter............................................. 16.13 8.50
Fourth quarter............................................ 17.75 12.25
FISCAL 1998:
First quarter............................................. 20.25 14.38
Second quarter (through July 9)........................... 19.00 18.50
</TABLE>

As of June 30, 1997, there were 9,077,007 shares of the Class A Common Stock
outstanding, which were held by approximately 165 stockholders of record.

10
<PAGE>

CAPITALIZATION

The following table sets forth the current maturities of long-term debt and
the capitalization of the Company as of March 31, 1997, and as adjusted for
the sale of the 2,500,000 shares of the Class A Common Stock offered hereby by
the Company (assuming a public offering price of $18.75 per share) and
application of the estimated net proceeds therefrom as set forth in "Use of
Proceeds."

<TABLE>
<CAPTION>
MARCH 31, 1997
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Current maturities of long-term debt(1).................. $ 13,008 $ 13,008
======== ========
Long-term debt, net of current maturities(1)............. $ 59,318 $ 55,037
-------- --------
Stockholders' equity:
Preferred stock, $0.01 par value 2,000,000 shares
authorized; no shares issued and outstanding.......... -- --
Common stock, Class A $0.01 par value, 30,000,000
shares authorized; 9,046,044 shares issued and
outstanding, actual; 11,546,174 shares issued and
outstanding, as adjusted(2)........................... 90 115
Common stock, Class B $0.01 par value, 7,500,000 shares
authorized; 3,040,262 shares issued and outstanding,
actual and as adjusted................................ 30 30
Additional paid-in capital............................. 33,832 78,088
Retained earnings...................................... 29,443 29,443
Notes receivable from stockholders(3).................. (233) (233)
-------- --------
Total stockholders' equity........................... 63,162 107,443
-------- --------
Total capitalization............................... $122,480 $162,480
======== ========
</TABLE>
- --------
(1) Does not include indebtedness of $20 million incurred subsequent to March
31, 1997 in connection with the Rosedale and JTI acquisitions.
(2) Excludes currently outstanding options to acquire 218,509 shares of Class
A Common Stock at a weighted average price of $8.78 per share. See
"Management--Stock Incentive Plan."
(3) Represents notes payable to the Company for the purchase of restricted
stock on November 30, 1993 by certain key employees of the Company. See
"Management--Stock Incentive Plan."

DIVIDEND POLICY

The Company has never paid cash dividends on its Class A or Class B Common
Stock and does not intend to pay cash dividends on its Common Stock for the
foreseeable future. The declaration and payment of any future cash dividends
will be determined by the Company's Board of Directors, based on the Company's
results of operations, financial condition, cash requirements, certain
corporate law restrictions, restrictions under loan agreements and other
factors deemed relevant.

11
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

The selected consolidated financial data presented below for the past five
fiscal years have been derived from the Company's Consolidated Financial
Statements, which have been audited by Arthur Andersen LLP, independent public
accountants. The selected consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements and Notes
thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
--------------------------------------------
1993 1994 1995 1996 1997
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(1):
Operating revenue:
U.S. Xpress.................... $164,856 $191,403 $230,416 $251,880 $296,974
CSI/Crown...................... 21,288 24,001 23,915 47,817 65,845
-------- -------- -------- -------- --------
Consolidated.................. 186,144 215,404 254,331 299,697 362,819
Income from operations.......... 7,790 14,095 18,159 5,251 19,716
Income before taxes............. 3,313 9,714 13,557 75 14,236
Net income...................... 1,867 6,042 8,263 94 7,878
Net income per share............ .19 .63 .76 .01 .65
Weighted average number of
shares outstanding............. 9,665 9,665 10,806 12,003 12,168
TRUCKLOAD OPERATING DATA:
Total revenue miles (in
thousands)..................... 160,664 180,609 204,804 222,496 261,596
Average revenue per mile........ $ 1.08 $ 1.09 $ 1.14 $ 1.14 $ 1.15
Tractors (at end of period)..... 1,323 1,504 1,721 1,975 2,246
Average revenue per tractor per
week........................... $ 2,795 $ 2,796 $ 2,807 $ 2,646 $ 2,761
BALANCE SHEET DATA:
Working capital................. $ 8,611 $ 2,636 $ 10,786 $ 19,606 $ 33,829
Total assets.................... 89,412 103,385 146,070 177,821 178,084
Long-term debt, net of current
maturities(2). 51,628 49,871 46,157 61,789 59,318
Stockholders' equity............ 7,394 13,436 54,082 55,086 63,162
</TABLE>
- --------
(1) Includes the results of operations of the following acquired businesses
from dates of acquisition: the air freight service operations of Michael
Lima Transportation from July 1996 and CSI/Reeves from August 1995. The
Company's 50% acquisition of Hall Systems in March 1994 was accounted for
under the equity method until the remaining 50% of Hall Systems was
acquired in October 1995.
(2) Does not include indebtedness of $20 million incurred subsequent to March
31, 1997 in connection with the Rosedale and JTI acquisitions.

12
<PAGE>

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

INTRODUCTION

The Company has initiated a strategy to enhance profitability and sustain
growth by improving efficiency, reducing costs and introducing technologies to
improve service. During fiscal 1997 the Company significantly improved
operating results. Operating revenue for fiscal 1997 was $363 million, up from
$300 million in fiscal 1996. Operating income was $19.7 million, compared to
$5.2 million in fiscal 1996. Net income for fiscal 1997 was $7.9 million
compared to $94,000 in fiscal 1996. Principal reasons for the Company's
improved performance include:

. the realignment of operations into two subsidiaries to combine various
operating, marketing, maintenance and administrative functions to
improve operating efficiencies, reduce costs, improve customer service
and increase equipment utilization;

. the reduction and increased predictability of costs by eliminating five
maintenance facilities and outsourcing some maintenance activities,
revising insurance programs, changing the Company's revenue equipment
acquisition strategy and improving fuel economy;

. the improvement of customer service and equipment utilization through a
new bonus system that rewards operations personnel for exceeding
equipment utilization and customer and driver satisfaction goals;

. an increase in the Company's market share in its target markets of
expedited freight, regional freight, services to third party logistics
providers, dedicated fleet services and floorcovering logistics; and

. a reduction in the seasonality of the Company's business by obtaining
new customers with more predictable shipping patterns.

These initiatives increased profitability in fiscal 1997, and management
believes that these strategies will have a more significant effect on results
of operations in the future.

The acquisition of CSI/Reeves in August 1995 has resulted in a change in the
Company's revenue mix and associated costs by increasing non-transportation
revenues and costs. For example, the revenue and operating costs associated
with the sale of installation supplies and the warehousing of floorcoverings
by CSI/Crown affects the comparability of the Company's year-to-year results
of operations as well as the comparability of the Company with other truckload
carriers.

13
<PAGE>

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the components of
the consolidated statements of operations expressed as a percentage of
consolidated operating revenue:

<TABLE>
<CAPTION>
YEAR ENDED
MARCH 31,
----------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Operating revenue............................................ 100% 100% 100%
Operating expenses:
Salaries, wages and employee benefits, including contract
wages..................................................... 42.5 43.0 41.0
Fuel and fuel taxes........................................ 16.8 16.3 16.9
Vehicle rents.............................................. 6.6 5.8 6.0
Depreciation and amortization.............................. 5.9 5.6 4.0
Purchased transportation................................... 4.1 6.6 6.3
Operating expenses and supplies............................ 6.8 7.1 6.3
Insurance premiums and claims.............................. 4.2 4.3 4.2
Operating taxes and licenses............................... 1.8 1.7 1.6
Communications and utilities............................... 1.7 1.8 1.7
Cost of installation supplies sold......................... -- 1.7 2.3
Building rental............................................ 0.8 1.2 1.3
Bad debt expense........................................... 0.2 0.3 0.2
General and other operating expenses....................... 2.7 3.2 3.2
Gain on sales of equipment................................. (1.1) (0.4) (0.4)
Equity in earnings of unconsolidated affiliate............. (0.1) -- --
---- ---- ----
Total operating expenses................................. 92.9 98.2 94.6
---- ---- ----
Income from operations....................................... 7.1 1.8 5.4
Interest and other income (expense), net..................... (1.8) (1.8) (1.5)
---- ---- ----
Income before income tax provision........................... 5.3 -- 3.9
Income tax provision......................................... (2.1) -- (1.7)
---- ---- ----
Net income................................................... 3.2% -- 2.2%
==== ==== ====
</TABLE>

COMPARISON OF FISCAL 1997 TO FISCAL 1996

The Company's initiatives to improve equipment utilization and to reduce
operating expenses as a percent of revenue had favorable results for fiscal
1997. In this period, utilization for the combined truckload operations
increased 4.3% to $2,761 in revenue per tractor per week, compared to $2,646
during fiscal 1996. The operating ratio (operating expenses as a percentage of
revenue) improved 3.6 percentage points, reflecting a 21% increase in revenue
versus a 16.5% increase in operating expenses. The smaller increase in
operating expenses, compared to revenues, was due to reductions in several
fixed and variable expense items.

Operating revenue during fiscal 1997 increased $63.1 million, or 21.1%, to
$362.8 million, compared to $299.7 million during fiscal 1996. This increase
resulted partially from the fiscal 1996 acquisitions of CSI/Reeves and Hall
Systems, which together contributed $29.7 million of the $63.1 million
increase. U.S. Xpress linehaul operations contributed $33.4 million to the
increase. Increased U.S. Xpress linehaul revenue resulted from increased
revenue miles and a slight increase in the rate per revenue mile.

Operating expenses represented 94.6% of operating revenue for fiscal 1997,
compared to 98.2% during fiscal 1996.

14
<PAGE>

Salaries, wages and employee benefits as a percentage of operating revenue
were 41.0% for fiscal 1997, compared to 43.0% during fiscal 1996. This
decrease was a result of salaries and wages for both Hall Systems and
CSI/Crown representing a lower percentage of operating revenue due to the
utilization of owner-operators at Hall Systems and the utilization of outside
linehaul carriers at CSI/Crown. All owner-operator expenses and purchased
linehaul services are reflected as purchased transportation.

Fuel and fuel taxes as a percentage of operating revenue were 16.9% for
fiscal 1997, compared to 16.3% during fiscal 1996. This increase was primarily
attributable to an 11.0% increase in the average price per gallon, offset by a
2.2% increase in average miles per gallon.

Vehicle rents as a percentage of operating revenue were 6.0% for fiscal
1997, compared to 5.8% for fiscal 1996. Depreciation and amortization as a
percentage of operating revenue was 4.0% for fiscal 1997, compared to 5.6%
during fiscal 1996. Overall, as a percentage of operating revenue, vehicle
rents and depreciation were 10.0% for fiscal 1997, compared to 11.4% during
fiscal 1996. This decrease was due in part to increased non-transportation
revenue from CSI/Crown and an increase in owner-operator revenue from Hall
Systems, both of which do not require expenditures for revenue equipment.
Additionally, utilization for U.S. Xpress linehaul operations increased to
$2,761 in revenue per tractor per week for fiscal 1997, a 4.3% increase from
the previous fiscal year, which reduced the number of tractors required.

Purchased transportation as a percentage of operating revenue was 6.3% for
fiscal 1997, compared to 6.6% in fiscal 1996. This decrease was due to
increased non-transportation revenue at CSI/Crown which does not require
expenditures for purchased transportation.

Operating expenses and supplies as a percentage of operating revenue were
6.3% for fiscal 1997, compared to 7.1% during fiscal 1996. This decrease
resulted from two factors: (i) an increase in non-transportation revenue from
CSI/Crown and an increase in owner-operator revenue from Hall Systems which do
not require incremental Company expenditures for operating expenses and
supplies; and (ii) reductions in maintenance expenses.

Cost of installation supplies sold during fiscal 1997 was $8.2 million,
compared to $5.2 million during fiscal 1996. This increase was due to an
increase in installation supplies sold in fiscal 1997 to $11.0 million from
$6.6 million in fiscal 1996. This expense item reflects the cost of carpet
installation supplies that are sold to CSI/Crown's customers.

Income from operations for fiscal 1997 increased $14.5 million, or 275.5%,
to $19.7 million from $5.3 million during fiscal 1996. As a percentage of
operating revenue, income from operations was 5.4% during fiscal 1997,
compared to 1.8% during fiscal 1996.

Income tax provision for fiscal 1997 was $6.4 million, compared to a $19,000
benefit in fiscal 1996. This reflects an effective federal and state income
tax rate of 44.7% in fiscal 1997 as compared to the statutory federal and
state rate of approximately 39.0%. This higher rate was primarily the result
of non-deductible per diem allowances paid to drivers during part of fiscal
1997. Subsequent to December 31, 1996, per diem allowances paid to drivers
were eliminated.

COMPARISON OF FISCAL 1996 TO FISCAL 1995

Operating revenue for fiscal 1996 increased $45.4 million, or 17.8%, to
$299.7 million, compared to $254.3 million in fiscal 1995. This increase
resulted primarily from the acquisitions of CSI/Reeves and Hall Systems, which
contributed $25.8 and $10.0 million of revenues, respectively, and a 5.1%
increase in revenue miles operated by U.S. Xpress.

Operating expenses represented 98.2% of operating revenue during fiscal 1996
and 92.9% during fiscal 1995.

15
<PAGE>

Salaries, wages and employee benefits as a percentage of operating revenue
were 43.0% during fiscal 1996, compared to 42.5% in fiscal 1995. This increase
was due to a 6.0% increase in driver pay in mid-March 1995 and an increase in
the empty miles percentage to 6.9% of total miles in fiscal 1996, compared to
5.5% in fiscal 1995. Partly offsetting these factors were lower salaries and
wages at Hall Systems, as a percentage of operating revenue, due to that
company's utilization of owner- operators. All owner-operator expenses are
reflected as purchased transportation.

Fuel and fuel taxes as a percentage of operating revenue were 16.3% during
fiscal 1996, compared to 16.8% in fiscal 1995. This decrease resulted from an
increase of $5.4 million in logistics revenues and the addition of $7.9
million of non-transportation revenue from the newly acquired CSI/Reeves, both
of which do not require Company expenditures for fuel and fuel taxes. As a
percentage of operating revenue, excluding the increase in logistics and non-
transportation revenue, fuel and fuel taxes were 17.0% during fiscal 1996.

Vehicle rents as a percentage of operating revenue were 5.8% during fiscal
1996, compared to 6.6% in fiscal 1995. Depreciation and amortization
represented 5.6% of operating revenue in fiscal 1996, compared to 5.9% in
fiscal 1995. Overall, as a percentage of operating revenue, vehicle rents and
depreciation and amortization were 11.4% during fiscal 1996, compared to 12.5%
during fiscal 1995. This decrease was primarily attributable to increased
revenues from warehousing, transportation logistics services and the sale of
installation supplies, none of which required significant expenditures for
revenue equipment. Revenue from warehousing, logistics services and the sale
of installation supplies was $19.2 million during fiscal 1996, compared to
$5.9 million in fiscal 1995. As a percentage of operating revenue, excluding
the increase in logistics and non-transportation revenue, vehicle rents and
depreciation were 11.9% during fiscal 1996.

Purchased transportation as a percentage of operating revenue was 6.6%
during fiscal 1996, compared to 4.1% during fiscal 1995. This increase
resulted primarily from increased third-party transportation purchases by
CSI/Reeves and Xpress Logistics, and owner-operator expense from Hall Systems.
The majority of transportation services provided by Xpress Logistics and
CSI/Reeves are provided by third parties.

Operating expenses and supplies as a percentage of operating revenue were
7.1% during fiscal 1996, compared to 6.8% in fiscal 1995. This increase
reflected high parts, tires and repair costs incurred in fiscal 1996
associated with preparing used tractors for disposal during the Company's
second quarter.

Cost of installation supplies sold during fiscal 1996 reflects costs of
carpet installation supplies sold through CSI/Reeves to retail customers from
the date of acquisition on August 31, 1995.

Building rental as a percentage of operating revenue was 1.2% during fiscal
1996, compared to 0.8% during fiscal 1995. This increase was primarily
attributable to building rental expenses associated with the acquired
warehousing operations of CSI/Reeves.

Gain on sales of equipment as a percentage of operating revenue was 0.4%
during fiscal 1996, compared to 1.1% during fiscal 1995. Proceeds from the
disposals of used equipment were $17.4 million during fiscal 1996, compared to
$17.6 million during fiscal 1995.

Income from operations for fiscal 1996 decreased $12.9 million, or 71.1%, to
$5.3 million from $18.2 million in fiscal 1995. As a percentage of operating
revenue, income from operations was 1.8% in fiscal 1996, compared to 7.1% in
fiscal 1995.

16
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of liquidity during fiscal 1997 were funds
provided by operations, borrowings under long-term debt facilities, lines of
credit and proceeds from the sales of used property and equipment. At March
31, 1997, the Company had in place a $50.0 million credit facility with a
group of banks with a weighted average interest rate of 6.77%, of which $14.5
million was available for borrowing. In fiscal 1998, the Company's primary
sources of liquidity are expected to be the net proceeds of this offering,
funds from operations, borrowings under installment notes payable and
borrowings under the line of credit.

Cash generated from operations decreased to $7.9 million in fiscal 1997 from
$9.0 million in fiscal 1996. Net cash used in investment activities was $3.2
million in fiscal 1997 and $17.3 million in fiscal 1996. Of the cash used in
investment activities in fiscal 1997, $24.8 million was used to acquire
additional property and equipment, compared to $28.2 million in fiscal 1996.
The decrease in amounts expended for purchases of new equipment in fiscal
1997, compared to fiscal 1996, reflects the Company's greater use of operating
leases in fiscal 1997 as opposed to purchasing such equipment. The Company
anticipates that expenditures (net of trade-ins) for the acquisition of
revenue equipment will be approximately $68 million in fiscal 1998 and will be
either acquired by purchases or financed through operating leases.

Net cash used for financing activities was $4.1 million in fiscal 1997,
compared to $6.3 million provided in fiscal 1996. This decrease resulted
primarily from the Company's greater use of leased equipment in fiscal 1997.
As a result, net repayments under lines of credit and long-term debt during
fiscal 1997 were $4.1 million, compared to net borrowings of $5.4 million
during fiscal 1996. Net borrowings under lines of credit were $1.0 million
during fiscal 1997, compared to net borrowings of $30.3 million during fiscal
1996. During fiscal 1996, the Company obtained a new revolving line of credit
with capacity up to $50.0 million. A portion of the availability under this
new line was immediately used to repay an equal amount of existing long-term
indebtedness bearing higher interest rates.

Management believes that the net proceeds of this offering, funds provided
by operations, borrowings under installment and bank notes payable and
available borrowings under the Company's existing line of credit will be
sufficient to fund its cash needs and anticipated capital expenditures through
at least the next twelve months. Management also believes that the use of the
net proceeds of this offering to acquire revenue equipment currently under
operating leases and pay indebtedness will result in a reduction in interest
rates under the existing line of credit and will increase the Company's
flexibility to finance its planned future growth. However, if the Company were
to make a significant cash acquisition, it is likely that the Company would
need to increase its borrowing capability under its existing line of credit.

INFLATION

Inflation has not had a material effect on the Company's results of
operations or financial condition during the past three years. However,
inflation higher than experienced during the past three years could have an
adverse effect on the Company's future results.

SEASONALITY

17
<PAGE>

INDUSTRY OVERVIEW

Truckload carriers such as the Company typically transport full trailer
loads directly from origin to destination without the delays and expense of en
route handling and multiple shipper load consolidation that characterize less-
than-truckload ("LTL") carriers. As the service-sensitive, flexible mode of
transportation, leading truckload carriers have consistently gained market
share at the expense of more costly or less flexible modes such as LTL or
rail. The Company estimates the for-hire truckload market segment of the
transportation industry accounted for $60 billion in revenue in 1996 and the
private fleet segment of the truckload industry generated $115 billion in 1996
revenues. The for-hire truckload segment is highly fragmented, with the ten
largest for-hire truckload carriers accounting for less than 13% of total for-
hire truckload revenues in 1996.

Subsequent to deregulation in 1980, the truckload industry has experienced
significant changes that affect both shippers and carriers. Five trends
currently evolving in the truckload industry are:

. Significant growth opportunities for high-service providers. Many
shippers are focusing on improving the logistical efficiency of their
manufacturing and distribution systems. With the adoption of just-in-
time manufacturing and distribution systems, expedited product movement
has become increasingly important and the demand for time-definite
pickup and delivery of freight has increased. In addition, air freight
customers are increasingly using truckload carriers for less costly
expedited transportation services.

. Increasing reliance on core carriers. Shippers are seeking to reduce the
number of authorized carriers they use and establish long-term
relationships with a small group of "core carriers." These
relationships: (i) help to ensure consistent, high quality service for
the shipper, (ii) enhance the likelihood for advanced electronic
interface between shipper and carrier and (iii) provide the carrier the
opportunity for higher equipment utilization and more predictable
revenue streams.

. Growing role of logistics providers. An increasing number of shippers
are focusing their capital resources on their primary business and,
therefore, are outsourcing their freight transportation management and
logistics functions. Logistics providers coordinate the transportation
of shipments on behalf of customers, often tailoring their services to
meet the specific requirements of the shippers.

. Driver shortage. A shortage of qualified drivers continues to constrain
the truckload industry. In response, truckload carriers are constantly
seeking methods such as better equipment, improved communications and
increased compensation, to attract and retain drivers.

. Industry consolidation. Competitive pressures within the truckload
industry and high levels of service demanded by customers require
today's carriers to demonstrate financial stability, critical mass and
technological capabilities. Carriers that do not possess these
characteristics have begun to exit the truckload industry through
liquidation or through continued industry consolidation. Economies of
scale in the industry favor large carriers with modern fleets, excellent
service, superior technology and a strong capital base.

18
<PAGE>

BUSINESS

INTRODUCTION

The Company is one of the ten largest truckload carriers in the United
States. The Company provides transportation and logistics services throughout
the United States and in parts of Canada and Mexico, specializing in time-
definite and expedited longhaul and regional truckload services. The Company is
a leader in the adoption of proven new technologies as a means of reducing
costs and providing better service. The Company has two operating subsidiaries,
U.S. Xpress and CSI/Crown. U.S. Xpress, which accounted for 82% of the
Company's fiscal 1997 revenues, provides time-definite and expedited longhaul
and regional truckload services as well as transportation and logistics
services to the air freight industry. CSI/Crown is the leader in providing
logistics services to manufacturers and retailers in the floorcovering
industry. The Company's top 50 customers, most of which have designated the
Company as a core carrier, include Federal Express, Carrier, Amana, Hewlett
Packard, DuPont, Compaq and Armstrong.

The Company has increased its revenues at a compounded annual growth rate of
18.2% over the past five fiscal years to $363 million for fiscal 1997 through
the expansion of business from existing customers, the development of
relationships with new customers and strategic acquisitions. The Company's
strategy for future revenue growth is to continue to establish strategic
alliances with its top customers, target high-service market segments, make
strategic acquisitions and leverage its technology advantage. The Company also
seeks to sustain growth through programs designed to recruit and retain quality
drivers for its expanding fleet.

The Company has initiated a strategy to enhance profitability and sustain
growth by improving efficiency, reducing costs and introducing technology to
improve service. The Company realigned its operations into two subsidiaries to
combine various operating, marketing, maintenance and administrative functions
thereby reducing costs and improving equipment utilization. The Company has
improved the predictability of and further reduced costs by eliminating five
maintenance facilities and outsourcing some maintenance activities, revising
insurance programs, modifying its revenue equipment acquisition strategy and
improving fuel economy. These initiatives increased profitability in fiscal
1997, and management believes that these strategies will have a more
significant effect on results of operations in the future.

The Company is a leader in the innovation and adoption of proven new
technologies as a means of reducing costs and enhancing customer service. For
example, the newly-introduced Xpress Connect Internet connection, a fully
integrated customer-to-truck communications system, enables customers to trace
freight, tender loads and exchange invoice information via the Internet as well
as communicate with the Company via e-mail.

STRATEGY

The Company's operating and growth strategy is focused on taking advantage of
opportunities and evolving trends in the truckload transportation industry.
These strategies include:

. Position the Company as a premier high-service provider. The Company's
services have attracted customers across many industries, particularly
those that operate just-in-time manufacturing and distribution systems.
A large portion of the Company's growth has been attributable to
providing services that are differentiated from other truckload
carriers. The Company was one of the first in the industry to establish
time-definite pickups and deliveries as a standard for service quality.
In addition, the Company is one of the few truckload carriers to provide
expedited service throughout the continental United States and in parts
of Canada and Mexico. This is particularly important to shippers that
operate multiple, geographically-separated facilities. The Company has
consistently utilized proven new technologies that provide value to
customers, such as the newly-introduced Xpress Connect system that
enables U.S. Xpress and CSI/Crown customers to trace freight, tender
loads, exchange invoice information and perform other functions through
the Internet.

19
<PAGE>

. Expand core carrier relationships with shippers. Through its service
capabilities, the Company is positioned to act as a core carrier to
major shippers. The Company provides longhaul and regional truckload
service, expedited and time-definite service, dedicated fleets and
services to third party logistics providers. In seeking customers, the
Company emphasizes its commitment to flexibility, responsiveness,
analytical planning and information systems. The Company's top 50
customers, most of which have designated the Company as a core carrier,
include Federal Express, Carrier, Amana, Hewlett Packard, DuPont, Compaq
and Armstrong and accounted for approximately 46% of revenues in fiscal
1997.

. Emphasize driver-friendly practices. The Company focuses significant
resources and attention on the successful recruiting, hiring, training
and retention of qualified professional drivers. Hiring and retaining
drivers is an essential element of the Company's continuing growth and
profitability. The Company has implemented a number of ongoing
initiatives to retain and recruit drivers, such as handling driver-
friendly freight, adopting attractive compensation and benefits
packages, providing equipment with desirable driver amenities and
emphasizing a Company-wide culture of support for drivers' needs.

. Continue to emphasize relationships with logistics providers. As
shippers continue to focus on their core competencies and outsource
their transportation needs, shippers' use of logistics providers is
increasing. The Company believes that its service capabilities and high
quality service will result in additional business opportunities with
these logistics providers. The Company has established close working
relationships with a number of leading third party logistics providers,
such as Menlo Logistics, J.B. Hunt Logistics and Ryder Integrated
Logistics. Revenues from logistics providers grew 196% to $33.1 million
in fiscal 1997.

. Continue to pursue attractive acquisition opportunities. The Company
seeks strategic acquisition opportunities within the Company's
established market segments or that complement its existing business.
Management believes that market and financial forces will continue to
create attractive acquisition opportunities. The Company has completed
two acquisitions since the end of fiscal 1997.

SERVICES

The Company provides six principal services: time-definite service,
expedited service, regional service, service to third party logistics
providers, dedicated fleets and floorcovering logistics.

Time-Definite Service. This is the Company's principal service speciality
and involves the pickup and delivery of freight on time-specific schedules
over distances ranging from 200 to 3,000 miles. Time-definite transportation
requires pickups and deliveries to be performed to exact appointment times or
within a specified number of minutes without necessarily involving expedited
transit times. This service is a key point of differentiation for U.S. Xpress
from many other trucking companies that typically provide service only within
windows ranging from several hours to a few days. Time-definite service is
particularly important to the Company's customers that operate just-in-time
manufacturing or distribution systems.

Expedited Service. A substantial portion of the time-definite freight
transported by the Company is handled on an expedited basis. The Company's
expedited service consists of the pickup and delivery of freight on a
prescribed schedule at transit times competitive to deferred air freight
service. The Company is able to meet these transit times through the use of
team drivers or relays at a much lower cost than deferred air freight. In
fiscal 1997, expedited revenue grew 176% to $124.8 million, and accounted for
44% of U.S. Xpress' truckload revenue. Customers in the air freight industry
accounted for approximately one-quarter of expedited services revenue, with
the remainder provided by manufacturers, distributors and retailers.

20
<PAGE>

Examples of this service are as follows:

<TABLE>
<CAPTION>
TRANSIT TIME
ORIGIN DESTINATION MILES (IN HOURS)
------ ----------- ----- ------------
<S> <C> <C> <C>
Charlotte, NC Los Angeles, CA 2,381 53
Atlanta, GA San Francisco, CA 2,482 55
Seattle, WA Miami, FL 3,263 73
Dallas, TX Chicago, IL 923 20
Newark, NJ Columbus, OH 527 12
</TABLE>

Regional Service. The ability to provide regional service is an important
factor in obtaining many core carrier accounts. Recognizing the strategic
importance of offering regional services, the Company acquired Hall Systems, a
Southeast regional truckload carrier, in 1994. In 1995, the Company
established regional truckload carrier service in the West and in July 1996,
significantly expanded its Western regional operations with the acquisition of
the air freight service operations of Michael Lima Transportation. Prior to
fiscal 1998, regional service in the Midwest was offered by U.S. Xpress on a
limited basis as a service to key customers and to reposition equipment. This
service is expected to expand significantly as a result of the acquisition of
JTI, a truckload carrier primarily serving the Midwest.

Services to Third Party Logistics Providers. The Company has established
strategic alliances with several major third party logistics suppliers.
Logistics providers and air freight forwarders typically manage transportation
purchasing, coordination and freight allocation for their customers. As
shippers continue to focus on their core competencies and outsource their
transportation needs, the use of logistics providers by shippers is expected
to increase. Revenues from logistics providers increased 196% to $33.1 million
in fiscal 1997.

Dedicated Fleets. The Company provides equipment and drivers that are
dedicated to specific customers and specific traffic lanes. The Company
benefits from its dedicated operations through increased freight volume from
key customers and improved planning of equipment requirements while drivers
benefit from more predictable schedules and traveling regular routes. As of
June 30, 1997, the Company operated 200 tractors dedicated to specific
customers or lanes, compared with 83 tractors as of June 30, 1996.

Floorcovering Logistics. CSI/Crown picks up floorcovering products from
manufacturers; consolidates shipments into truckloads bound for specific
destinations; contracts with U.S. Xpress and other truckload carriers to
deliver the products to CSI/Crown service centers or to contract agents; and
delivers or arranges for delivery of the products to floorcovering
distributors and retailers throughout the United States and in parts of Canada
and Mexico. In addition, CSI/Crown provides warehouse facilities, cutting
services and installation supplies to floor covering distributors and
retailers. The Company's revenues from floor covering logistics in fiscal 1997
were $65.8 million, an increase of 38% from fiscal 1996. In April 1997,
CSI/Crown purchased Rosedale's floor covering distribution system assets,
including dock and material handling equipment and assumed Rosedale's leases
of eight terminal facilities and several customer agreements. As a result,
CSI/Crown now operates 28 distribution centers and contracts with others to
provide distribution services at 31 other locations.

MARKETING AND CUSTOMERS

Marketing personnel target customers for each of the Company's six major
services. The Company's services are marketed on the basis of the Company's
commitment to high levels of service, flexibility, responsiveness, analytical
planning and high technology information management. The Company's marketing
department is primarily responsible for identifying new business prospects and
implementing marketing programs to obtain and retain customer accounts. The
marketing staff also is responsible for offering the Company's logistics
capabilities to existing and new customers and to third party logistics
providers.

21
<PAGE>

Mr. Quinn, the Company's Co-Chairman, and Mr. Lusk, the Executive Vice
President of Marketing, are directly involved in marketing the Company's
services at the national account level and supporting local sales activities.
In addition, the Company employs 17 full-time marketing representatives, who
are geographically dispersed.

