Exhibit 2.2

                      AGREEMENT AND PLAN OF REORGANIZATION


                             BESTWAY TRUCKING, INC.

                              DATED: JULY 23, 1999
<PAGE>


                                TABLE OF CONTENTS


1.    DEFINITIONS............................................................1


2.    PLAN OF REORGANIZATION.................................................3

   2.1    THE MERGER.........................................................3
   2.2    FRACTIONAL SHARES..................................................4
   2.3    EFFECTS OF THE MERGER..............................................4
   2.4    TAX-FREE REORGANIZATION............................................4
   2.5    PURCHASE ACCOUNTING TREATMENT......................................5
   2.6    WAIVER OF DISSENTERS RIGHTS........................................5
   2.7    CLOSING............................................................5
   2.8    CLOSING OBLIGATIONS................................................5

3.    REPRESENTATIONS AND WARRANTIES OF SELLER...............................6

   3.1    ORGANIZATION AND GOOD STANDING.....................................6
   3.2    AUTHORITY; NO CONFLICT.............................................7
   3.3    CAPITALIZATION.....................................................8
   3.4    FINANCIAL STATEMENTS...............................................9
   3.5    BOOKS AND RECORDS..................................................9
   3.6    TITLE TO PROPERTIES; ENCUMBRANCES..................................9
   3.7    CONDITION AND SUFFICIENCY OF ASSETS................................10
   3.8    ACCOUNTS RECEIVABLE................................................10
   3.9    NO UNDISCLOSED LIABILITIES.........................................10
   3.10   TAXES..............................................................11
   3.11   NO MATERIAL ADVERSE CHANGE.........................................11
   3.12   EMPLOYEE BENEFITS..................................................12
   3.13   COMPLIANCE.........................................................12
   3.14   LITIGATION.........................................................12
   3.15   ABSENCE OF CHANGES.................................................13
   3.16   CONTRACTS; NO DEFAULTS.............................................14
   3.17   INSURANCE..........................................................14
   3.18   ENVIRONMENTAL MATTERS..............................................15
   3.19   EMPLOYEES; INDEPENDENT CONTRACTORS.................................16
   3.20   LABOR RELATIONS; COMPLIANCE........................................16
   3.21   INTELLECTUAL PROPERTY..............................................17
   3.22   RELATIONSHIPS WITH RELATED PERSONS.................................18
   3.23   BROKERS OR FINDERS.................................................18
   3.24   DISCLOSURE.........................................................18
   3.25   INVESTMENT REPRESENTATION..........................................18
   3.26   TAX REPRESENTATIONS................................................19
   3.27   DISTRIBUTIONS......................................................19
   3.28   RELATED TRANSACTIONS...............................................19

4.    REPRESENTATIONS AND WARRANTIES OF TGI..................................19

   4.1    ORGANIZATION AND GOOD STANDING.....................................19
   4.2    AUTHORITY; NO CONFLICT.............................................19
   4.3    CERTAIN PROCEEDINGS................................................20
   4.4    SECURITIES COMPLIANCE..............................................20
   4.5    TAX REPRESENTATIONS................................................20

5.    COVENANTS..............................................................20

   5.1    ACCESS AND INVESTIGATION...........................................20
   5.2    OPERATION OF THE BUSINESSES OF THE COMPANY.........................20
   5.3    NEGATIVE COVENANT..................................................21
   5.4    NOTIFICATION.......................................................21
   5.5    RELATED PARTY TRANSACTIONS.........................................21
   5.6    NO NEGOTIATION.....................................................22
   5.7    BEST EFFORTS.......................................................22
   5.8    LEASE AGREEMENTS...................................................22
   5.9    SATISFACTION OF PAYABLE OWED TO SELLER.............................22
   5.10   ASSET PURCHASE.....................................................23
   5.11   NAME CHANGE........................................................23
<PAGE>
6.    CONDITIONS PRECEDENT TO TGI'S OBLIGATION TO CLOSE......................23

   6.1    ACCURACY OF REPRESENTATIONS........................................23
   6.2    SELLER'S PERFORMANCE...............................................23
   6.3    CONSENTS...........................................................23
   6.4    ADDITIONAL DOCUMENTS...............................................23
   6.5    NO PROCEEDINGS.....................................................24
   6.6    NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS................24
   6.7    SATISFACTORY DUE DILIGENCE.........................................24
   6.8    HSR WAITING PERIOD.................................................24
   6.9    PURCHASE OF DLS LEASING, INC.......................................24

7.    CONDITIONS PRECEDENT TO SELLER'S  OBLIGATION TO CLOSE..................24

   7.1    ACCURACY OF REPRESENTATIONS........................................24
   7.2    TGI'S PERFORMANCE..................................................24
   7.3    NO PROCEEDINGS.....................................................24
   7.4    HSR WAITING PERIOD.................................................25
   7.5    CONSENTS...........................................................25
   7.6    PURCHASE OF DLS LEASING, INC.......................................25
   7.7    RELEASE OF GUARANTEES..............................................25

8.    TERMINATION............................................................25

   8.1    TERMINATION EVENTS.................................................25
   8.2    EFFECT OF TERMINATION..............................................26

9.    INDEMNIFICATION; REMEDIES..............................................26

   9.1    SURVIVAL...........................................................26
   9.2    INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER...................26
   9.3    INDEMNIFICATION AND PAYMENT OF DAMAGES BY TGI......................27
   9.4    ESCROW.............................................................28
   9.5    PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS..................28
   9.6    PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS........................29
   9.7    TIME LIMITATIONS...................................................29
   9.8    LIMITATION.........................................................29

10.   GENERAL PROVISIONS.....................................................30

   10.1   EXPENSES...........................................................30
   10.2   PUBLIC ANNOUNCEMENTS...............................................30
   10.3   NOTICES............................................................30
   10.4   JURISDICTION; SERVICE OF PROCESS...................................31
   10.5   FURTHER ASSURANCES.................................................31
   10.6   WAIVER.............................................................31
   10.7   ENTIRE AGREEMENT AND MODIFICATION..................................31
   10.8   DISCLOSURE LETTER..................................................32
   10.9   ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS.................32
   10.10  SEVERABILITY.......................................................32
   10.11  SECTION HEADINGS, CONSTRUCTION.....................................32
   10.12  TIME OF ESSENCE....................................................32
   10.13  GOVERNING LAW......................................................32
   10.14  COUNTERPARTS.......................................................33

Exhibits and Schedules

         Exhibit A                    --    Articles of Merger
         Exhibit B1 and "B2"          --    Employment Agreements
                        ----
         Exhibit C1 and "C2"          --    Noncompetition Agreements
                        ----
         Exhibit "D1" and "D2"        --    Protective Covenants Agreement
         ------------     ----
         Exhibit E                    --    Escrow Agreement
         Exhibit F                    --    Subscription Agreement
         Exhibit "G1" and "G2"        --    Lease Agreement
         ------------     ----

         Schedule 5.5                       Affiliate Indebtedness
<PAGE>

                      AGREEMENT AND PLAN OF REORGANIZATION

         This Agreement and Plan of  Reorganization  ("Agreement") is made as of
July 23,  1999,  by and  between  Transit  Group,  Inc.,  a Florida  corporation
("TGI"),  Bestway Trucking,  Inc., a Kentucky  corporation (the "Company"),  and
David L.  Summitt,  a resident  of the State of  Indiana  ("Seller").  TGI,  the
Company  and the Seller  are  sometimes  referred  to herein  individually  as a
"Party," and collectively as the "Parties."

                                    RECITALS

         A. The Parties  intend that,  subject to the terms and  conditions  set
forth herein,  a new corporation  will be organized as a wholly owned subsidiary
of Transit Group, Inc. ("Newco") and will be merged with and into the Company in
a reverse triangular merger (the "Merger"), with the Company to be the surviving
corporation  of the Merger,  all  pursuant to the terms and  conditions  of this
Agreement,  the  Articles  of Merger  substantially  in the form of Exhibit  "A"
hereto (the "Articles of Merger") and applicable law.

         B. Upon the  effectiveness of the Merger,  all the outstanding  capital
stock of the Company  will be converted  into cash and capital  stock of TGI, in
the manner and on the basis determined herein and as provided in the Articles of
Merger.

