Exhibit 10.5 Guarantee Agreement.


                               GUARANTEE AGREEMENT


     THIS GUARANTEE AGREEMENT (the "Agreement") is dated as of July 28, 2004 by
and between CENTRAL FREIGHT LINES,  INC., a Nevada corporation (the "Guarantor")
and SUNTRUST BANK, a Georgia banking corporation (the "Lender").

     Reference is made to the First Amended and Restated  Revolving  Credit Loan
Agreement  dated as of July 28,  2004 (as  amended,  supplemented  or otherwise
modified from time to time, the "Credit  Agreement"),  between  Central  Freight
Lines,  Inc., a Texas  corporation (the "Borrower") and the Lender.  Capitalized
terms used herein and not defined  herein  shall have the  meanings  assigned to
such terms in the Credit Agreement.

     The Lender has agreed to make Loans to and issue  Letters of Credit for the
account of the  Borrower,  pursuant  to,  and upon the terms and  subject to the
conditions  specified  in,  the  Credit  Agreement.  The  Borrower  is a  direct
wholly-owned Subsidiary of the Guarantor, and the Guarantor acknowledges that it
will derive substantial benefit from the making of the Loans and the issuance of
the Letters of Credit by the Lender. The obligations of the Lender to make Loans
and to issue  Letters of Credit are  conditioned  on,  among other  things,  the
execution and delivery by the Guarantor of this Agreement in the form hereof. As
consideration  therefor  and in order to induce  the Lender to make Loans and to
issue  Letters of Credit,  the  Guarantor is willing to execute  this  Guarantee
Agreement.

         Accordingly, the parties hereto agree as follows:

     SECTION 1. Guarantee.  Guarantor  unconditionally  guarantees, as a primary
obligor and not merely as a surety,  (a) the due and punctual payment of (i) the
principal of and premium,  if any, and  interest  (including  interest  accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding,  regardless of whether  allowed or allowable in such  proceeding) on
the Loans, when and as due, whether at maturity, by acceleration,  or otherwise,
(ii) each payment required to be made by the Borrower under the Credit Agreement
in  respect  of any Letter of Credit,  when and as due,  including  payments  in
respect of reimbursement or  disbursements,  interest thereon and obligations to
provide cash  collateral,  and (iii) all other monetary  obligations,  including
fees,  costs,  expenses and  indemnities,  whether primary,  secondary,  direct,
contingent,  fixed or otherwise  (including monetary obligations incurred during
the  pendency  of any  bankruptcy,  insolvency,  receivership  or other  similar
proceeding,  regardless of whether allowed or allowable in such proceeding),  of
the Borrower to the Lender under the Credit  Agreement and the other  applicable
Loan  Documents,  (b)  the  due  and  punctual  performance  of  all  covenants,
agreements, obligations and liabilities of the Borrower under or pursuant to the
Credit  Agreement and the other  applicable Loan Documents;  and (c) the due and
punctual payment and performance of all obligations of the Borrower, monetary or
otherwise,  under  each  Hedging  Agreement  entered  into with the Lender or an
Affiliate of Lender with respect to the Credit  Agreement  (all the monetary and
other  obligations  referred to in the  preceding  clauses (a) through (c) being
collectively  called  the  "Obligations").  Guarantor  further  agrees  that the
Obligations may be extended or renewed,  in whole or in part,  without notice to
or further  assent  from it, and that it will remain  bound upon this  Agreement
notwithstanding any extension or renewal of the Obligations.

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     SECTION 2.  Obligations  Not Waived.  To the fullest  extent  permitted  by
applicable  law,  Guarantor  waives  presentment  to, demand of payment from and
protest to the Borrower of the Obligations, and also waives notice of acceptance
of its guarantee  and notice of protest for  nonpayment.  To the fullest  extent
permitted by applicable law, the obligations of Guarantor hereunder shall not be
affected  by (a) the  failure  of the Lender to assert any claim or demand or to
enforce or exercise  any right or remedy  against the Borrower or any other Loan
Party under the provisions of the Credit  Agreement,  any other Loan Document or
otherwise,  (b) any rescission,  waiver,  amendment or  modification  of, or any
release from any of the terms or provisions of, this  Agreement,  any other Loan
Document,  or any other  agreement,  including  with  respect  to any other Loan
Party,  or (c) the failure to perfect any  security  interest in, or the release
of, any of the security held by or on behalf of the Lender.