The Company's top 50 customers, most of which have designated the Company as
a core carrier include Federal Express, Carrier, Amana, Hewlett Packard,
DuPont, Compaq and Armstrong, and accounted for approximately 57.3% of
revenues in fiscal 1997. During fiscal 1997, no single customer accounted for
more than 6% of the Company's revenue.

TECHNOLOGY

The Company adopts proven new technologies that result in both competitive
service advantages and more profitable service to its customers. Within the
past five years, the Company developed a computerized information system that
has been integrated with the QUALCOMM Omnitracs satellite communication system
(the "QUALCOMM system"). The QUALCOMM system provides direct communication
between the Company and its drivers to enhance customer service and equipment
utilization. The Company's Electronic Data Interchange ("EDI") capabilities
provide customers with an efficient means of tendering loads, tracing freight,
directly paying invoices and performing other administrative functions.
Management believes that this system is a base from which it will be able to
provide enhanced customer service and ultimately provide direct connectivity
between customers and drivers via the Internet.

Xpress Connect. In November 1996, the Company introduced its proprietary
Internet-based Xpress Connect system that enables customers to trace freight,
tender loads and exchange invoice information via the Internet and communicate
with the Company via e-mail. The system, which is a featured part of the
Company's World Wide Web site, is designed to assist shippers in better
managing their transportation shipments by providing up-to-date information on
the location and status of active shipments as well as historical information
on completed shipments. The Company believes that Xpress Connect is the first
World Wide Web application to permit a customer to track shipments without
prior knowledge of shipment or order numbers. Xpress Connect is customer-
specific and password protected to guarantee the security of each customer's
proprietary information.

Eaton Vorad. This collision avoidance system is specified equipment on the
Freightliner's Century Class tractors now being deployed by U.S. Xpress. This
radar-based system is designed to detect traffic ahead and to the side of
trucks, thereby providing drivers with additional response time to avoid side
and front impact collision. The U.S. Xpress fleet had more than 1,100 such
systems in operation at June 30, 1997.

Transit Technologies. The Pre-Pass(TM) and Advantage 75(TM) technologies
enable a tractor to stop at one weigh station and receive clearance for travel
on participating highways. After the truck conducts an initial visit to a
weigh station, information regarding the truck and its contents are downloaded
onto a transponder located on the tractor. Thereafter, a sensor located along
the highway reads the information contained in the transponder and allows the
truck and its contents to be electronically cleared without the delays
associated with multiple weigh station visits. The Company participated in
beta tests for these technologies and equipped a majority of its tractors with
these systems as of June 30, 1997. The Company has begun to implement a
similar technology to expedite movement through toll plazas. These
technologies enhance fuel economy, improve equipment utilization, improve
transit times and reduce accidents.

DRIVERS

At June 30, 1997, U.S. Xpress employed 3,461 drivers. Recruiting, training
and retention of qualified drivers are all essential to support the Company's
continued growth and to maintain high equipment

22
<PAGE>

utilization. The Company has implemented a number of ongoing initiatives to
retain and recruit drivers, such as handling driver-friendly freight, adopting
an attractive compensation and benefits package, providing equipment with
desirable driver amenities and providing a Company-wide culture of support for
drivers' needs.

Recruiting. The Company's recruiting efforts include targeted advertising
and recruitment by Company drivers. New driver candidates are carefully
screened on the basis of prior driving experience and safety records and are
required to pass mandatory drug tests. The Company also maintains a "quick
response" system that investigates prospective drivers' credentials and
driving histories and in many instances qualifies drivers for hiring within
one business day of application.

Training. All new drivers, regardless of experience, are trained under
strict guidelines. The Company provides a two-day orientation program to
inform drivers about the Company, its equipment and its expectations. The
orientation program also stresses safety instruction and proper operation of
the tractors and trailers used by the Company.

Driver Managers. Each Company driver is assigned a driver manager who is
responsible for all aspects of driver satisfaction, including miles, home time
and resolution of work-related issues. Driver managers' performance is
evaluated based on equipment utilization, driver turnover, driver miles, on
time service and driver safety performance. The driver managers communicate
with drivers daily through the satellite communications system and by
telephone when personal communication is warranted.

Driver-Friendly Freight. The Company focuses much of its marketing effort on
customers with freight which is driver-friendly in that it requires minimal or
no loading or unloading by drivers and minimizes waiting time for drivers
while trucks are loaded or unloaded.

Compensation and Benefits. Company drivers are compensated primarily on the
basis of miles driven, with base pay per mile increasing with a driver's
length of employment. Drivers also earn additional mileage pay through safety
and mileage incentive bonuses. Employee benefits include paid holidays and
vacations, health insurance, a 401(k) retirement plan under which the Company
matches 50% of employee contributions up to 6% of compensation and pre-paid
telephone calling cards that contain 30 minutes of free calling time per
month. The Company recently increased its driver pay an average of $.02 per
mile in order to provide a competitive wage.

Driver Amenities. The Company's late-model, conventional tractors are
designed for driver comfort and safety. In fiscal 1997, the Company began
purchasing Freightliner Century Class tractors, which contain additional
driver amenities, such as double sleeper bunks, extra large cabs, air-ride
suspensions and additional storage for personal items. The Company also has
developed specific satellite communications applications that enable drivers
to remain in touch with their families and receive information about pay and
expense advances, directions to customer locations, weather updates and load
assignments. In October 1996, the Company introduced Internet e-mail
capability to its entire fleet.

EQUIPMENT

At June 30, 1997, U.S. Xpress operated 2,474 Freightliner conventional
tractors and 5,824 dry van trailers. Over 97% of the trailers are 53' x 102"
high-cubic capacity vans, many of which include air ride suspension. During
fiscal 1997, management implemented a program designed to reduce the Company's
trailer to tractor ratio as a part of its cost reduction strategies.

Growth of the Company's tractor and trailer fleets is managed based on
market conditions and the Company's experience and expectations with respect
to equipment utilization levels. The Company determines the specifications of
equipment purchases based on such factors as vehicle and component quality,
warranty service, driver preferences, new vehicle prices and the likely resale
market. Because the fleet is standardized and has warranty maintenance
agreements with original equipment suppliers, the Company has reduced parts
inventories and maintenance costs.

23
<PAGE>

Tractors are typically replaced every 36 months, generally well in advance
of the need for major engine overhauls. This schedule can be accelerated or
delayed based on trade-in values of existing revenue equipment. The Company
has negotiated favorable arrangements from its primary equipment vendors for
its scheduled 1998 purchases of tractors, which reduce the Company's risks
related to equipment resale values. The Company purchases all of its tractors
from Freightliner and has begun purchasing composite plate trailers from
Wabash. The air ride suspension trailers provide a more comfortable ride for
the drivers and allow the Company to haul sensitive freight such as electronic
equipment. The lighter Wabash composite trailers reduce fuel consumption and
increase capacity.

SAFETY AND RISK MANAGEMENT

The Company is committed to ensuring that it has safe drivers. The Company
regularly communicates with drivers to promote safety and to instill safe work
habits through Company media, safety review sessions and ethics and
responsibility training. These programs reinforce the importance of driving
safely, abiding by all laws and regulations such as speed limits and driving
hours, performing regular equipment inspections and acting as good citizens on
the road. The Company's accident review committee meets weekly to review any
new accidents, take appropriate action related to drivers, examine accident
trends and implement changes in procedures or communications to address safety
issues.

Management's emphasis on safety also is demonstrated through its equipment
specifications, such as anti-lock brakes on tractors and trailers, automatic
engine brakes, electronic engines, special mirrors, conspicuity tape and the
implementation of the Eaton Vorad collision avoidance system on all
Freightliner Century Class tractors.

The Company requires prospective drivers to meet higher qualification
standards than those required by the DOT. The DOT requires the Company's
drivers to obtain national commercial driver's licenses pursuant to the
regulations promulgated by the DOT. The DOT also requires that the employer
implement a drug-testing program in accordance with DOT regulations. The
Company's program includes pre-employment, random, reasonable cause, post-
accident and post-injury drug testing.

The primary claims arising in the Company's business consist of cargo loss
and damage, vehicle liability (personal injury and property damage). The
Company currently purchases primary and excess coverage for these types of
claims in levels which management believes are sufficient to adequately
protect the Company from significant claims. The Company also maintains
primary and excess coverage for employee medical expenses and hospitalization,
damage to physical properties and equipment damage resulting from collisions
or other losses.

PERSONNEL

At June 30, 1997, the Company employed 4,916 persons, including 3,461
drivers at U.S. Xpress. In addition, 108 independent contractor/drivers
provided services to U.S. Xpress. The Company considers relations with its
employees, all of whom are non-union, to be satisfactory.

On August 1, 1996, the Company ended its arrangement with a third-party
leasing company under which the Company leased its drivers and most office and
maintenance employees. On that date, all persons employed through the leasing
company became employees of the Company or its subsidiaries. On January 1,
1997, the Company entered into an arrangement with a third party, under which
the Company out-sourced administration of payroll, benefits, unemployment
insurance and workers' compensation. Under this arrangement, the Company pays
the third party for its services a fixed amount per employee. The Company
believes that this arrangement enables it to achieve cost savings on personnel
benefits and insurance premiums.

COMPETITION

The trucking industry is highly competitive and fragmented and includes
numerous regional, inter-regional and national truckload carriers, none of
which dominates the market. The Company also

24
<PAGE>

competes with logistics providers and alternative forms of surface
transportation, such as intermodal transportation, railroads and air freight
carriers, particularly in the longer haul segments of its business.
Historically, this competition has created downward pressure on the truckload
industry's pricing structure. Competition for the freight transported by the
Company is based on service, efficiency, the ability to meet shipping deadlines
and freight rates. Prolonged weakness in the freight markets or downward
pressure on freight rates could adversely affect the Company's results of
operations or financial condition. Some truckload carriers and many railroad
companies do have greater financial resources, operate more equipment and
transport more freight than the Company.

REGULATION

The Company, as a motor carrier, is subject to rules and regulations
promulgated by the DOT and by various laws and regulations enforced by state
agencies. These regulatory authorities have broad powers, generally governing
activities such as authority to engage in motor carrier operations, accounting
systems, certain mergers, consolidations, acquisitions and periodic financial
reporting. Subject to federal, state and provincial regulatory authorities, the
Company may transport most types of freight to and from any point in the
continental United States and in parts of Mexico and Canada over any route
selected by the Company. The trucking industry is subject to possible
regulatory and legislative changes (such as increasingly stringent
environmental regulations or limits on vehicle weight and size) that may affect
the economics of the industry by requiring changes in operating practices or by
affecting the cost of providing truckload services.

The Company has underground storage tanks for diesel fuel at its terminals in
Chattanooga, Tennessee; Tunnel Hill, Georgia; Oklahoma City, Oklahoma;
Birmingham, Alabama; and Lincoln, Nebraska. As a result, the Company is subject
to regulations promulgated by the EPA governing the design, construction and
operation of underground fuel storage tanks from installation to closure. The
Company believes all of its tanks are in substantial compliance with EPA
regulations.

PROPERTIES

Most of the Company's offices and terminals are leased. The Company's and
U.S. Xpress' headquarters are located in two leased buildings in Chattanooga,
Tennessee. CSI/Crown is based in Tunnel Hill, Georgia, approximately 25 miles
from the Chattanooga location. In addition to the headquarters locations, U.S.
Xpress operates 18 terminal facilities and CSI/Crown operates 28 distribution
service centers.

Each of the Company's terminals and service centers is headed by a terminal
or service center manager. Seven U.S. Xpress terminals include maintenance
facilities. Several terminals include driver lounges and customer service
functions for local pickups and deliveries. In fiscal 1997, an expansion of the
CSI/Crown dock facility in Tunnel Hill was completed, and expansion of the U.S.
Xpress maintenance facility at Tunnel Hill was begun. The Company believes that
its current facilities are adequate for its present needs although the Company
may consider consolidation of some office operations into a new headquarters
facility in the next several years. The Company also periodically seeks
additional locations and facilities and has not encountered any significant
difficulty in locating additional facilities.

LEGAL PROCEEDINGS

The Company is routinely a party to litigation incidental to its business,
primarily involving claims for worker's compensation or for personal injury and
property damage incurred in the transportation of freight. The Company
maintains insurance which covers liability in excess of retained amounts for
personal injury and property damage claims. Prior to December 31, 1996, the
Company was self-insured for personal injury and property damage in the amount
of $500,000 per occurrence and could become subject to one or more as yet
unasserted claims as a result of accidents which occurred prior to that date,
which, if decided adversely to the Company, could have a materially adverse
affect on the Company's operating results.

25
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
Max L. Fuller........... 44 Co-Chairman of the Board, Vice President and
Secretary, Director
Patrick E. Quinn........ 51 Co-Chairman of the Board, President and
Treasurer, Director
Ray M. Harlin........... 47 Chief Financial Officer, Director Nominee
E. William Lusk, Jr. ... 41 Executive Vice President of Marketing, Director
William K. Farris....... 44 Executive Vice President of Operations and
President, U.S. Xpress, Inc., Director
L. D. Miller, II........ 43 Chairman of CSI/Crown, Inc.
Steven J. Cleary........ 39 Chief Executive Officer and General Manager of
CSI/Crown, Inc.
Thor N. Edman, Jr. ..... 52 President of CSI/Crown, Inc.
Ronald E. Pate.......... 54 President of U.S. Xpress Leasing, Inc.
James B. Baker.......... 51 Director
A. Alexander Taylor, 44 Director
II.....................
</TABLE>

All directors are elected for one-year terms by the Company's stockholders
and hold office until their successors are elected and qualified. Executive
officers of the Company are appointed annually by the Board of Directors and
serve at the Board's discretion.

Mr. Fuller has served as Co-Chairman of the Board of the Company since March
1994 and was first elected a director, Vice President and Secretary of the
Company in 1985. Mr. Fuller has been employed in the transportation industry
continuously since 1970 and served as Vice President of Southwest Equipment
Rental, Inc., a transportation company, from 1974 to July 1985, when he left
to form U.S. Xpress with Mr. Quinn. Mr. Fuller currently serves as a director
of the Tennessee and Georgia Trucking Associations, is a past director of the
University of Georgia Trucking Profitability Studies Conference and is active
in the Young Presidents Organization.

Mr. Quinn has served as Co-Chairman of the Board since March 1994 and also
as President and Treasurer of the Company since 1985. Mr. Quinn was first
elected a director of the Company in 1985. In 1977, he joined Southwest
Equipment Rental, Inc., a transportation company, as Vice President and
General Counsel and became Executive Vice President and General Manager in
1984. Mr. Quinn left Southwest Equipment Rental, Inc. in July 1985 to form
U.S. Xpress with Mr. Fuller. Mr. Quinn is Chairman of the American Trucking
Association's Communications and Image Advisory Committee, a Director and the
Treasurer of the American Trucking Association's Litigation Center and a
member of the Board of Directors of the Truckload Carriers Association.

Mr. Harlin has served as Chief Financial Officer of the Company since June
1997 and is a nominee for election to the Board of Directors. Prior to joining
the Company, Mr. Harlin was employed for 25 years with the public accounting
firm of Arthur Andersen LLP. He was a Partner with that firm for the last 14
years serving in the Chattanooga, Tennessee office. Mr. Harlin is a member of
the American Institute of Certified Public Accountants.

Mr. Lusk has served as an Executive Vice President of the Company since 1996
and was Vice President of Marketing of the Company from 1991 to 1996. He
previously served as Executive Vice

26
<PAGE>

President of U.S. Xpress, an operating subsidiary of the Company, from 1987 to
1990 and has been employed in the transportation industry in various
capacities for the past 19 years.

Mr. Farris was named Executive Vice President of Operations of the Company
and President of U.S. Xpress in 1996. He previously served as Vice President
of Operations of the Company from 1993 to 1996. Mr. Farris was Vice President
of Operations of Southwest from 1991 to 1993 and Vice President of Customer
Service of U.S. Xpress from 1988 to 1991.

Mr. Cleary joined the Company in 1991 as Director of Human Resources and was
named Vice President of Human Resources and Safety in 1994. He was named
Executive Vice President of Human Resources in 1996 and Chief Executive
Officer and General Manager of CSI/Crown in 1997. Prior to joining the
Company, he served in operations and human resources management positions for
Ryder Distribution Services and Rollins Transportation Services.

Mr. Miller served as President of Crown Transport from its inception in 1985
until the merger of Crown Transport and CSI/Reeves in 1996. He now serves as
Chairman of CSI/Crown. He has been employed in the transportation industry
since 1974.

Mr. Edman served as President and Chief Executive Officer of CSI/Reeves,
Inc. from 1990 to 1995, when the Company acquired CSI/Reeves, Inc. Mr. Edman
has served as President of CSI/Crown since the acquisition. He has been
employed in the floor covering industry since 1968.

Mr. Pate joined the Company in 1994 as Assistant Director of Maintenance. He
became Director of Maintenance later that year and Executive Vice President of
U.S. Xpress Leasing, Inc., the Company's equipment leasing and maintenance
subsidiary. He was named President of U.S. Xpress Leasing, Inc. in 1996. Prior
to joining the Company, Mr. Pate was Vice President of Chattanooga operations
for Universal Tire Company and had been employed in the tire business for 25
years.

Mr. Baker has served as a director of the Company since 1994. Mr. Baker has
been a partner in River Associates, LLC, an investment firm, since 1993.
Previously, Mr. Baker was employed by CONSTAR International, Inc., a plastic
container manufacturer, as a Senior Vice President from 1988 to 1991 and as
the President and Chief Operating Officer from 1991 to 1992. Mr. Baker is also
a director of Wellman, Inc., a chemical company.

Mr. Taylor has served as a director of the Company since 1994. Mr. Taylor
has been a partner with the law firm of Miller & Martin since 1983. Mr. Taylor
is also a director of Chattem, Inc., a publicly-held consumer products
company.

27
<PAGE>

COMMITTEES

The Board of Directors has established an Audit Committee and a Compensation
Committee. The functions of the Audit Committee are to meet with the
independent public accountants of the Company, to review the audit plan for the
Company, to review the annual audit of the Company with the accountants,
together with any other reports or recommendations made by the accountants, to
recommend whether the auditors should be continued as auditors of the Company
and, if other auditors are to be selected, to recommend the auditors to be
selected. The Audit Committee also reviews with the auditors for the Company
the adequacy of the Company's internal controls and perform such other duties
as shall be delegated to the Committee by the Board of Directors. Messrs.
Baker, Quinn and Taylor serve as the members of the Audit Committee, with Mr.
Taylor serving as Chairman.

The functions of the Compensation Committee are to recommend to the Board of
Directors policies and plans concerning the salaries, bonuses and other
compensation of the senior executives of the Company, including reviewing the
salaries of the senior executives; recommending bonuses, stock options and
other forms of additional compensation for them; establishing and reviewing
policies regarding management perquisites and performing such other duties as
shall be delegated to the Committee by the Board. Messrs. Baker, Fuller and
Taylor serve as members of the Compensation Committee, with Mr. Baker serving
as Chairman.

DIRECTOR COMPENSATION

Directors who receive no other compensation from the Company receive a $5,000
annual retainer, $1,000 for each Board meeting attended, and $1,000 for each
committee meeting not held in conjunction with a Board of Directors' meeting.
In accordance with the terms of the 1995 Non-Employee Directors Stock Award and
Option Plan, each of the current non-employee directors has currently elected
to receive shares of the Company's Class A Common Stock in lieu of cash
compensation for their service on the Board. In addition, each non-employee
director is granted an option to purchase 1,200 shares of Class A Common Stock
on the date he is elected or re-elected. Options have an exercise price equal
to the fair market value of the Company's Class A Common Stock as of the grant
date and vest over a three-year period.

28
<PAGE>

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth information concerning compensation paid or
accrued to the Co-Chairman of the Board and the four other most highly
compensated executive officers of the Company for the past three fiscal years:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ----------------
AWARDS PAYOUTS
-------- -------
NAME AND OTHER ANNUAL LTIP ALL OTHER
PRINCIPAL FISCAL SALARY BONUS COMPENSATION OPTIONS/ PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($)(1) SARS ($) ($) ($)(2)
--------- ------ ------- ------ ------------ -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Patrick E. Quinn........ 1997 500,000 -- 1,458 -- -- 3,505
Co-Chairman, 1996 500,000 -- 260 -- -- 3,364
President and Treasurer 1995 534,952 -- 6,065 -- -- 675,176(3)(4)
Max L. Fuller........... 1997 500,000 -- 1,594 -- -- 2,964
Co-Chairman, Vice 1996 500,000 -- 1,463 -- -- 2,848
President and Secretary 1995 534,952 -- 6,366 -- -- 651,192(3)(4)
L. D. Miller, III....... 1997 244,629 40,000 8,400 10,000 -- 43,375
Chairman, CSI/Crown 1996 211,578 25,000 8,400 -- -- 37,500
1995 228,089 -- 8,400 -- -- 42,746
William K. Farris....... 1997 135,962 -- 8,400 10,000 -- --
Executive Vice
President-- 1996 123,077 -- 5,600 -- -- --
Operations and
President, 1995 107,981 -- -- -- -- 30,705(4)
U.S. Xpress
E. William Lusk, Jr..... 1997 135,962 -- 8,400 10,000 41,712 3,090
Executive Vice 1996 123,077 -- 6,114 -- -- 3,090
President--Marketing 1995 107,981 -- 1,454 -- -- 33,430(4)
Thor N. Edman, Jr....... 1997 124,900 -- 8,400 10,000 -- 3,210
President, CSI/Crown 1996 72,116 -- 4,200 -- -- 2,049
1995 -- -- -- -- -- --
</TABLE>
- --------
(1) Amounts represent compensation for auto expenses.
(2) Amounts in 1997 represent the Company's contribution pursuant to the
Company's 401(k) Plan of $2,500, $2,500, $4,750, $3,090 and $3,210, for
each of Messrs. Quinn, Fuller, Miller, Lusk and Edman, respectively, and
life insurance premiums of $1,005, $464 and $38,625 paid by the Company
for Messrs. Quinn, Fuller and Miller, respectively.
(3) Amounts in 1995 include an annual payment of $406,875 for each of Messrs.
Quinn and Fuller pursuant to a compensation arrangement in which the
Company paid Messrs. Quinn and Fuller 0.5% of the total amount of the
Company's indebtedness and certain future operating lease payments that
were secured by their personal guarantees. As a result of the Company's
initial public offering in October 1994, the Company was able to obtain
the release of the personal guarantees of Messrs. Quinn and Fuller on the
Company's indebtedness and future operating lease commitments.
Accordingly, compensation related to such personal guarantees was
eliminated in January 1995.
(4) Amounts in 1995 also include the Company's contribution to a profit-
sharing plan of $205,403, $205,403, $30,705 and $30,523 for each of
Messrs. Quinn, Fuller, Farris and Lusk, respectively.

29
<PAGE>

OPTION EXERCISES AND HOLDINGS

The following table sets forth information with respect to the named
executives concerning the exercise of options during the last fiscal year and
unexercised options held as of March 31, 1997:

AGGREGATED EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
SHARES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED VALUE OPTIONS AT 3/31/97 OPTIONS AT 3/31/97
ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Patrick E. Quinn........ -- -- -- --
Max L. Fuller........... -- -- -- --
L.D. Miller, III........ -- -- 3,333/ 6,667 $ 23,747/$ 47,502
William K. Farris....... -- -- 25,341/39,680 $227,982/$353,863
E. William Lusk, Jr. ... 5,000 $40,150 20,341/39,680 $181,582/$353,863
Thor N. Edman, Jr. ..... -- -- 3,333/ 6,667 $ 23,747/$ 47,502
</TABLE>

The following table shows information concerning the individual grants of
stock options made during fiscal 1997 to each of the named executive officers
of the Company and the potential realizable values of the grants assuming
annually compounded stock price appreciation rates of 5% and 10% per annum
over the option term. The 5% and 10% rates of appreciation are set by the
rules of the Securities and Exchange Commission and are not intended to
forecast possible future appreciation, if any.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL
---------------------------------------------------- RATES OF STOCK
NUMBER OF PERCENT OF TOTAL PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION -----------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
---- ------------ ---------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Patrick E. Quinn........ -- -- -- -- -- --
Max L. Fuller........... -- -- -- -- -- --
L.D. Miller, III........ 10,000 9.57% $6.875 8/27/2006 $111,987 $178,320
William K. Farris....... 10,000 9.57% $6.875 8/27/2006 $111,987 $178,320
E. William Lusk, Jr. ... 10,000 9.57% $6.875 8/27/2006 $111,987 $178,320
Thor N. Edman, Jr. ..... 10,000 9.57% $6.875 8/27/2006 $111,987 $178,320
</TABLE>

SALARY CONTINUATION AGREEMENT

Messrs. Quinn and Fuller have each entered into an agreement with the
Company, pursuant to which the Company is obligated, in the event of either of
their deaths, to continue paying 50% of their current salary for a period of
six months and, in the event of either of their disabilities, to continue
paying their current salary in full for a period of 12 months and 50% of their
current salary for an additional 12 months thereafter. The agreements also
provide that Messrs. Quinn and Fuller will receive payments on account of
personal guarantees of Company indebtedness at the current rate if either of
them or their estates personally guarantee any Company indebtedness.

30
<PAGE>

STOCK INCENTIVE PLAN

In November 1993, the Company adopted the U.S. Xpress Enterprises, Inc.
Incentive Stock Plan (the "Plan"). The Plan provides for the issuance of
shares of restricted common stock of the Company, as well as both incentive
and nonstatutory stock options. There may be issued under the Plan (as
restricted stock, in payment of performance grants, or pursuant to the
exercise of stock options) an aggregate of not more than the greater of (a)
1,038,138 shares of Class A Common Stock, or (b) 8% of the total number of
shares of Common Stock of all classes outstanding at any given time.
Participants in the Plan may include key employees as selected by the
Compensation Committee. Under the terms of the Plan, the Company may sell
restricted shares, grant options, or issue performance grants to participants
in amounts and for such prices as determined by the Compensation Committee.
All options will vest immediately in the event of a change in control of the
Company, or the death, disability, or retirement of the employee.

On November 30, 1993, 289,195 shares of restricted Class A Common Stock were
sold to employees at $4.72 per share, which approximated the fair market value
of the shares at the date of sale. Employees issued recourse notes payable to
the Company in the aggregate amount of $1,365,000 as payment for the
restricted shares. The notes bear interest at 6% and are due in three equal
annual installments beginning November 30, 1999. The restricted stock may not
be sold, assigned, transferred, pledged or otherwise disposed of during the
restriction period.

In fiscal 1995, the Board authorized, upon the completion of the Company's
initial public offering, the removal of the restrictions on 91,800 shares
scheduled to expire on November 30, 1995. In exchange for the removal of
restrictions on these shares, the affected employees repaid an aggregate of
$837,800 of the related recourse notes. During each of the years ended March
31, 1997, 1996 and 1995, 18,390 shares of restricted stock were forfeited, and
related recourse notes receivable of $44,900 were canceled. At March 31, 1997,
91,750 shares of restricted stock were outstanding. The restrictions expire on
November 30, 1997 and 1998. Restrictions also expire in the event of a change
in control of the Company or upon the death, disability or retirement of the
employee.

Effective as of July 3, 1997, the Board authorized the grant of options to
acquire 50,000 shares of Class A Common Stock at an exercise price of $18.75
per share and the issuance of 10,000 shares of restricted Class A Common Stock
to Mr. Harlin. The options vest ratably over five years from the first
anniversary date of grant. The restrictions on the restricted shares expire
ratably over five years from the first anniversary date of the issuance.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

There are no members of the Company's Compensation Committee who serve as a
member of another company's compensation committee. See "Certain Relationship
and Transactions" for a discussion of certain transactions between the Company
and certain members of the Board of Directors.

31
<PAGE>

CERTAIN RELATIONSHIPS AND TRANSACTIONS

The information set forth herein briefly describes certain transactions
between the Company and certain affiliated parties. The Company believes that
the terms of these transactions, are comparable to the terms that could be
obtained from unaffiliated parties. Future transactions, if any, with
affiliated parties will be approved by the Audit Committee and will be on terms
no less favorable to the Company than those that could be obtained from
unaffiliated parties.

Messrs. Quinn and Fuller together own 100% of Paragon Leasing, LLC
("Paragon"). Paragon purchases, sells and leases used tractors and trailers. In
fiscal 1997, the Company paid Paragon approximately $869,000 in rent for leased
trailers.

Messrs. Quinn and Fuller, together with the Quinn Family Partnership and the
Fuller Family Partnership, own approximately 43% of Transcom Technologies, Inc.
("Transcom"). Transcom operates a debit card system that is marketed to, among
others, truck drivers through which long distance phone calls and Internet e-
mail access can be debited to the customer's account. The Company purchases $10
per month of telephone time per tractor for its drivers through Transcom, in
lieu of reimbursing drivers for telephone expenses. Total payments by the
Company to Transcom in fiscal 1997 were $142,919.

Six terminals used by the Company during fiscal 1997 are owned by Q&F Realty,
LLC and California Q&F Realty, LLC, of which Messrs. Quinn and Fuller own 100%
of the membership interests, and leased to the Company, in management's
opinion, at fair market rent. In the aggregate, rental payments to the LLCs
from the Company and its subsidiaries in fiscal 1997 were $1,639,000.

Substantially all of Messrs. Quinn and Fuller's business time is spent on the
Company's business and affairs. In the case of each of the other companies in
which Messrs. Quinn and Fuller own an interest, that company has other active,
full-time management personnel who operate that company's business.

During fiscal 1997, the Company incurred fees for legal services to the law
firm of Miller & Martin, of which A. Alexander Taylor, II, a director of the
Company, is a partner.

32
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the ownership of the
Class A and Class B Common Stock as of July 10, 1997 and as adjusted to
reflect the sale of the shares of Class A and Class B Common Stock offered
hereby with respect to (i) each person known by the Company to own
beneficially more than 5% of the outstanding shares of either class of Common
Stock, (ii) each director and nominee, (iii) the Co-Chairmen of the Board and
the four other most highly compensated executive officers who earned in excess
of $100,000 during the 1997 fiscal year, and (iv) all directors and executive
officers as a group. Unless otherwise indicated, each of the stockholders has
sole voting and investment power with respect to the shares beneficially
owned.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES TO BE BENEFICIALLY
OWNED BEFORE OFFERING OWNED AFTER OFFERING
----------------------------- SHARES -----------------------------
PERCENT OFFERED PERCENT
NAME CLASS A CLASS B (1)(2)(3) NUMBER CLASS A CLASS B (1)(2)(3)
---- --------- --------- --------- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Max L. Fuller(4)(6)..... 2,800,018 1,520,131 35.7 450,000 2,350,018 1,520,131 26.5
Patrick E. Quinn(5)(6).. 2,674,539 1,520,131 34.6 405,084 2,269,455 1,520,131 25.9
Quinn Family
Partnership............ 444,916 -- 3.7 44,916 400,000 -- 2.7
J. & W. Seligman and
Co., Incorporated(7)... 1,449,899 -- 12.0 1,449,899 -- 9.9
William K. Farris(1).... 52,021 -- * 52,021 -- *
E. William Lusk,
Jr.(1)................. 47,021 -- * 47,021 -- *
Ray M. Harlin........... 10,000 -- * 10,000 -- *
James B. Baker(1)(8).... 5,508 -- * 5,508 -- *
A. Alexander
Taylor, II(1).......... 4,008 -- * 4,008 -- *
Thor N. Edman, Jr.(1)... 3,333 -- * 3,333 -- *
L.D. Miller, III(1)(9).. 3,333 -- * 3,333 -- *
All Executive Officers
and Directors as a
Group (11 Persons)..... 5,623,737 3,040,262 71.4 4,768,653 3,040,262 53.4
</TABLE>
- --------
* Less than 1% of the Class A and Class B Common Stock.
(1) Share amounts include shares issuable pursuant to stock options that are
exercisable within 60 days of July 10, 1997 held by the following
individuals: Mr. Farris--15,341 shares, Mr. Lusk--10,341 shares, Mr.
Edman--3,333 shares, Mr. Baker--800 shares and Mr. Taylor--800 shares.
(2) Percentage of total number of outstanding shares of both Class A and Class
B Common Stock.
(3) For the purpose of computing the percentage of outstanding shares owned by
each beneficial owner, the shares issuable pursuant to presently
exercisable stock options held by such beneficial owner are deemed to be
outstanding. Such options are not deemed to be outstanding for the purpose
of computing the percentage owned by any other person.
(4) Does not include 444,916 shares of Class A Common stock held by the Fuller
Family Partnership, as to which shares Mr. Fuller disclaims beneficial
ownership.
(5) Does not include 444,916 shares of Class A Common Stock held by the Quinn
Family Partnership, as to which shares Mr. Quinn disclaims beneficial
ownership.
(6) The principal business address for Messrs. Quinn and Fuller is 2931 South
Market Street, Chattanooga, Tennessee 37410.
(7) The principal business address of J. & W. Seligman and Co., Incorporated
is 100 Park Avenue, New York, New York 10017. The reported information is
based upon the Schedule 13G filed by J. & W. Seligman and Co.,
Incorporated with the Securities and Exchange Commission on February 13,
1997.
(8) Does not include 500 shares of Class A Common Stock held by Mr. Baker's
son, as to which shares Mr. Baker disclaims beneficial ownership.
(9) Does not include a total of 6,000 shares of Class A Common Stock held by
Mr. Miller's wife and two children, as to which shares Mr. Miller
disclaims beneficial ownership.