         C. The Merger is intended to be treated as a "purchase"  for accounting
purposes and a tax-free  reorganization  pursuant to the  provisions  of Section
368(a)(1)(A) of the Internal  Revenue Code of 1986, as amended (the "Code"),  by
virtue of the provisions of Section 368(a)(2)(E) of the Code.

         D. As of the  Closing,  Seller  will  be the  sole  shareholder  of the
Company.

                                    AGREEMENT

         For and in consideration of the above premises and the mutual covenants
contained  herein,  and other good and valuable  consideration,  the receipt and
sufficiency  of which are hereby  acknowledged,  the  Parties,  intending  to be
legally bound, agree as follows:


1.      DEFINITIONS

         For purposes of this  Agreement,  the following terms have the meanings
specified or referred to in this Section 1:

         "Agreement"  --this Agreement and Plan of Reorganization  together with
all Schedules and Exhibits hereto.

         "Balance Sheet"--as defined in Section 3.4.

         "Closing"--as defined in Section 2.7.

         "Closing Date"--the date and time as of which the Closing actually
takes place.

         "Company"--collectively  the Company identified in the Recitals to this
Agreement together with each Subsidiary.

         "Company's  Disclosure  Letter"--the  disclosure  letter  delivered  by
Seller to TGI concurrently with the execution and delivery of this Agreement.

         "Computer Devices"--as defined in Section 3.21(c).

         "Contemplated Transactions"--all of the transactions contemplated by
this Agreement, including:

         (d)       the Merger of Newco and the Company;

         (e)      the  execution,  delivery,  and  performance of the Employment
                  Agreements,  the  Noncompetition  Agreements,  the  Protective
                  Covenants  Agreements,  the  Subscription  Agreements  and the
                  Escrow Agreement; and

         (f)      the  performance  by TGI,  the  Company  and  Seller  of their
                  respective covenants and obligations under this Agreement.

         "Damages"--as defined in Section 9.2.
<PAGE>
         "Effective Time"--the effective time of the Merger as defined in
Section 2.1.

         "Employment Agreements"--as defined in Section 2.8(a)(iii).

         "Environmental Law"--any law or regulation that materially requires or
relates to:

         (f)      advising appropriate authorities, employees, and the public of
                  intended  or  actual   releases  of  pollutants  or  hazardous
                  substances or materials,  violations of discharge  limits,  or
                  other  prohibitions  and of the  commencements  of activities,
                  such as resource  extraction or construction,  that could have
                  significant impact on the environment;

         (g)      preventing  or  reducing to  acceptable  levels the release of
                  pollutants  or  hazardous  substances  or  materials  into the
                  environment;

         (h)      reducing  to  acceptable  levels  the  risks  inherent  in the
                  transportation of hazardous  substances,  pollutants,  oil, or
                  other potentially harmful substances;

         (i)      cleaning up pollutants that have been released, preventing the
                  threat of  release,  or paying  the costs of such  clean up or
                  prevention; or

         (j)      making responsible  parties pay private parties,  or groups of
                  them, for damages done to their health or the environment,  or
                  permitting   self-appointed   representatives  of  the  public
                  interest to recover for injuries done to public assets.

         "ERISA"--the  Employee  Retirement  Income  Security  Act of  1974,  as
amended, and regulations and rules issued pursuant to that act.

         "Escrow Agreement" --as defined in Section 2.8(a)(vi).

         "Facility" -- as defined in Section 3.18.

         "GAAP"--generally accepted United States accounting principles, applied
on a basis  consistent  with the basis on which the Balance  Sheet and the other
financial statements referred to in Section 3.4 were prepared.

         "Hazardous  Materials"--any  waste or other  substance  that, as of the
date of this  Agreement,  is  listed,  defined,  designated,  or  classified  as
hazardous,  radioactive,  or  toxic or a  pollutant  or a  contaminant  under or
pursuant  to any  applicable  Environmental  Law,  including  petroleum  and all
derivatives   thereof  or  synthetic   substitutes   therefor  and  asbestos  or
asbestos-containing materials.

         "HSR Act"-- the Hart-Scott-Rodino  Antitrust  Improvements Act of 1976,
as amended, and the rules and regulations thereunder.

         "Merger"--as defined in the Recitals hereto.

         "Noncompetition Agreements"--as defined in Section 2.8(a)(iv).

         "Occupational Safety and Health Law"--any law or regulation designed to
provide safe and healthy working  conditions and to reduce  occupational  safety
and health hazards,  and any program whose direct purpose is to provide safe and
healthful working conditions.

         "Securities  Act"--the  Securities  Act of 1933,  as  amended,  and the
regulations  and rules  issued  pursuant  to that act,  as in effect on the date
hereof.

         "Seller"--as defined in the first paragraph of this Agreement.

         "Subsidiary" or "Subsidiaries"--means any company, entity,  partnership
or  joint  venture  in which  the  Company  owns an  equity  or other  ownership
interest.

         "TGI  Disclosure  Letter"--the  disclosure  letter  delivered by TGI to
Seller concurrently with the execution and delivery of this Agreement.

         "Year 2000 Problem"--as defined in Section 3.21(c).


2.      PLAN OF REORGANIZATION.
<PAGE>
2.1     THE MERGER.

           Subject to the terms and conditions of this  Agreement,  prior to the
Closing Date, TGI will  incorporate  and organize Newco and will cause the Board
of Directors and  shareholders of Newco to approve the Merger and perform all of
the  duties  of Newco  set  forth in this  Agreement.  Subject  to the terms and
conditions  of this  Agreement,  the  Articles  of Merger will be filed with the
Secretary  of State of the State of Kentucky on the Closing  Date.  The date and
time that the Articles of Merger are filed with the Kentucky  Secretary of State
and the Merger thereby  becomes  effective will be referred to in this Agreement
as the  "Effective  Time." Subject to the terms and conditions of this Agreement
and the Articles of Merger,  Newco will be merged with and into the Company in a
statutory  merger  pursuant  to the  Articles of Merger and in  accordance  with
applicable provisions of Kentucky law as follows:

(a)  Conversion  of Company  Common  Stock.  Each  share of common  stock of the
Company,  no par  value  -------------------------------------  per  share  (the
"Company Common Stock"), that is issued and outstanding immediately prior to the
----------------------  Effective Time, will, by virtue of the Merger and at the
Effective Time and without further action on the part of any holder thereof,  be
converted  into  the  right  to  receive  complete  shares  of  fully  paid  and
nonassessable  common  stock of TGI,  $.01 par  value  per  share  ("TGI  Common
Stock"). The total number of  -----------------  shares of TGI Common Stock into
which the Seller's shares of Company Common Stock will be converted is 1,542,501
shares,  calculated  by  offsetting  the  amounts  set  forth  on  Schedule  5.5
($489,292)  against  the  $8,250,000  aggregate  stock  value  for  a  total  of
$7,760,708  divided  by the per share  price on the date of the letter of intent
between the Parties of $5.03125.

(b)  Conversion  of Newco Shares.  Each share of Newco Common  Stock,  par value
$0.01 ("Newco Common Stock"),  that is issued and outstanding  immediately prior
to the Effective Time,  will, by virtue of the Merger and without further action
on the part of the sole  shareholder of Newco,  be converted into and become one
share of common stock of the Company as the surviving  corporation,  which shall
be the only shares of Company  Common Stock issued and  outstanding  immediately
after the Effective Time.

2.2              FRACTIONAL SHARES.

           De minimus  rounding  adjustments may be made to the relative amounts
of stock  consideration to avoid the issuance of fractional shares of TGI Common
Stock.