     SECTION 3.  Security.  The Guarantor  authorizes the Lender to (a) take and
hold security for payment of this  Agreement and the  Obligations  and exchange,
enforce, waive and release any such security, (b) apply such security and direct
the order or manner of sale thereof as they in its  discretion may determine and
(c) release or substitute any one or more endorsees,  other  guarantors of other
obligors.

     SECTION 4.  Guarantee of Payment.  The  Guarantor  further  agrees that its
guarantee constitutes a guarantee of payment when due and not of collection, and
waives any right to require that any resort be had by the Lender to any security
held for payment of the  Obligations or to any balance of any deposit account or
credit on the books of the Lender in favor of the Borrower or any other person.

     SECTION 5. No Discharge or  Diminishment  of Guarantee.  The obligations of
the  Guarantor  hereunder  shall not be  subject to any  reduction,  limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the  Obligations),  including  any  claim  of  waiver,  release,
surrender,  alteration or compromise of any of the Obligations, and shall not be
subject to any  defense  or  setoff,  counterclaim,  recoupment  or  termination
whatsoever by reason of the invalidity,  illegality or  unenforceability  of the
Obligations or otherwise.  Without limiting the generality of the foregoing, the
obligations  of the Guarantor  hereunder  shall not be discharged or impaired or
otherwise affected by the failure of the Lender to assert any claim or demand or
to enforce any remedy under the Credit Agreement, any other Loan Document or any
other agreement,  by any waiver or modification of any provision of any thereof,
by any default,  failure or delay,  willful or otherwise,  in the performance of
the Obligations, or by any other act or omission that may or might in any manner
or to the extent vary the risk of the Guarantor or that would otherwise  operate
as a discharge  of the  Guarantor  as a matter of law or equity  (other than the
indefeasible payment in full in cash of all the Obligations).

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     SECTION 6. Defenses of Borrower Waived.  To the fullest extent permitted by
applicable law, the Guarantor  waives any defense based on or arising out of any
defense of the Borrower or the  unenforceability  of the Obligations or any part
thereof from any cause,  or the cessation from any cause of the liability of the
Borrower,  other than the final and indefeasible  payment in full in cash of the
Obligations.  The Lender may, at its election, foreclose on any security held by
one or more of them by one or more  judicial  or  nonjudicial  sales,  accept an
assignment of any such security in lieu of foreclosure, compromise or adjust any
part of the Obligations,  make any other  accommodation with the Borrower or any
other guarantor,  without affecting or impairing in any way the liability of the
Guarantor  hereunder  except to the  extent  the  Obligations  have been  fully,
finally and indefeasibly paid in cash. Pursuant to applicable law, the Guarantor
waives any defense  arising out of any such  election  even though such election
operates,  pursuant to applicable  law, to impair or to extinguish  any right of
reimbursement or subrogation or other right or remedy of such Guarantor  against
the  Borrower or any other  Guarantor or  guarantor,  as the case may be, or any
security.

     SECTION 7. Agreement to Pay; Subordination. In furtherance of the foregoing
and not in limitation of any other right that the Lender has at law or in equity
against the Guarantor by virtue hereof,  upon the failure of the Borrower or any
other Loan Party to pay any  Obligation  when and as the same shall  become due,
whether at maturity,  by acceleration,  after notice of prepayment or otherwise,
the Guarantor hereby promises to and will forthwith pay, or cause to be paid, to
the Lender in cash the amount of such unpaid  Obligations.  Upon  payment by the
Guarantor  of any sums to the Lender,  all rights of the  Guarantor  against the
Borrower   arising  as  a  result  thereof  by  way  of  right  of  subrogation,
contribution,  reimbursement,  indemnity or  otherwise  shall in all respects be
subordinate and junior in right of payment to the prior indefeasible  payment in
full in cash  of all the  Obligations.  In  addition,  any  indebtedness  of the
Borrower now or hereafter held by the Guarantor is hereby  subordinated in right
of  payment  to the prior  payment  in full in cash of the  Obligations.  If any
amount  shall  erroneously  be paid to the  Guarantor  on  account  of (i)  such
subrogation, contribution, reimbursement, indemnity or similar right or (ii) any
such  indebtedness  of the Borrower,  such amount shall be held in trust for the
benefit of the Lender and shall  forthwith  be paid to the Lender to be credited
against  the  payment  of the  Obligations,  whether  matured or  unmatured,  in
accordance with the terms of the Loan Documents.