33
<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company is authorized to issue up to 30,000,000 shares of Class A Common
Stock, par value $0.01 per share, 7,500,000 shares of Class B Common Stock,
par value $0.01 per share and up to 2,000,000 shares of preferred stock, par
value $0.01 per share. As of July 10, 1997, 9,087,007 shares of Class A Common
Stock and 3,040,262 shares of Class B Common Stock were issued and
outstanding. No shares of preferred stock have been issued.

CLASS A AND CLASS B COMMON STOCK

Voting. Holders of Class A Common Stock are entitled to one vote per share.
Holders of Class B Common Stock are entitled to two votes per share. All
actions submitted to a vote of stockholders are voted on by holders of Class A
and Class B Common Stock voting together as a single class, except as
otherwise set forth below or provided by law.

Conversion. Class A Common Stock has no conversion rights. Class B Common
Stock may be converted into Class A Common Stock, in whole or in part, at any
time and from time to time on the basis of one share of Class A Common Stock
for each share of Class B Common Stock. If at any time any shares of Class B
Common Stock are beneficially owned by any person other than Messrs. Fuller
and Quinn (or certain immediate family members), such shares shall
automatically be converted into an equal number of shares of Class A Common
Stock.

Dividends. Holders of Class A Common Stock are entitled to receive cash
dividends on the same basis as Class B Common Stock if and when such dividends
are declared by the Board of Directors of the Company from funds legally
available therefor. In the case of any dividend paid in stock, holders of
Class A Common Stock are entitled to receive the same percentage dividend
(payable in shares of Class A Common Stock) as the holders of Class B Common
Stock receive (payable in shares of Class B Common Stock).

Liquidation. Holders of Class A and Class B Common Stock share with each
other on a ratable basis as a single class in the net assets of the Company
available for distribution in respect of Class A and Class B Common Stock in
the event of liquidation.

Other Terms. Neither the Class A nor the Class B Common Stock may be
subdivided, consolidated, reclassified or otherwise changed unless
contemporaneously therewith the other class of shares is subdivided,
consolidated, reclassified or otherwise changed in the same proportion and in
the same manner.

In any merger, consolidation or business combination, the consideration to
be received per share by holders of either Class A or Class B Common Stock
must be identical to that received by holders of the other class of Common
Stock, except that in any such transaction in which shares of capital stock
are distributed, such shares may differ as to voting rights only to the extent
that voting rights now differ between Class A and Class B Common Stock.

The rights, preferences and privileges of holders of both classes of Common
Stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of Preferred Stock which the Company may
designate and issue in the future.

PREFERRED STOCK

The Board of Directors of the Company is authorized, without further action
of the stockholders of the Company, to issue up to 2,000,000 shares of
preferred stock in classes or series and to fix the voting powers,
designations, preferences or other rights of the shares of each such class or
series and the

34
<PAGE>

qualifications, limitations and restrictions thereon. Such preferred stock may
rank prior to the Common Stock as to dividend rights, liquidation preferences
or both, may have full or limited voting rights and may be convertible into
shares of either class of the Company's Common stock.

The purpose of authorizing the Board of Directors to issue preferred stock
is, in part, to eliminate delays associated with a stockholder vote in
specific instances. The issuance of preferred stock, for example in connection
with a stockholder rights plan, could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
acquiring, a majority of the outstanding existing stock of the Company.

The Company has no present plans to issue any shares of the preferred stock.

CERTAIN PROVISIONS OF RESTATED ARTICLES AND BYLAWS

Provisions with Anti-takeover Implications. A number of provisions of the
Company's Restated Articles and Bylaws deal with matters of corporate
governance and the rights of stockholders. The Company's Restated Articles
provide the Board of Directors the ability to issue shares of preferred stock
and to set the voting rights, preferences and other terms thereof. This
ability afforded to the Board of Directors by the Restated Articles may be
deemed to have an anti-takeover effect and may discourage takeover attempts
not first approved by the Board of Directors (including takeovers which
certain stockholders may deem to be in their best interest). To the extent
takeover attempts are discouraged, temporary fluctuations in the market price
of the Company's Class A Common Stock, which may result from actual or rumored
takeover attempts, will be inhibited.

The Company's Bylaws provide that a special meeting of stockholders may be
called only by the Chairman of the Board of the Company, if one is elected, by
the President or by a majority of the directors. The Company's Bylaws provide
that only those matters set forth in the notice of the special meeting may be
considered or acted upon at that special meeting. The Company's Bylaws also
set forth certain advance notice or information requirements and time
limitations on any director nomination or any new business which a stockholder
wishes to propose for consideration at an annual or special meeting of
stockholders. Any such nomination or new business must be stated in writing
and filed with the Secretary of the Company (a) at least 30 days before the
anniversary date of the notice of the immediately preceding annual meeting of
stockholders; or (b) in the event of a special meeting, at least 10 days after
notice of such special meeting. The notice must contain certain information
relating to the nominee for director or new business proposal. The Board of
Directors of the Company may reject any nomination or new business proposal
not timely made or supported by insufficient information.

The foregoing provisions, together with the provisions of the Nevada General
Corporation Law discussed below (see Statutory Business Combination
Provision), also could discourage or make more difficult a merger, tender
offer or proxy contest, even if they could be favorable to the interests of
stockholders, and could potentially depress the market price of the Class A
Common Stock. The Board of Directors of the Company adopted these provisions
upon the recommendation of management that these provisions are appropriate to
protect the interests of the Company and all of its stockholders.

Indemnification. The Company's Bylaws provide that directors and officers of
the Company will be indemnified by the Company to the fullest extent
authorized by Nevada law, as it now exists or may in the future be amended,
against all expenses and liabilities reasonably incurred in connection with
service for or on behalf of the Company. The Bylaws of the Company also
provide that the right of directors and officers to indemnification is not
exclusive of any other right now possessed or hereafter acquired under any
statute, agreement or otherwise.

35
<PAGE>

Limitation of Liability. The Restated Articles provide that to the fullest
extent permitted by Nevada law directors and officers of the Company are not
personally liable for monetary damages to the Company for certain breaches of
their fiduciary duty as directors or officers. This provision would have no
effect on the availability of equitable remedies or non-monetary relief, such
as an injunction or rescission for breach of the duty of care. In addition, the
provision applies only to claims against a director or officer arising out of
his role as a director or officer and not in any other capacity. Further,
liability of a director or officer for violations of the federal securities
laws are not limited by this provision. Directors and officers, however, will
no longer be liable for monetary damages arising from decisions involving
violations of the duty of care which could be deemed grossly negligent.

STATUTORY BUSINESS COMBINATION PROVISION

The Company is subject to the provisions of Section 78.411 et seq. of the
Nevada General Corporation Law ("Business Combination Act"). The Business
Combination Act provides, with certain exceptions, that a Nevada corporation
may not engage in any of a broad range of business combinations with a person
or affiliate, or associate of such person, who is an "interested stockholder"
for a period of three years from the date that such person became an interested
stockholder, unless the transaction resulting in a person becoming an
interested stockholder, or the business combination, is approved by the board
of directors of the corporation before the person becomes an interested
stockholder.

The Business Corporation Act further provides that a Nevada corporation may
not engage in such a business combination after the expiration of three years
from the date that such person became an interested stockholder, unless the
business combination is approved by the board of directors of the corporation
before the person became an interested stockholder or by the affirmative vote
of a majority of outstanding votes not beneficially owned by the interested
stockholder at a meeting called not earlier than three years after the
interested stockholder's date of acquiring shares.

Under the Business Combination Act, an "interested stockholder" is defined as
any person that is (i) the owner of 10% or more of the outstanding voting stock
of the corporation or (ii) an affiliate or associate of the corporation and was
the owner of 10% or more of the outstanding voting stock of the corporation at
any time within the three year period immediately prior to the date on which it
is sought to be determined whether such person is an interested stockholder.

At its option, a corporation may exclude itself from the coverage of the
Business Combination Act by amending its Restated Articles by action of its
stockholders, other than interested stockholders and their affiliates and
associates, to exempt itself from coverage, provided that such charter
amendment may not become effective until 18 months after the date it is adopted
and does not apply to any combination of the corporation with an interested
stockholder whose date of acquiring shares is on or before the effective date
of the amendment. The Company has not adopted such an amendment to its Restated
Articles.

TRANSFER AGENT AND REGISTRAR

Boston EquiServe, L.P. is the Transfer Agent and Registrar for the Class A
Common Stock.

36
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have outstanding
11,587,007 shares of Class A Common Stock and 3,040,262 shares of Class B
Common Stock that may be converted into Class A Common Stock. Of these shares,
all of the 3,400,000 shares (3,910,000 shares if the Underwriters' over-
allotment option is exercised in full) sold in this offering will be and the
3,335,000 shares sold in the Company's initial public offering are freely
transferable by persons other than "affiliates" of the Company, without
restriction or further restriction under the Securities Act.

The remaining 4,852,007 shares of Class A Common Stock and all of the shares
of Class B Common Stock that may be converted into Class A Common Stock
outstanding are "restricted securities" within the meaning of Rule 144 ("Rule
144") under the Securities Act and may not be sold in the absence of
registration under the Securities Act unless an exemption from registration is
available, including the exemption contained in Rule 144. Certain principal
stockholders and the officers and directors of the Company, beneficially
holding an aggregate of 8,653,831 shares, and the Company have agreed, subject
to certain exceptions, not to sell or otherwise dispose of such shares, for 90
days after the date of this offering without the prior written consent of
Alex. Brown & Sons Incorporated.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned his or her shares for
at least one year, including an "affiliate" of the Company (as that term is
defined under the Securities Act), is entitled to sell, within any three-month
period, that number of shares that does not exceed the greater of (i) 1% of
the then outstanding shares of Class A Common Stock of the Company or (ii) the
average weekly trading volume of the then outstanding shares during the four
calendar weeks preceding each such sale. A person (or persons whose shares are
aggregated) who is not deemed an "affiliate" of the Company and who has
beneficially owned shares for at least two years is entitled to sell such
shares under Rule 144 without regard to the volume limitations described
above. Affiliates, including members of the Board of Directors and senior
management, continue their respective to be subject to such limitations.

No predictions can be made of the effect, if any, that market sales of
restricted securities or the availability of restricted securities for sale
will have on the market price prevailing from time to time. Nevertheless,
sales of substantial amounts of the Class A Common Stock in the public market,
or the perception that such sales could occur, could have an adverse impact on
the market price.

37
<PAGE>

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below (the "Underwriters"), through their Representatives,
Alex. Brown & Sons Incorporated, Morgan Stanley & Co. Incorporated, Morgan
Keegan & Company, Inc. and Schroder & Co. Inc. (the "Representatives"), have
severally agreed to purchase from the Company the following respective number
of shares of Common Stock at the initial public offering price less the
underwriting discounts and commission set forth on the cover page of this
Prospectus.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Alex. Brown & Sons Incorporated....................................
Morgan Stanley & Co. Incorporated..................................
Morgan Keegan & Company, Inc. .....................................
Schroder & Co. Inc. ...............................................
---------
Total............................................................ 3,400,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will
purchase the total number of shares of Class A Common Stock offered hereby if
any of such shares are purchased.

The Company and certain of the Selling Stockholders have been advised by the
Representatives of the Underwriters that the Underwriters propose to offer the
shares of Class A Common Stock to the public at the public offering price set
forth on the cover page of this Prospectus and to certain dealers at such price
less a concession not in excess of $ per share. The Underwriters may allow,
and such dealers may reallow, a concession not to exceed $ per share to
certain other dealers. After commencement of the public offering, the offering
price and other selling terms may be changed by Representatives of the
Underwriters.

The Company and the Selling Stockholders have granted to the Underwriters an
option, exercisable not later than 30 days after the date of this Prospectus,
to purchase up to 442,500 and 67,500 shares of the Class A Common Stock,
respectively, at the public offering price set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will have a firm commitment to purchase approximately the same
percentage thereof that the number of shares of Class A Common Stock purchased
by each of them as shown in the above table, bears to 3,400,000, and the
Selling Stockholders will be obligated, pursuant to the option, to sell such
shares to the Underwriters. The Underwriters may exercise such option only to
cover over-allotments made in connection with the sale of the Class A Common
Stock offered hereby. If purchased, the Underwriters will offer such additional
shares on the same terms as those on which the 3,400,000 shares are being
offered.

In connection with this offering, certain Underwriters may engage in passive
market making transactions in the Class A Common Stock on The Nasdaq National
Market immediately prior to the commencement of sales in this offering in
accordance with Rule 103 of Regulation M. Passive market making consists of
displaying bids on The Nasdaq National Market limited by the bid prices of
independent market makers and making purchases limited by such prices and
effected in response to order flow. Net purchases by a passive market maker on
each day are limited to a specified percentage of the passive

38
<PAGE>

market maker's average daily trading volume in the Class A Common Stock during
a specified period and must be discontinued when such limit is reached.
Passive market making may stabilize the market price of the Class A Common
Stock at a level above that which might otherwise prevail and, if commenced,
may be discontinued at any time.

Subject to applicable limitations, the Underwriters, in connection with this
offering, may place bids for or make purchases of the Class A Common Stock in
the open market or otherwise, for long or short account, or cover short
positions incurred, to stabilize, maintain or otherwise affect the price of
the Class A Common Stock, which may be higher than the price that might
otherwise prevail in the open market. There can be no assurance that the price
of the Class A Common Stock will be stabilized, or that stabilizing, if
commenced, will not be discontinued at any time. Subject to applicable
limitations, the Underwriters may also place bids or make purchases on behalf
of the underwriting syndicate to reduce a short position created in connection
with this offering. The Underwriters are not required to engage in these
activities and may end these activities at any time.

The Underwriting Agreement contains covenants of indemnity and contribution
between the Underwriters and the Company and the Selling Stockholders with
respect to certain civil liabilities, including liabilities under the
Securities Act.

Certain of the Company's principal stockholders and the directors and
officers, who following the offering will beneficially own an aggregate of
5,613,569 shares of Class A Common Stock and 3,040,262 shares of Class B
Common Stock, and the Company have agreed not to offer, sell or otherwise
dispose of any of such Common Stock or any shares of Common Stock issuable
upon exercise of any options for Common Stock for a period of 90 days after
the date of this Prospectus without the prior written consent of Alex. Brown &
Sons Incorporated.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Miller & Martin, Chattanooga, Tennessee. A. Alexander
Taylor, II, a Director of the Company, is a partner in the law firm of Miller
& Martin. Certain legal matters in connection with this offering are being
passed upon for the Underwriters by Piper & Marbury L.L.P., Baltimore,
Maryland.

EXPERTS

The consolidated financial statements and schedules included in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.

39
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants.................................. F-2
Consolidated Statements of Operations for the Years Ended March 31, 1995,
1996 and 1997............................................................ F-3
Consolidated Balance Sheets as of March 31, 1996 and 1997................. F-4
Consolidated Statements of Cash Flows for the Years Ended March 31, 1995,
1996 and 1997............................................................ F-5
Consolidated Statements of Stockholders' Equity for the Years Ended March
31, 1995, 1996
and 1997................................................................. F-6
Notes to Consolidated Financial Statements................................ F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of U.S. Xpress Enterprises, Inc.:

We have audited the accompanying consolidated balance sheets of U.S. Xpress
Enterprises, Inc. (a Nevada corporation) and subsidiaries as of March 31, 1996
and 1997 and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the three years in the period ended March
31, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of U.S. Xpress Enterprises,
Inc. and subsidiaries as of March 31, 1996 and 1997 and the results of their
operations and their cash flows for each of the three years in the period
ended March 31, 1997 in conformity with generally accepted accounting
principles.

/s/ Arthur Andersen LLP
_____________________________________
ARTHUR ANDERSEN LLP

Chattanooga, Tennessee
May 7, 1997

F-2
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
FOR THE
YEARS ENDED MARCH 31,
----------------------------
1995 1996 1997
-------- -------- --------
<S> <C> <C> <C>
Operating Revenue............................... $254,331 $299,697 $362,819
-------- -------- --------
Operating Expenses:
Salaries, wages and employee benefits,
including contract wages...................... 108,074 129,311 148,850
Fuel and fuel taxes............................ 42,586 48,782 61,268
Vehicle rents.................................. 16,767 17,263 21,603
Depreciation and amortization.................. 15,070 16,765 14,492
Purchased transportation....................... 10,493 19,929 22,682
Operating expenses and supplies................ 17,398 21,321 22,503
Insurance premiums and claims.................. 10,457 12,874 15,265
Operating taxes and licenses................... 4,608 5,227 5,984
Communications and utilities................... 4,332 5,343 6,301
Cost of installation supplies sold............. -- 5,214 8,180
Building rental................................ 2,063 3,495 4,878
Bad debt expense............................... 543 784 880
General and other operating expenses........... 6,949 9,582 11,506
Gain on sales of equipment..................... (2,979) (1,320) (1,289)
Equity in earnings of unconsolidated
affiliate..................................... (189) (124) --
-------- -------- --------
Total operating expenses...................... 236,172 294,446 343,103
-------- -------- --------
Income from Operations.......................... 18,159 5,251 19,716
-------- -------- --------
Other Income (Expense):
Interest expense, net.......................... (4,796) (5,251) (5,542)
Other income, net.............................. 194 75 62
-------- -------- --------
Total other expense........................... (4,602) (5,176) (5,480)
-------- -------- --------
Income Before Income Tax Provision.............. 13,557 75 14,236
Income Tax (Provision) Benefit.................. (5,294) 19 (6,358)
-------- -------- --------
Net Income...................................... $ 8,263 $ 94 $ 7,878
======== ======== ========
Earnings Per Share.............................. $ .76 $ .01 $ .65
======== ======== ========
Weighted Average Common Shares and Common Share
Equivalents Outstanding........................ 10,806 12,003 12,168
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-3
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
MARCH 31,
------------------
1996 1997
-------- --------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents................................. $ 4,378 $ 5,092
Customer receivables, net of allowance of $3,033 in 1996
and $2,733 in 1997....................................... 41,910 50,056
Other receivables......................................... 4,318 3,969
Prepaid insurance and licenses............................ 4,837 3,853
Operating and installation supplies....................... 4,033 4,904
Deferred income taxes..................................... 3,888 4,443
Other current assets...................................... 482 719
-------- --------
Total current assets................................... 63,846 73,036
-------- --------
Property and Equipment, at cost
Land and buildings........................................ 2,232 2,717
Revenue and service equipment............................. 126,501 112,076
Furniture and equipment................................... 10,325 11,265
Leasehold improvements.................................... 5,086 7,619
-------- --------
144,144 133,677
Less accumulated depreciation and amortization............ (39,702) (39,803)
-------- --------
Net property and equipment............................. 104,442 93,874
-------- --------
Other Assets
Goodwill, net............................................. 6,579 7,700
Other..................................................... 2,954 3,474
-------- --------
Total other assets..................................... 9,533 11,174
-------- --------
Total Assets........................................... $177,821 $178,084
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable.......................................... $ 10,025 $ 8,708
Accrued wages and benefits................................ 5,543 5,086
Claims and insurance accruals............................. 11,465 9,601
Other accrued liabilities................................. 3,378 2,804
Current maturities of long-term debt...................... 13,829 13,008
-------- --------
Total current liabilities.............................. 44,240 39,207
-------- --------
Long-Term Debt, net of current maturities.................. 61,789 59,318
-------- --------
Deferred Income Taxes...................................... 10,885 14,543
-------- --------
Other Long-Term Liabilities................................ 5,821 1,854
-------- --------
Commitments and Contingencies (Notes 6 and 8)
Stockholders' Equity
Preferred Stock, $.01 par value, 2,000,000 shares
authorized, no shares issued............................. -- --
Common Stock Class A, $.01 par value, 30,000,000 shares
authorized, 9,034,884 and 9,046,044 shares issued and
outstanding at March 31, 1996 and 1997, respectively..... 89 90
Common Stock Class B, $.01 par value, 7,500,000 shares
authorized, 3,040,262 shares issued and outstanding at
March 31, 1996 and 1997.................................. 30 30
Additional paid-in capital................................ 33,774 33,832
Retained earnings......................................... 21,565 29,443
Notes receivable from stockholders........................ (372) (233)
-------- --------
Total stockholders' equity............................. 55,086 63,162
-------- --------
Total Liabilities and Stockholders' Equity............. $177,821 $178,084
======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-4
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE YEARS ENDED MARCH 31,
-------------------------------
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income.................................. $ 8,263 $ 94 $ 7,878
Adjustments to reconcile net income to net
cash provided by operating activities:
Deferred income tax provision............. 1,953 2,737 3,103
Depreciation and amortization............. 15,070 16,765 14,492
Gain on sales of equipment................ (2,979) (1,320) (1,289)
Equity in earnings of unconsolidated
affiliate................................ (189) (124) --
Increase in receivables................... (3,279) (9,674) (7,309)
(Increase) decrease in prepaid insurance
and licenses............................. (1,484) (497) 984
(Increase) decrease in operating
supplies................................. 10 (688) (575)
(Increase) decrease in other assets....... 190 (559) (1,141)
Increase (decrease) in accounts payable
and other accrued liabilities............ 2,669 3,606 (7,722)
Increase (decrease) in accrued wages and
benefits................................. 2,190 (1,317) (457)
Other..................................... -- 16 18
--------- --------- ---------
Net cash provided by operating activities.. 22,414 9,039 7,982
--------- --------- ---------
Cash Flows from Investing Activities:
Payments for purchases of property and
equipment.................................. (61,072) (28,247) (24,868)
Proceeds from sales of property and
equipment.................................. 17,582 17,383 24,618
Repayment of notes receivable from
stockholders............................... 838 -- 94
Acquisition of business, net of cash
acquired................................... (308) (6,227) (3,048)
Acquisition of remaining 50% of
unconsolidated affiliate, net of cash
acquired................................... -- (239) --
--------- --------- ---------
Net cash used in investing activities...... (42,960) (17,330) (3,204)
--------- --------- ---------
Cash Flows from Financing Activities:
Net borrowings (payments) under lines of
credit..................................... (7,158) 30,325 1,000
Payment of long-term debt................... (31,305) (36,355) (26,450)
Borrowings under long-term debt............. 32,215 11,468 21,300
Proceeds from exercise of stock options..... -- -- 128
Proceeds from issuance of common stock...... 31,588 -- --
Repurchase of restricted common stock....... (42) (42) (42)
Increase in other liabilities............... 481 906 --
--------- --------- ---------
Net cash provided by (used in) financing
activities................................ 25,779 6,302 (4,064)
--------- --------- ---------
Net Increase (Decrease) in Cash and Cash
Equivalents................................. 5,233 (1,989) 714
Cash and Cash Equivalents, beginning of
year........................................ 1,134 6,367 4,378
--------- --------- ---------
Cash and Cash Equivalents, end of year....... $ 6,367 $ 4,378 $ 5,092
========= ========= =========
Supplemental Disclosure of Cash Flow
Information:
Cash paid during the year for interest...... $ 5,227 $ 5,198 $ 5,643
========= ========= =========
Cash paid (refunded) during the year for
income taxes, net.......................... $ 2,621 $ (470) $ 2,766
========= ========= =========
Supplemental Disclosure of Significant
Noncash Investing and Financing Activities:
Issuance of long-term debt in connection with
purchase of business........................ $ 600 $ -- $ 792
========= ========= =========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-5
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
NOTES
COMMON STOCK ADDITIONAL RECEIVABLE
--------------- PAID-IN RETAINED FROM
CLASS A CLASS B CAPITAL EARNINGS STOCKHOLDERS TOTAL
------- ------- ---------- -------- ------------ -------
<S> <C> <C> <C> <C> <C> <C>
Balance, March 31,
1994................... $73 $22 $ 1,433 $13,208 $(1,300) $13,436
Net income............. -- -- -- 8,263 -- 8,263
Conversion of 815,680
shares of Class A
Common Stock to Class
B Common Stock........ (8) 8 -- -- -- --
Issuance of 2,500,000
shares of Class A
Common Stock in
initial public
offering.............. 25 -- 31,563 -- -- 31,588
Repayment of notes
receivable from
stockholders.......... -- -- -- -- 838 838
Repurchase of 18,390
shares of restricted
stock................. (1) -- (87) -- 45 (43)
--- --- ------- ------- ------- -------
Balance, March 31,
1995................... 89 30 32,909 21,471 (417) 54,082
Net income............. -- -- -- 94 -- 94
Repurchase of 18,390
shares of restricted
stock................. (1) -- (87) -- 45 (43)
Issuance of 1,744
shares of Class A
Common Stock for non-
employee director
compensation.......... -- -- 16 -- -- 16
Issuance of 110,182
shares of Class A
Common Stock for
purchase of Hall
Systems............... 1 -- 936 -- -- 937
--- --- ------- ------- ------- -------
Balance, March 31,
1996................... 89 30 33,774 21,565 (372) 55,086
Net income............. -- -- -- 7,878 -- 7,878
Repurchase of 18,390
shares of restricted
stock................. -- -- (87) -- 45 (42)
Repayment of notes
receivable from
stockholders.......... -- -- -- -- 94 94
Issuance of 2,542
shares of Class A
Common Stock for non-
employee director
compensation.......... -- -- 18 -- -- 18
Proceeds from exercise
of 27,008 stock
options............... 1 -- 127 -- -- 128
--- --- ------- ------- ------- -------
Balance, March 31,
1997................... $90 $30 $33,832 $29,443 $ (233) $63,162
=== === ======= ======= ======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-6
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND OPERATIONS

U. S. Xpress Enterprises, Inc. (the "Company") provides transportation
services through two subsidiaries. U.S. Xpress, Inc. ("U.S. Xpress") is a
truckload carrier serving the Continental United States, Canada and Mexico.
CSI/Crown, Inc. ("CSI/Crown") provides transportation and logistics services to
the floorcovering industry.

2. ACQUISITIONS

Effective March 31, 1994, the Company acquired 50% of the outstanding stock
of Hall Systems, Inc. ("Hall Systems") for $625,000 cash and a $625,000 note
payable. Effective October 31, 1995, the Company acquired the remaining 50% of
the outstanding stock of Hall Systems for $1,000,000 cash and 110,182 shares of
the Company's Class A Common Stock in a transaction accounted for by the
purchase method of accounting.

Effective August 31, 1995, the Company acquired 100% of the outstanding stock
of CSI/Reeves, Inc. ("CSI/Reeves") for cash of $6,240,000 in a transaction
accounted for by the purchase method of accounting. Effective January 1, 1996,
CSI/Reeves was merged into the Company's existing freight consolidator (Crown
Transport Systems, Inc.) to form CSI/Crown, Inc.

The results of operations of CSI/Reeves and Hall Systems are included in the
accompanying consolidated financial statements from the dates of their
respective acquisition. On a pro forma (unaudited) basis, operating revenue for
the Company would have been approximately $310 million and $332 million,
respectively, for fiscal 1995 and 1996, had the acquisitions taken place at the
beginning of the respective periods. The impact on net income and earnings per
share is insignificant. This information is for comparative purposes only and
does not purport to be indicative of the results of operations had the
transactions been completed at the beginning of the respective periods or
indicative of the results which may occur in the future.

In June 1996, the Company acquired certain equipment and the right to fulfill
a contract to provide expedited truckload services in the Western United States
to a major air freight company from Michael Lima Transportation for $3,048,000
cash and a $792,000 note payable. In addition, $1,000,000 will be paid to the
seller if the Company is able to extend the contract. The pro forma effect of
this transaction on prior period financial statements is immaterial. Subsequent
to March 31, 1997, the Company acquired eight distribution centers and certain
equipment from Rosedale Transport, Inc. and acquired JTI, Inc.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation. The consolidated financial statements include
the accounts of the Company and its subsidiaries. All significant intercompany
transactions and accounts have been eliminated.

Use of Estimates in the Preparation of Financial Statements. The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

Cash and Cash Equivalents. Cash and cash equivalents include all highly
liquid investment instruments with an original maturity of three months or
less.

F-7
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Recognition of Revenue. For financial reporting purposes, the Company
recognizes revenue and direct cost when shipments are completed.

Concentration of Credit Risk. Concentrations of credit risk with respect to
customer receivables are limited due to the large number of entities comprising
the Company's customer base and their dispersion across many different
industries. The Company performs ongoing credit evaluations and generally does
not require collateral.

Operating and Installation Supplies. Operating supplies consist primarily of
tires, parts, materials and supplies for servicing the Company's revenue and
service equipment. Installation supplies consist of various accessories used in
the installation of floorcoverings and are held for sale at various CSI/Crown
distribution centers. Operating and installation supplies are recorded at the
lower of cost (on a first-in, first-out basis) or market. Tires and tubes
purchased as part of revenue and service equipment are capitalized as part of
the cost of the equipment. Replacement tires and tubes are charged to expense
when placed in service.

Property and Equipment. Property and equipment is carried at cost.
Depreciation and amortization of property and equipment are computed using the
straight-line method for financial reporting purposes and accelerated methods
for tax purposes over the estimated useful lives of the related assets (net of
salvage value) as follows:

<TABLE>
<S> <C>
Buildings..................................................... 10-30 years
Revenue and service equipment................................. 3-7 years
Furniture and equipment....................................... 3-7 years
Leasehold improvements........................................ 5-6 years
</TABLE>

The Company recognized $14,813,000, $16,066,000 and $13,837,000 in
depreciation expense during the years ended March 31, 1995, 1996 and 1997,
respectively. Upon the retirement of property and equipment, the related asset
cost and accumulated depreciation are removed from the accounts and any gain or
loss is reflected in the Company's statement of operations with the exception
of gains on trade-ins, which are included in the basis of the new asset.

Expenditures for normal maintenance and repairs are expensed. Renewals or
betterments that affect the nature of an asset or increase its useful life are
capitalized.