2.3              EFFECTS OF THE MERGER.

           At the  Effective  Time:  (a) the  separate  existence  of Newco will
cease,  Newco will be merged with and into the Company,  and the Company will be
the surviving  corporation  pursuant to the terms of the Articles of Merger; (b)
the  Articles  of  Incorporation  and  Bylaws of Newco will be the  Articles  of
Incorporation  and Bylaws of the  surviving  corporation;  (c) the  Articles  of
Incorporation  will be  amended  to  reflect  the  name of the  Company,  as the
surviving  corporation;  (d) the  directors of Newco in effect at the  Effective
Time will be the directors of the Company as the surviving corporation,  and the
officers  of  Newco  will  be the  officers  of  the  Company  as the  surviving
corporation;  (e) each share of Company  Common  Stock  outstanding  immediately
prior to the Effective Time will be converted as provided in Section 2.1(a); (f)
each share of Newco Common Stock outstanding  immediately prior to the Effective
Time will be converted as provided in Section 2.1(b) and (g) the Merger will, at
and after the  Effective  Time,  have all of the effects  provided by applicable
law.

2.4              TAX-FREE REORGANIZATION.

           The  Parties  intend to adopt this  Agreement  as a tax-free  plan of
reorganization and to consummate the Merger in accordance with the provisions of
Section  368(a)(1)(A) of the Code. The Parties believe that the value of the TGI
Common Stock to be received by the Seller in the Merger is equal to the value of
the Company Common Stock to be surrendered in exchange therefor.  The TGI Common
Stock  issued in the Merger will be issued  solely in  exchange  for the Company
Common  Stock,  and no  other  transaction  other  than the  Merger  represents,
provides for or is intended to be an adjustment to, the  consideration  paid for
the Company  Common  Stock.  Seller  acknowledges  that he has  received his own
independent  tax  advice  and  counsel  with  respect  to  the  Merger  and  the
transactions  contemplated herein and is not relying on representations  made by
TGI or its counsel, accountants or advisors with respect thereto.

2.5              PURCHASE ACCOUNTING TREATMENT.

           The  Parties  intend that the Merger be treated as a  "purchase"  for
accounting purposes.
<PAGE>
2.6              WAIVER OF DISSENTERS RIGHTS.

          The Seller  hereby waives any and all rights such  shareholder  has to
dissent from the Merger under Kentucky law.

2.7              CLOSING.

           The  consummation  of the Merger  provided for in this Agreement (the
"Closing")  will take place at the offices of Womble  Carlyle  Sandridge & Rice,
PLLC,  Suite 3500, One Atlantic  Center,  2100 West Peachtree  Street,  Atlanta,
Georgia 30309, at 10:00 a.m. (local time) on the later of (i) July 31, 1999, and
(ii) the fifth (5th) business day following the  satisfaction  of the conditions
set forth in Sections  6.3,  7.5 and 7.7, or (iii) at such time and place as the
Parties may agree.

2.8              CLOSING OBLIGATIONS.

           At the Closing:

(a)               Seller will deliver to TGI:

(i)               certificates  representing his shares of Company Common Stock,
                  duly  endorsed for transfer (or  accompanied  by duly executed
                  stock  powers),  with  signatures  guaranteed  by a commercial
                  bank;

(ii)  releases and  resignations  from the officers and directors of the Company
and each Subsidiary duly executed by such parties;  (iii) employment  agreements
in the form of Exhibit  "B1" and "B2",  executed by each of the Seller and Jenny
Summitt,   respectively,   (the  "Employment  Agreement");  (iv)  noncompetition
agreements in the form of Exhibit "C1" and "C2",  executed by each of the Seller
and  Jenny  Summitt,   respectively  (the  "Noncompetition  Agreement");  (v)  a
protective covenants agreement in the form of Exhibit "D1" and "D2", executed by
each of Mike Motsinger and Yolanda  Cartwright,  respectively  (the  "Protective
Covenants Agreement");

(vi) an escrow agreement in the form of Exhibit "E", executed by the Seller (the
"Escrow ------------ ------ Agreement"); ---------

(vii) a  subscription  agreement  executed  by the  Seller for the shares of TGI
Common  Stock to be  received  by the Seller in the Merger in the form  attached
hereto as Exhibit "F"; and (viii) a certificate executed by Seller certifying to
TGI that the Seller's  representations  and  warranties in this  Agreement  were
accurate in all respects as of the date of this  Agreement and as of the Closing
Date. (b) TGI will deliver to Seller:

(i)               share certificates  representing the TGI Common Stock,  issued
                  in the name of the Seller in the amount  indicated  in Section
                  2.1(a) to be  delivered as promptly as  practicable  after the
                  Closing;

(ii) a certificate executed by TGI to the effect that TGI's  representations and
warranties  in this  Agreement  were  accurate in all respects as of the date of
this  Agreement  and as of the Closing  Date;  (iii)  Noncompetition  Agreements
executed  by TGI with  each of the  Seller  and  Jenny  Summitt;  (iv) an Escrow
Agreement executed by TGI. (c) The Company will deliver to Seller:

(i)  Employment  Agreements  executed by the Company with each of the Seller and
Jenny Summitt;

(ii) Protective Covenants Agreements executed by TGI with each of Mike Motsinger
and Yolanda Cartwright; and

(iii)  a  Lease  Agreement  for  the  Company's  Jeffersonville,   Indiana,  and
Nashville,  Tennessee,  facilities  substantially in the form attached hereto as
Exhibit "G1" and "G2", respectively.

3.      REPRESENTATIONS AND WARRANTIES OF SELLER

         Seller represents and warrants to TGI as follows:
<PAGE>
3.1              ORGANIZATION AND GOOD STANDING.

(a) Part 3.1 of the  Company's  Disclosure  Letter  contains a statement  of the
Company's and each  Subsidiary's  jurisdiction of  incorporation,  a list of all
other  jurisdictions  in  which  it  is  authorized  to  do  business,  and  its
capitalization  (including  the identity of each  stockholder  and the number of
shares held by each). The Company and each Subsidiary is duly organized, validly
existing,   and  in  good  standing  under  the  laws  of  its  jurisdiction  of
incorporation,  with full corporate  power and authority to conduct its business
as it is now being  conducted,  to own or use the  properties and assets that it
purports to own or use, and to perform all its obligations  under its contracts.
The Company and each  Subsidiary  is duly  qualified to do business as a foreign
corporation  and is in good  standing  under  the  laws of each  state  or other
jurisdiction  in which either the  ownership or use of the  properties  owned or
used by it, or the  nature of the  activities  conducted  by it,  requires  such
qualification,  except  for  those  jurisdictions  where  the  failure  to be so
qualified  will not have a  material  adverse  effect on the  Company or require
material expense to qualify due to failure of the Company to previously do so.

(b)      Seller has delivered to TGI copies of the Articles of Incorporation and
         Bylaws of the Company and each Subsidiary, as currently in effect.

3.2              AUTHORITY; NO CONFLICT.

(a) This  Agreement  constitutes  the legal,  valid,  and binding  obligation of
Seller and the Company  enforceable  against them in accordance  with its terms.
Upon the  execution  and  delivery by Seller of the  Employment  Agreement,  the
Escrow Agreement,  the Subscription Agreement,  and the Noncompetition Agreement
(collectively, the "Seller's Closing Documents"), the Seller's Closing Documents
will  constitute  the  ----------------------------  legal,  valid,  and binding
obligations  of  Seller,  enforceable  against  him  in  accordance  with  their
respective  terms.  Each of the  Seller and the  Company  has the  absolute  and
unrestricted  right,  power,  authority and capacity to execute and deliver this
Agreement and the Seller's  Closing  Documents  and to perform their  respective
obligations  under this Agreement and the Seller's  Closing  Documents,  subject
only  to  payment  in  full  of  the  Company's   Promissory  Notes  to  Vincent
Benningfield  in the  principal  amount of  $315,295.75  as of July 1, 1999 (the
"Benningfield      Indebtedness")      which     the     Company     has     the
-------------------------- absolute right to do prior to Closing.