     SECTION 8. Information.  The Guarantor assumes all responsibility for being
and keeping itself  informed of the Borrower's  financial  condition and assets,
and of all  other  circumstances  bearing  upon  the risk of  nonpayment  of the
Obligations  and the  nature,  scope and extent of the risks that the  Guarantor
assumes and incurs hereunder,  and agrees that the Lender will not have any duty
to advise the Guarantor of information known to it regarding such  circumstances
or risks.

     SECTION 9.  Representations  and Warranties.  The Guarantor  represents and
warrants that all  representations  and warranties relating to it (as the entity
defined as "Holdings" in the Credit Agreement) contained in the Credit Agreement
are true and correct.

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     SECTION  10.  Incorporation  by  Reference  of  Article  VII of the  Credit
Agreement.  Sections 7.1 through 7.11 of the Credit Agreement,  are incorporated
herein by  reference in their  entirety  with the same effect as if set forth in
full herein (with the defined terms used therein,  including  defined terms used
in other  defined  terms,  having the  meanings  assigned  to them in the Credit
Agreement,  except that all references to the "Borrower" in the Credit Agreement
shall be deemed references to the Guarantor in this Agreement. It is agreed that
the purpose of the foregoing  incorporation is to afford the Lender with respect
to the Obligations,  substantially the protections  afforded by the incorporated
provisions  to the  Lender  under  the  Credit  Agreement  with  respect  to the
Borrower,  and the  provisions  set forth or  incorporated  by reference in this
Section shall be construed accordingly.

     SECTION 11. Termination.  The guarantees made hereunder (a) shall terminate
when all the  Obligations  have been paid in full in cash and the  Lender has no
further commitment to lend under the Credit Agreement,  the LC Exposure has been
reduced to zero and the Lender has no  further  obligation  to issue  Letters of
Credit under the Credit  Agreement and (b) shall  continue to be effective or be
reinstated,  as the case may be, if at any time payment, or any part thereof, of
any Obligation is rescinded or must otherwise be restored by Lender or Guarantor
upon  the  bankruptcy  or  reorganization  of the  Borrower,  the  Guarantor  or
otherwise.  In  connection  with the  foregoing,  the Lender  shall  execute and
deliver to  Guarantor or  Guarantor's  designee,  at  Guarantor's  expense,  any
documents or instruments  which Guarantor shall reasonably  request from time to
time to evidence such termination and release.

     SECTION 12. Binding Effect;  Several  Agreement;  Assignments.  Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted  successors  and assigns of such party;  and all
covenants,  promises and  agreements by or on behalf of the  Guarantor  that are
contained  in this  Agreement  shall bind and inure to the benefit of each party
hereto and their respective  successors and assigns. This Agreement shall become
effective  as to  Guarantor  when a  counterpart  hereof  executed  on behalf of
Guarantor  shall have been  delivered to the Lender,  and a  counterpart  hereof
shall  have been  executed  on behalf of the  Lender,  and  thereafter  shall be
binding  upon  Guarantor  and the Lender  and their  respective  successors  and
assigns,  and shall inure to the  benefit of  Guarantor,  the Lender,  and their
respective  successors  and assigns,  except that  Guarantor  shall not have the
right to assign its rights or obligations  hereunder or any interest herein (and
any such attempted assignment shall be void).

     SECTION 13.  Waivers;  Amendment.  (a) No failure or delay of the Lender in
exercising any power or right hereunder  shall operate as a waiver thereof,  nor
shall  any  single  or  partial  exercise  of any such  right or  power,  or any
abandonment  or  discontinuance  of steps  to  enforce  such a right  or  power,
preclude  any other or further  exercise  thereof or the  exercise  of any other
right or power.  The rights and remedies of the Lender  hereunder  and under the
other Loan  Documents  are  cumulative  and are not  exclusive  of any rights or
remedies  that they would  otherwise  have.  No waiver of any  provision of this
Agreement or consent to any  departure by the Guarantor  therefrom  shall in any
event be effective  unless the same shall be  permitted by paragraph  (b) below,
and then  such  waiver  and  consent  shall be  effective  only in the  specific
instance  and for the  purpose  for  which  given.  No  notice  or demand on the
Guarantor in any case shall entitle the Guarantor to any other or further notice
in similar or other circumstances.

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(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to a written agreement entered into between the
Guarantor and the Lender.