Goodwill. The excess of the consideration paid by the Company over the
estimated fair value of net assets acquired has been recorded as goodwill and
is being amortized on the straight-line basis over periods ranging from 20 to
40 years. The Company continually evaluates whether subsequent events and
circumstances have occurred that indicate that the remaining estimated useful
life of goodwill may warrant revision or that the remaining balance may not be
recoverable. The Company recognized $204,000, $220,000 and $272,000 of goodwill
amortization expense during the years ended March 31, 1995, 1996 and 1997,
respectively. Accumulated amortization was $756,000 and $1,028,000 at March 31,
1996 and 1997, respectively.

Claims and Insurance Accruals. The primary claims in the Company's business
are cargo loss and damage, physical damage and automobile liability. Prior to
January 1, 1997, most of the Company's insurance provided for large self-
insurance levels with excess coverage sufficient to protect the Company from
catastrophic claims. Beginning January 1997, the Company began purchasing
policies with low deductibles which essentially fully insure cargo and auto
liability, while physical damage has an annual aggregate deductible. For claims
with self-insurance levels, estimated costs are accrued based upon

F-8
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

information provided by insurance adjustors for reported claims and adjusted
for expected loss development factors.

Other Long-Term Liabilities. Periodically, the Company receives volume
rebates from vendors related to certain operating leases for new revenue and
service equipment. Additionally, certain equipment leases include spare tires,
which increase tire inventories. The Company defers recognition of these
rebates and amortizes such amounts as a reduction of vehicle rent expense over
the respective lease terms. At March 31, 1996 and 1997, other long-term
liabilities include deferred rents of $1,802,000 and $1,295,000, respectively.

Income Taxes. Deferred tax assets and liabilities are computed based on the
difference between the financial statement and income tax bases of assets and
liabilities using the enacted marginal tax rate. Deferred income tax expenses
or credits are based on the changes in the asset or liability from period to
period.

Contract Wages. Prior to August 1996, the Company leased a substantial
portion of its personnel, including drivers, from an independent personnel
leasing company. Under the lease agreements, the Company paid a contracted
amount per person and the personnel leasing company had the responsibility for
payroll, unemployment insurance and workers' compensation claims. In August
1996, the lease agreements with the independent personnel leasing company were
terminated and the personnel previously leased under these agreements became
employees of the Company. Effective January 1, 1997, the Company entered into
an agreement with a Professional Employer Organization (PEO) in which the PEO
is a co-employer with the Company for all of the Company's personnel. The PEO
is responsible for processing and administration of the Company's payroll,
including tax reporting, and provides group health benefits and worker's
compensation coverage.

Hedging Instruments. For a small percentage of the Company's fuel
requirements, the Company hedges the effects of fluctuations in the price of
fuel. The resulting gains or losses are accounted for as a decrease or
increase in fuel expense. The impact of the Company's hedging program is not
significant in relation to total fuel purchases.

Earnings Per Share. Earnings per share is computed based on the weighted
average number of common shares outstanding plus the dilutive effect of
outstanding common stock options. The weighted average number of shares and
equivalents used in the computation were 10,806,336, 12,002,754 and 12,167,890
for fiscal 1995, 1996 and 1997, respectively.

Reclassifications. Certain reclassifications have been made in the fiscal
1995 and 1996 financial statements to conform with the 1997 presentation.

Stock-Based Compensation. The Company accounts for its stock-based
compensation plans under Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB No. 25"). Effective fiscal
1997, the Company adopted the disclosure option of SFAS No. 123, "Accounting
for Stock-Based Compensation."

Recent Accounting Pronouncements. In 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standard No. 128
"Earnings Per Share" ("SFAS 128"). SFAS 128 changes the criteria for reporting
earnings per share ("EPS") by replacing primary EPS with basic EPS and fully
diluted EPS with diluted EPS. The Company is required to adopt SFAS 128 for
periods ending after December 15, 1997, and all prior period EPS data must be
restated. The impact of adopting SFAS 128 will not have a material impact on
EPS for any period presented.

F-9
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

4. INCOME TAXES

The income tax provision (benefit) in fiscal 1995, 1996 and 1997 consisted of
the following:

<TABLE>
<CAPTION>
1995 1996 1997
------ ------- ------
(IN THOUSANDS)
<S> <C> <C> <C>
Current
Federal............................................. $2,989 $(2,876) $2,726
State............................................... 352 120 529
------ ------- ------
3,341 (2,756) 3,255
Deferred.............................................. 1,953 2,737 3,103
------ ------- ------
$5,294 $ (19) $6,358
====== ======= ======
</TABLE>

The income tax provision (benefit) as reported in the consolidated statements
of operations differs from the amounts computed by applying federal statutory
rates due to the following:

<TABLE>
<CAPTION>
1995 1996 1997
------ ----- ------
(IN THOUSANDS)
<S> <C> <C> <C>
Federal income tax at statutory rate.................. $4,609 $ 25 $4,840
State income taxes, net of federal income tax bene-
fit.................................................. 419 73 349
Goodwill amortization................................. 78 75 75
Nondeductible driver per diems........................ -- -- 650
Other................................................. 188 (192) 444
------ ----- ------
Income tax provision (benefit)........................ $5,294 $ (19) $6,358
====== ===== ======
</TABLE>

The tax effect of temporary differences that give rise to significant
portions of deferred tax assets and liabilities at March 31, 1996 and 1997
consisted of the following:

<TABLE>
<CAPTION>
1996 1997
------- -------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets
Allowance for doubtful accounts............................ $ 1,133 $ 952
Insurance reserves......................................... 3,743 3,721
Net operating loss carryforwards........................... 6,117 --
Alternative minimum tax credit carryforwards............... 2,883 2,362
Claims and other reserves.................................. 694 826
Other...................................................... 84 284
------- -------
Total deferred tax assets................................. $14,654 $ 8,145
======= =======
Deferred tax liabilities
Book over tax basis of property and equipment.............. $20,376 $16,880
Prepaid license fees....................................... 1,248 1,279
Other...................................................... 27 86
------- -------
Total deferred tax liabilities............................ $21,651 $18,245
======= =======
</TABLE>

F-10
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. LONG-TERM DEBT

Long-term debt at March 31, 1996 and 1997 consisted of the following:

<TABLE>
<CAPTION>
1996 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Obligation under line of credit with a group of banks,
weighted average interest rate of 6.77% at March 31,
1997, maturing August 1998............................... $ 31,500 $ 32,500
Installment notes with banks, weighted average interest
rate of 7.19% at March 31, 1997, maturing at various
dates ranging from November 1997 to December 2002........ 23,160 14,673
Installment notes with finance companies, weighted average
interest rate of 7.73% at March 31, 1997, maturing at
various dates ranging from May 1997 to December 1998..... 20,055 23,598
Note payable to former stockholder of National Freight
Systems, interest payable at 7% at March 31, 1997, due in
annual installments through October 1997................. 400 200
Note payable to stockholder of Lima Transportation, Inc.,
interest payable at 9%, due July 1998.................... -- 792
Other..................................................... 503 563
-------- --------
$ 75,618 $ 72,326
Less: current maturities of long-term debt................ (13,829) (13,008)
-------- --------
$ 61,789 $ 59,318
======== ========
</TABLE>

The aggregate annual maturities of long-term debt for each of the next five
years ending March 31 are:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C> <C>
1998...................................................... $ 13,008
1999...................................................... 50,079
2000...................................................... 5,465
2001...................................................... 768
2002...................................................... 1,592
</TABLE>

The installment notes with banks and finance companies are collateralized by
certain property and equipment of the Company.

In November 1995, the Company entered into an unsecured credit agreement (the
"Credit Agreement") with a group of banks. The Credit Agreement operates as a
revolving credit facility until August 1998, at which time it will convert to a
three year installment loan, if not extended or renewed.

Borrowings (including letters of credit) under the Credit Agreement are
limited to the lesser of: (a) 90% of the book value of eligible revenue
equipment plus 85% of eligible accounts receivable; or (b) $50,000,000.

Borrowings under the Credit Agreement bear interest rates, at the option of
the Company, equal to either: (i) the greater of the bank prime rate or the
federal funds rate plus 1/2%, (ii) the rate offered in the Eurodollar market
for amounts and periods comparable to the relevant loan plus a margin that is
determined by several financial covenants, or (iii) the rate offered to the
Company for a loan of a specific amount and maturity by any of the
participating banks under a competitive bid process. At March 31, 1997, the
margin applicable to the Eurodollar interest rate was equal to 1.25%.

F-11
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Credit Agreement contains covenants that limit, among other things, the
payment of dividends, the incurrence of additional debt, and the pledging of
assets as security on other indebtedness. The Credit Agreement also requires
the Company to meet certain financial tests, including a minimum amount of
tangible net worth, a minimum fixed charge coverage and a maximum amount of
leverage.

6. LEASES

The Company leases certain revenue and service equipment and office and
terminal facilities under long-term non-cancelable operating lease agreements
expiring at various dates through December 2002. For the years ended March 31,
1995, 1996 and 1997, rental expense under these agreements was approximately
$17,092,000, $19,437,000 and, $26,388,000 respectively.

Approximate aggregate minimum future rentals payable under these operating
leases for each of the next five years are:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
1998....................................................... $30,481
1999....................................................... 27,774
2000....................................................... 15,010
2001....................................................... 4,751
2002....................................................... 686
</TABLE>

7. RELATED PARTY TRANSACTIONS

The Company leases certain office and terminal facilities from entities owned
by the two principal stockholders of the Company. The lease agreements are for
five-year terms and provide the Company with the option to renew the lease
agreements for four three-year terms. Rent expense of approximately $1,210,000,
$1,256,000 and $1,639,000 was recognized in connection with these leases during
the years ended March 31, 1995, 1996 and 1997, respectively.

The two principal stockholders of the Company own 100% of the outstanding
common stock of Paragon Leasing LLC ("Paragon"). Paragon leases certain revenue
and service equipment to the Company on a temporary basis. Rent expense of
approximately $1,181,000, $1,028,000, and $869,000 was recognized in connection
with these leases during the years ended March 31, 1995, 1996 and 1997,
respectively.

Prior to December 31, 1995, a principal stockholder of the Company directly
controlled 50% of the outstanding stock of LTL Express Systems. During the
years ended March 31, 1995 and 1996, the Company recognized operating revenue
from LTL Express Systems of approximately $897,000 and $427,000, respectively.
The principal stockholder disposed of his interest in LTL Express Systems
effective December 31, 1995.

The two principal stockholders of the Company and certain partnerships
controlled by their families own 43% of the outstanding common stock of
Transcom Technologies, Inc. ("Transcom"). Transcom makes a debit card system
available to the Company's drivers through which phone calls and Internet
e-mail can be credited while the driver is on the road. Total payments by the
Company to Transcom were approximately $87,000, $148,000 and $143,000 in the
years ended March 31, 1995, 1996 and 1997, respectively.

F-12
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

8. COMMITMENTS AND CONTINGENCIES

The Company is party to certain legal proceedings incidental to its business.
The ultimate disposition of these matters, in the opinion of management, based
in part on the advice of legal counsel, will not have a material adverse effect
on the Company's financial position or results of operations.

Letters of credit of $3,055,000 were outstanding at March 31, 1997. The
letters of credit are maintained primarily to support the Company's insurance
program (see Note 3). Commitment fees of 1% on the outstanding portion of the
letters of credit are paid by the Company.

9. EMPLOYEE BENEFIT PLANS

The Company has in place an employee profit-sharing plan covering
substantially all non-driver employees. The plan provides for additional
compensation to employees, the amount of which is based on results of
operations exceeding certain goals.

The Company has a 401(k) retirement plan covering substantially all employees
of the Company, whereby participants may contribute a percentage of their
compensation, as allowed under applicable laws. The plan provides for a
matching contribution by the Company. Participants are 100% vested in
participant contributions and become vested in employer matching contributions
over a period of four years.

During 1995, 1996 and 1997, the Company recognized $2,827,000, $290,000 and
$400,000, respectively, of expense under these employee benefit plans.

10. STOCKHOLDERS' EQUITY

Initial Public Offering. In October 1994, the Company completed its initial
public offering through the issuance of 2,500,000 shares of Class A Common
Stock. As a result of this offering, the Company received proceeds, net of
underwriting discounts and commissions and issuance costs, of $31,588,000. The
Company utilized the net proceeds to reduce outstanding debt and acquire
certain equipment previously leased under operating leases.

Common Stock Holders of Class A. Common Stock are entitled to one vote per
share. Holders of Class B Common Stock are entitled to two votes per share.
Once the Class B Common Stock is no longer held by the two principal
stockholders of the Company, or their families, as defined, the stock is
automatically converted into Class A Common Stock on a share per share basis.

Preferred Stock. Effective December 31, 1993, the Board of Directors approved
the designation of 2,000,000 shares of preferred stock with par value of $.01
per share. The Board of Directors has the authority to issue these shares and
to determine the rights, terms and conditions of the preferred stock as needed.

Incentive Stock Plan. In November 1993, the Company adopted the U.S. Xpress
Enterprises, Inc. Incentive Stock Plan (the "Plan"). The Plan provides for the
issuance of shares of restricted common stock of the Company, as well as both
incentive and nonstatutory stock options. There may be issued under the Plan
(as restricted stock, in payment of performance grants, or pursuant to the
exercise of stock options) an aggregate of not more than the greater of (a)
1,038,138 shares of Class A Common Stock, or (b) 8% of the total number of
common shares of the Company outstanding at any given time. Participants of the
Plan may include key employees as selected by the compensation committee of the
Board of Directors. Under the terms of the Plan, the Company may sell
restricted shares of common stock, grant options, or

F-13
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

issue performance grants to participants in amounts and for such prices as
determined by the compensation committee. All options will vest immediately in
the event of a change in control of the Company, or the death, disability, or
retirement of the employee.

On November 30, 1993, 289,195 shares of restricted stock were sold to
employees at $4.72 per share, which approximated the fair market value of the
shares at the date of sale. Employees issued recourse notes payable to the
Company in the aggregate amount of $1,365,000 as proceeds for the issuance of
the restricted shares. The notes bear interest at 6% and are due in three equal
annual installments beginning November 30, 1999. The restricted stock may not
be sold, assigned, transferred, pledged or otherwise disposed of during the
restriction period.

In fiscal 1995, the board authorized, upon the completion of the initial
public offering, the removal of the restrictions on 91,800 shares scheduled to
expire on November 30, 1996. In exchange for the removal of restrictions on
these shares, the affected employees repaid an aggregate of $837,800 of the
related notes receivable. During each of the years ended March 31, 1997, 1996
and 1995, 18,390 shares of restricted stock were forfeited, and related notes
receivable of $44,900 were canceled in each year. At March 31, 1997, 91,750
shares of restricted stock were outstanding. The restrictions expire on
November 30, 1997 and 1998. Restrictions also expire in the event of a change
in control of the Company or upon the death, disability or retirement of the
employee.

Non-Employee Directors Stock Plan. In August 1995, the Company adopted the
1995 Non-Employee Directors Stock Award and Option Plan (the "Directors Stock
Plan") providing for the issuance of stock options to non- employee directors
upon their election to the Company's Board of Directors. The Directors Stock
Plan also provides non-employee directors the option to receive certain board-
related compensation in the form of stock. The number of shares of Class A
Common Stock available for option or issue under the Directors Stock Plan may
not exceed 50,000 shares.

The Directors Stock Plan provides for grant of 1,200 options to purchase the
Company's Class A Common Stock to each non-employee director upon the election
of each such director to the Board. The exercise price of options issued under
the plan is set at the fair market value of the Company's stock on the date
granted. Options vest at the rate of 400 options on each of the first, second
and third anniversaries of the date of grant. In August 1996 and 1995, 2,400
options were granted to non-employee directors with an exercise price of $6.625
and $9.50, respectively.

The Directors Stock Plan also provides non-employee directors the option to
receive compensation earned for board-related activities in the form of the
Company's Class A Common Stock in lieu of cash. If a board member elects to
receive board-related compensation in the form of stock, the number of shares
issued to each director in lieu of cash is determined based on the amount of
earned compensation divided by the fair market value of the Company's stock on
the date compensation is earned. During the years ended March 31, 1997 and
1996, 2,542 and 1,744 shares, respectively, of the Company's Class A Common
Stock were issued to non-employee directors in lieu of cash compensation of
$18,000 and $16,000, respectively, for each of those years.

Accounting for Stock-Based Compensation. The Company accounts for its stock-
based compensation under APB No. 25, under which no compensation expense has
been recognized for stock options granted with exercise prices equal to the
fair value of the Company's common stock on the date of grant. The Company
adopted SFAS No. 123 for disclosure purposes only in fiscal 1997. For SFAS No.
123 purposes, the fair value of each option grant has been estimated as of the
date of grant using the Black-Scholes option pricing model with the following
weighted average assumptions for 1996 and 1997,

F-14
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

respectively: risk-free interest rate of 6.24% and 6.56%, expected life of five
years, expected dividend yield of 0% and expected volatility of 58% for 1996
and 1997. Using these assumptions, the fair value of the stock options granted
in 1996 and 1997 is $9,000 and $294,000, respectively, which would be amortized
as compensation expense over the vesting period of the options. Had
compensation cost for the plan been determined in accordance with SFAS No. 123,
utilizing the assumptions detailed above, the Company's pro forma net income
would have been $93,000 and $7,816,000 for the years ended March 31, 1996 and
1997, respectively. Pro forma net income per share would have been $.01 and
$.64 for the years ended March 31, 1996 and 1997, respectively.

The pro forma effect on net income in this pro forma disclosure may not be
representative of the pro forma effect on net income in future years, because
it does not take into consideration pro forma compensation expense related to
grants made prior to fiscal 1996.

A summary of the Company's stock option activity for 1995, 1996 and 1997
follows:

<TABLE>
<CAPTION>
WEIGHTED-AVERAGE
SHARES OPTION PRICE EXERCISE PRICE
------- ------------ ----------------
<S> <C> <C> <C>
Outstanding at March 31, 1995......... 165,064 $ 4.72 $4.72
Granted at market price.............. 2,400 $ 9.50 $9.50
-------
Outstanding at March 31, 1996......... 167,464 $4.72-$9.50 $4.79
Granted at market price.............. 99,400 $6.63-$6.80 $6.87
Exercised............................ (27,008) $ 4.72 $4.72
Canceled or expired.................. (40,514) $4.72-$9.50 $5.12
-------
Outstanding at March 31, 1997......... 199,342 $4.72-$9.50 $5.77
=======
</TABLE>

There was no option activity in fiscal 1995. The weighted-average fair value
of options granted during 1996 and 1997 was $5.35 and $3.89, respectively.
Shares subject to options outstanding at March 31, 1997 have a weighted-average
remaining contractual life of 8.38 years. Of the options outstanding at March
31, 1997, 73,050 are currently exercisable with a weighted-average exercise
price of $5.66 per share. As of March 31, 1996, 33,412 of the options
outstanding were exercisable with a weighted average exercise price of $4.78
per share. No options were exercisable at March 31, 1995.

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, customer and other
receivables, accounts payable and accrued liabilities are reasonable estimates
of their fair values because of the short maturity of these financial
instruments. Based on the borrowing rates available to the Company for long-
term debt with similar terms and average maturities, the carrying amounts
approximate the fair value of such financial instruments.

F-15
<PAGE>

U.S. XPRESS ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

12. QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH FULL
QUARTER QUARTER QUARTER QUARTER YEAR
------- ------- ------- ------- --------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Fiscal 1996
Operating revenue................. $65,031 $71,744 $81,807 $81,115 $299,697
Income from operations............ 1,055 1,780 2,168 248 5,251
Income (loss) before income tax
provision........................ (203) 571 906 (1,199) 75
Net income (loss)................. (88) 351 551 (720) 94
Earnings (loss) per share......... $ (0.01) $ 0.03 $ 0.05 $ (0.06) $ 0.01
Fiscal 1997
Operating revenue................. $87,817 $92,259 $91,179 $91,564 $362,819
Income from operations............ 2,241 6,026 6,473 4,976 19,716
Income before income tax
provision........................ 896 4,611 5,120 3,609 14,236
Net income........................ 552 2,745 2,411 2,170 7,878
Earnings per share(1)............. $ 0.05 $ 0.23 $ 0.20 $ 0.18 $ 0.65
</TABLE>
- --------
(1) The sum of quarterly earnings per share amounts differs from annual
earnings per share because of differences in the weighted average number of
common shares used in the quarterly and annual computations.

F-16
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CON-
NECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
SINCE THE DATES AS OF WHICH INFORMATION IS SET FORTH HEREIN. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.

-----------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 6
Use of Proceeds.......................................................... 10
Price Range of Common Stock.............................................. 10
Capitalization........................................................... 11
Dividend Policy.......................................................... 11
Selected Consolidated Financial Data..................................... 12
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 13
Industry Overview........................................................ 18
Business................................................................. 19
Management............................................................... 26
Certain Relationships and Transactions................................... 32
Principal and Selling Stockholders....................................... 33
Description of Capital Stock............................................. 34
Shares Eligible for Future Sale.......................................... 37
Underwriting............................................................. 38
Legal Matters............................................................ 39
Experts.................................................................. 39
Index to Consolidated Financial Statements............................... F-1
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

3,400,000 Shares

U.S. XPRESS ENTERPRISES, INC.

Class A Common Stock

------------
PROSPECTUS
------------

Alex. Brown & Sons
INCORPORATED

Morgan Stanley Dean Witter

Morgan Keegan & Company, Inc.

Schroder & Co. Inc.

, 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an itemized statement of all expenses to be incurred by
the Company in connection with the sale and distribution of the securities
being registered by this Registration Statement, other than the underwriting
discount. All amounts are estimated except the SEC registration fee, the NASD
filing fee and the NASDAQ listing fee.

<TABLE>
<S> <C>
SEC registration fee............................................... $ 21,991
NASD filing fee.................................................... 7,757
NASDAQ listing fee................................................. 17,500
Accounting fees and expenses....................................... 45,000
Legal fees and expenses............................................ 75,000
Printing........................................................... 80,000
Registrar and transfer agent fees.................................. 2,500
Miscellaneous...................................................... 252
--------
Total............................................................ $250,000
========
</TABLE>

The Company will bear the expenses shown above.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article 12 of the Company's Restated Articles of Incorporation ("Restated
Articles") provides as follows:

To the fullest extent permitted by the Nevada General Corporation Law, as
the same exists or may hereafter be amended, a director or officer of this
corporation shall not be personally liable to the corporation or its
shareholders for monetary damages for breach of his or her fiduciary duty
as a director or officer.

To the fullest extent permitted by the Nevada General Corporation Law, as
the same exists or may hereafter be amended, the corporation shall
indemnify any person who is made or threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative and whether formal or informal,
by reason of the fact that such person is or was a director or officer of
the corporation or of any of its subsidiaries, or is or was serving at the
direction of the corporation in any such capacity with any other entity
whatsoever.

The requirement that the corporation shall provide indemnification
pursuant to this Article 12 shall not preclude any other or additional
provision of indemnification, whether provided by law, by insurance, by
agreement between this corporation and the parties to be indemnified or
otherwise.

In addition to the rights of indemnification granted herein, this
corporation shall, to the fullest extent now or hereafter permitted by the
Nevada General Corporation Law, provide for the advancement of expenses as
they are incurred by any director or officer of the corporation in the
defense of any proceeding of the type described above, in advance of the
final disposition of such proceeding.

Article 11 of the Company's Bylaws provides as follows: "[a]ny director or
officer, or the executor or administrator of any director or officer, is
entitled to indemnification to the fullest extent permissible under the laws
of this state."

The Underwriting Agreement between the Registrant, the Selling Stockholders
and the Underwriters named therein contains provisions pursuant to which the
Underwriters, under certain specified circumstances, have agreed to indemnify
the officers and directors of the Company.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

None.

II-1
<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

a. Exhibits

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------------------------------------------------------------------
<C> <S>
*1 Form of Underwriting Agreement.
3.1 Restated Articles of Incorporation of the Company.(1)
3.2 By-Laws of the Company.(1)
4.1 Stock Purchase Agreement dated June 10, 1993 by and among Max L.
Fuller, Patrick E. Quinn, and the Company.(1)
4.2 Agreement of Right of First Refusal with regard to Class B Shares of
the Company dated May 11, 1994 by and between Max L. Fuller and Patrick
E. Quinn.(1)
*5 Opinion, including consent of Miller & Martin, counsel to the Company,
as to the legality of the securities being registered.
10.1 Accounts Financing Agreement (Security Agreement) dated February 2,
1988, as amended, between Congressional Financial Corp. (Southern) and
Southwest Motor Freight, Inc.(1)
10.2 Security Agreement dated December 18, 1985, as amended, by and between
Exchange National Bank of Chicago and U.S. Xpress, Inc.(1)
10.3 Security Agreement dated September 17, 1987, as amended, by and between
Exchange National Bank of Chicago and Crown Transport Systems, Inc.(1)
10.4 1993 Incentive Stock Plan of the Company.(1)
10.5 Stock Option Agreement Under 1993 Incentive Stock Plan.(1)
10.6 Stock Rights and Restrictions Agreement for Restricted Stock Award
Under 1993 Incentive Stock Plan.(1)
10.7 Self-Funded Employee Benefits Plan Document of the Company.(1)
10.8 Service Agreement dated May 2, 1994 by and between TTC, Illinois, Inc.
and the Company for the provision of leased personnel to the
Company.(1)
10.9 Salary Continuation Agreement dated June 10, 1993 by and between the
Company and Max L. Fuller.(1)
10.10 Salary Continuation Agreement dated June 10, 1993 by and between the
Company and Patrick E. Quinn.(1)
10.11 Stock Purchase Agreement dated November 28, 1990 by and between the
Company and Clyde Fuller for the acquisition by the Company of the
capital stock of Southwest Motor Freight, Inc. held by Mr. Fuller, such
stock constituting all of the issued and outstanding capital stock of
Southwest Motor Freight, Inc.(1)
10.12 Stock Purchase Agreement dated September 30, 1992 by and between the
Company and Clyde Fuller for the acquisition by the Company of the
capital stock of Chattanooga Leasing, Inc. held by Mr. Fuller, such
stock constituting all of the issued and outstanding capital stock of
Chattanooga Leasing, Inc.(1)
10.13 Articles of Merger and Plan of Merger filed February 24, 1993, pursuant
to which Chattanooga Leasing, Inc. was merged with and into Southwest
Motor Freight, Inc.(1)
10.14 Stock Purchase Agreement dated January 1, 1993 by and among Max L.
Fuller, Patrick E. Quinn and the Company for the acquisition by the
Company of the capital stock of U.S. Xpress, Inc. held by Messrs.
Fuller and Quinn, such stock constituting all of the issued and
outstanding capital stock of U.S. Xpress, Inc.(1)
10.15 Stock Purchase Agreement dated January 1, 1993 by and among Max L.
Fuller, Patrick E. Quinn and the Company for the acquisition by the
Company of the capital stock of U.S. Xpress Leasing, Inc. held by
Messrs. Fuller and Quinn, such stock constituting all of the issued and
outstanding capital stock of U.S. Xpress Leasing, Inc.(1)
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------------------------------------------------------------------
<C> <S>
10.16 Stock Purchase Agreement dated March 10, 1994 by and between the
Company and L. D. Miller, III for the acquisition by the Company of the
capital stock of Crown Transport Systems, Inc. held by Mr. Miller, such
stock constituting 40% of the issued and outstanding capital stock of
Crown Transport Systems, Inc.(1)
10.17 Stock Purchase Agreement dated March 17, 1994 by and between the
Company, Patrick E. Quinn and Max L. Fuller for the acquisition by the
Company of the capital stock of Crown Transport Systems, Inc. held by
Messrs. Quinn and Fuller, such stock constituting 60% of the issued and
outstanding capital stock of Crown Transport Systems, Inc.(1)
10.18 Stock Purchase Agreement dated March 18, 1994 by and between the
Company and Ken Adams for the acquisition by the Company of 50% of the
capital stock of Hall Systems, Inc. held by Mr. Adams and the grant of
an option to the Company to purchase the remaining 50% of the capital
stock of Hall Systems, Inc. from Mr. Adams exercisable beginning April
1, 1997.(1)
10.19 Software Acquisition Agreement dated September 15, 1994 by and among
QUALCOMM Incorporated, XPRESS Data Services, Inc., U.S. Xpress
Enterprises, Inc., Patrick E. Quinn, Max L. Fuller, Information
Management Solutions, Inc. and James Coppinger.(2)
10.20 Stock Purchase Agreement dated October 31, 1994 by and between the
Company and Ken Frohlich for the acquisition by the Company of the
capital stock of National Freight Systems, Inc. held by Mr. Frohlich,
such stock constituting all of the issued and outstanding capital stock
of National Freight Systems, Inc.(3)
10.21 Asset Purchase Agreement with respect to acquisition of CSI/Reeves,
Inc.(4)
10.22 Stock Purchase Agreement with respect to Hall Systems, Inc.(5)
10.23 Credit Agreement with NationsBank.(5)
10.24 Amendment No. 1 to Credit Agreement with NationsBank.(6)
10.25 Asset Purchase Agreement dated June 18, 1996 with respect to
acquisition of Michael Lima Transportation, Inc.(7)
10.26 Asset Purchase Agreement dated April 1, 1997 with respect to
acquisition of assets from Rosedale Transport, Inc. and Rosedale
Transport, Ltd.(7)
10.27 Asset Purchase Agreement dated April 25, 1997 with respect to
acquisition of JTI, Inc.(7)
*10.28 Loan and Security Agreement dated June 24, 1997 by and between Wachovia
Bank, N.A. and U.S. Xpress Leasing, Inc.
22 List of the current subsidiaries of the Company.(7)
*23.1 Consent of Miller & Martin (included in their opinion filed as Exhibit
5 to this Registration Statement).
*23.2 Consent of Arthur Andersen LLP, independent certified public
accountants.
</TABLE>
- --------
* Filed herewith
(1) Filed as an exhibit to Registration Statement on Form S-1 dated May 20,
1994 (SEC File No. 33-79208) and incorporated herein by reference.
(2) Filed as an exhibit to Pre-Effective Amendment No. 2 to Registration
Statement on Form S-1 dated October 4, 1994 (SEC File No. 33-79208) and
incorporated herein by reference.
(3) Filed as an exhibit to Quarterly Report on Form 10-Q for quarter ended
September 30, 1994 and incorporated herein by reference.
(4) Filed as an exhibit to Quarterly Report on Form 10-Q for quarter ended
September 30, 1995 and incorporated herein by reference.
(5) Filed as an exhibit to Quarterly Report on Form 10-Q for quarter ended
December 31, 1995 and incorporated herein by reference.
(6) Filed as an exhibit to Quarterly Report on Form 10-Q for quarter ended
September 30, 1996 and incorporated herein by reference.
(7) Filed as an exhibit to the Annual Report on Form 10-K for the fiscal year
ended March 31, 1997 and incorporated herein by reference.

II-3
<PAGE>

b. Financial Statement Schedules

<TABLE>
<S> <C>
Report of Independent Public Accountants on Financial Statement
Schedules........................................................... S-1
Schedule II -- Valuation and Qualifying Accounts..................... S-2
</TABLE>

All other schedules are omitted as the required information is inapplicable
or the information is presented in the financial statements or related notes.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions set forth in Item 14, or otherwise, the
Company has been advised in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and the Company will be governed by the final
adjudication of such issue.