(b) Except as set forth in Part 3.2 of the Company's Disclosure Letter,  neither
the execution and delivery of this Agreement nor the consummation or performance
of any of the Contemplated  Transactions  will,  directly or indirectly (with or
without notice or lapse of time): (i) contravene,  conflict with, or result in a
violation of (A) any provision of the Articles of Incorporation or Bylaws of the
Company  or any  Subsidiary;  or (B) any  resolution  adopted  by the  board  of
directors or the  stockholders of the Company or any  Subsidiary;  or (C) any of
the terms or requirements of, or give any governmental body the right to revoke,
withdraw,  suspend,  cancel,  terminate,  or modify, any permit or authorization
that is held by the Company or any Subsidiary or that  otherwise  relates to the
business  of,  or any of the  assets  owned  or  used  by,  the  Company  or any
Subsidiary;  or (D) any  provision of, or give any person the right to declare a
default  or  exercise  any  remedy  under,  or to  accelerate  the  maturity  or
performance  of, or to cancel,  terminate,  or modify any  contract to which the
Company or any Subsidiary is bound; or

(ii) result in the imposition or creation of any lien, claim or encumbrance upon
or with  respect  to any of the  assets  owned  or used  by the  Company  or any
Subsidiary.
(c) Except as set forth in Part 3.2 of the Company's Disclosure Letter,  neither
Seller, the Company nor any Subsidiary is or will be required to give any notice
to or obtain any consent from any person in  connection  with the  execution and
delivery of this  Agreement or the  consummation  or  performance  of any of the
Contemplated Transactions.
<PAGE>
3.3              CAPITALIZATION.

(a) The authorized  equity  securities of the Company consist of 1,500 shares of
common  stock,  no par value per  share,  of which 750  shares  are  issued  and
outstanding (the "Shares"). The current stock ------ ownership of the Company is
set forth on Part 3.3 of the Company's Disclosure Letter.  Seller is and will be
on the  Closing  Date the sole  record  and  beneficial  owner and holder of 750
shares  of common  stock of the  Company,  representing  all of the  issued  and
outstanding  shares  on such  date,  free and  clear  of all  liens,  claims  or
encumbrances,  and the Shares were  acquired  by Seller  free of any  preemptive
rights or rights of first  refusal.  With the exception of the Shares (which are
owned by Seller), on the Closing Date there are and will be no other outstanding
equity  securities  or other  securities  of the  Company.  No  legend  or other
reference to any purported encumbrance appears upon any certificate representing
equity securities of the Company,  including,  without  limitation,  any options
warrants,  convertible  securities  or other rights or agreements to acquire any
securities  of the Company.  All of the  outstanding  equity  securities  of the
Company  have been duly  authorized  and  validly  issued and are fully paid and
nonassessable.  As of the Closing Date,  there will be no contracts  relating to
the issuance,  sale or transfer of any equity  securities or other securities of
the Company,  and any such agreements in effect on the date hereof are set forth
on Part 3.3 of the Company's  Disclosure Letter.  None of the outstanding equity
securities  or other  securities  of the Company was issued in  violation of the
Securities Act or any other law or  regulation.  Except as set forth in Part 3.3
of the Company's  Disclosure  Letter, the Company does not own, nor does it have
any contract to acquire, any equity securities or other securities of any person
(other than the Company) or any direct or indirect equity or ownership  interest
in any other business.

(b) The authorized equity securities of each Subsidiary and the number of shares
of such  Subsidiary  that  are  outstanding  are set  forth  on Part  3.3 of the
Company's  Disclosure Letter. The Company is and will be on the Closing Date the
record and  beneficial  owner and  holder of all of the  issued and  outstanding
stock of each Subsidiary,  free and clear of all liens,  claims or encumbrances.
With the  exception  of the  shares  owned by the  Company,  there  are no other
outstanding  equity securities or other securities of any Subsidiary.  No legend
or other  reference to any purported  encumbrance  appears upon any  certificate
representing equity securities of a Subsidiary,  including,  without limitation,
any options,  warrants,  convertible securities or other rights or agreements to
acquire  any  securities  of  the  Subsidiary.  All of  the  outstanding  equity
securities of each  Subsidiary  have been duly authorized and validly issued and
are  fully  paid and  nonassessable.  There  are no  contracts  relating  to the
issuance,  sale, or transfer of any equity securities or other securities of any
Subsidiary. None of the outstanding equity securities or other securities of any
Subsidiary  was issued in  violation of the  Securities  Act or any other law or
regulation.  No Subsidiary  owns, nor does it have any contract to acquire,  any
equity  securities  or other  securities of any person or any direct or indirect
equity or ownership interest in any other business.

3.4              FINANCIAL STATEMENTS.

           Seller  has  delivered  to TGI:  (a)  audited  balance  sheets of the
Company and its  Subsidiaries as at their fiscal year end for the year 1998, and
the related audited statements of income,  changes in stockholders'  equity, and
cash flow for the fiscal year then ended,  and (b) unaudited  balance  sheets of
the Company and its Subsidiaries as at their fiscal year end for the years 1995,
1996 and 1997,  and the  related  unaudited  statements  of  income,  changes in
stockholders' equity, and cash flow for the fiscal years then ended, and (c) the
unaudited  balance sheet of the Company and its Subsidiaries as of June 30, 1999
(the "Balance  Sheet") and income  statements  for the six (6) month period then
ended.  Such  financial  statements  and the notes thereto fairly present in all
material respects the financial condition and the results of operations, changes
in stockholders'  equity and cash flow of the Company and its Subsidiaries as at
the  respective  dates  of and for the  periods  referred  to in such  financial
statements,  all in  accordance  with GAAP  (except  with  respect to  unaudited
statements as indicated in the notes thereto and as set forth on Part 3.4 of the
Company's  Disclosure Letter),  consistently applied throughout the periods 1992
through and including 1996, with changes in accounting  methods for depreciation
in fiscal  1997 and  salvage  value in  fiscal  1998 as  indicated  in the notes
thereto, and subject, in the case of the interim statements,  to normal year-end
adjustments.

3.5              BOOKS AND RECORDS.

           The books of account,  minute  books,  stock  record  books and other
records  of the  Company  and each  Subsidiary,  all of  which  have  been  made
available  to TGI,  are  complete  and correct and have been  maintained  in all
material  respects in accordance  with  applicable  law. The minute books of the
Company  and each  Subsidiary  contain  accurate  and  complete  records  of all
meetings of, and  corporate  actions taken by, the  stockholders,  the Boards of
Directors  and  committees  of the Boards of  Directors  of the Company and each
Subsidiary,  and no formal meeting of any such stockholders,  Board of Directors
or committee  has been held for which minutes have not been prepared and are not
contained in such minute books.
<PAGE>
3.6              TITLE TO PROPERTIES; ENCUMBRANCES.

           Part 3.6 of the Company's  Disclosure  Letter contains a complete and
accurate list of any and all material  items of personal  property  owned by the
Company  and each  Subsidiary.  Except  for liens  set forth on Part 3.6,  or as
otherwise  reflected on the Balance Sheet,  the Company and each Subsidiary owns
good and marketable title to the properties and assets located in the facilities
owned or operated by the Company or any  Subsidiary or reflected as owned in the
books  and  records  of the  Company  or any  Subsidiary,  including  all of the
properties and assets  reflected in the Balance Sheet, and all of the properties
and assets  purchased  or  otherwise  acquired by the Company or any  Subsidiary
since  the  date of the  Balance  Sheet.  All  material  properties  and  assets
reflected in the Balance Sheet are owned free and clear of all liens,  claims or
encumbrances  and are not,  in the  case of real  property,  subject  to any use
restrictions,  exceptions, variances, reservations, or limitations of any nature
except,  with  respect to all such  properties  and  assets,  (a)  mortgages  or
security interests shown on the Balance Sheet as securing specified  liabilities
or obligations,  with respect to which no default (or event that, with notice or
lapse of time or both, would  constitute a default) exists,  and (b) zoning laws
and other land use  restrictions  that do not impair the present or  anticipated
use of the property  subject  thereto.  To the best of Seller's  knowledge,  all
buildings,  plants,  and  structures  owned  or  leased  by the  Company  or any
Subsidiary  lie wholly within the  boundaries of the real property  owned by the
Company or any  Subsidiary or its lessor,  and do not encroach upon the property
of, or otherwise  conflict with the property  rights of, any other person.

3.7 CONDITION AND SUFFICIENCY OF ASSETS.

           The buildings,  plants,  structures, and equipment owned or leased by
the Company and each Subsidiary are  structurally  sound,  are in good operating
condition  and repair  (normal wear and tear  excepted) and are adequate for the
uses to which they are being put, have been  maintained  in the ordinary  course
and  are not in  need  of  extraordinary  repairs.  In  Seller's  judgment,  the
building,  plants,  structures, and equipment owned or leased by the Company and
each  Subsidiary are  sufficient for the continued  conduct of the Company's and
each Subsidiary's  businesses after the Closing in substantially the same manner
as conducted prior to the Closing.