     SECTION  14.  Governing  Law.  THIS  AGREEMENT  SHALL BE  GOVERNED  BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TENNESSEE.

     SECTION 15. Notices.  All  communications and notices hereunder shall be in
writing and given as provided in Section 9.1 of the Credit Agreement.

     SECTION  16.  Survival  of  Agreement;  Severability.  (a)  All  covenants,
agreements  representations  and warranties made by the Guarantor  herein and in
the certificates or other  instruments  prepared or delivered in connection with
or pursuant to this Agreement or the other Loan Documents shall be considered to
have been relied  upon by the Lender and shall  survive the making by the Lender
of the Loans and the issuance of the Letters of Credit by the Lender  regardless
of any investigation made by Lender or on its behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any  other fee or amount  payable  under  this  Agreement  or any other  Loan
Document is outstanding and unpaid or the LC Exposure does not equal zero and as
long as the Commitment has not been terminated.

(b) In the event one or more of the provisions contained in this Agreement or in
any other Loan Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby (it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

     SECTION 17.  Counterparts.  This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single agreement.  Delivery of an executed  signature page to
this Agreement by facsimile  transmission shall be as effective as delivery of a
manually executed counterpart of this Agreement.

     SECTION 18. Rules of Interpretation.  The rules of interpretation specified
in Section 1.3 of the Credit Agreement shall be applicable to this Agreement.

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     SECTION 19. Jurisdiction;  Consent to Service of Process. (a) The Guarantor
hereby irrevocably and unconditionally  submits, for itself and its property, to
the  nonexclusive  jurisdiction  of  any  Chancery  Court  in  Davidson  County,
Tennessee  State court or Federal court of the United States of America  sitting
in the Middle  District of Tennessee,  and any appellate court from any thereof,
in any action or proceeding  arising out of or relating to this Agreement or the
other Loan  Documents,  or for  recognition or enforcement of any judgment,  and
each of the parties hereto hereby  irrevocably and  unconditionally  agrees that
all  claims  in  respect  of any such  action  or  proceeding  may be heard  and
determined in such Tennessee State court or, to the extent  permitted by law, in
such Federal  court.  Each of the parties hereto agrees that a final judgment in
any such action or proceeding  shall be conclusive  and may be enforced in other
jurisdictions  by suit on the judgment or in any other  manner  provided by law.
Nothing in this  Agreement  shall affect any right that the Lender may otherwise
have to bring any action or proceeding  relating to this  Agreement or the other
Loan  Documents  against the  Guarantor or its  properties  in the courts of any
jurisdiction.

(b) The Guarantor hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any
Tennessee State or Federal court as set forth herein. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 15. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

     SECTION 20. Waiver of Jury Trial.  EACH PARTY HERETO HEREBY WAIVES,  TO THE
FULLEST EXTENT  PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION  DIRECTLY OR INDIRECTLY  ARISING OUT OF, UNDER
OR IN CONNECTION  WITH THIS  AGREEMENT OR THE OTHER LOAN  DOCUMENTS.  EACH PARTY
HERETO (A)  CERTIFIES  THAT NO  REPRESENTATIVE,  AGENT OR  ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED,  EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE  EVENT OF  LITIGATION,  SEEK TO  ENFORCE  THE  FOREGOING  WAIVER  AND (B)
ACKNOWLEDGES  THAT IT AND THE OTHER  PARTIES  HERETO HAVE BEEN  INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 20.

     SECTION 21. Right of Setoff. If an Event of Default shall have occurred and
be continuing, Lender is hereby authorized at any time and from time to time, to
the fullest  extent  permitted by law, to set off and apply any and all deposits
(general or special, time or demand,  provisional or final) at any time held and
other  Indebtedness at any time owing by such Lender to or for the credit or the
account of the Guarantor against any or all the obligations of the Guarantor now
or hereafter  existing under this Agreement and the other Loan Documents held by
the  Lender,  irrespective  of  whether or not such  Lender  shall have made any
demand  under  this  Agreement  or any other Loan  Document  and  although  such
obligations may be unmatured.  The rights of Lender under this Section 21 are in
addition to other rights and remedies  (including  other rights of setoff) which
Lender may have.


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         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

                              CENTRAL FREIGHT LINES, INC., a Nevada corporation



                              By:


                              Name:


                              Title:





                              SUNTRUST BANK



                              By:


                              Name:


                              Title:



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