The Company hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Company pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act of 1933 shall be deemed to be part of
this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

POWER OF ATTORNEY

The Company and each person whose signature appears below hereby appoints
Max L. Fuller, Patrick E. Quinn and Ray M. Harlin, and each of them, as
attorneys-in-fact with full power of substitution, to execute in their
respective names and on behalf of the Company and each such person,
individually and in each capacity stated below, any and all amendments
(including post-effective amendments) to this registration statement as the
attorney-in-fact and to file any such amendment to the registration statement
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and their substitutes, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and their substitutes may lawfully
do or cause to be done by virtue hereof.

II-4
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CHATTANOOGA, STATE OF
TENNESSEE ON JULY 10, 1997.

U.S. XPRESS ENTERPRISES, INC.

By: /s/ Patrick E. Quinn
------------------------------
Patrick E. Quinn, President and
Co-Chairman of the Board

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.

SIGNATURES TITLE DATE

/s/ Max L. Fuller Co-Chairman of the July 10, 1997
- ---------------------------- Board; Director
MAX L. FULLER (principal executive
officer)

/s/ Patrick E. Quinn Co-Chairman of the July 10, 1997
- ---------------------------- Board; President and
PATRICK E. QUINN Treasurer; Director
(principal executive
officer)

/s/ Ray M. Harlin Chief Financial Officer; July 10, 1997
- ---------------------------- (principal financial and
RAY M. HARLIN accounting officer)

/s/ E. William Lusk, Jr. Executive Vice President July 10, 1997
- ---------------------------- of Marketing; Director
E. WILLIAM LUSK, JR.

/s/ William K. Farris Executive Vice President July 10, 1997
- ---------------------------- of Operations; Director
WILLIAM K. FARRIS

/s/ James B. Baker Director July 10, 1997
- ----------------------------
JAMES B. BAKER

/s/ A. Alexander Taylor, II Director July 10, 1997
- ----------------------------
A. ALEXANDER TAYLOR, II

II-5
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
of U.S. Xpress Enterprises, Inc.

We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of U.S. XPRESS ENTERPRISES, INC. (a
Nevada corporation) AND SUBSIDIARIES in this Form 10-K and have issued our
report thereon dated May 7, 1997. Our audit was made for the purpose of
forming an opinion on the financial statements taken as a whole. Schedule II
is the responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and
is not part of the basic consolidated financial statements. This schedule has
been subjected to the auditing procedures applied in the audit of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.

/s/ Arthur Andersen LLP
_____________________________________
Arthur Andersen LLP

Chattanooga, Tennessee
May 7, 1997

S-1
<PAGE>

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED MARCH 31, 1995, 1996 AND 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT
BEGINNING CHARGED TO CHARGED TO BALANCE AT
DESCRIPTION OF PERIOD COST/EXPENSES OTHER (1) DEDUCTIONS (2) END OF PERIOD
----------- ---------- ------------- ---------- -------------- -------------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED
3/31/95
Reserve for doubtful
accounts.............. $1,212 $ 543 $ 181 $ 306 $1,630
FOR THE YEAR ENDED
3/31/96
Reserve for doubtful
accounts.............. $1,630 $ 784 $1,036 $ 417 $3,033
FOR THE YEAR ENDED
3/31/97
Reserve for doubtful
accounts.............. $3,033 $1,259 $ 113 $1,672 $2,733
</TABLE>

<TABLE>
<S> <C>
(1)For the year ended 3/31/95
Recoveries on accounts written off............................... $ 181
------
For the year ended 3/31/96
Recoveries on accounts written off............................... $ 25
Balance acquired through purchase of CSI/Reeves.................. 886
Balance acquired through purchase of Hall Systems................ 125
------
1,036
For the year ended 3/31/97
Recoveries on accounts written off............................... $ 113
------
(2)Accounts written off
</TABLE>

S-2

<PAGE>

EXHIBIT 1

3,400,000 Shares

U.S. XPRESS ENTERPRISES, INC.

Class A Common Stock

UNDERWRITING AGREEMENT
----------------------

___________, 1997
ALEX. BROWN & SONS INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
MORGAN KEEGAN & COMPANY, INC.
SCHRODER & CO. INC.
As Representatives of the
Several Underwriters
c/o Alex. Brown & Sons Incorporated
One South Street
Baltimore, Maryland 21202

Ladies and Gentlemen:

U.S. Xpress Enterprises, Inc., a Nevada corporation (the "Company"), and
certain shareholders of the Company (the "Selling Stockholders") propose to sell
to the several underwriters (the "Underwriters") named in Schedule I hereto for
whom you are acting as representatives (the "Representatives") an aggregate of
3,400,000 shares of the Company's Class A Common Stock, $.01 par value (the
"Firm Shares"), of which 2,500,000 shares will be sold by the Company and
900,000 shares will be sold by the Selling Stockholders. The respective amounts
of the Firm Shares to be so purchased by the several Underwriters are set forth
opposite their names in Schedule I hereto, and the respective amounts to be sold
by the Selling Stockholders are set forth opposite their names in Schedule II
hereto. The Company and the Selling Stockholders are sometimes referred to
herein collectively as the "Sellers." The Company and certain Selling
Stockholders also propose to sell at the Underwriters' option an aggregate of up
to 510,000 additional shares of the Company's Class A Common Stock (the "Option
Shares") as set forth below.

-1-
<PAGE>

As the Representatives, you have advised the Company and the Selling
Stockholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares set
forth opposite their respective names in Schedule I, plus their pro rata portion
of the Option Shares if you elect to exercise the over-allotment option in whole
or in part for the accounts of the several Underwriters. The Firm Shares and
the Option Shares (to the extent the aforementioned option is exercised) are
herein collectively called the "Shares."

In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:

1. Representations and Warranties of the Company and the Selling
-------------------------------------------------------------
Stockholders.
------------

(a) The Company represents and warrants to each of the Underwriters as
follows:

(i) A registration statement on Form S-1 (File No. 33-_______) with
respect to the Shares has been carefully prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended, (the "Act") and
the Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission. Copies of such registration statement, including any amendments
thereto, the preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been delivered by the
Company to you. Such registration statement, together with any registration
statement filed by the Company pursuant to Rule 462(b) of the Act, herein
referred to as the "Registration Statement," which shall be deemed to include
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, has become effective under the Act and no
post-effective amendment to the Registration Statement has been filed as of the
date of this Agreement. "Prospectus" means (a) the form of prospectus first
filed by the Company with the Commission pursuant to its Rule 424(b) (b) the
last preliminary prospectus included in the Registration Statement filed prior
to the time it becomes effective or filed pursuant to Rule 424(a) under the Act
that is delivered by the Company to the Underwriters for delivery to purchasers
of the Shares, together with the term sheet or abbreviated term sheet filed with
the Commission pursuant to Rule 424(b)(7) under the Act. Each preliminary
prospectus included in the Registration Statement prior to the time it becomes
effective is herein referred to as a "Preliminary Prospectus."

(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Nevada, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement. Each of the subsidiaries
of the Company, as listed in Exhibit 22 to Item 16(a) of the Registration
Statement, or incorporated therein by reference (collectively, the
"Subsidiaries"), has been duly organized and is validly existing as a
corporation in good standing under the laws of

-2-
<PAGE>

the jurisdiction of its incorporation, with corporate power and authority to own
or lease its properties and conduct its business as described in the
Registration Statement. The Company and each of the Subsidiaries are duly
qualified to transact business in all jurisdictions in which the conduct of
their business requires such qualification and a failure to qualify would have a
materially adverse effect upon the business or financial condition of the
Company and the Subsidiaries taken as a whole. The outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable and are owned by the Company free and clear of
all liens, encumbrances and equities and claims; and no options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into shares of capital stock or ownership
interests in the Subsidiaries are outstanding.

(iii) The outstanding shares of Common Stock of the Company, including
all shares to be sold by the Selling Stockholders, have been duly authorized and
validly issued and are fully paid and non-assessable; the Shares to be issued
and sold by the Company have been duly authorized and when issued and paid for
as contemplated herein will be validly issued, fully-paid and non-assessable;
and no preemptive rights of stockholders exist with respect to any of the Shares
or the issue and sale thereof. Neither the filing of the Registration Statement
nor the offering or sale of the Shares as contemplated by this Agreement gives
rise to any rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of Common Stock.

(iv) The information set forth under the caption "Capitalization" in
the Prospectus is true and correct. All of the Shares conform to the
description thereof contained in the Registration Statement. The form of
certificates for the Shares conforms to the corporate law of the State of
Nevada.

(v) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Shares nor
instituted proceedings of which the Company has been made aware for that
purpose. The Registration Statement contains and the Prospectus and any
amendments or supplements thereto will contain, all statements which are
required to be stated therein by, and in all respects conform or will conform,
as the case may be, to the requirements of the Act and the Rules and
Regulations. Neither the Registration Statement nor any amendment thereto, and
neither the Prospectus nor any amendment or supplement thereto, contains or will
contain, as the case may be, any untrue statement of a material fact or omits or
will omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from the
Registration Statement or the Prospectus, or any such amendment or supplement,
in reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of any Underwriter through the Representatives,
specifically for use in the preparation thereof.

-3-
<PAGE>

(vi) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set forth in the
Registration Statement, present fairly in all material respects the financial
position and the results of operations and cash flows of the Company and the
consolidated Subsidiaries, at the indicated dates and for the indicated periods.
Such financial statements and related schedules have been prepared in accordance
with generally accepted principles of accounting, consistently applied
throughout the periods involved, and all adjustments necessary for a fair
presentation of results for such periods have been made. The selected and
summary financial and statistical data included in the Registration Statement
presents fairly the information shown therein and has been compiled on a basis
consistent with the financial statements presented therein and the books and
records of the Company.

(vii) Arthur Andersen LLP, which have certified certain of the
financial statements filed with the Commission as part of the Registration
Statement, have certified to the Company that they are independent public
accountants as required by the Act and the Rules and Regulations.

(viii) There is no action, suit, claim or proceeding pending or, to
the knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency or otherwise which if
determined adversely to the Company or any of its Subsidiaries might result in
any material adverse change in the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and of the Subsidiaries taken as a whole or to prevent the
consummation of the transactions contemplated hereby, except as set forth in the
Registration Statement.

(ix) The Company and the Subsidiaries have good and marketable title to
all of the properties and assets reflected as being owned by them in the
financial statements (or as described in the Registration Statement) hereinabove
described, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in such financial statements (or as described in the
Registration Statement) or which are not material in amount or for taxes not yet
due and payable. The Company and the Subsidiaries occupy their leased
properties under valid and binding leases conforming in all material respects to
the description thereof set forth in the Registration Statement.

(x) The Company and the Subsidiaries have filed all Federal, State and
foreign income tax returns which have been required to be filed and have paid
all taxes indicated by said returns and all assessments received by them or any
of them to the extent that such taxes have become due and are not being
contested in good faith.

(xi) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not been
any material adverse change or any development which could reasonably be
expected to involve a prospective

-4-
<PAGE>

material adverse change in or affecting the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise), or
prospects of the Company and its Subsidiaries taken as a whole, whether or not
occurring in the ordinary course of business, and there has not been any
material transaction entered into or any material transaction that is probable
of being entered into by the Company or the Subsidiaries, other than
transactions in the ordinary course of business and changes and transactions
contemplated by the Registration Statement, as it may be amended or
supplemented. The Company and the Subsidiaries have no material contingent
obligations which are not disclosed in the Registration Statement or the
financial statements included therein, as it may be amended or supplemented.

(xii) Neither the Company nor any of the Subsidiaries is in default
under its Articles of Incorporation or By-Laws or under any agreement, lease,
contract, indenture or other instrument or obligation to which it is a party or
by which it, or any of its properties, is bound and which default is of material
significance in respect of the business or financial condition of the Company
and the Subsidiaries, taken as a whole or the business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company and the Subsidiaries taken as a whole. The execution and delivery
of this Agreement and the consummation of the transactions herein contemplated
and the fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, any
material indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any Subsidiary is a party, or of the Articles of
Incorporation or By-Laws of the Company or any order, rule or regulation
applicable to the Company or any Subsidiary of any court or of any regulatory
body or administrative agency or other governmental body having jurisdiction.

(xiii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or may be necessary to
qualify the Shares for public offering by the Underwriters under state
securities or Blue Sky laws) has been obtained or made and is in full force and
effect.

(xiv) The Company and each of the Subsidiaries holds all material
licenses, certificates and permits from governmental authorities which are
necessary to the conduct of their businesses; and neither the Company nor any of
the Subsidiaries has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement is material to the business of the
Company and the Subsidiaries taken as a whole. The Company knows of no material
infringement by others of patents, patent rights, trade names, trademarks or
copyrights owned by or licensed to the Company.

-5-
<PAGE>

(xv) To the best of the Company's knowledge, there are no affiliations
or associations between any member of the National Association of Securities
Dealers, Inc. and any of the Company's officers, directors or 5% or greater
security holders, except as set forth in the Registration Statement or as
otherwise disclosed in writing to the Representatives.

(xvi) Neither the Company, nor to the Company's best knowledge, any of
its affiliates, has taken or will take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares.

(xvii) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of such term under the 1940 Act and the rules and
regulations of the Commission thereunder.

(xiii) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(xix) The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar industries.

(xx) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification.

-6-
<PAGE>

(b) Each of the Selling Stockholders severally and not jointly represents
and warrants as follows:

(i) Such Selling Stockholder now has and at the Closing Date and the
Option Closing Date, as the case may be (as such dates are hereinafter defined)
will have good and valid title to the Firm Shares and the Option Shares to be
sold by such Selling Stockholder, free of any liens, encumbrances, equities and
claims, and full right, power and authority to effect the sale and delivery of
such Firm Shares and the Option Shares; and upon the delivery of, against
payment for, such Firm Shares and the Option Shares pursuant to this Agreement,
the Underwriters will acquire good and marketable title thereto, free and clear
of any liens, encumbrances, equities and claims.

(ii) Such Selling Stockholder has full right, power and authority to
execute and deliver this Agreement, the Power of Attorney, and the Custodian
Agreement referred to below and to perform its obligations under such
agreements. The execution and delivery of this Agreement and the consummation
by such Selling Stockholder of the transactions herein contemplated and the
fulfillment by such Selling Stockholder of the terms hereof will not require any
consent, approval, authorization, or other order of any court, regulatory body,
administrative agency or other governmental body (except as may be required
under the Act, state securities laws or Blue Sky laws) and will not result in a
breach of any of the terms and provisions of, or constitute a default under,
organizational documents of such Selling Stockholder, if not an individual, or
any indenture, mortgage, deed of trust or other agreement or instrument to which
such Selling Stockholder is a party, or of any order, rule or regulation
applicable to such Selling Stockholder of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.

(iii) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to, or which has constituted, or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Class A Common Stock of the Company and, other
than as permitted by the Act, the Selling Stockholder will not distribute any
prospectus or other offering material in connection with the offering of the
Shares.

(iv) No offering, sale or other disposition of any Common Stock of the
Company, any options or warrants to purchase shares of Common Stock or any
securities convertible into or exchangeable for shares of Common Stock will be
made for a period of 90 days after the date of this Agreement, directly or
indirectly, by such Selling Stockholder otherwise than hereunder or with the
prior written consent of Alex. Brown & Sons Incorporated.

(v) Without having undertaken to determine independently the accuracy
or completeness of either the representations and warranties of the Company
contained herein or the information contained in the Registration Statement,
such Selling Stockholder has no reason to

-7-
<PAGE>

believe that the representations and warranties of the Company contained in this
Section 1 are not true and correct, is familiar with the Registration Statement
and has no knowledge of any material fact, condition or information not
disclosed in the Registration Statement which has adversely affected or may
adversely affect the business of the Company or any of the Subsidiaries; and the
sale of the Firm Shares and the Option Shares by such Selling Stockholder
pursuant hereto is not prompted by any material, non-public information
concerning the Company or any of the Subsidiaries which is not set forth in the
Registration Statement. The information pertaining to such Selling Stockholder
under the caption "Selling Stockholders" in the Prospectus is complete and
accurate in all material respects.

2. Purchase, Sale and Delivery of the Firm Shares.
----------------------------------------------

(a) On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Sellers agree to
sell to the Underwriters and each Underwriter agrees, severally and not jointly,
to purchase, at a price of $______ per share, the number of Firm Shares set
forth opposite the name of each Underwriter in Schedule I hereof, subject to
adjustments in accordance with Section 9 hereof. The number of Firm Shares to
be purchased by each Underwriter from each Seller shall be as nearly as
practicable in the same proportion to the total number of Firm Shares being sold
by each Seller as the number of Firm Shares being purchased by each Underwriter
bears to the total number of Firm Shares to be sold hereunder. The obligations
of the Company and of each of the Selling Stockholders shall be several and not
joint.

(b) Certificates in negotiable form for the total number of the Shares to be
sold hereunder by the Selling Stockholders have been placed in custody with Ray
M. Harlin as custodian (the "Custodian") pursuant to the Custodian Agreement
executed by each Selling Stockholder for delivery of all Firm Shares and any
Option Shares to be sold hereunder by the Selling Stockholders. Each of the
Selling Stockholders specifically agrees that the Firm Shares and any Option
Shares represented by the certificates held in custody for the Selling
Stockholders under the Custodian Agreement are subject to the interests of the
Underwriters hereunder, that the arrangements made by the Selling Stockholders
for such custody are to that extent irrevocable, and that the obligations of the
Selling Stockholders hereunder shall not be terminable by any act or deed of the
Selling Stockholders (or by any other person, firm or corporation including the
Company, the Custodian or the Underwriters) or by operation of law (including
the death of an individual Selling Stockholder or the dissolution of a
partnership Selling Stockholder) or by the occurrence of any other event or
events, except as set forth in the Custodian Agreement. If any such event
should occur prior to the delivery to the Underwriters of the Firm Shares or the
Option Shares hereunder, certificates for the Firm Shares or the Option Shares,
as the case may be, shall be delivered by the Custodian in accordance with the
terms and conditions of this Agreement as if such event has not occurred. The
Custodian is authorized to receive and acknowledge receipt of the proceeds of
sale of the Shares held by it against delivery of such Shares.

-8-
<PAGE>

(c) Payment for the Firm Shares to be sold hereunder is to be made in same
day funds via wire transfer to the order of the Company for the shares to be
sold by it and to the order of "Ray M. Harlin" for the shares to be sold by the
Selling Stockholders, in each case against delivery of certificates therefor to
the Representatives for the several accounts of the Underwriters. Such payment
and delivery are to be made at the offices of Alex. Brown & Sons Incorporated,
One South Street, Baltimore, Maryland, at 10:00 a.m., Baltimore time, on the
third business day after the date of this Agreement or at such other time and
date not later than five business days thereafter as you and the Company shall
agree upon, such time and date being herein referred to as the "Closing Date."
(As used herein, "business day" means a day on which the New York Stock Exchange
is open for trading and on which banks in New York are open for business and not
permitted by law or executive order to be closed.) The certificates for the
Firm Shares will be delivered in such denominations and in such registrations as
the Representatives request in writing not later than the second full business
day prior to the Closing Date, and will be made available for inspection by the
Representatives at least one business day prior to the Closing Date.

(d) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
and certain Selling Stockholders listed on Schedule III hereto hereby grant an
option to the several Underwriters to purchase the Option Shares at the price
per share as set forth in the first paragraph of this Section 2. The maximum
number of Option Shares to be sold by the Company and the Selling Stockholders
is set forth opposite their respective names on Schedule III hereto. The option
granted hereby may be exercised in whole or in part but only once and at any
time upon written notice given within 30 days after the date of this Agreement,
by you, as Representatives of the several Underwriters, to the Company, the
Attorney-in-Fact and the Custodian setting forth the number of Option Shares as
to which the several Underwriters are exercising the option, the names and
denominations in which the Option Shares are to be registered and the time and
date at which such certificates are to be delivered. If the option granted
hereby is exercised in part, the respective number of Option Shares to be sold
by the Company and each of the Selling Stockholders listed in Schedule III
hereto shall be determined on a pro rata basis in accordance with the
percentages set forth opposite their names in Schedule III hereto, adjusted by
you in such manner as to avoid fractional shares. The time and date at which
certificates for Option Shares are to be delivered shall be determined by the
Representatives but shall not be earlier than three nor later than 10 full
business days after the exercise of such option, nor in any event prior to the
Closing Date (such time and date being herein referred to as the "Option Closing
Date"). If the date of exercise of the option is three or more days before the
Closing Date, the notice of exercise shall set the Closing Date as the Option
Closing Date. The number of Option Shares to be purchased by each Underwriter
shall be in the same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such Underwriter bears
to the total number of Firm Shares, adjusted by you in such manner as to avoid
fractional shares. The option with respect to the Option Shares granted
hereunder may be exercised only to cover

-9-
<PAGE>

over-allotments in the sale of the Firm Shares by the Underwriters. You, as
Representatives of the several Underwriters, may cancel such option at any time
prior to its expiration by giving written notice of such cancellation to the
Company and the Attorney-in-Fact. To the extent, if any, that the option is
exercised, payment for the Option Shares shall be made on the Option Closing
Date in same day funds via wire transfer to the order of the Company for the
Option Shares to be sold by it and to the order of "Ray M. Harlin, as Custodian"
for the Option Shares to be sold by the Selling Stockholders against delivery of
certificates therefor at the offices of Alex. Brown & Sons Incorporated, One
South Street, Baltimore, Maryland.

(e) If on the Closing Date or Option Closing Date, as the case may be, any
Selling Stockholder fails to sell the Firm Shares or Option Shares which such
Selling Stockholder has agreed to sell on such date as set forth in Schedule II
-----------
or Schedule III hereto, the Company agrees that it will sell or arrange for the
------------
sale of that number of shares of Common Stock to the Underwriters which
represents Firm Shares or the Option Shares which such Selling Stockholder has
failed to so sell, as set forth in Schedule II or Schedule III hereto, or such
----------- -------------
lesser number as may be requested by the Representatives.

3. Offering by the Underwriters. It is understood that the several
----------------------------
Underwriters are to make a public offering of the Firm Shares as soon as the
Representatives deem it advisable to do so. The Firm Shares are to be initially
offered to the public at the initial public offering price set forth in the
Prospectus. The Representatives may from time to time thereafter change the
public offering price and other selling terms. To the extent, if at all, that
any Option Shares are purchased pursuant to Section 2 hereof, the Underwriters
will offer them to the public on the foregoing terms.

It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.

4. Covenants of the Company and the Selling Stockholders.
-----------------------------------------------------

(a) The Company covenants and agrees with the several Underwriters that:

(i) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule 430A of
the Rules and Regulations is followed, to prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus in a form
approved by the Representatives containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A of
the Rules and Regulations, and (B) not file any amendment to the Registration
Statement or supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not in
compliance with the Rules and Regulations and (C) file on a timely basis all
reports and

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<PAGE>

any definitive proxy or information statements required to be filed by the
Company with the Commission subsequent to the date of the Prospectus and prior
to the termination of the offering of the Shares by the Underwriters.

(ii) The Company will advise the Representatives promptly (A) when the
Registration Statement or any post-effective amendment thereto shall have become
effective, (B) of receipt of any comments from the Commission, (C) of any
request of the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information and (D) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose. The Company will use its best efforts to prevent
the issuance of any such stop order preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if issued.

(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of such
jurisdictions as the Representatives may reasonably have designated in writing
and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other documents, as are or
may be required to continue such qualifications in effect for so long a period
as the Representatives may reasonably request for distribution of the Shares.

(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary Prospectus
as the Representatives may reasonably request. The Company will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representatives may
reasonably request. The Company will deliver to the Representatives at or
before the Closing Date, four signed copies of the Registration Statement and
all amendments thereto including all exhibits filed therewith, and will deliver
to the Representatives such number of copies of the Registration
Statement(including such number of copies of the exhibits filed therewith that
may reasonably be requested), and of all amendments thereto, as the
Representatives may reasonably request.

(v) The Company will comply with the Act and the Rules and Regulations,
and the Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and
regulations of the Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and the Prospectus.
If during the period in which a prospectus is required by law to be delivered by
an Underwriter or dealer any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the Underwriters, it

-11-
<PAGE>

becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Prospectus to comply with any law, the
Company promptly will prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with the law.

(vi) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.

(vii) The Company will, for a period of five years from the Closing
Date, deliver to the Representatives copies of annual reports and copies of all
other documents, reports and information furnished by the Company to its
stockholders or filed with any securities exchange pursuant to the requirements
of such exchange or with the Commission pursuant to the Act or the Exchange Act.
The Company will deliver to the Representatives similar reports with respect to
significant subsidiaries, as that term is defined in the Rules and Regulations,
which are not consolidated in the Company's financial statements.

(viii) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other securities convertible into or
exchangeable or exercisable for shares of Common Stock or derivative of Common
Stock (or agreement for such) will be made for a period of 90 days after the
date of this Agreement, directly or indirectly, by the Company otherwise than
hereunder or with the prior written consent of Alex. Brown & Sons Incorporated
except that the Company may, without such consent, issue shares upon the
exercise of options outstanding on the date hereof.

(ix) The Company will obtain the approval of The Nasdaq Stock Market in
connection with the issuance and listing of the applicable portion of the
Shares.

(x) The Company has caused each executive officer and director and the
Selling Stockholders of the Company to furnish to you, on or prior to the date
of this agreement, a letter or letters, in form and substance satisfactory to
the Underwriters, pursuant to which each such person shall agree not to offer,
sell, sell short or otherwise dispose of any shares of Common Stock of the
Company or other capital stock of the Company, or any other securities
convertible, exchangeable or exercisable for Common Shares or derivative of
Common Shares owned by such person or request the registration for the offer or
sale of any of the foregoing (or as to

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<PAGE>

which such person has the right to direct the disposition of) for a period of 90
days after the date of this Agreement, directly or indirectly, except with the
prior written consent of Alex. Brown & Sons Incorporated ("Lockup Agreements").

(xi) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Shares in such a manner as would
require the Company or any of the Subsidiaries to register as an investment
company under the 1940 Act.

(xii) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for the
Common Stock.

(xiii) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.

(b) Each of the Selling Stockholders severally and not jointly covenants
and agrees with the several Underwriters that:

(i) No offering, sale, short sale or other disposition of any shares of
Common Stock of the Company or other capital stock of the Company or other
securities convertible, exchangeable or exercisable for Common Stock or
derivative of Common Stock owned by the Selling Stockholder or request the
registration for the offer or sale of any of the foregoing (or as to which the
Selling Stockholder has the right to direct the disposition of) will be made for
a period of 90 days after the date of this Agreement, directly or indirectly, by
such Selling Stockholder otherwise than hereunder or with the prior written
consent of Alex. Brown & Sons Incorporated.

(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 and the Interest and Dividend Tax Compliance Act of 1983 with
respect to the transactions herein contemplated, each of the Selling
Stockholders agrees to deliver to you prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).

(iii) Such Selling Stockholder will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.

5. Costs and Expenses. The Company will pay all costs, expenses and fees
------------------
incident to the performance of the obligations of the Sellers under this
Agreement, including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements of
counsel for the Company and the Selling Stockholders; the cost of printing and
delivering to, or as requested by, the Underwriters copies of the Registration
Statement,

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<PAGE>

Preliminary Prospectuses, the Prospectus, this Agreement, the Underwriters'
Invitation Letter, the Listing Application, the Blue Sky Survey and any
supplements or amendments thereto; the filing fees of the Commission; and the
filing fees of the NASD. The Selling Stockholders have agreed with the Company
to reimburse the Company for a portion of such expenses. To the extent, if at
all, that any of the Selling Stockholders engage special legal counsel to
represent them in connection with this offering, the fees and expenses of such
counsel shall be borne by such Selling Stockholder. Any transfer taxes imposed
on the sale of the Shares to the several Underwriters will be paid by the
Sellers pro rata. The Company shall not, however, be required to pay for any of
the Underwriters' expenses (other than those related to qualification under
State securities or Blue Sky laws or NASD regulation) except that, if this
Agreement shall not be consummated because the conditions in Section 6 hereof
are not satisfied, or because this Agreement is terminated by the
Representatives pursuant to Section 11 hereof, or by reason of any failure,
refusal or inability on the part of the Company or the Selling Stockholders to
perform any undertaking or satisfy any condition of this Agreement or to comply
with any of the terms hereof on their part to be performed, unless such failure
to satisfy said condition or to comply with said terms be due to the default or
omission of any Underwriter, then the Company shall reimburse the several
Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Company and the Selling Stockholders shall
not in any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits from the sale by them of the Shares.

6. Conditions of Obligations of the Underwriters. The several obligations
---------------------------------------------
of the Underwriters to purchase the Firm Shares on the Closing Date and the
Option Shares, if any, on the Option Closing Date are subject to the accuracy,
as of the Closing Date or the Option Closing Date, as the case may be, of the
representations and warranties of the Company and the Selling Stockholders
contained herein, and to the performance by the Company and the Selling
Stockholders of their covenants and obligations hereunder and to the following
additional conditions:

(a) The Registration Statement and all post-effective amendments thereto
shall have become effective and any and all filings required by Rule 424 and
Rule 430A of the Rules and Regulations shall have been made, and any request of
the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company or the Selling Stockholders, shall be
contemplated by the Commission and no injunction, restraining order, or order of
any nature by a Federal or state court of competent jurisdiction shall have been
issued as of the Closing Date which would prevent the issuance of the Shares.

-14-
<PAGE>

(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Miller & Martin, counsel
for the Company and the Selling Stockholders, dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Underwriters (and
stating that it may be relied upon by counsel to the Underwriters) to the effect
that:

(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Nevada, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement; each of the Subsidiaries
has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with corporate
power and authority to own or lease its properties and conduct its business as
described in the Registration Statement; the Company and each of the
Subsidiaries are duly qualified to transact business in all jurisdictions in
which the conduct of their business requires such qualification, or in which the
failure to qualify would have a materially adverse effect upon the business of
the Company and the Subsidiaries taken as a whole; and the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the Company or
Subsidiary; and, to the best of such counsel's knowledge, the outstanding shares
of capital stock of each of the Subsidiaries is owned free and clear of all
liens, encumbrances and equities and claims, and no options, warrants or other
rights to purchase, agreements or other obligations to issue or other rights to
convert any obligations into any shares of capital stock or of ownership
interests in the Subsidiaries are outstanding.

(ii) The Company has authorized and outstanding capital stock as set
forth under the caption "Capitalization" in the Prospectus; the authorized
shares of the Company's Common Stock have been duly authorized; the outstanding
shares of the Company's Common Stock, including the Shares to be sold by the
Selling Stockholders, have been duly authorized and validly issued and are fully
paid and non-assessable; all of the Shares conform to the description thereof
contained in the Prospectus; the certificates for the Shares, assuming they are
in the form filed with the Commission, are in due and proper form; the shares of
Common Stock, including the Option Shares, if any, to be sold by the Company
pursuant to this Agreement have been duly authorized and will be validly issued,
fully paid and non-assessable when issued and paid for as contemplated by this
Agreement; and no preemptive rights of stockholders exist with respect to any of
the Shares or the issue or sale thereof.

(iii) Except as described in or contemplated by the Prospectus, to the
knowledge of such counsel, there are no outstanding securities of the Company
convertible or exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and there are no
outstanding or authorized options, warrants or rights of any character
obligating the Company to issue any shares of its capital stock or any
securities convertible or exchangeable into or evidencing the right to purchase
or subscribe for any shares of such stock;

-15-
<PAGE>

and except as described in the Prospectus, to the knowledge of such counsel, no
holder of any securities of the Company or any other person has the right,
contractual or otherwise, which has not been satisfied or effectively waived, to
cause the Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, any of the Shares or the right to have any Common Shares
or other securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement, to require
registration under the Act of any shares of Common Stock or other securities of
the Company.