3.8              ACCOUNTS RECEIVABLE.

           All accounts  receivable of the Company and each Subsidiary as of the
Closing Date represent or will represent  valid  obligations  arising from sales
actually made or services actually performed in the ordinary course of business.
Unless paid prior to the Closing Date, the accounts receivable are or will be as
of the Closing Date current and at least 95%  collectible,  however,  no reserve
reflected on the Balance Sheet. To the best of the Company's knowledge, there is
no  contest,  claim,  or right of set-off  relating to the amount or validity of
such  accounts  receivable.  The  parties  agree that in the event the Seller is
required to reimburse TGI or the Company for an uncollected  receivable due to a
breach of this  representation and warranty,  the amount of such receivable paid
by the Seller will be assigned to the Seller for collection and receipt.

3.9              NO UNDISCLOSED LIABILITIES.

           Except as set forth in Part 3.9 of the Company's  Disclosure  Letter,
neither the Company nor any Subsidiary has any liabilities or obligations of any
nature except for  liabilities or obligations  reflected or reserved  against in
the Balance Sheet and nonmaterial current  liabilities  incurred in the ordinary
course of business since the date thereof.

3.10             TAXES.

(a) To the best of the Company's knowledge,  the Company and each Subsidiary has
filed or caused to be filed on a timely  basis all tax returns  that are or were
required to be filed by or with  respect to it. The Company and each  Subsidiary
has paid, or made  provision for the payment of, all taxes that have or may have
become  due,  as  reflected  on the  returns  filed  by  the  Company  and  each
Subsidiary,  for all periods  prior to and through  Closing.  To the best of the
Company's  knowledge,  all tax returns filed by the Company and each  Subsidiary
are true, correct and complete in all material respects.  All references in this
Section 3.10 to "taxes" and "tax  returns"  shall  include all  federal,  state,
local  and  foreign  taxes  required  to be paid and tax  returns,  reports  and
statements required to be filed by the Company or any Subsidiary.
<PAGE>
(b) Except as disclosed on Part 3.10 of the Company Disclosure Letter, no United
States,  federal or state income,  sales,  use, fuel or other tax returns of the
Company or any  Subsidiary  have been  audited by the IRS or relevant  state tax
authorities during the past seven years. Except as disclosed on Part 3.10 of the
Company's Disclosure Letter, neither Seller, the Company, nor any Subsidiary has
given or been requested to give waivers or extensions (or is or would be subject
to a  waiver  or  extension  given  by  any  other  person)  of any  statute  of
limitations relating to the payment of taxes of the Company.

(c) The charges,  accruals,  and reserves  with respect to taxes on the books of
the Company are adequate  (determined in accordance  with GAAP) and are at least
equal  to  the  Company's   liability  for  taxes  (including  any  Subsidiary's
liability).  The Company has not received  notice of any proposed tax assessment
against the Company or any Subsidiary.

(d) Except as set forth on Part  3.10(a)  of the  Company's  Disclosure  Letter,
proper and accurate  amounts have been withheld by Company and its  Subsidiaries
from its employees for all periods  through the Closing Date in compliance  with
the tax, social security and unemployment  withholding  provisions of applicable
federal, state, local and foreign law and such withholdings due and payable have
been timely paid to the respective governmental agencies. Except as disclosed in
Part 3.10 of the Company's Disclosure Letter, neither the Company nor any of its
Subsidiaries  has  executed  or  filed  with the IRS or any  other  governmental
authority any  agreement or other  document  extending,  or having the effect of
extending the period for assessment or collection of any taxes.

3.11             NO MATERIAL ADVERSE CHANGE.

           With the exception of matters  disclosed in the Balance Sheet,  since
December  31,  1998,  there  has not been any  material  adverse  change  in the
business, operations, properties, prospects, assets, or condition of the Company
or any  Subsidiary,  and, to the Company's  knowledge,  no event has occurred or
circumstance  exists  that  could  reasonably  be  expected  to result in such a
material adverse change.

3.12             EMPLOYEE BENEFITS.

           Part 3.12 of the Company's  Disclosure  Letter contains a list of all
pension,  retirement,  disability,  medical,  dental or other health plans, life
insurance or other death benefit plans,  profit sharing,  deferred  compensation
agreements,  stock,  option,  bonus or other incentive  plans,  vacation,  sick,
holiday or other paid leave plans,  severance  plans or other  similar  employee
benefit  plans  maintained  by the  Company  or any  Subsidiary  (the  "Plans"),
including,  without  limitation,  all  "employee  benefit  plans" as  defined in
Section  3(3) of  ERISA.  Except  as  otherwise  disclosed  on Part  3.12 of the
Company's  Disclosure  Letter,  and except  for  401-(k)  contributions  for the
current  month that are paid  monthly by the  Company but are not accrued on the
Balance Sheet,  all  contributions  due from the Company or any Subsidiary  with
respect to any of the Plans have been made or accrued on the Balance Sheet,  and
no further  contributions  will be due or will have accrued thereunder as of the
Closing.  Each of the Plans,  and its operation and  administration,  is, in all
material respects, in compliance with all applicable,  federal, state, local and
other governmental laws and ordinances, orders, rules and regulations, including
the requirements of ERISA and the Internal Revenue Code. All such Plans that are
"employee pension benefit plans" (as defined in Section 3(2) of ERISA) which are
intended to qualify  under I.R.C.  Section  401(a)(8)  have  received  favorable
determination letters that such plans satisfy all qualification requirements. In
addition,   the  Company  has  not  been  a  participant   in  any   "prohibited
transaction,"  within the meaning of Section 406 of ERISA,  with  respect to any
employee  pension  benefit  plan (as defined in Section 3(2) of ERISA) which the
Company or any  Subsidiary  sponsors  as employer or in which the Company or any
Subsidiary participates as an employer,  which was not otherwise exempt pursuant
to Section  408 of ERISA  (including  any  individual  exemption  granted  under
Section 408(a) of ERISA),  or which could reasonably be expected to result in an
excise tax.

3.13             COMPLIANCE.

(a) The Company and each  Subsidiary  is and has  conducted its business and the
ownership and use of its assets in  substantial  compliance  with all applicable
laws throughout the period of all applicable statutes of limitation.
<PAGE>
(b) Part  3.13 of the  Company's  Disclosure  Letter  contains  a  complete  and
accurate list of each permit or governmental  consent or  authorization  that is
held by the  Company  and  each  Subsidiary  or that  otherwise  relates  to the
business  of,  or to any of the  assets  owned or used by,  the  Company  or any
Subsidiary.  Each such permit or governmental  consent or authorization is valid
and  in  full  force  and  effect  and  constitutes  all  of  the   governmental
authorizations  necessary to permit the Company and each  Subsidiary to lawfully
conduct and  operate  its  business  in the manner  currently  conducted.

3.14 LITIGATION.

(a) Except as set forth in Part 3.14 of the Company's  Disclosure Letter,  there
is no pending or to the  knowledge  of the  Seller,  threatened  action,  claim,
arbitration, audit, hearing,  investigation,  litigation or suit (whether civil,
criminal, administrative,  investigative, or informal) by or against the Company
or any Subsidiary or that relates to or may  materially  affect the business of,
or any of the assets  owned or used by, the Company or any  Subsidiary;  or that
challenges, or that may have the effect of preventing,  delaying, making illegal
or enjoining, any of the Contemplated Transactions. The Company has not received
notice of any vehicle accident involving any employees,  contractors or vehicles
of the Company or a Subsidiary which could reasonably be expected to result in a
claim or action  against the Company or a Subsidiary  and which is not set forth
on Part 3.14.

(b) Except as set forth on Part 3.14 of the Company's  Disclosure Letter,  there
is no order or court decision to which the Company, any Subsidiary,  the Seller,
any  director or officer of the  Company,  or any of the assets owned or used by
the Company, is subject.

3.15 ABSENCE OF CHANGES.

           Except as set forth in Part 3.15 of the Company's  Disclosure Letter,
since December 31, 1998 (except as disclosed in the Balance Sheet),  the Company
and each  Subsidiary has conducted its business only in the ordinary  course and
there has not been any:

(a) change in its authorized or issued capital stock;  grant of any stock option
or right to purchase  shares of capital stock of the Company or any  Subsidiary;
issuance of any  security  convertible  into such  capital  stock;  grant of any
purchase,  redemption or stock  retirement  rights,  or any  acquisition  by the
Company or any Subsidiary of any shares of its capital stock;  or declaration or
payment of any dividend or other distribution or payment in respect of shares of
capital stock;

(b) amendment to the Articles of  Incorporation  or Bylaws of the Company or any
Subsidiary;

(c) payment or increase  by the  Company or any  Subsidiary  of any
bonuses, salaries or other compensation to any stockholder, director, officer or
employee  (except  normal raises in the ordinary  course of business  consistent
with past  practices),  or entry  into any  employment,  severance,  or  similar
contract with any director, officer or employee; (d) adoption of, or increase in
the  payments  to  or  benefits  under,  any  profit  sharing,  bonus,  deferred
compensation,  savings, insurance, pension, retirement or other employee benefit
plan for or with any  employees of the Company or any  Subsidiary;  (e) material
damage  to or  destruction  or loss of any  material  asset or  property  of the
Company or any Subsidiary,  whether or not covered by insurance; (f) entry into,
termination of, or receipt of notice of termination of any material  contract or
any contract or transaction  involving a total remaining commitment by or to the
Company  or any  Subsidiary  of at least  $50,000;  (g)  sale,  lease,  or other
disposition of any material asset or property of the Company or any  Subsidiary,
or mortgage,  pledge,  or  imposition  of any lien or other  encumbrance  on any
material asset or property of the Company or any Subsidiary; (h) material change
in the accounting methods used by the Company; or (i) agreement, whether oral or
written,  by the Company or any  Subsidiary  to do any of the  foregoing.

3.16 CONTRACTS; NO DEFAULTS.

(a)      Part 3.16 of the Company's  Disclosure  Letter  contains a complete and
         accurate  list,  and  Seller  has  delivered  to TGI true and  complete
         copies, of:

(i)               each  contract  that  involves   performance  of  services  or
                  delivery  of goods or  materials  by or to the  Company or any
                  Subsidiary  of an amount or value in excess of  $25,000 in the
                  aggregate  or which is not  terminable  by the  Company or its
                  Subsidiaries  without penalty or premium upon 60 days' or less
                  notice;
<PAGE>
(ii) each lease, license, installment and conditional sales agreement, and other
contract  affecting  the  ownership  of,  leasing  of,  title to, use of, or any
leasehold  or other  interest  in,  any real or  personal  property;  (iii) each
agreement  evidencing  or relating to any  indebtedness  or capital lease of the
Company or its  Subsidiaries;  (iv) each joint venture,  partnership,  and other
contract  involving a sharing of profits,  losses,  costs, or liabilities by the
Company or any Subsidiary  with any other person;  (v) each contract  containing
covenants  that purport to restrict the business  activity of the Company or any
Subsidiary;  (vi)  each  power  of  attorney  that is  currently  effective  and
outstanding;  and (vii) each written  warranty,  guaranty,  and or other similar
undertaking by the Company or any  Subsidiary.

(b) Each  contract  identified  or required to be identified in Part 3.16 of the
Company's  Disclosure  Letter  is in full  force  and  effect  and is valid  and
enforceable in accordance  with its terms.  The Company and each  Subsidiary is,
and  at  all  times  has  been,  in  compliance  with  all  material  terms  and
requirements of each contract. Each third party to any contract with the Company
or any Subsidiary is, and at all times has been, in compliance with all material
terms and requirements of such contract.  Neither the Company nor any Subsidiary
has given nor  received  notice  from any other  person  regarding  any  actual,
alleged,  possible,  or potential  violation or breach of, or default under, any
contract, and no default or event of default has occurred thereunder.

3.17             INSURANCE.

(a) Set  forth on Part  3.17 of the  Company's  Disclosure  Letter is a true and
complete list and description of all insurance  policies to which the Company or
any Subsidiary is a party or under which the Company or any Subsidiary is or has
been covered at any time within the three (3) years  preceding  the date of this
Agreement, and all pending applications for policies of insurance, including the
premium paid, coverage amounts, deductible, and risks insured.

(b) All  policies  to which the  Company  or any  Subsidiary  is a party or that
provide coverage to either Seller,  the Company,  any Subsidiary or any director
or officer of the  Company or any  Subsidiary  (i) are valid,  outstanding,  and
enforceable;  (ii) are  issued  by an  insurer  that is  financially  sound  and
reputable;  (iii) in the Seller's judgment,  provide adequate insurance coverage
for the assets and the  operations of the Company and the  Subsidiaries  for all
risks normally insured against in the Company's industry;  (iv) may be continued
in  full  force  and  effect  following  the  consummation  of the  Contemplated
Transactions;  and (v)  except as set  forth in Part  3.17(b)  of the  Company's
Disclosure  Letter, do not provide for any retrospective  premium  adjustment or
other experienced-based  liability on the part of the Company or any Subsidiary.

(c)  Except as set forth on Part  3.17,  neither  Seller,  the  Company  nor any
Subsidiary has received (i) any refusal of coverage or any notice that a defense
will be afforded with reservation of rights,  or (ii) any notice of cancellation
or any other  indication that any insurance policy is no longer in full force or
effect or will not be renewed or that the issuer of any policy is not willing or
able to perform its obligations thereunder.  (d) The Company and each Subsidiary
has paid all premiums due, and has otherwise  performed all of its  obligations,
under each  policy to which it is a party or that  provides  coverage to it. The
Company and each  Subsidiary has given notice to the insurer of all known claims
that may be insured thereby.

13.18 ENVIRONMENTAL MATTERS.

(a) The Company and each  Subsidiary  is, and at all times has been, in material
compliance with, and has not been and is not currently in violation of or liable
under,  any applicable  Environmental  Law. All real property  owned,  leased or
otherwise  operated by the Company and its Subsidiaries  (each, a "Facility") is
free of contamination  from any Hazardous  Material which may result in material
liability  --------- under any Environmental Law. Seller has no reasonable basis
to expect, nor has Seller or the Company or any Subsidiary received,  any actual
or threatened order,  notice, or other  communication  from (i) any governmental
body or private  citizen,  or (ii) the current or prior owner or operator of any
facilities  owned or leased by the Company or any  Subsidiary,  of any actual or
potential violation or failure to comply with any Environmental Law. To the best
of the Company's  knowledge,  neither  Company nor any of its  Subsidiaries  has
caused or suffered to occur any release, spill, migration,  leakage,  discharge,
spillage,  uncontrolled  loss,  seepage,  or filtration of Hazard Material at or
from any Facility.
<PAGE>
(b) All above or underground storage tanks,  landfills,  land deposits, or dumps
present  on or at any  Facility  or,  to the  knowledge  of the  Seller,  at any
adjoining  property,  or incorporated  into any structure therein or thereon are
listed  on the  Phase I  Environmental  Audits  referenced  on Part  3.18 of the
Company's  Disclosure  Letter and are to the best of the Company's  knowledge in
full  compliance  with all  Environmental  Laws.  Neither  the  Company  nor any
Subsidiary has transported  Hazardous Materials except in the ordinary course of
its business in compliance  with applicable law. (c) Seller has delivered to TGI
true and complete copies and results of any reports,  studies,  analyses, tests,
or monitoring  possessed or initiated by Seller,  the Company or any  Subsidiary
pertaining  to  Hazardous  Materials  in, on, or under the  facilities  owned or
leased  by  the  Company  or  any  Subsidiary.

13.19  EMPLOYEES;   INDEPENDENT CONTRACTORS.

(a) Part  3.19 of the  Company's  Disclosure  Letter  contains  a  complete  and
accurate  list  of (i)  each  employee  or  director  of the  Company  and  each
Subsidiary, including each employee on leave of absence or layoff status, his or
her job title, and current compensation; and (ii) each independent contractor of
the Company and each Subsidiary, the type of services he or she provides and his
current compensation.