(iv) The Registration Statement has become effective under the Act and,
to the best of the knowledge of such counsel, no stop order proceedings with
respect thereto have been instituted or are pending or threatened under the Act.

(v) The Registration Statement, the Prospectus and each amendment or
supplement thereto comply as to form in all material respects with the
requirements of the Act or the 1934 Act, as applicable and the applicable rules
and regulations thereunder (except that such counsel need express no opinion as
to the financial statements, schedules and other financial information included
therein).

(vi) The statements under the captions "Business-Regulation,"
"Executive Compensation and Other Information-Stock Incentive Plan,"
"Description of Capital Stock" and "Shares Eligible for Future Sale" in the
Prospectus, insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries and fairly and
correctly present the information called for with respect to such documents and
matters.

(vi) Such counsel does not know of any contracts or documents required
to be filed as exhibits to or incorporated by reference in the Registration
Statement or described in the Registration Statement or the Prospectus which are
not so filed, incorporated by reference or described as required, and such
contracts and documents as are summarized in the Registration Statement or the
Prospectus are fairly summarized in all material respects.

(vii) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the Subsidiaries
except as set forth in the Prospectus.

(viii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, the Articles of Incorporation or By-Laws of the
Company, or any agreement or instrument known to such counsel to which the
Company or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries may be bound.

-16-
<PAGE>

(ix) This Agreement has been duly authorized, executed and delivered by
the Company.

(x) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and delivery of
this Agreement and the consummation of the transactions herein contemplated
(other than as may be required by the NASD or as required by State securities
and Blue Sky laws as to which such counsel need express no opinion) except such
as have been obtained or made, specifying the same.

(xi) This Agreement has been duly authorized, executed and delivered on
behalf of the Selling Stockholders.

(xii) The Company is not, and will not become, as a result of the
consummation of the transactions contemplated by this Agreement and application
of the net proceeds therefrom as described in the Prospectus, required to
register as an investment company under the 1940 Act.

(xiii) Each Selling Stockholder has full legal right, power and
authority, and any approval required by law (other than as required by State
securities and Blue Sky laws as to which such counsel need express no opinion),
to sell, assign, transfer and deliver the portion of the Shares to be sold by
such Selling Stockholder.

(xiv) The Custodian Agreement and the Power of Attorney executed and
delivered by each Selling Stockholder is valid and binding.

(xv) The Underwriters (assuming that they are bona fide purchasers
within the meaning of the Uniform Commercial Code) have acquired good and
marketable title to the Shares being sold by each Selling Stockholder on the
Closing Date, and the Option Closing Date, as the case may be, free and clear of
all liens, encumbrances, equities and claims.

In rendering such opinion, Miller & Martin may rely as to matters
governed by the laws of states other than Tennessee and Nevada or Federal laws
on local counsel in such jurisdictions and as to the matters set forth in
subparagraphs (xiii), (xiv) and (xv) on opinions of other counsel representing
the respective Selling Stockholders, provided that in each case Miller & Martin
shall state that they believe that they and the Underwriters are justified in
relying on such other counsel. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has come to
the attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the Act (but after
giving effect to any modifications incorporated therein pursuant to Rule 430A
under the Act) and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be

-17-
<PAGE>

stated therein or necessary to make the statements therein not misleading, and
(ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they are made, not
misleading (except that such counsel need express no view as to financial
statements, schedules and other financial or statistical information included or
incorporated by reference therein). With respect to such statement, Miller &
Martin may state that their belief is based upon the procedures set forth
therein, but is without independent check and verification.

(c) The Representatives shall have received from Piper & Marbury L.L.P.,
counsel for the Underwriters, an opinion dated the Closing Date or the Option
Closing Date, as the case may be, substantially to the effect specified in
subparagraphs (ii), (iii), (iv), (x) and (xi) of Paragraph (b) of this Section
6, and that the Company is a duly organized and validly existing corporation
under the laws of the State of Nevada. In rendering such opinion Piper &
Marbury L.L.P. may rely as to all matters governed other than by the laws of the
States of Maryland and Delaware or Federal laws on the opinion of counsel
referred to in paragraph (b) of this Section 6. In addition to the matters set
forth above, such opinion shall also include a statement to the effect that
nothing has come to the attention of such counsel which leads them to believe
that (i) the Registration Statement, or any amendment thereto, as of the time it
became effective under the Act (but after giving effect to any modifications
incorporated therein pursuant to Rule 430A under the Act) as of the Closing Date
or the Option Closing Date, as the case may be, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (ii) the
Prospectus, or any supplement thereto, on the date it was filed pursuant to the
Rules and Regulations and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted to
state a material fact, necessary in order to make the statements, in the light
of the circumstances under which they are made, not misleading (except that such
counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement, Piper &
Marbury L.L.P. may state that their belief is based upon the procedures set
forth therein, but is without independent check and verification.

(d) The Representatives shall have received, on each of the dates hereof, the
Closing Date and the Option Closing Date, as the case may be, a letter dated the
date hereof, the Closing Date or the Option Closing Date, as the case may be, in
form and substance satisfactory to you, of Arthur Andersen LLP confirming that
they are independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating that in their
opinion the financial statements and schedules examined by them and included in
the Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published Rules
and Regulations; and containing such other statements and information as is
ordinarily included in accountants' "comfort letters" to

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<PAGE>

Underwriters with respect to the financial statements and certain financial and
statistical information contained in the Registration Statement and Prospectus.

(e) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
President and the Chief Financial Officer of the Company to the effect that, as
of the Closing Date or the Option Closing Date, as the case may be, each of them
severally represents as follows:

(i) The Registration Statement has become effective under the Act and
no stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission;

(ii) The representations and warranties of the Company contained in
Section 1 hereof are true and correct as of the Closing Date or the Option
Closing Date, as the case may be;

(iii) All filings required to have been made pursuant to Rules 424 or
430A under the Act have been made;

(iv) He or she has carefully examined the Registration Statement and
the Prospectus and, in his opinion, as of the effective date of the Registration
Statement, the statements contained in the Registration Statement, were true and
correct, and such Registration Statement and Prospectus did not omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading and, in his opinion, since the effective date
of the Registration Statement, no event has occurred which should have been set
forth in a supplement to or an amendment of the Prospectus which has not been so
set forth in such supplement or amendment; and

(v) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, there has not been any material adverse
change or any development which could reasonably be expected to result in a
prospective material adverse change in or affecting the condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole or the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and the Subsidiaries taken
as a whole, whether or not arising in the ordinary course of business.

(f) The Company and the Selling Stockholders shall have furnished to the
Representatives such further certificates and documents confirming the
representations and warranties, covenants and conditions contained herein and
related matters as the Representatives may reasonably have requested.

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<PAGE>

(g) The Firm Shares, and Option Shares, if any, have been approved for
designation upon official notice of issuance on The Nasdaq Stock Market.

(h) The Lockup Agreements described in Section 4(a)(x) are in full force and
effect.

The opinions and certificates mentioned in this Agreement shall be deemed to
be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Piper & Marbury L.L.P.,
counsel for the Underwriters.

If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company and the Selling Stockholders of such
termination in writing or by telegram at or prior to the Closing Date or the
Option Closing Date, as the case may be.

In such event, the Selling Stockholders, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).

7. Conditions of the Obligations of the Sellers. The obligations of the
--------------------------------------------
Sellers to sell and deliver the portion of the Shares required to be delivered
as and when specified in this Agreement are subject to the conditions that at
the Closing Date or the Option Closing Date, as the case may be, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and in effect or proceedings therefor initiated or threatened.

8. Indemnification
---------------

(a) The Company and the Selling Stockholders, jointly and severally, agree
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Act against any losses,
claims, damages or liabilities to which such Underwriter or such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter and each such controlling person
upon demand for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or proceeding or in
responding to a subpoena or governmental inquiry relating to the offering of the
Shares, whether or not such Underwriter or controlling person is a party to the
action or proceeding; provided, however, that the Company and the Selling
Stockholders will not be liable in any such case to the extent that any such
loss,

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<PAGE>

claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof. In no event, however, shall the
liability of any Selling Stockholder for indemnification under this Section 8(a)
exceed the proceeds received by such Selling Stockholder from the Underwriters
in the offering. This indemnity agreement will be in addition to any liability
which the Company or the Selling Stockholders may otherwise have.

(b) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, the Selling Stockholders, and each person, if
any, who controls the Company within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, Selling Stockholder or controlling person may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, (ii) the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances under
which they were made; and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, Selling Stockholder or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that each
Underwriter will be liable in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by or through
the Representatives specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.

(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to this Section 8, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section 8(a) or (b)
shall be available to any party who shall fail to give notice as provided in
this Section 8(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially prejudiced
by the failure to give such notice, but the failure to give such notice shall
not relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution or otherwise than on
account of the provisions of Section 8(a) or (b). In case any such proceeding

-21-
<PAGE>

shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred (or within 30 days of presentation) the fees and
expenses of the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel reasonably acceptable to the indemnified party within a reasonable
period of time after notice of commencement of the action. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm for all such indemnified parties.
Such firm shall be designated in writing by you in the case of parties
indemnified pursuant to Section 8(a) and by the Company [and the Selling
Stockholders] in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. In addition, the indemnifying party will not,
without the prior written consent of the indemnified party, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action or proceeding of which indemnification may be sought hereunder (whether
or not any indemnified party is an actual or potential party to such claim,
action or proceeding) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action or proceeding.

(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under Section 8(a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Stockholders on
the one hand and the Underwriters on the other from the offering of the Shares.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law, then each indemnifying party shall contribute
to such amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Stockholders on the one hand and the
Underwriters on the other in connection with the

-22-
<PAGE>

statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Selling Stockholders on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholders on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation, and (iii) no Selling Stockholder
shall be required to contribute any amount in excess of the proceeds received by
such Selling Stockholder from the Underwriters in the offering. The
Underwriters' obligations in this Section 8(d) to contribute are several in
proportion to their respective underwriting obligations and not joint.

(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.

(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or

-23-
<PAGE>

expenses are incurred. If, after the indemnified party receives such payments
for indemnification, it shall be determined that the indemnified party was not
entitled to such indemnification, the indemnified party shall reimburse the
indemnifying party for all such payments. The indemnity and contribution
agreements contained in this Section 8 and the representations and warranties of
the Company set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Company, its
directors or officers or any persons controlling the Company, (ii) acceptance of
any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter, or to the Company, its directors or
officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 8.

9. Default by Underwriters. If on the Closing Date or the Option Closing
-----------------------
Date, as the case may be, any Underwriter shall fail to purchase and pay for the
portion of the Shares which such Underwriter has agreed to purchase and pay for
on such date (otherwise than by reason of any default on the part of the Company
or a Selling Stockholder), you, as Representatives of the Underwriters, shall
use your reasonable efforts to procure within 36 hours thereafter one or more of
the other Underwriters, or any others, to purchase from the Company and the
Selling Stockholders such amounts as may be agreed upon and upon the terms set
forth herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during such 36
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter or Underwriters failed to purchase, or (b) if
the aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, the Company and the
Selling Stockholders or you as the Representatives of the Underwriters will have
the right, by written notice given within the next 36-hour period to the parties
to this Agreement, to terminate this Agreement without liability on the part of
the non-defaulting Underwriters or of the Company or of the Selling Stockholders
except to the extent provided in Section 8 hereof. In the event of a default by
any Underwriter or Underwriters, as set forth in this Section 9, the Closing
Date or Option Closing Date, as the case may be, may be postponed for such
period, not exceeding seven days, as you, as Representatives, may determine in
order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action

-24-
<PAGE>

taken under this Section 9 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.

10. Notices. All communications hereunder shall be in writing and, except
-------
as otherwise provided herein, will be mailed, delivered or telegraphed and
confirmed as follows: if to the Underwriters, to Alex. Brown & Sons
Incorporated, One South Street, Baltimore, Maryland 21202, Attention: Robert P.
Irwin, Principal; if to the Company or the Selling Stockholders, to U.S. Xpress
Enterprises, Inc., 2931 South Market Street, Chattanooga, Tennessee 37410,
Attention: Ray M. Harlin, Chief Financial Officer.

11. Termination. This Agreement may be terminated by you by notice to the
-----------
Sellers as follows:

(a) at any time prior to the earlier of (i) the time the Shares are released
by you for sale by notice to the Underwriters, or (ii) 11:30 a.m. on the first
business day following the date of this Agreement;

(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any material adverse change or
any development involving a prospective material adverse change in or affecting
the condition, financial or otherwise, of the Company and its Subsidiaries taken
as a whole or the earnings, business management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business; (ii) any outbreak or escalation of hostilities or declaration of
war or political emergency or other national or international calamity or crisis
or change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make it
impracticable to market the Shares or to enforce contracts for the sale of the
Shares; (iii) suspension of trading in securities generally on the New York
Stock Exchange or the American Stock Exchange or limitation on prices (other
than limitations on hours or numbers of days of trading) for securities on
either such Exchange; (iv) the enactment, publication, decree or other
promulgation of any statute, regulation, rule or order of any court or other
governmental authority which in your reasonable opinion materially and adversely
affects or may materially and adversely affect the business or operations of the
Company; (v) declaration of a banking moratorium by United States or New York
State authorities; (vi) the suspension of trading of the Company's Common Stock
by the Commission on The Nasdaq Stock Market or (vii) the taking of any action
by any federal, state or local government or agency in respect of its monetary
or fiscal affairs which in your reasonable opinion has a material adverse effect
on the securities markets in the United States; or

-25-
<PAGE>

12. Successors. This Agreement has been and is made solely for the benefit
----------
of the Underwriters, the Company and the Selling Stockholders and their
respective successors, executors, administrators, heirs and assigns, and the
officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign merely because
of such purchase.

13. Information Provided by Underwriters. The Company, the Selling
------------------------------------
Stockholders and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the Company for
inclusion in any Prospectus or the Registration Statement consists of the
information set forth in the last paragraph on the front cover page (insofar as
such information relates to the Underwriters), legends required by Item 502(d)
of Regulation S-K under the Act and the information under the caption
"Underwriting" in the Prospectus.

14. Miscellaneous. The reimbursement, indemnification and contribution
-------------
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers and (c) delivery of and payment for the
Shares under this Agreement.

This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Maryland.

If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Stockholders, the
Company and the several Underwriters in accordance with its terms.

-26-
<PAGE>

Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-Fact to take such
action.

Very truly yours,

U.S. XPRESS ENTERPRISES, INC.

By
------------------------------------------
Patrick E. Quinn, President and Treasurer

Selling Stockholders listed on Schedule II

By
------------------------------------------
Attorney-in-Fact

The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.

ALEX. BROWN & SONS INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
MORGAN KEEGAN & COMPANY, INC.
SCHRODER & CO. INC.
As Representatives of the
several Underwriters listed
on Schedule I

By ALEX. BROWN & SONS INCORPORATED

By
--------------------------------
Authorized Officer

-27-
<PAGE>

SCHEDULE I

Schedule of Underwriters

Number of Firm Shares
Underwriter to be Purchased
----------- --------------------------

Alex. Brown & Sons Incorporated

Morgan Stanley & Co. Incorporated

Morgan Keegan & Company, Inc.

Schroder & Co. Inc.

____________

Total 3,400,000
____________

-28-
<PAGE>

SCHEDULE II

Schedule of Selling Stockholders

Number of Firm Shares
Selling Stockholder to be Sold
- ------------------- ----------------------------------

Max L. Fuller 450,000

Patrick E. Quinn 405,084

Quinn Family Partnership 44,916
-------

Total 900,000
-------

-29-
<PAGE>

SCHEDULE III

Schedule of Option Shares

Maximum Number Percentage of
of Option Shares Total Number of
Name of Seller to be Sold Option Shares
- -------------- -------------------------- ---------------------

_________ ________

Total 510,000 100%
_________ ________

-30-

<PAGE>

EXHIBIT 5

Miller & Martin
1000 Volunteer Building
Chattanooga, Tennessee 37402

July 10, 1997

U.S. Xpress Enterprises, Inc.
2931 South Market Street
Chattanooga, TN 37410

Re: Registration Statement on Form S-1 -
3,910,000 Shares of Class A Common Stock
----------------------------------------

Gentlemen:

We are special counsel to U.S. Xpress Enterprises, Inc., a Nevada
corporation (the "Company"), and have acted as such in the preparation and
filing of its Registration Statement on Form S-1 dated July 10, 1997 (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC"), pursuant to the requirements of the Securities Act of 1933, as amended,
and the General Rules and Regulations of the SEC promulgated thereunder for the
registration of 3,910,000 shares of Class A Common Stock of the Company, of
which up to 2,942,500 shares of Class A Common Stock will be sold by the Company
and 967,500 shares of Class A Common Stock will be sold by certain selling
stockholders (the "Selling Stockholders").

In connection with the following opinions, we have examined and have
relied upon such documents, records, certificates, statements and instruments as
we have deemed necessary and appropriate to render the opinions herein set
forth.

Based upon the foregoing, it is our opinion that:

1. The Company's shares of Class A Common Stock, when and if issued
and sold in the manner set forth in the Registration Statement, will be legally
and validly issued, fully paid and nonassessable.

2. The shares of Class A Common Stock to be sold by the Selling
Stockholders were, when issued by the Company, duly authorized, legally and
validly issued, fully paid and nonassessable.

The undersigned hereby consents to filing this opinion as Exhibit 5 to
the Registration Statement and using its name in the
<PAGE>

U.S. Xpress Enterprises, Inc.
July 10, 1997
page 2

Registration Statement under the caption of the prospectus entitled "Legal
Matters."

Very truly yours,

/s/ Miller & Martin
---------------------
MILLER & MARTIN

<PAGE>

EXHIBIT 10.28

LOAN AND SECURITY AGREEMENT

THIS AGREEMENT, made, entered into and effective as of the 24th day of
June, 1997, by and between WACHOVIA BANK, N.A. and U.S. XPRESS LEASING, INC., a
Tennessee corporation;

WITNESSETH:

WHEREAS, Borrower has applied to Lender for financing of the type more
particularly described hereinbelow; and

WHEREAS, Lender is willing to extend financing to Borrower in accordance
with the terms hereof upon the execution of this Agreement by Borrower,
compliance by Borrower with all of the terms and provisions of this Agreement
and fulfillment of all conditions precedent to Lender's obligations herein
contained;

NOW, THEREFORE, in consideration of the sum of ONE HUNDRED DOLLARS
($100.00), the foregoing premises, to induce Lender to extend the financing
provided for herein, and for other good and valuable consideration, the
sufficiency and receipt of all of which are acknowledged by Borrower, Lender and
Borrower agree as follows:

1. DEFINITIONS, TERMS AND REFERENCES.
---------------------------------

1.1 Certain Definitions. In addition to such other terms as elsewhere
-------------------
defined herein, as used in this Agreement and in any Exhibits, the following
terms shall have the following meanings, unless the context requires otherwise:

"Adjusted London Interbank Offered Rate" applicable to any Interest Period
--------------------------------------
shall mean a rate per annum equal to the quotient obtained (rounded upwards, if
necessary, to the next higher 1/1OOth of 1%) by dividing (i) the applicable
London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage.

"Affiliate" shall have the meaning set forth in the Existing Syndicated
---------
Credit Agreement.

"Agreement" shall meaning this Loan and Security Agreement, as amended or
---------
supplemented from time to time.

"Applicable Interest Rate Margin" shall mean, with respect to Euro-Dollar
-------------------------------
Loans for any fiscal quarter, (i) 1.40% per annum if the Consolidated Leverage
Ratio as of the last day of the prior fiscal quarter (computed for the four
fiscal quarterly periods then ending) is greater than 2.8 to 1.0,

<PAGE>

(ii) 1.25% per annum if the Consolidated Leverage Ratio as of the last day of
the prior fiscal quarter (computed for the four fiscal quarterly periods then
ending) is equal to or less than 2.8 to 1.0 but greater than 2.5 to 1.0, (iii)
1.0% per annum if the Consolidated Leverage Ratio as of the last day of the
prior fiscal quarter (computed for the four fiscal quarterly periods then
ending) is equal to or less than 2.5 to 1.0 but greater than 2.0 to 1.0, (iv)
.75% per annum if the Consolidated Leverage Ratio as of the last day of the
prior fiscal quarter (computed for the four fiscal quarterly periods then
ending) is equal to or less than 2.0 to 1.0 but greater then 1.5 to 1.0 and (v)
.625% per annum if the Consolidated Leverage Ratio as of the last day of the
prior fiscal quarter (computed for the four fiscal quarterly periods then
ending) is equal to or less than 1.5 to 1.0. Changes in the Applicable Interest
Rate Margin shall be effective as provided in the Existing Syndicated Credit
Agreement.

"Asset Sale" shall have the meaning set forth in the Existing Syndicated
----------
Credit Agreement.

"Bankruptcy Code" shall mean Title 11 of the United States Code, as amended
---------------
from time to time.

"Base Rate" means for any Base Rate Loan for any day, the rate per annum
---------
equal to the higher as of such day of (i) the Prime Rate, and (ii) one-half of
one percent above the Federal Funds Rate for such day. For purposes of
determining the Base Rate for any day, changes in the Prime Rate and the Federal
Funds Rate shall be effective on the date of each such change.

"Base Rate Loan" shall mean the Term Loan during Interest Periods when the
--------------
applicable interest rate is calculated by reference to the Base Rate.

"Benefit Arrangement" shall have the meaning set forth in the Existing
-------------------
Syndicated Credit Agreement.

"Borrower" shall mean U.S. XPRESS LEASING, INC., a corporation organized
--------
and existing under the laws of the State of Tennessee, and its successors and
permitted assigns.

"Business Day" shall mean a day on which Lender is open for the conduct of
------------
banking business at its principal office in Atlanta, Georgia.

"Change of Law" shall have the meaning set forth in Section 2.9.
-------------

"Collateral" shall mean the Property of Borrower described in Article 3, or
----------
any part thereof, as the context shall require, in which Lender has, or is to
have, a security interest pursuant thereto, as security for payment of the
Obligations.

"Company" shall mean U.S. Xpress Enterprises, Inc., a Nevada corporation.
-------

2
<PAGE>

"Consolidated Leverage Ratio" shall have the meaning set forth in, shall be
---------------------------
calculated in accordance with and shall be equal to the amount determined under
the Existing Syndicated Credit Agreement.

"Debt" (and the defined terms used in such definition) shall have the
----
meaning set forth in the Existing Syndicated Credit Agreement.

"Default Condition" shall mean the occurrence of any event which, after
-----------------
satisfaction of any requirement for the giving of notice or the lapse of time,
or both, would become an Event of Default.

"Default Rate" shall mean that interest rate per annum equal to 2% plus the
------------
stated interest rate effective under the Note from time to time.

"Dollars" and "$" mean lawful money of the United States of America.
------- -

"Domestic Business Day" means any day except a Saturday, Sunday or other
---------------------
day on which commercial banks in Georgia are authorized by law to close.

"Environmental Laws," "ERISA," and "ERISA Group" shall have the meaning set
------------------- ------ -----------
forth in the Existing Syndicated Credit Agreement.

"Euro-Dollar Business Day" means any Domestic Business Day on which
------------------------
dealings in Dollar deposits are carried out in the London interbank market.

"Euro-Dollar Loan" shall mean the Term Loan during Interest Periods when
----------------
the applicable interest rate is calculated by reference to the Euro-Dollar Rate.

"Euro-Dollar Rate" applicable to any Euro-Dollar Loan for any Interest
----------------
Period means a rate per annum equal to the Applicable Interest Rate Margin plus
the Adjusted London Interbank Offered Rate applicable to such Interest Period.

"Euro-Dollar Reserve Percentage" means for any day that percentage
------------------------------
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on EuroDollar Loans is determined or any category of extension of
credit or other assets which includes loans by a non-United States office of the
Lender to United States residents). The Euro-Dollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.

3
<PAGE>

"Event of Default" shall mean any of the events or conditions described in
----------------
Section 7.01, provided that any requirement for the giving of notice or the
lapse of time, or both, has been satisfied.

"Executive Office" shall mean 2931 South Market Street, Chattanooga, TN
----------------
37410.

"Existing Syndicated Credit Agreement" shall mean that certain Credit
------------------------------------
Agreement dated November 21, 1995, by and among the Company, the banks party
thereto and NationsBank of Georgia, N.A., as amended by an Amendment No. 1 to
Credit Agreement dated as of March 31, 1996, and an Amendment No. 2 to Credit
Agreement dated as of July 1, 1996, as in effect on the date hereof, without
regard and without giving effect to any waivers given by the Banks (as defined
in the Existing Syndicated Credit Agreement) or amendments agreed to by the
Company and the Banks (as defined in the Credit Agreement). Any definitions,
terms, covenants or other provisions of the Existing Syndicated Credit Agreement
that are incorporated herein will continue to be effective for purposes of this
Agreement, not withstanding that the indebtedness under the Existing Syndicated
Credit Agreement has been or hereafter may be partially or fully repaid or the
fact that the Existing Syndicated Credit Agreement otherwise might be
terminated.

"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve Bank of New York on the Domestic Business Day next succeeding
such day, provided that (i) if the day for which such rate is to be determined
is not a Domestic Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if such rate is
not so published for any day, the Federal Funds Rate for such day shall be the
average rate charged to Lender on such day on such transactions as determined by
the Lender.

"Final Maturity Date" means July 1, 2001.
-------------------

"Foreign Government," "Foreign Person," "Government," "Guarantee," and
------------------- -------------- ----------- ----------
"Hazardous Substance" shall have the meanings set forth in the Existing
- --------------------
Syndicated Credit Agreement.

"GAAP" shall mean generally accepted accounting principles, consistently
----
applied.

"Guarantor" shall mean individually and collectively, (x) the Company, and
---------
each of the Company's Subsidiaries (other than the Borrower and XPRESS AIR,
INC.), and (y) any and all other accommodation makers, endorsers, guarantors or
sureties from whom Lender may require the endorsement of any note or the
execution of any contract of guaranty or suretyship guaranteeing payment of any
of the Obligations.

"Guaranty Agreement" shall mean (x) the respective Guaranty Agreements
------------------
dated of even date herewith, as amended or supplemented from time to time,
executed by the Guarantors, and (y) any

4
<PAGE>

other agreement or other writing executed by a Guarantor guaranteeing payment of
any of the Obligations.

"Interest Period" means: (1) with respect to each Euro-Dollar Loan, the
---------------
period commencing on the date the Loan is first made as a Euro-Dollar Loan, is
continued from the preceding Interest Period as a Euro-Dollar Loan, or is
converted to a Euro-Dollar Loan from another Type of Loan, as the case may be,
and ending on the numerically corresponding day in the first, second, or third
month thereafter, as the Borrower may elect in accordance with the terms of this
Agreement; provided that:

(a) any Interest Period (other than an Interest Period determined pursuant
to clause (c) below), which would otherwise end on a day which is not a Euro-
Dollar Business Day shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding Euro-
Dollar Business Day;

(b) any Interest Period which begins on the last Euro-Dollar Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall, subject to clause (c)
below, end on the last Euro-Dollar Business Day of the appropriate subsequent
calendar month; and

(c) any Interest Period which begins before the Due Date and would
otherwise end after the Final Maturity Date shall end on the Final Maturity
Date.

(2) with respect to each Base Rate Loan, the period commencing on the date the
Loan is first made as a Base Rate Loan, is continued from the preceding Interest
Period as a Base Rate Loan, or is converted to a Base Rate Loan from another
Type of Loan, as the case may be, and ending 30 days thereafter; provided that:

(a) any Interest Period (other than an Interest Period determined pursuant
to clause (b) below) which would otherwise end on a day which is not a Domestic
Business Day shall be extended to the next succeeding Domestic Business Day; and

(b) any Interest Period which begins before the Final Maturity Date and
would otherwise end after the Final Maturity Date shall end on the Final
Maturity Date.

"Initial Call Date" shall have the meaning set forth in Section 2.2(b).
-----------------

"Internal Revenue Code" and "Investment" shall have the meanings set forth
--------------------- ----------
in the Existing Syndicated Credit Agreement.

"Lender" shall mean WACHOVIA BANK, N.A. with its principal office in
------
Atlanta, Georgia, and its successors and assigns.

5
<PAGE>

"Lending Office" means the Lender's office located in Atlanta, Georgia or
--------------
such other office as the Lender may hereafter designate from time to time as its
Lending Office by notice to the Borrower.

"Lien" shall mean any deed to secure debt, deed of trust, mortgage or
----
similar instrument, and any lien, security interest, preferential arrangement
which has the practical effect of constituting a security interest, security
title, pledge, charge, encumbrance or servitude of any kind, whether by
consensual agreement or by operation of statute or other law, and whether
voluntary or involuntary, including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof.

"Loan Documents" shall mean this Agreement, the Note, the Guaranty
--------------
Agreements, any financing statements covering portions of the Collateral, and
any and all other documents, instruments, certificates and agreements executed
and/or delivered by Borrower and/or any Guarantor in connection herewith, or any
one, more, or all of the foregoing, as the context shall require.

"London Interbank Offered Rate" applicable to any Euro-Dollar Loan for any
-----------------------------
Interest Period means the rate per annum determined on the basis of the rate for
deposits in Dollars of amounts equal or comparable to the principal amount of
such Euro-Dollar Loan offered for a term comparable to such Interest Period,
which rate appears on the display designated as Page "3750" of the Telerate
Service (or such other page as may replace page 3750 of that service or such
other service or services as may be nominated by the British Banker's
Association for the purpose of displaying London Interbank Offered Rates for
U.S. dollar, deposits) determined as of 1:00 p.m. New York City time, two (2)
Euro-Dollar Business Days prior to the first day of such Interest Period.

"Margin Stock," "Material Plan" and "Multiemployer Plan" shall have the
------------ ------------- ------------------
meanings set forth in the Existing Syndicated Credit Agreement.

"Note" shall mean the term promissory note, dated of even date herewith, as
----
amended or supplemented from time to time, in the principal amount of the Term
Loan, together with any renewals or extensions thereof, in whole or in part. The
Note shall be substantially in the form of Exhibit "C".
----------

"Obligations" shall mean any and all indebtedness, liabilities and
-----------
obligations of the Borrower and any or all of the Guaranties to Lender evidenced
by, arising under or as a result of this Agreement, the Note, the Guaranty
Agreements or any of the other Loan Documents, and any and all extensions or
renewals thereof in whole or in part; and whether direct, indirect, absolute or
contingent, as maker, endorser, guarantor, surety or otherwise, and whether
evidenced by, arising out of, or relating to the Loan Documents, or otherwise.

"Obligor" shall mean individually and collectively (x) the Borrower and (y)
-------
any Guarantor.

6
<PAGE>

"PBGC" and "Plan" shall have the meanings set forth in the Existing
---- ----
Syndicated Credit Agreement.

"Permitted Encumbrances" shall mean those Liens, if any, set forth and
----------------------
described on Exhibit "B", pertaining to the type of Collateral involved, as
----------
shown thereon.

"Person" shall mean any individual, sole proprietorship, partnership, joint
------
venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (whether territorial, national,
federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof).

"Prime Rate" means that interest rate so denominated and set by the Lender
----------
from time to time as an interest rate basis for borrowings. The Prime Rate is
but one of several interest rate bases used by the Lender. The Lender lends at
interest rates above and below the Prime Rate.

"Property(ies)" shall mean any interest in any property or asset of any
-------------
kind, whether real, personal or mixed, or tangible or intangible.

"Regulation D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System, as in effect from time to time.