(b) To the Company's  knowledge,  no employee nor independent  contractor of the
Company or any Subsidiary is a party to, or is otherwise bound by, any agreement
or arrangement,  including any  confidentiality,  noncompetition  or proprietary
rights  agreement,  between  such  employee and any other person that in any way
adversely  affects  or will  affect  (i) the  performance  of his  duties to the
Company or any Subsidiary,  or (ii) the ability of the Company or any Subsidiary
to conduct its business.  (c) All persons  rendering  services to the Company or
any Subsidiary have been properly  characterized and treated as either employees
or  independent  contractors,  and neither the  Company nor any  Subsidiary  has
received notice of, nor does Seller reasonably believe that, such treatment will
be challenged by the IRS or otherwise.

3.20 LABOR RELATIONS; COMPLIANCE.

(a) Neither the Company nor any Subsidiary has been nor is it now a party to any
collective bargaining or other labor contract. There is not presently pending or
existing,  and to the  Company's  knowledge  there  is not  threatened,  (a) any
strike, slowdown,  picketing,  work stoppage, or employee grievance process, (b)
any proceeding  against or affecting the Company or any  Subsidiary  relating to
the alleged  violation of any applicable  law  pertaining to labor  relations or
employment  matters,  including any charge or complaint  filed by an employee or
union with the National Labor Relations Board, the Equal Employment  Opportunity
Commission,  or any comparable  governmental body,  organizational  activity, or
other labor or employment  dispute against or affecting the Company,  or (c) any
application for  certification  of a collective  bargaining  agent.  There is no
lockout of any employees by the Company or any Subsidiary, and no such action is
contemplated  by the  Company  or any  Subsidiary.  Except  as set forth on Part
3.20(a) of the Company's  Disclosure Letter, the Company and each Subsidiary has
substantially  complied  in all  respects  with  applicable  legal  requirements
relating  to  employment,   equal  employment  opportunity,   nondiscrimination,
immigration,  wages,  hours,  benefits,  collective  bargaining,  the payment of
social  security and similar taxes,  occupational  safety and health,  and plant
closing.

(b) The Company and each Subsidiary is, and at all times has been, in compliance
with,  and  has  not  been  and is not in  violation  of or  liable  under,  any
applicable  Occupational  Safety and Health Law.  Seller has no basis to expect,
nor has Seller, the Company or any Subsidiary received, any actual or threatened
order, notice, or other communication from any person of any actual or potential
violation  or failure to comply  with any  Occupational  Safety and Health  Law.

13.21 INTELLECTUAL PROPERTY.

(a)               Intellectual Property Assets.  The term "Intellectual
Property Assets" includes:

(i)               the  Company's  and  each  Subsidiary's  name,  all  fictional
                  business  names,  trade  names,  registered  and  unregistered
                  trademarks, service marks, and applications;
<PAGE>
(ii) all patents,  patent  applications,  inventions and discoveries that may be
patentable;  (iii) all copyrights in both published works and unpublished works;
and (iv) all know-how, trade secrets, confidential information,  customer lists,
software, technical information,  data, process technology,  plans, drawings and
blue prints owned,  used, or licensed by the Company or any Subsidiary.  (b) The
Intellectual   Property  Assets  [other  than  items  listed  under   subsection
3.21(a)(iv)]  are  listed on Part 3.21 of the  Disclosure  Letter.  The  Company
(directly or  indirectly  through its  Subsidiaries)  owns all right,  title and
interest in and to each of the Intellectual  Property Assets,  free and clear of
all liens, security interests, charges, encumbrances, equities and other adverse
claims,  and has the right to use  without  payment to a third  party all of the
Intellectual Property Assets except as listed on Part 3.21.

(c)  All of  the  computer  software,  computer  hardware,  other  computer  and
microprocessor-based  equipment and all other  equipment which performs or is or
may be required  to perform  functions  involving  dates or the  computation  of
dates, or containing date related data, owned,  licensed, or used by the Company
or any  Subsidiary  which are material to the operations of the Company or would
require  material  expense  to repair or  replace  (collectively  the  "Computer
Devices") will not suffer a Year 2000 Problem (as defined below).  Except as set
forth on Part 3.12(c) of the Company's  Disclosure  Letter, the Company and each
Subsidiary  has  contacted  and received  written  assurances  from all material
suppliers  of goods and  services,  including  but not limited to  suppliers  of
Computer Devices,  that all of the computer  software,  computer  hardware,  and
other computer and  microprocessor-based  equipment owned,  licensed, or used by
such  supplier  will not have a Year  2000  Problem.  For the  purposes  of this
Section 3.21(c), "Year 2000 Problem" shall mean any failure of a Computer Device
to: (a) store all  date-related  information  and  process  all data  interfaces
involving dates in a manner that unambiguously  identifies the century,  for all
date values before, during or after January 1, 2000; (b) calculate, sort, report
and  otherwise  materially  operate  correctly  and in a  consistent  manner and
without interruption regardless whether the date on which the Computer Device is
operated or executed is before,  during or after January 1, 2000; (c) report and
display all dates with a  four-digit  date so that the century is  unambiguously
identified; and (d) handle all leap years, including but not limited to the year
2000 leap year, correctly.

3.22             RELATIONSHIPS WITH RELATED PERSONS.

           Except as set forth on Part 3.22 of the Company's  Disclosure Letter,
no Seller or any related person or affiliate of Seller or of the Company has, or
has had, any interest in any property used in the Company's or any  Subsidiary's
business.  Except as set forth on Part 3.22 of the Company's  Disclosure Letter,
no Seller or any related  person or affiliate of Seller or of the Company is, or
has owned, directly or indirectly,  an equity interest or any other financial or
profit  interest in, an entity that has (i) had business  dealings or a material
financial  interest in any transaction  with the Company or any  Subsidiary;  or
(ii) engaged in competition  with the Company or any Subsidiary  with respect to
any line of the products or services of the Company or any Subsidiary. No Seller
or any related person or affiliate of Seller or of the Company is a party to any
contract with the Company or any Subsidiary.  All transactions or agreements set
forth on Part 3.22 of the Company's  Disclosure  Letter are on arms length terms
no less  favorable  to the  Company  and  its  Subsidiaries  than  independently
obtained.

3.23             BROKERS OR FINDERS.

           Except as set forth on Part 3.23 of the Company's  Disclosure Letter,
neither  the  Company,  Seller nor their  respective  agents have  incurred  any
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or  agents'  commissions  or other  similar  payment  in  connection  with  this
Agreement.

3.24             DISCLOSURE.

           No  representation  or  warranty of Seller in this  Agreement  and no
statement in the  Company's  Disclosure  Letter  omits to state a material  fact
necessary  to  make  the  statements   herein  or  therein,   in  light  of  the
circumstances in which they were made, not misleading. There is no fact known to
Seller  that  has  specific  application  to  any  Seller,  the  Company  or any
Subsidiary  (other  than  general  economic  or  industry  conditions)  and that
materially adversely affects or, as far as either Seller can reasonably foresee,
materially threatens, the assets, business,  prospects,  financial condition, or
results of  operations  of the Company or any  Subsidiary  that has not been set
forth in this Agreement or the Disclosure Letter.
<PAGE>
3.25             INVESTMENT REPRESENTATION.

          The Seller is  acquiring  the shares of the TGI Common Stock for their
own  account  and not with a view to their  distribution  within the  meaning of
Section 2(11) of the Securities  Act. Each Seller  understands  that such shares
are  "restricted  stock"  and agrees not to sell,  pledge,  transfer,  assign or
otherwise dispose of such shares except in accordance with the Securities Act.

3.26             TAX REPRESENTATIONS.

           The  liabilities  of the Company were  incurred by the Company in the
ordinary  course of  business.  Through the Closing  Date,  the Company will not
discontinue any of its historic  businesses nor has it  discontinued  any of its
historic  businesses within the period beginning twelve months prior to the date
hereof.  The  Company  and the  Seller  will  each pay  their  own  expenses  in
connection  with the  Merger.  Dividends  the  Company  has paid (or may pay) in
anticipation  of the Merger  will be regular  and normal  distributions  made in
accordance with the Company's past practices.  At all times during the five year
period ending on the Closing Date, the fair market value of all of the Company's
real property interests has been less than fifty percent (50%) of the total fair
market  value  of all  the  assets  used in the  Company's  trade  or  business,
including any real property  owned by the Company which is not used in its trade
or business.