"Regulation G," "Regulation T," "Regulation U", "Regulation X" "Responsible
------------ ------------ ------------ ------------ -----------
Officer" and "Solvent" shall have the meanings set forth in the Existing
- ------- -------
Syndicated Credit Agreement.

"Subsequent Call Date" shall have the meaning set forth in Section 2.2(b).
--------------------

"Subsidiary" shall have the same meaning as set forth in the Existing
----------
Syndicated Credit Agreement.

"Term Loan" means a Base Rate Loan or a Euro-Dollar Loan and "Term Loans"
---------
means Base Rate Loans or Euro-Dollar Loans or both.

"Type" as to a Term Loan shall mean its nature as a Euro-Dollar Loan or
----
Base Rate Loan.

"UCC" shall mean the Uniform Commercial Code Secured Transactions of
---
Georgia (O.C.G.A. Art. 11-9), as in effect on the date hereof.

"Unfunded Liabilities" and "Wholly-Owned Subsidiary" shall have the same
-------------------- -----------------------
meanings as set forth in the Existing Syndicated Credit Agreement.

1.2 Use of Defined Terms. All terms defined in this Agreement and the
--------------------
Exhibits shall have the same defined meanings when used in any other Loan
Documents, unless the context shall require otherwise.

7
<PAGE>

1.3 Accounting Terms. All accounting terms not specifically defined herein
----------------
shall have the meanings generally attributed to such terms under GAAP.

1.4 UCC Terms. The terms "accounts", "chattel paper", "instruments",
---------
"general intangibles", "inventory" and "equipment", as and when used in the Loan
Documents, shall have the same meanings given such terms under the UCC.

1.5 Terminology. All personal pronouns used in this Agreement, whether used
-----------
in the masculine, feminine or neuter gender, shall include all other genders;
the singular shall include the plural, and the plural shall include the
singular. Titles of Articles and Sections in this Agreement are for convenience
only, and neither limit nor amplify the provisions of this Agreement, and all
references in this Agreement to Articles, Sections, Subsections, paragraphs,
clauses, subclauses or Exhibits shall refer to the corresponding Article,
Section, Subsection, paragraph, clause, subclause of, or Exhibit attached to,
this Agreement, unless specific reference is made to the articles, sections or
other subdivisions divisions of, or Exhibit to, another document or instrument.

1.6 Exhibits. All Exhibits attached hereto are by reference made a part
--------
hereof.

2. THE FINANCING.
-------------

2.1 Term Loan. Upon the execution of this Agreement and compliance
---------
with its terms and conditions, and so long as there is not in existence any
Default Condition or Event of Default, Lender agrees to make the Term Loan in
the principal amount of $10,000,000 to Borrower, the proceeds from which shall
be used by Borrower for the sole purposes of working capital and other general
corporate purposes. The indebtedness represented by the Term Loan shall be
evidenced by the Note, which shall be executed and delivered simultaneously
herewith by Borrower.

2.2 Principal.
----------

(a) Subject to the terms of Section 2.2(b), the principal amount
of the Term Loan shall be repaid as follows: (i) $1,000,000
shall be due and payable on July 1, 1998 (the "First Payment
Date"); (ii) $1,000,000 shall be due and payable on July 1,
1999 (the "Second Payment Date"); (iii) $1,000,000 shall be
due and payable on July 1, 2000 (the "Third Payment Date");
and (iv) the outstanding principal amount of the Term Loan
and any and all accrued and unpaid interest thereon shall be
due and payable in full on the Final Maturity Date.

(b) Notwithstanding anything herein to the contrary, and in
furtherance and not in limitation of the rights and remedies
provided in Sections 8.1 through 8.4, inclusive, the Bank
may, at its sole option: (1) upon at least ten (10) Domestic
Business Days' prior written notice to the Borrower, declare
the outstanding principal of the Term Loan and the

8
<PAGE>

Note and any and all accrued and unpaid interest due thereon,
due and payable in full as of July 1, 1998 (unless earlier
accelerated pursuant to Sections 8.1 through 8.4) (the
"Initial Call Date"); and (2) at any time after July 1, 1998,
upon at least ninety (90) calendar days' prior written notice
to the Borrower, declare the outstanding principal of the
Term Loan and the Note and any and all accrued and unpaid
interest due thereon, due and payable in full as of the date
specified in the written notice (unless earlier accelerated
pursuant to Sections 8.1 through 8.4) (which date, referred
to herein as a "Subsequent Call Date", shall be at least
ninety (90) days after the date such notice is given) which
the Bank delivers to the Borrower exercising the Bank's
option under this Section 2.2(b)(2). A failure by the Bank to
exercise its rights under this Section 2.2 on any date shall
not adversely affect the right of the Bank to exercise its
rights on any subsequent date.

2.3 Interest.
--------

(a) The Term Loan shall at all times be either a Euro-Dollar Loan
or a Base Rate Loan and bear interest as provided in this
Section 2.3, provided that except as provided in Section
2.3(e), at any time the Term Loan may be only one Type of
Loan and there may be in effect only one Interest Period.
Prior to the commencement of each Interest Period, the
Borrower may elect, and shall give the Lender notice of its
election, whether the Term Loan shall be a Euro-Dollar Loan
or a Base Rate Loan during such Interest Period and the
applicable Interest Period, provided that (1) such notice
shall be delivered to the Lender (A) not later than 11:00
A.M. (Atlanta, Georgia time) on the third Euro-Dollar
Business Day prior to the first day of such Interest Period
if the Borrower elects for the Term Loan to be a Euro-Dollar
Loan during such Interest Period, or (B) not later than 11:00
A.M. (Atlanta, Georgia time) on the Domestic Business Day
prior to the first day of such Interest Period if the
Borrower elects for the Term Loan to be a Base Rate Loan
during such Interest Period, (2) if the Borrower shall fail
to deliver such notice to the Lender in a timely manner as a
set forth in clause (1) of this sentence, then the Term Loan
shall be a Euro-Dollar Loan with an Interest Period of one
month, and (3) at any time in which there exists an Event of
Default which has not been waived by the Lender, the Borrower
may not so elect for the Term Loan to be a Euro-Dollar Loan.

(b) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such
Term Loan is made until it becomes due, at a rate per annum
equal to the Base Rate for

9
<PAGE>

such day plus the Applicable Interest Rate Margin. Such
interest shall be payable on each Interest Payment Date. Any
overdue principal of and, to the extent permitted by law,
overdue interest on any Base Rate Loan shall bear interest,
payable on demand for each day until paid at a rate per annum
equal to the sum of 2% plus the rate otherwise applicable to
Base Rate Loans for such day.

(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the Euro-Dollar Rate
for such Interest Period; provided that if any Euro-Dollar
Loan shall, as a result of clause (l)(c) of the definition of
Interest Period, have an Interest Period of less than 30
days, such Euro-Dollar Loan shall bear interest during such
Interest Period at the rate applicable to Base Rate Loans
during such period. Such interest shall be payable on each
Interest Payment Date. Any overdue principal of and, to the
extent permitted by law, overdue interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day
from and including the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum
equal to the sum of 2% plus the rate otherwise applicable to
Base Rate Loans for such day.

(d) The Lender shall determine each interest rate applicable to
the Term Loan hereunder. Upon request by the Borrower, the
Lender shall give prompt notice to the Borrower of each rate
of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.

(e) Notwithstanding anything herein to the contrary, if the first
Payment Date, the Second Payment Date, the Third Payment
Date, the Initial Call Date or any Subsequent Call Date is
scheduled to occur during an Interest Period in which the
Term Loan is a Euro-Dollar Loan other than on the last day of
such Interest Period, then during such Interest Period a
portion of the outstanding balance of the Term Loan which is
equal to the aggregate amount of the principal payment due on
the Term Loan on such date shall be a Base Rate Loan, and
only the remaining portion of the outstanding principal of
the Term Loan shall constitute a Euro-Dollar Loan.

2.4 Optional Prepayments.
--------------------

(i) The Borrower may, upon at least one Domestic Business Days'
notice to the Lender, prepay any Base Rate Loan in whole at
any time, or

10
<PAGE>

from time to time in part in an amount of at least $1,000,000
(or integral multiples thereof of $500,000), by paying the
principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such prepayment shall
be applied to installments of principal in their inverse
order of maturity.

(ii) Except as provided in paragraph (2.9) below, the Borrower may
not prepay all or any portion of the principal amount of the
Term Loan during any Interest Period in which the Term Loan
is a Euro-Dollar Loan except on the last day of such Interest
Period. The Borrower shall give the Lender at least three (3)
Euro-Dollar Business Days' prior notice of any such permitted
prepayment of a Euro-Dollar Loan and any such prepayment, in
part, shall be in an amount of at least $1,000,000 (or
integral multiples thereof of $500,000).

(iii) Upon receipt of a notice of prepayment pursuant to this
paragraph, such notice shall not thereafter be revocable by
the Borrower.

2.5 General Provisions as to Payments.
---------------------------------

(i) The Borrower shall make each payment of principal of, and
interest on, the Term Loan and of fees hereunder, not later
than 11:00 A.M. (Atlanta, Georgia time) on the date when due,
in Federal or other funds immediately available in Atlanta,
Georgia, to the Lender at its address referred to herein.

(ii) Whenever any payment of principal of, or interest on, a Base
Rate Loan or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, a Euro-
Dollar Loan shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended
to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such
extended time.

2.6 Funding Losses. If the Borrower makes any payment or prepayment of
----------------
principal with respect to any Euro-Dollar Loan (pursuant to the express terms of
this Agreement, or by reason of acceleration or otherwise) on any day other than
the last day of the Interest Period applicable thereto, or the end of an
applicable period fixed pursuant to

11
<PAGE>

paragraph 2.3 (c), the Borrower shall reimburse the Lender on demand for any
resulting loss or expense incurred by it (or by any existing or prospective
participant in the related Term Loan), including, without limitation, any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment or failure,
provided that the Lender shall have delivered to the Borrower a certificate as
to the amount of such loss or expense, which certificate shall be conclusive in
the absence of manifest error.

2.7 Computation of Interest and Fees. Interest on the Term Loan shall be
--------------------------------
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed, calculated as to each Interest Period or period fixed pursuant to
paragraph 2.3 (c) from and including the first day thereof to but excluding the
last day thereof.

2.8 Basis for Determining Interest Rate Inadequate or Unfair. If on or
--------------------------------------------------------
prior to the first day of any Interest Period:

(a) the Lender determines that deposits in Dollars (in the applicable
amounts) are not being offered to the relevant market for such
interest period, or

(b) the Lender determines that the London Interbank Offered Rate, as
determined by the Lender will not adequately and fairly reflect
the cost to the Lender of funding the Euro-Dollar Loan for such
Interest Period,

the Lender shall forthwith give notice thereof to the Borrower whereupon until
the Lender notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Lender to make Euro-Dollar
Loans shall be suspended.

2.9 Illegality. If, after the date hereof, the adoption of any applicable
----------
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof (any such agency being referred to as an "Authority" and any such event
being referred to as a "Change of Law"), or compliance by the Lender (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any Authority shall make it unlawful or impossible for the Lender (or
its Lending Office) to make, maintain or fund its Euro-Dollar Loans, the Lender
shall forthwith give notice thereof to the Borrower, whereupon until the Lender
notifies the Borrower that the circumstances giving rise to such suspension no
longer exist, the obligation of the Lender to make or maintain Euro-Dollar Loans
shall be suspended. Before giving any notice to the Borrower, pursuant to this
paragraph, the Lender shall designate a different Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment

12
<PAGE>

of the Lender, be otherwise disadvantageous to the Lender. If the Lender shall
determine that it may not lawfully continue to maintain and fund any of its
outstanding Euro-Dollar Loans to the maturity of the applicable Interest Period
and shall so specify in such notice, such Term Loan shall immediately be
converted to a Base Rate Loan and concurrently with such conversion, the
Borrower shall pay all accrued and unpaid interest on such Term Loan.

2.10 Increased Cost and Reduced Return.
----------------------------------

(i) If after the date hereof, a Change of Law or compliance by the
Lender (or its Lending Office) with any request or directive
(whether or not having the force of law) of any Authority:

(1) shall subject the Lender (or its Lending Office) to any tax,
duty or other charge with respect to its Euro-Dollar Loans,
this Agreement, the Note or the Lender's obligation to make
Euro-Dollar Loans, or shall change the basis of taxation of
payments to the Lender (or its Lending Office) of the
principal of or interest on its Euro-Dollar Loans or any
other amounts due under this Agreement or the Note in
respect of its Euro-Dollar Loans or its obligation to make
or maintain Euro-Dollar Loans (except for changes in the
rate of tax on the overall net income of the Lender or its
Lending Office imposed by the jurisdiction in which such
Lender's principal executive office or Lending Office is
located); or

(2) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding with
respect to any Euro-Dollar Loan any such requirement with
respect to which the Lender is entitled to compensation
during the relevant Interest Period under paragraph 2.8
against assets of, deposits with or for the account of, or
credit extended by, the Lender (or its Lending Office); or

(3) shall impose on the Lender (or its Lending Office) or on the
United States market for certificates of deposit or the
London interbank market any other condition affecting its
Euro-Dollar Loans, this Note, or the Lender's obligation to
make or maintain Euro-Dollar Loans;

and the result of any of the foregoing is to increase the cost to the Lender (or
its Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce
the amount of any sum

13
<PAGE>

received or receivable by the Lender (or its Lending Office) under this Note
with respect thereto, by an amount deemed by the Lender to be material, then,
within 15 days after demand by the Lender, the Borrower shall pay to the Lender
such additional amount or amounts as will compensate such Lender for such
increased cost or reduction.

(ii) If after the date hereof, the Lender shall have determined that
the adoption of any applicable law, rule or regulation regarding
capital adequacy or any change in the interpretation or
administration thereof, or compliance by the Lender with any
request or directive regarding capital adequacy (whether or not
having the force of law) of any Authority, has or would have the
effect of reducing the rate of return on the Lender's capital as
a consequence of its obligations hereunder to a level below that
which it could have achieved but for such adoption, change or
compliance (taking into consideration the Lender's policies with
respect to capital adequacy) by an amount deemed by the Lender to
be material, then, from time to time within ten (10) days after
demand by the Lender, the Borrower shall pay to the Lender such
additional amount or amounts as will compensate the Lender for
such reduction.

(iii) The Lender will promptly notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which
will entitle the Lender to compensation pursuant to this Section
and will designate a different Lending Office if such designation
will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of the Lender, be
otherwise disadvantageous to the Lender. A certificate of the
Lender claiming compensation under this Section and setting forth
the additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of manifest error. In determining
such amount, the Lender may use any reasonable averaging and
attribution methods.

2.11 Base Rate Loans Substituted for Affected Euro-Dollar Loans. If (i) the
-----------------------------------------------------------
obligation of the Lender to make Euro-Dollar Loan has been suspended pursuant to
paragraph 2.8 or 2.9 or (ii) the Lender has demanded compensation under
paragraph 2.10 and the Borrower shall, by at least five Euro-dollar Business
Days' prior notice to the Lender have elected that the provisions of this
paragraph 2.11 shall apply to the Lender, then, unless and until the Lender
notifies the Borrower that the circumstances giving rise to such suspension or
demand for compensation no longer apply, the Term Loan if it is to be made by
the Lender as a Euro-Dollar Loan, shall be made or maintained instead as a Base
Rate Loan.

14
<PAGE>

2.12 Indemnification of Lender. At all times prior to and after the
-------------------------
consummation of the transactions contemplated by this Agreement, Borrower will
hold Lender, its respective directors, officers, employees, agents,
Affiliates, successors and assigns harmless from and indemnify Lender, its
respective directors, officers, employees, agents, Affiliates, successors and
assigns against, all loss, damages, costs and expenses (including, without
limitation, reasonable actual attorney's fees, costs and expenses) incurred by
any of the foregoing, whether direct, indirect or consequential, as a result
of or arising from or relating to any "Proceedings" (as defined below) by any
Person, whether threatened or initiated, asserting a claim for any legal or
equitable remedy against any Person under any statute, case or regulation,
including, without limitation, any federal or state securities laws or under
any common law or equitable case or otherwise, arising from or in connection
with this Agreement, and any other of the transactions contemplated by this
Agreement except to the extent such losses, damages, costs or expenses are due
to the wilful misconduct or gross negligence of Lender. As used herein,
"Proceedings" shall mean actions, suits or proceedings before any court,
governmental or regulatory authority. At the request of Lender, Borrower will
indemnify any Person to whom Lender transfers or sells all or any portion of
its interest in the Obligations or participations therein on terms
substantially similar to the terms set forth above. Lender shall not be
responsible or liable to any Person for consequential damages which may be
alleged as a result of this Agreement or any of the transactions contemplated
hereby. The obligations of Borrower under this Section 2.12 shall survive the
termination of this Agreement and payment of the Obligations.

3. SECURITY INTEREST -- COLLATERAL. As security for the payment for the
-------------------------------
Note and all Obligations whatsoever to the Lender, Borrower hereby grants to
Lender a continuing, general lien upon and security interest and title in and to
the following described Property, wherever located, whether now existing or
hereafter acquired or arising, namely:

(a) the trailers and other equipment and property described on Exhibit A;
and

(b) all products and/or proceeds of any and all of the foregoing,
including, without limitation, all cash and non-cash proceeds of any
type, insurance proceeds, all Property received wholly or partly in
trade or exchange for any of the foregoing, and all rents, revenues,
issues, profits and proceeds arising from the sale, lease, license,
encumbrance, collection or any other temporary or permanent
disposition of any of the foregoing or any interest therein.

The Borrower shall execute and file such certificates, authorizations,
documents, financing statements and other items (the "Lien Documents") as the
Lender may request and the Lender is authorized, at its option, after exercising
reasonable efforts to have the Borrower execute such Lien Documents, and to the
extent lawful, to file such Lien Documents or amendments thereto without the
signature of the Borrower with respect to any of the Collateral; the Borrower
agrees to reimburse the Lender for the expense of any such filing. The Borrower
agrees that a carbon, photographic, or other reproduction of this Agreement
shall be sufficient as a financing statement and may be filed

15
<PAGE>

in any appropriate office in lieu thereof. To the extent lawful, the Borrower
hereby appoints the Lender as its attorney-in-fact (without requiring the Lender
to act as such) to execute any financing statement in the name of the Borrower,
and to perform all other acts that the Lender deems appropriate to perfect and
continue its security interest in, and to protect and preserve, the Collateral.

4. GENERAL REPRESENTATIONS AND WARRANTIES.
--------------------------------------

The Borrower represents and warrants that:

4.01 Corporate Existence and Power. The Borrower and each of its
-----------------------------
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.

4.02 Corporate and Governmental Authorization; No Contravention. The
----------------------------------------------------------
execution and delivery by the Borrower of the Loan Documents to which the
Borrower is a party and the performance by the Borrower of its obligations
thereunder are within the corporate power of the Borrower, have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official (except for any
such action or filing that has been taken and is in full force and effect) and
do not contravene, or constitute a default under, any provision of applicable
law or regulation or of the articles of incorporation or bylaws of the Borrower
or of any material agreement, judgment, injunction, order, decree or other
material instrument binding upon the Borrower or result in the creation or
imposition of any Lien on any asset of the Borrower other than Liens created
pursuant to the Loan Documents.

4.03 Binding Effect. This Agreement constitutes a valid and binding
--------------
agreement of the Borrower, and the other Loan Documents to which the Borrower is
a party, when executed and delivered as contemplated by this Agreement, will
constitute valid and binding obligations of the Borrower.

4.04 Litigation. Except as set forth on Schedule 4.04 attached to the
----------
Existing Syndicated Credit Agreement, there is no action, suit or proceeding
pending against, or to the knowledge of the Borrower threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which would materially adversely
affect the business or the consolidated results of operations of the Borrower
and its Subsidiaries, or which in any manner draws into question the validity of
any Loan Document.

4.05 Compliance with ERISA. Except as set forth on Schedule 4.05 attached
---------------------
to the Existing Syndicated Credit Agreement, each member of the ERISA Group has
fulfilled its obligations in all material aspects under the minimum funding
standards of ERISA and the Internal Revenue Code with respect to each Plan and
is in compliance in all material respects with the presently applicable
provisions of ERISA and the Internal Revenue Code with respect to each Plan.
Except as previously disclosed to the Bank in writing prior to the date hereof,
no member of the

16
<PAGE>

ERISA Group has (i) sought a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which in either event has resulted or could reasonably be expected
to result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Internal Revenue Code or (iii) incurred any liability under
Title IV of ERISA other than a liability to the PBGC for premiums or similar
items under Section 4007 of ERISA.

4.06 Environmental Matters. Except as set forth in Schedule 4.06 attached
---------------------
to the Existing Syndicated Credit Agreement:

(a) No written notice, notification, demand, request for information,
citation, summons, complaint or order has been received by the Borrower or any
of its Subsidiaries and to the knowledge of the Borrower, no penalty has been,
assessed and no investigation or review is pending or threatened by any
governmental or other entity, (i) with respect to any alleged violation of any
Environmental Laws in connection with the conduct of the Borrower or any of its
Subsidiaries and relating to a Hazardous Substance or (ii) with respect to any
alleged failure to have any permit, certificate, license, approval, registration
or authorization required in connection with the conduct of the Borrower or any
of its Subsidiaries relating to a Hazardous Substance or (iii) with respect to
any generation, treatment, storage, recycling, transportation, disposal, or
release (including a release as defined in 42 U.S.C. Section 9601(22))
("Release") of any Hazardous Substance used by the Borrower or any of its
Subsidiaries, which alleged violation, alleged failure to have any required
permit, certificate, license, approval, or registration, or generation,
treatment, storage, recycling, transportation, disposal or release, individually
or in the aggregate, is reasonably likely to result in liability to the Borrower
and its Subsidiaries in excess of $500,000.00.

(b) (i) To the best knowledge of the Borrower, there has been no
Release of a Hazardous Substance at, on or under any property used by the
Borrower or any of its Subsidiaries or for which the Borrower or any of its
Subsidiaries would be liable, which Release, individually, is reasonably likely
to result in liability to the Borrower and its Subsidiaries in excess of
$500,000.00; (ii) neither the Borrower nor any of its Subsidiaries has, other
than as a generator or in a manner not regulated under the Environmental Laws,
stored or treated any "hazardous waste" (as defined in 42 U.S.C. Section
6903(5)) on any property used by the Borrower or any of its Subsidiaries or for
which the Borrower or any of its Subsidiaries would be liable, except for such
storage or treatment which individually or in the aggregate is not reasonably
likely to result in liability to the Borrower or any of its Subsidiaries in
excess of $500,000.00; and (iii) no polychlorinated biphenyl ("PCB") in
concentrations greater than 50 parts per million, friable asbestos, or
underground storage tank (in use or abandoned) is at any property used by the
Borrower or any of its Subsidiaries or for which the Borrower or any of its
Subsidiaries would be liable, except for such PCBs, friable asbestos or
underground storage tanks that are not reasonably likely, individually or in the
aggregate, to result in liability to the Borrower or any of its Subsidiaries in
excess of $500,000.00

17
<PAGE>

(c) To the best knowledge of the Borrower, neither the Borrower nor
any of its Subsidiaries has transported or arranged for the transportation
(directly or indirectly) of any Hazardous Substance to any location which is
listed under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), on the Comprehensive Environmental
Response, Compensation and Liability Information System, as amended ("CERCLIS"),
or on any similar state list or which is the subject of any federal, state or
local enforcement action or other investigation which may lead to claims for
clean-up costs, remedial work, damages to natural resources or for personal
injury claims, including, but not limited to, claims under CERCLA that are
reasonably likely, individually or in the aggregate, to result in liability to
the Borrower or any of its Subsidiaries in excess of $500,000.00.

(d) No written notification of a Release of a Hazardous Substance has
been filed by or on behalf of the Borrower or any of its Subsidiaries, which
individually or in combination with other such Releases, is reasonably likely to
result in liability for the Borrower or any of its Subsidiaries in excess of
$500,000.00.

(e) There have been no environmental audits or similar investigations
conducted by or which are in the possession of the Borrower or any of its
Subsidiaries in relation to any property used by the Borrower or any of its
Subsidiaries or for which the Borrower or any of its Subsidiaries would be
liable, which identify one or more environmental liabilities of the Borrower or
any of its Subsidiaries which are reasonably likely to exceed $500,000.00
individually or in the aggregate.

4.07 Subsidiaries. Set forth on Schedule 4.07 attached to the Existing
------------
Syndicated Credit Agreement is a complete and accurate list of all of the
Subsidiaries of the Company showing as to each such Subsidiary the jurisdiction
of its organization, the number of shares of each class of capital stock or
other equity interests outstanding and the percentage of the outstanding shares
of each such class owned (directly or indirectly) by the Company or any other
Subsidiary of the Company and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase, and similar rights. All of
the outstanding capital stock or other equity interests of all of such
Subsidiaries identified in such Schedule 4.07 as being owned by the Company or
any of its Subsidiaries has been validly issued, is fully paid and nonassessable
and is owned directly or indirectly by the Company or any of its Subsidiaries
(other than directors' qualifying shares or nominee shares which are required
for Foreign Subsidiaries pursuant to local law), as the case may be, free and
clear of all Liens other than a Lien described in and permitted by Section
5.08(d) of the Existing Syndicated Credit Agreement. Each corporate Subsidiary
of the Company is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.

4.08 Not an Investment Company. Neither the Borrower nor any of its
-------------------------
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.

18
<PAGE>

4.09 Margin Stock. No proceeds of the Term Loan will be used to purchase or
------------
carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock in violation of Regulations U, G, T or
X.

4.10 Compliance With Laws. The Borrower and each of its Subsidiaries is in
--------------------
compliance in all material respects with all applicable laws, rules and
regulations, and is not in violation of, or in default under, any term or
provision of any charter, by-law, mortgage, indenture, agreement, instrument,
statute, rule, regulation, judgment, decree, order, writ or injunction
applicable to it, except for any such non-compliance, violation, default or
failure to comply which would not be reasonably expected, individually or in the
aggregate, to have a material adverse effect on the business, financial position
or results of operations of the Borrower or any of its Subsidiaries, or on the
ability of the Borrower or any of its Subsidiaries to perform its obligations
under the Loan Documents.

4.11 Absence of Liens. There are no Liens of any nature whatsoever on any
----------------
properties or assets of the Borrower or any of its Subsidiaries existing as of
the date hereof, except as otherwise permitted under Section 5.08 of the
Existing Syndicated Credit Agreement.

4.12 Debt. There is no Debt of the Borrower and its Subsidiaries
----
outstanding as of the date hereof other than the Debt set forth on Schedule 4.12
attached to the Existing Syndicated Credit Agreement and/or Schedule 5.08
attached to the Existing Syndicated Credit Agreement, (ii) Debt permitted by
Section 5.07 of the Existing Syndicated Credit Agreement and (iii) other Debt
not exceeding $250,000 in the aggregate.

4.13 Contingent Liabilities. There are no material contingent liabilities
----------------------
(other than contingent liabilities that constitute Debt) of the Borrower or its
Subsidiaries as or the date hereof other than as set forth in the financial
statements referred to in Section 4.17 of the Existing Syndicated Credit
Agreement.

4.14 Investments. Set forth on Schedule 4.14 attached to the Existing
-----------
Syndicated Credit Agreement is a complete and accurate list as of the date
hereof of all investments by the Company or any of its Subsidiaries in any
Person, other than (i) Permitted Investments and (ii) investments by the
Borrower or any of its Subsidiaries in a Subsidiary.

4.15 Solvency. The Borrower is Solvent after giving effect to the
--------
transactions contemplated by this Agreement.

4.16 Taxes. The Borrower and its Subsidiaries have filed, or caused to be
-----
filed or properly extended, all material tax returns (federal, state, local and
foreign) required to be filed and paid all amounts of taxes shown thereon to be
due (including interest and penalties) and have paid all other taxes, fees,
assessments and other governmental charges owing by them, except for such taxes
(i) which are not yet delinquent or (ii) as are being contested in good faith
and by proper proceedings, and against which adequate reserves are being
maintained in accordance with generally accepted

19
<PAGE>

accounting principles. Except as set forth on Schedule 4.16 attached to the
Existing Syndicated Credit Agreement, the Borrower is not aware of any proposed
material tax assessments against it or any of its Subsidiaries.

4.17 Financial Condition. The financial statements and financial
-------------------
information provided to the Bank, consisting of, among other things, (i) an
audited consolidated balance sheet of the Company dated as of March 31, 1996,
together with related consolidated statements of income, retained earnings and
cash flows, certified by the Company's certified public accountants, as true and
correct, fairly represent the financial condition of the Company as of such
date; such financial statements were prepared in accordance with generally
accepted accounting principles applied on a consistent basis; and since the date
of such financial statements there have occurred no changes or circumstances
which have had or are reasonably likely to have a material adverse effect on the
financial condition of the Borrower.

5. GENERAL COVENANTS.
-----------------

The Borrower hereby covenants and agrees that until the Term Loan, together
with interest, fees and other obligations hereunder, have been paid in full, the
Borrower shall, and shall cause its Subsidiaries to, perform and comply with the
following covenants:

5.01 Information. The Borrower will mail or deliver to the Bank:
-----------

(a) as soon as available and in any event within 90 days after the end of
each fiscal year of the Company, a consolidated and consolidating balance sheet
of the Company and its Subsidiaries as of the end of such fiscal year and the
related consolidated and consolidating statements of income and consolidated
statement of cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, and, with respect to
such financial information for the Company, such consolidated (but not
consolidating) statements shall be audited statements by Arthur Andersen LLP or
other independent public accountants of nationally recognized standing and
containing an unqualified opinion of such accountants;

(b) as soon as available and in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such quarter and the related consolidated statements of income and consolidated
statement of cash flows for such quarter and for the portion of the Company's
fiscal year ended at the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding quarter and the corresponding
portion of the previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency by a Responsible Officer;

20
<PAGE>

(c) simultaneously with the delivery of each set of financial statements
referred to in subsections (a) and (b) of this Section, a certificate of the
treasurer, chief accounting officer or chief financial officer of the Company
(i) stating whether, to the best of such officer's knowledge after due inquiry,
there exists on the date of such certificate any Default Condition and, if any
Default Condition then exists, setting forth the details thereof and the action
that the Company and Borrower are taking or propose to take with respect thereto
and (ii) stating whether, since the date of the most recent financial statements
previously delivered pursuant to subsection (a) or (b) of this Section, there
has been a change in the generally accepted accounting principles applied in
preparing the financial statements then being delivered from those applied in
preparing the most recent audited financial statements so delivered which is
material to the financial statements then being delivered and which is not
otherwise disclosed in the financial statements then being delivered, (iii)
furnishing calculations demonstrating the compliance by the Company of the
covenants contained in Sections 5.19, 5.20 and 5.21 of the Existing Syndicated
Credit Agreement, and (iv) attaching management's summary of the results
contained in such financial statements;

(d) simultaneously with the delivery of each set of financial statements
referred to in clause (a) above, a statement of the firm of independent public
accountants which reported on such statements whether anything has come to their
attention to cause them to believe that any Default Condition existed on the
date of such statements;

(e) as soon as available and in any event within ninety (90) days after the
end of each fiscal year of the Company, financial forecasts and projections of
the Company and its Subsidiaries for each fiscal quarter in the first succeeding
fiscal year and financial forecasts and projections of the Company and its
Subsidiaries for the second succeeding fiscal year together with a certificate
of the chief financial officer, chief accounting officer or the treasurer of the
Company setting forth that such financial forecasts and projections (i) have in
all material respects been prepared in accordance with the Company's normal
accounting procedures on the basis of reasonable assumptions, (ii) fairly
represent in all material respects the expectations of the Company as to the
matters covered thereby based on currently available information, (iii) were
prepared by the Company in good faith and (iv) remain unchanged in all material
respects as of the date delivered;

(f) within five Business Days after any Responsible Officer obtains
knowledge of any Default Condition, if such Default Condition is then
continuing, a certificate of a Responsible Officer setting forth the details
thereof and the action which the Borrower is taking or proposes to take with
respect thereto;

(g) promptly upon the mailing thereof to the shareholders of the Company
generally, copies of all financial statements, reports and proxy statements so
mailed;

(h) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and

21
<PAGE>

reports on Forms 10-K, 10-Q and 8-K (or their equivalents) which the Company
shall have filed with the Securities and Exchange Commission;

(i) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability with
respect to any Multiemployer Plan under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is not Solvent or has been terminated,
a copy of such notice; (iii) receives notice from the PBGC under Title IV of
ERISA of its intent to terminate, impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or appoint a trustee to administer
any Plan, a copy of such notice; (iv) applies for a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under Section
4041(c) of ERISA, a copy of such notice and other information filed with the
PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of
ERISA, a copy of such notice; or (vii) except as previously disclosed to the
Bank in writing prior to the date hereof, fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of a bond or
other security under ERISA or the Internal Revenue Code, a certificate of the
chief financial officer, the chief accounting officer or the treasurer of the
Company setting forth details as to such occurrence and the action, if any,
which the Company or any applicable member of the ERISA Group is required or
proposes to take;

(j) as soon as reasonably practicable after any Responsible Officer of the
Company obtains knowledge of the commencement of, or of a material threat of the
commencement of, an action, suit or proceeding against the Company or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable likelihood of an adverse decision which
could after the application of applicable insurance materially and adversely
affect the business, financial position or results of operations of the Company
and its Subsidiaries, in each case considered as a whole, or which in any manner
questions the validity of any Loan Document, a written report informing the Bank
in reasonable detail of the nature of such pending or threatened action, suit or
proceeding; and

(k) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries, as the Bank may
reasonably request.

5.02 Payment of Obligations. The Borrower will pay and discharge, and will
----------------------
cause each of its Subsidiaries to pay and discharge, at or before maturity, all
their respective material obligations

22
<PAGE>

and liabilities, including, without limitation, tax liabilities, except where
the same may be contested in good faith by appropriate proceedings, and will
maintain, and will cause each of its Subsidiaries to maintain, in accordance
with generally accepted accounting principles, appropriate reserves for the
accrual of any of the same.

5.03 Maintenance of Property: Insurance.
----------------------------------

(a) The Borrower will keep, and will cause each of its Subsidiaries to
keep, all property materially useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted.

(b) The Borrower will maintain, and will cause each of its Subsidiaries to
maintain, with financially sound and responsible insurance companies, insurance
on all their respective properties in at least such amounts and against such
risks (and with such risk retention) as are usually insured against in the same
general area by companies of established repute engaged in the same or a similar
business, and will furnish to the Bank, upon request from the Bank, information
presented in reasonable detail as to the insurance so carried.

5.04 Conduct of Business and Maintenance of Existence. The Borrower will
------------------------------------------------
continue, and will cause each Subsidiary to continue, to engage in business of
the same general type as now conducted by the Borrower and each of its
Subsidiaries, and will preserve, renew and keep in full force and effect, and
will cause each of its Subsidiaries to preserve, renew and keep in full force
and effect their respective corporate existences and, except for any such
rights, privileges and franchises the failure to preserve which would not in the
aggregate have a material adverse effect on the Borrower and its Subsidiaries or
the ability of the Borrower or any Subsidiary to perform any of their respective
obligations under any Loan Document, their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business; provided
--------
that nothing in this Section 5.04 shall prohibit (a) the merger of a Subsidiary
of the Borrower into the Borrower or the merger or consolidation of any
Subsidiary of the Borrower with or into another Person if the corporation
surviving such consolidation or merger is a Wholly-Owned Subsidiary of the
Borrower and if, in each case, after giving effect thereto, no Default shall
have occurred and be continuing or (b) the termination of the corporate
existence of any Subsidiary of the Borrower or the discontinuation of any line
of business of the Borrower or any of its Subsidiaries if the Borrower in good
faith determines that such termination is in the best interest of the Borrower
or such Subsidiary, as the case may be, and is not materially disadvantageous to
the Banks.

5.05 Compliance with Laws. The Borrower will comply, and cause each of its
--------------------
Subsidiaries to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) the failure to comply with which would have a material
adverse effect on the Borrower and its Subsidiaries or their ability to perform
any of its obligations under any Loan Document, except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings.

23
<PAGE>

5.06 Inspection of Property, Books and Records. The Borrower will keep, and
-----------------------------------------
will cause each of its Subsidiaries to keep, proper books of record and account
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and, except to the
extent prohibited by applicable law, rule, regulations or orders, will permit,
and will cause each of its Subsidiaries to permit, representatives of any Bank
at such Bank's expense to visit and inspect any of their respective properties,
to examine and make abstracts from any of their respective books and records and
to discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants, all at such reasonable
times and as often as may reasonably be desired.

5.07 Consolidations, Mergers and Sales of Assets.
-------------------------------------------

(a) The Borrower will not, nor will it permit any of its Subsidiaries to,
consolidate or merge with or into any other Person except as permitted in
accordance with Section 5.04.

(b) The Borrower will not, nor will it permit any of its Subsidiaries to,
make any Asset Sale.

5.08 Creation of Subsidiaries. The Borrower will not, nor will it permit
------------------------
any of its Subsidiaries to, create any Subsidiary except for Subsidiaries in
existence on the date hereof.

5.09 Transactions with Affiliates. The Borrower will not, nor will it
----------------------------
permit any of its Subsidiaries to, directly or indirectly, pay any funds to or
for the account of, make any Investment in, lease, sell, transfer or otherwise
dispose of any assets, tangible or intangible, to, or participate in, or effect
any transaction in connection with any joint enterprise or other joint
arrangement with, any of their Affiliates unless such transactions are made on
an arms-length basis; provided, however, that the foregoing provisions of this
-----------------
Section shall not prohibit (i) any Subsidiaries of the Borrower from declaring
or paying any lawful dividend to the Borrower or any of its Subsidiaries or
(ii) the payment of ordinary and customary directors fees to outside directors
of the Borrower.

5.10 Use of Proceeds. The proceeds of the Loans will be used for working
---------------
capital purposes and to finance the general corporate purposes of the Borrower
and its Subsidiaries.

5.11 Constitutional Documents. Subject to changes, including any
------------------------
dissolutions permitted pursuant to this Agreement, the Borrower will not, nor
will it permit any of its Subsidiaries to, amend their respective articles of
incorporation or bylaws in any manner which could materially adversely affect
the rights of the Bank under the Loan Documents or their ability to enforce the
same.

6. REPRESENTATIONS. WARRANTIES AND COVENANTS APPLICABLE TO COLLATERAL. With
------------------------------------------------------------------
respect to the Collateral, Borrower hereby represents, warrants and covenants to
Lender as set forth in Section 6.1 through 6.5, inclusive.

24
<PAGE>

6.1 Sale of Collateral. Borrower will not sell, lease, exchange, or
------------------
otherwise dispose of any of the Collateral without the prior written consent of
Lender; provided, however, that, with notice to, but without the necessity of
consent of, Lender, from time to time hereafter, in the ordinary course of
Borrower's business, Borrower may sell, exchange or otherwise dispose of
portions of its Collateral which are obsolete, worn-out or unsuitable for
continued use by Borrower if such Collateral is replaced promptly upon its
disposition with equipment constituting Collateral having a market value equal
to or greater than the Collateral so disposed of and in which Lender shall
obtain and have a first priority security interest pursuant hereto; provided,
that the Borrower shall not be obligated to replace an item of the Collateral if
such item is damaged by a casualty and the outstanding principal balance of the
Term Loan is an amount less than ninety percent of the fair market value of the
remaining Collateral.

6.2 Insurance. Borrower agrees that it will obtain and maintain insurance
---------
on the Collateral with such companies and in such amounts and against such risks
as Lender may reasonably request, with loss payable to Lender as its interests
may appear. The loss payable clause of each such insurance policy shall be in
form and substance satisfactory to Lender and shall provide that all proceeds
thereunder are payable to Lender and the payment of such proceeds shall not be
affected by any act or neglect of the insured or owner of property described in
such policy. Such insurance shall not be cancellable by Borrower, unless with
the prior written consent of Lender, or by Borrower's insurer, unless with at
least 10 days advance written notice to Lender.

6.3 Good Title; No Existing Encumbrances. Borrower owns the Collateral free
------------------------------------
and clear of any prior Lien thereon other than with respect to any Permitted
Encumbrances and no financing statements or other evidences of the grant of a
security interest respecting the Collateral exist on the public records as of
the date hereof other than any evidencing any Permitted Encumbrances.

6.4 Right to Grant Security Interest; No Further Encumbrances. Borrower has
---------------------------------------------------------
the right to grant a security interest in the Collateral. Borrower will pay all
taxes and other charges against the Collateral. Borrower will not use the
Collateral illegally or allow the Collateral to be encumbered except for the
security interest in favor of Lender granted herein.

6.5 Location. As of the date hereof, the Collateral is titled in the state
--------
of [Tennessee] and, hereafter, Borrower covenants with Lender not to title (or
permit any state to issue a new or replacement title) with respect to any of the
Collateral, without the Lender's prior written consent.

7. EVENTS OF DEFAULT.
-----------------

7.01 Events of Default. The occurrence of any of the following events shall
-----------------
constitute an event of default hereunder (individually, an "Event of Default"
and collectively the "Events of Default"):

25
<PAGE>

(a) The Borrower shall fail to pay (i) when due any principal of the Term
Loan; or (ii) within five days after the same shall become due, any interest on
the Term Loan or any fees or any other amount payable hereunder;

(b) The Borrower shall fail to observe or perform any covenant contained in
Section 5.01 hereof (other than in Section 5.01(f) hereof) for 15 days after
written notice of such failure shall have been given to the Borrower by the
Bank;

(d) (i) Any Obligor shall fail to observe or perform any covenant or
agreement contained in any Loan Document (other than those covered by clause
(a), (b) or (c) above) for 30 days after the earlier of the receipt of written
notice of such failure by the Borrower from the Bank or any Responsible Officer
becomes aware of such failure;

(e) Any representation, warranty, certification or statement made or deemed
made by any Obligor in any Loan Document or in any certificate, financial
statement or other document delivered pursuant thereto shall prove to have been
incorrect in any material respect when made (or deemed made);

(f) The Company or any of its Subsidiaries shall fail to make any payment
in respect of any Material Debt when due or within any applicable grace period
(for purposes of the foregoing, "Material Debt" shall be Debt in excess of
$500,000.00);

(g) Any event or condition shall occur which results in the acceleration of
the maturity of any Debt of the Company or any of its Subsidiaries in excess of
$500,000.00 or enables the holder of such Debt or any Person acting on such
holder's behalf to accelerate the maturity thereof;

(h) The Company or any of its Subsidiaries shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;

(i) An involuntary case or other proceeding shall be commenced against the
Company or any of its Subsidiaries seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or

26
<PAGE>

hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall
be entered against the Company or any of its Subsidiaries under the federal
bankruptcy laws as now or hereafter in effect and the Company or such
Subsidiary, as the case may be, shall have failed to appeal such order and to
have obtained a stay pending the outcome of such appeal;

(j) The Company shall admit its inability to pay its debts as and when
they fall due;

(k) Any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $500,000.00 which it shall have become liable
to pay under Title IV of ERISA; or notice of intent to terminate any Plan which
is then a Material Plan shall be filed under Title IV of ERISA by any member of
the ERISA Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any Plan which
is then a Material Plan; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any Plan which is then a
Material Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(S) of
ERISA, with respect to, one or more Multiemployer Plans which could cause one or
more members of the ERISA Group to incur a current payment obligation, that is,
an obligation or series of obligations payable within 12 months, in excess of
$500,000.00;

(l) An uninsured judgment or order for the payment of money in excess of
$500,000.00 shall be rendered against the Company or any of its Subsidiaries and
such judgment or order shall continue unsatisfied and unstayed for a period of
30 days;

(m) The occurrence of a "Default" or an "Event of Default" as such terms
are defined in the Existing Syndicated Credit Agreement;

(n) The Company shall at any time fail to have, directly or indirectly,
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of outstanding
shares of the voting stock of the Borrower possessing 100% of the voting power
of all outstanding shares of the voting stock of the Borrower; or

(o) Max Fuller and/or Patrick Quinn and their respective family members
and/or family trusts shall fail to own in the aggregate at least 25% of the
voting rights of the Company.

27
<PAGE>

8. REMEDIES. Upon the occurrence of any Default Condition or Event of
--------
Default, Lender's obligation to disburse any undisbursed portion of the Term
Loan shall immediately cease; provided, however, that if such obligation has
ceased due to the occurrence of a Default Condition, and such Default Condition
does not become an Event of Default due to its having been cured or waived
before it has matured into an Event of Default, then such obligation shall be
reinstated as of the date such Default Condition is cured or waived. Upon the
occurrence or existence of any Event of Default, or at any time thereafter,
without prejudice to the rights of Lender to enforce its claims against Borrower
for damages for failure by Borrower to fulfill any of its obligations hereunder,
subject only to prior receipt by Lender of payment in full of all Obligations
then outstanding in a form acceptable to Lender, Lender shall have all of the
rights and remedies described in Sections 8.1 through 8.4, inclusive, and it may
exercise any one, more, or all of such remedies, in its sole discretion, without
thereby waiving any of the others.

8.1 Acceleration of the Obligations. Lender, at its option, may declare all
---------------------------------
of the Obligations (including but not limited to that portion thereof evidenced
by the Note) to be immediately due and payable, and in the event a voluntary or
involuntary case is commenced under the Bankruptcy Code by or against Borrower
as a debtor, all Obligations automatically will be due and payable without any
notice or declaration by Lender, whereupon the same shall become immediately due
and payable without presentment, demand, protest, notice of non-payment or any
other notice required by law relative thereto, all of which are hereby expressly
waived by Borrower, anything contained herein to the contrary notwithstanding
and, in connection therewith, the rate of interest charged on the Note then
outstanding shall automatically and without further~xx notice increase to a rate
per annum equal to the Default Rate. If any promissory note of Borrower to
Lender constituting Obligations, including, without limitation, the Note, shall
be a demand instrument, however, the recitation of the right of Lender to
declare any and all Obligations to be immediately due and payable, whether such
recitation is contained in such promissory note or in this Agreement, as well as
the recitation of the above events permitting Lender to declare all Obligations
due and payable, shall not constitute an election by Lender to waive its right
to demand payment under such promissory note at any time and in any event, as
Lender in its discretion may deem appropriate. Thereafter, Lender, at its
option, may, but shall not be obligated to, accept less than the entire amount
of Obligations due, if tendered, provided, however, that unless then agreed to
in writing by Lender, no such acceptance shall or shall be deemed to constitute
a waiver of any Event of Default of Lender hereunder.

8.2 Remedies of a Secured Party. Lender shall thereupon have the rights and
-----------------------------
remedies of a secured party under the UCC in effect on the date thereof
(regardless of whether the same has been enacted in the jurisdiction where the
rights or remedies are asserted), including, without limitation, the right to
take the Collateral or any portion thereof into its possession, by such means
(without breach of the peace) and through agents or otherwise as it may elect
(and, in connection therewith, demand that Borrower assemble the Collateral at a
place or places and in such manner as Lender shall prescribe), and sell, lease
or otherwise dispose of the Collateral or any portion thereof in its then
condition or following any commercially reasonable preparation or processing,
which disposition may be by public or private proceedings, by one or more
contracts, as a unit or in parcels,

28
<PAGE>

at any time and place and on any terms, so long as the same are commercially
reasonable. Lender may apply the proceeds of any such sale or disposition to any
of the Obligations in such order as Lender, in its sole discretion, may elect.
Lender shall give Borrower written notice of the time and place of any public
sale of the Collateral or the time after which any other intended disposition
thereof is to be made, except when the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market. The requirement of sending reasonable notice shall be met if such notice
is given to Borrower pursuant to Section 9.9 at least 5 days before such
disposition. Expenses of retaking, holding, insuring, preserving, protecting,
preparing for sale or selling or the like with respect to the Collateral shall
include, in any event, reasonable actual attorneys' fees and other legally
recoverable collection expenses, all of which shall constitute Obligations.

8.3 Set Offs. The Borrower hereby grants to the Bank, as security for the
--------
full and punctual payment and performance of the Obligations, a continuing lien
on and security interest in all deposits and other sums credited by or due from
the Bank to the Borrower or subject to withdrawal by the Borrower; and
regardless of the adequacy of any collateral or other means of obtaining
repayment of such obligations, the Bank may at any time upon or after the
occurrence of any Event of Default, and without notice to the Borrower, set off
the whole or any portion or portions of any or all such deposits and other sums
against such obligations, whether or not any other Person or Persons could also
withdraw money therefrom.

8.4 Other Remedies. Unless and except to the extent expressly provided for
--------------
to the contrary herein, the rights of Lender specified herein shall be in
addition to, and not in limitation of, Lender's rights under the UCC, as amended
from time to time, or any other statute or rule of law or equity, or under any
other provision of any of the Loan Documents, or under the provisions of any
other document, instrument or other writing executed by Borrower or any third
party in favor of Lender, all of which may be exercised successively or
concurrently.

9. MISCELLANEOUS.
-------------

9.1 Waiver. Each and every right granted to Lender under this Agreement, or
------
any of the other Loan Documents, or any other document delivered hereunder or in
connection herewith or allowed it by law or in equity, shall be cumulative and
may be exercised from time to time. No failure on the part of Lender to
exercise, and no delay in exercising, any right shall operate as a waiver
thereof, nor shall any single or partial exercise by Lender of any right
preclude any other or future exercise thereof or the exercise of any other
right. No waiver by Lender of any Default Condition or Event of Default shall
constitute a waiver of any subsequent Default Condition or Event of Default.

9.2 Governing Law. This Agreement and the other Loan Documents, and the
-------------
rights and obligations of the parties hereunder and thereunder, shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of Georgia.

29
<PAGE>

9.3 Survival. All representations, warranties and covenants made herein
--------
shall survive the execution and delivery of all of the Loan Documents. The terms
and provisions of this Agreement shall continue in full force and effect,
notwithstanding the payment of the Note, until all of the Obligations have been
paid in full and Lender has terminated this Agreement in writing.

9.4 No Assignment by Borrower. No assignment hereof shall be made by
-------------------------
Borrower without the prior written consent of Lender. Lender may assign, or sell
participations and undivided ownership interests in, its right, title and
interest herein and in the Loan Documents at any time hereafter without notice
to or consent of Borrower.

9.5 Counterparts. This Agreement may be executed in two or more
--------------
counterparts, each of which when fully executed shall be an original, and all of
said counterparts taken together shall be deemed to constitute one and the same
agreement.

9.6 Reimbursement. Borrower shall pay to Lender on demand all reasonable
---------------
out-of-pocket costs and expenses that Lender pays or incurs in connection with
the negotiation, preparation, consummation, enforcement and termination of this
Agreement and the other Loan Documents, including, without limitation: (a)
reasonable attorneys' fees and paralegals' fees and disbursements of outside
counsel; (b) reasonable costs and expenses (including reasonable outside
attorneys' and paralegals' fees and disbursements) for any amendment,
supplement, waiver, consent or subsequent closing in connection with the Loan
Documents and the transactions contemplated thereby; (c) reasonable and actual
costs and expenses of lien and title searches and title insurance; (d) actual
taxes, fees and other charges for recording any deeds to secure debt, deeds of
trust, mortgages, filing financing statements and continuations, and other
actions to perfect, protect and continue the Lien of Lender in the Collateral;
(e) upon the occurrence and during the continuation of an Event of Default, sums
paid or incurred to pay for any amount or to take any action required of
Borrower under the Loan Documents that Borrower fails to pay or take; (f) if an
Event of Default exists, costs of appraisals, inspections, and verifications of
the Collateral, including, without limitation, reasonable costs of travel,
lodging, and meals for inspections of the Collateral and Borrower's operations
by Lender; (g) pursuant to Section 9.18, costs and expenses of preserving and
protecting the Collateral; and (h) after an Event of Default, costs and expenses
(including reasonable attorneys' and paralegals' fees and disbursements) paid or
incurred to obtain payment of the Obligations, enforce the Lien in the
Collateral, sell or otherwise realize upon the Collateral, and otherwise enforce
the provisions of the Loan Documents or to defend any claims made or threatened
against Lender arising out of the transactions contemplated hereby (including,
without limitation, preparations for and consultations concerning any such
matters). The foregoing shall not be construed to limit any other provisions of
the Loan Documents regarding costs and expenses to be paid by Borrower. Borrower
will pay all expenses incurred by it in the transaction. In the event Borrower
becomes a debtor under the Bankruptcy Code, Lender's secured claim in such case
shall include all fees, costs and charges provided for herein (including, either
limitation, reasonable attorneys' fees).

9.7 Successors and Assigns. This Agreement shall be binding upon and inure
----------------------
to the benefit of the successors and permitted assigns of the parties hereto.

30
<PAGE>

9.8 Severability. If any provision of any of the Loan Documents or the
------------
application thereof to any party thereto or circumstances shall be invalid or
unenforceable to any extent, the remainder of such Loan Documents and the
application of such provisions to any other party thereto or circumstance shall
not be affected thereby and shall be enforced to the greatest extent permitted
by law. Without limiting the foregoing, the obligations of Borrower under this
Agreement and the Note shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt thereof would be
contrary to provisions of law applicable to Lender limiting rates of interest
which may be charged or collected by Lender.

9.9 Notices. All notices, requests and demand to or upon the respective
-------
parties hereto shall be deemed to have been properly given or made when
personally delivered or deposited in the mail, registered or certified mail,
return receipt requested, postage prepaid, addressed as follows or to such other
address as may be designated hereafter in writing by the respective parties
hereto:

Borrower:

c/o U.S. Xpress Enterprises, Inc.
2931 South Market Street
Chattanooga, Tennessee 37410
Telephone: 800-251-6291
Facsimile: 423-265-5715

Lender:

Wachovia Bank, N.A.
Southeast Corporate Division
191 Peachtree Street, N.E. (29th Floor)
Atlanta, Georgia 30303
Attention: John Tibe
Telephone: 404-332-1040
Facsimile: 404-332-5016

except in cases where it is expressly provided herein or by applicable law that
such notice, demand or request is not effective until received by the party to
whom it is addressed in which instance rejection or other refusal to accept or
the inability to deliver because of changed address of which no notice was given
shall be deemed to be receipt of the notice, demand or request sent. By giving
at least 30 days written notice thereof, Borrower or Lender shall have the right
from time to time and at any time to change their respective addresses and each
shall have the right to specify any other address within the continental United
States of America.

9.10 Entire Agreement - Amendment. This Agreement constitutes the entire
------------------------------
agreement between the parties hereto with respect to the subject matter hereof.
Neither this Agreement nor any

31
<PAGE>

provision hereof may be changed, waived, discharged, modified or terminated
orally, but only by an instrument in writing signed by the party against whom
enforcement is sought.

9.11 Time of the Essence. Time is of the essence in this Agreement and the
-------------------
other-Loan Documents.

9.12 Interpretation. No provision of this Agreement shall be construed
--------------
against or interpreted to the disadvantage of any party hereto by any court or
other governmental or judicial authority by reason of such party having or being
deemed to have structured or dictated such provision.

9.13 Lender Not a Joint Venturer. Neither this Agreement nor any
---------------------------
agreements, instruments, documents or transactions contemplated hereby
(including the Loan Documents) shall in any respect be interpreted, deemed or
construed as making Lender a partner or joint venturer with Borrower or as
creating any similar relationship or entity, and Borrower agrees that it will
not make any contrary assertion, contention, claim or counterclaim in any
action, suit or other legal proceeding involving Lender and Borrower.

9.14 Jurisdiction. Borrower agrees that any legal action or proceeding with
------------
respect to this Agreement may be brought in the courts of the State of Georgia
or the United States District Court, Northern District of Georgia, Atlanta
Division, all as Lender may elect. By execution of this Agreement, Borrower
hereby submits to each such jurisdiction, hereby expressly waiving whatever
rights may correspond to it by reason of its present or future domicile. Nothing
herein shall affect the right of Lender to commence legal proceedings or
otherwise proceed against Borrower in any other jurisdiction or to serve process
in any manner permitted or required by law. In furtherance of the foregoing,
Borrower hereby appoints the Secretary of State of the State of Georgia as its
agent for service of process.

9.15 Acceptance. This Agreement, together with the other Loan Documents,
----------
shall not become effective unless and until delivered to Lender at its principal
office in Atlanta, Georgia and accepted in writing by Lender thereafter at
such office as evidenced by its execution hereof (notice of which delivery
and acceptance are hereby waived by Borrower).

9.16 Payment on Non-Business Days. Whenever any payment to be made
----------------------------
hereunder or under the Notes shall be stated to be due on a day which is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
payment of interest hereunder or under the Notes.

9.17 Waiver of Rights. Borrower hereby waives all rights which Borrower has
----------------
or may have under and by virtue of O.C.G.A. Ch. 44-14, including, without
limitation, the right of Borrower to notice and to a judicial hearing prior to
seizure of any Collateral by Lender. In addition, Borrower waives any right
which it has or may have under UCC (S) 9-404(1) to have Lender file UCC

32
<PAGE>

termination statements unless and until all Obligations have been paid in full
and Lender shall have terminated this Agreement in writing.

9.18 Cure of Defaults by Lender. If, hereafter, Borrower defaults in the
----------------------------
performance of any duty or obligation to Lender hereunder, Lender may, at its
option, but without obligation, cure such default and any costs, fees and
expenses incurred by Lender in connection therewith including, without
limitation, for the purchase of insurance, the payment of taxes and the removal
or settlement of liens and claims, shall be deemed to be payable upon demand and
shall accrue interest at the Default Rate overadvance under the Master Note, and
shall be payable in accordance with its terms.

9.19 Recitals. All recitals contained herein are hereby incorporated by
----------
reference into this Agreement and made part thereof.

9.20 Attorney-in-Fact. Borrower hereby designates, appoints and empowers
----------------
Lender irrevocably as its attorney-in-fact, at Borrower's cost and expense, to
do in the name of Borrower any and all actions which Lender may deem necessary
or advisable to carry out the terms hereof upon the failure, refusal or
inability of Borrower to do so and Borrower hereby agrees to indemnify and hold
Lender harmless from any costs, damages, expenses or liabilities arising against
or incurred by Lender in connection therewith. This power of attorney, being
coupled with an interest, shall be irrevocable, shall continue until all
Obligations have been satisfied in full and this Agreement has been terminated
by Lender in writing and shall be in addition to Lender's other rights, powers
and remedies.

9.21 Sole Benefit. The rights and benefits set forth in this Agreement and
------------
in all the other Loan Documents are for the sole and exclusive benefit of the
parties thereto and may be relied upon only by them.

l0. CONDITIONS PRECEDENT. Unless waived in writing by Lender at or prior
--------------------
to the execution and delivery of this Agreement, the conditions set forth in
Section 10.1 through 10.8 shall constitute express conditions precedent to any
obligation of Lender hereunder.

10.1 Board Resolutions and Incumbency Certificate of Borrower. Receipt by
----------------------------------------------------------
Lender of a certificate from the Secretary (or Assistant Secretary) of Borrower,
certifying to Lender that appropriate resolutions have been entered into by the
Board of Directors of Borrower incident hereto and that the officers of Borrower
whose signatures appear hereinbelow, on the other Loan Documents, and on any and
all other documents, instruments and agreements executed in connection herewith,
are duly authorized by the Board of Directors of Borrower for and on behalf of
Borrower to execute and deliver this Agreement, the other Loan Documents and
such other documents, instruments and agreements, and to bind Borrower
accordingly thereby, all in form and substance satisfactory to the Bank.

33
<PAGE>

10.2 Certificate of Good Standing of Borrower. Receipt by Lender of a
----------------------------------------
certificate of good standing or valid existence or other appropriate equivalent
with respect to Borrower from the secretaries of state of the state of
incorporation of Borrower, dated within 10 days of the date hereof.

10.3 Articles/Bylaws of Borrower. Receipt by Lender of copies of the
---------------------------
articles of incorporation and bylaws of Borrower as in effect on date hereof,
certified as to truth and accuracy by the corporate secretary of Borrower.

10.4 Loan Documents and any Guaranty. Receipt by Lender of all the other
-------------------------------
Loan Documents and the Guaranty Agreements, duly executed in form and substance
acceptable to Lender.

10.5 Hazard Insurance Certificate. Receipt by Lender of a certificate
----------------------------
respecting all hazard insurance required hereunder, in form and substance
acceptable to Lender.

l0.6 Opinion of Counsel to Borrower. Receipt by Lender of an opinion of
-----------------------------
counsel from independent legal counsel to Borrower in substantially the form of

Exhibit "G".
- ----------

10.7 Board Resolutions and Incumbency Certificates of Guarantors. Receipt
-----------------------------------------------------------
by Lender of a certificate from the Secretary (or Assistant Secretary) of
Guarantor, certifying to Lender that appropriate resolutions have been entered
into by the Board of Directors of each Guarantor incident to the Guaranty
Agreements and that the officers of such Guarantor whose signatures appear
on the Guaranty Agreements, and on any and all other documents, instruments and
agreements executed in connection therewith, are duly authorized by the Board of
Directors of such Guarantor for and on behalf of such Guarantor to execute and
deliver the Guaranty Agreement and such other documents, instruments and
agreements, and to bind such Guarantor accordingly thereby, all in form and
substance satisfactory to the Bank.

10.8 Certificates of Good Standing of Guarantors. Receipt by Lender of a
-------------------------------------------
certificate of good standing or valid existence or other appropriate equivalent
with respect to each Guarantor from the secretary of state of the state of
incorporation of such Guarantor.

10.9 Articles/Bylaws of Guarantors. Receipt by Lender of copies of the
-----------------------------
articles of incorporation and bylaws of each Guarantor as in effect on date
hereof, certified as to truth and accuracy by the corporate secretary of such
Guarantor.

10.10 Opinions of Counsel to Guarantors. Receipt by Lender of an opinion of
---------------------------------
counsel from independent legal counsel to each Guarantor in substantially the
form of Exhibit "G".
----------

1O.11 Miscellaneous. Receipt by Lender of such other documents,
-------------
certificates, instruments and agreements as shall be required hereunder or
provided for herein or as Lender or Lender's counsel may require in connection
herewith.

34
<PAGE>

IN WITNESS WHEREOF, Borrower and Lender each have set its hand and seal, as
of the day and year first above written.

"BORROWER"

U.S. XPRESS LEASING, INC.

By: /s/ Donald A. Rutledge
---------------------- (SEAL)
Title: Assistant Secretary

Attest: /s/ Mark Patterson
Title: Director of Treasury and
Finance

"LENDER"

WACHOVIA BANK, N.A.

By: /s/ John B. Tibe
----------------- (SEAL)
Title: Assistant Vice President

Attest: /s/ Patrick A. Phelan
Title: Assistant Vice President

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports and to all references to our Firm included in or made a part of this
Registration Statement.

/s/ Arthur Andersen LLP
_____________________________________
ARTHUR ANDERSEN LLP

Chattanooga, Tennessee
July 10, 1997