3.27             DISTRIBUTIONS.

           The Company will  continue to be solvent and able to pay its debts as
they  become  due  immediately  following  the  distributions  and  transactions
described in Section 5.9 hereof.

3.28             RELATED TRANSACTIONS.

           The  representations  and  warranties  contained in a Stock  Purchase
Agreement  for the  purchase  of all of the stock of DLS  Leasing,  Inc.  by and
between Seller and TGI (the "DLS  Agreement");  a Membership  Interest  Purchase
Agreement pursuant to which TGI will purchase all of the Membership Interests of
Connection One Trucking,  LLC (the "Connection One Agreement") and, an Agreement
for the Sale of Assets  pursuant to which the Company will  purchase  certain of
the  assets of DLS  Leasing,  Inc.  (the "DLS Asset  Agreement"),  were true and
correct when made and at the Closing.


4.      REPRESENTATIONS AND WARRANTIES OF TGI

         TGI  has  delivered  to  Seller,   simultaneously   herewith,  the  TGI
Disclosure Letter. TGI represents and warrants to Seller as follows:

4.1              ORGANIZATION AND GOOD STANDING.

           TGI is a corporation duly organized,  validly  existing,  and in good
standing  under the laws of the State of  Florida.  Newco will be a  corporation
duly  organized,  validly  existing and in good  standing  under the laws of the
state of Kentucky.

4.2              AUTHORITY; NO CONFLICT.

(a)      This Agreement  constitutes the legal,  valid and binding obligation of
         TGI, enforceable against TGI in accordance with its terms.

(b)  Neither  the  execution  and  delivery  of  this  Agreement  by TGI nor the
consummation or performance of any of the  Contemplated  Transactions by TGI and
Newco will give any person the right to prevent,  delay or  otherwise  interfere
with any of the  Contemplated  Transactions  pursuant  to: (i) any  provision of
TGI's or Newco's Articles of Incorporation or Bylaws;

(ii) any resolution adopted by the board of directors or the stockholders of TGI
or  Newco;  (iii) any  legal  requirement  or order to which TGI or Newco may be
subject;  or (iv) any  contract to which TGI or Newco is a party or by which TGI
or Newco may be bound.  (c) Neither TGI nor Newco will be required to obtain any
consent from any person in  connection  with the  execution and delivery of this
Agreement  or the  consummation  or  performance  of  any  of  the  Contemplated
Transactions, except as set forth on Schedule 4.2 hereto.

4.3              CERTAIN PROCEEDINGS.

           There is no pending  proceeding  that has been commenced  against TGI
that challenges, or may have the effect of preventing, delaying, making illegal,
or otherwise enjoining, any of the Contemplated Transactions.
<PAGE>
4.4              SECURITIES COMPLIANCE.

           TGI has made all securities filings required as a "reporting company"
under the Exchange Act of 1934, as amended.  Upon completion of the Merger,  the
TGI Common Stock to be issued to the Seller in  connection  with the Merger will
be fully paid and nonassessable.

4.5              TAX REPRESENTATIONS.

           TGI represents now, and as of the Closing,  that it presently intends
to continue the Company's historic business or use a significant  portion of the
Company's  business  assets in a business.  TGI has no present plan or intent to
reacquire any of the TGI Common Stock issued in the Merger.

5.      COVENANTS

5.1              ACCESS AND INVESTIGATION.

           Between the date of this Agreement and the Closing Date, Seller will,
and will cause the Company,  its Subsidiaries and their  representatives to, (a)
afford  TGI  and  its   representatives   and  prospective   lenders  and  their
representatives (collectively, "TGI's Advisors") reasonable access during normal
business  hours to the Company's and its  Subsidiaries'  personnel,  properties,
contracts,  books and records, and other documents and data, (b) furnish TGI and
TGI's Advisors with copies of all such contracts,  books and records,  and other
existing documents and data as TGI may reasonably  request,  and (c) furnish TGI
and TGI's Advisors with such additional financial, operating, and other data and
information as TGI may reasonably request.

5.2              OPERATION OF THE BUSINESSES OF THE COMPANY.

           Between the date of this Agreement and the Closing Date, Seller will,
and will cause the Company and its Subsidiaries to: (a) conduct their businesses
only in the ordinary course; and (b) use its best efforts to preserve intact the
current  business  organization  of  the  Company  and  its  Subsidiaries,  keep
available the services of their current  officers,  employees,  and agents,  and
maintain the relations and good will with their suppliers, customers, landlords,
creditors,  employees, agents, and others having business relationships with the
Company or any Subsidiary.

5.3              NEGATIVE COVENANT.

           Except as otherwise  expressly  permitted by this Agreement,  between
the date of this Agreement and the Closing Date, Seller will not, and will cause
the Company and each  Subsidiary  not to, without the prior consent of TGI, take
any affirmative  action,  or fail to take any reasonable  action within their or
its control, as a result of which any of the changes or events listed in Section
3.15 is likely to occur.

5.4              NOTIFICATION.

(a)  Between  the date of this  Agreement  and the  Closing  Date,  Seller  will
promptly  notify TGI in writing if Seller or the  Company  becomes  aware of any
fact  or   condition   that   causes  or   constitutes   a  breach  of  Seller's
representations and warranties as of the date of this Agreement, or if Seller or
the Company becomes aware of the occurrence  after the date of this Agreement of
any fact or  condition  that  would  cause or  constitute  a breach  of any such
representation  or warranty had such  representation or warranty been made as of
the time of occurrence or discovery of such fact or condition.

(b) Between the date of this  Agreement and the Closing Date,  TGI will promptly
notify the Company in writing if TGI becomes aware of any fact or condition that
causes or constitutes a breach of any of TGI's representations and warranties as
of the date of this Agreement,  or if TGI becomes aware of the occurrence  after
the  date of this  Agreement  of any  fact or  condition  that  would  cause  or
constitute   a  breach  of  any  such   representation   or  warranty  had  such
representation  or warranty  been made as of the time of occurrence or discovery
of such fact or condition.

5.5              RELATED PARTY TRANSACTIONS.

           Except  for the  amounts  set forth on  Schedule  5.5  hereto  (which
amounts  have been  offset  against  the  purchase  price as provided in Section
2.1(a) and will be  forgiven  as of the  Closing  Date),  Seller  will cause all
indebtedness  owed to the  Company  by any Seller or any  related  person of any
Seller to be paid in full prior to  Closing.  The Seller  agrees that except for
the Leases,  the Company shall have no  obligation  to continue any  arrangement
with any affiliate of Seller set forth on Part 3.22 of the Company's  Disclosure
Letter or to continue to include any such parties as additional  insureds on the
Company's insurance policies.
<PAGE>
5.6              NO NEGOTIATION.

           Until such time, if any, as this Agreement is terminated  pursuant to
Section  8,  Seller  will  not,  and  will  cause  the  Company  and each of its
Subsidiaries  and  representatives  not  to,  directly  or  indirectly  solicit,
initiate,  or encourage  any inquiries or proposals  from,  discuss or negotiate
with,  provide any  non-public  information  to, or  consider  the merits of any
unsolicited inquiries or proposals from, any person (other than TGI) relating to
any  transaction  involving the sale of the business or assets of the Company or
any Subsidiary, or any of the capital stock of the Company or any Subsidiary, or
any  merger,   consolidation,   business  combination,  or  similar  transaction
involving the Company or any Subsidiary.

5.7              BEST EFFORTS.

           Between the date of this Agreement and the Closing Date,  Seller will
use his best efforts to cause the  conditions in Section 6 to be satisfied,  and
TGI  will use its best  efforts  to cause  the  conditions  in  Section  7 to be
satisfied.  TGI and Seller  shall,  as promptly  as  practicable  following  the
execution of this Agreement,  in cooperation with each other,  complete and file
with the appropriate authorities the pre-merger notification forms and any other
documents required under the HSR Act.

5.8              LEASE AGREEMENTS.

           At   Closing,   the   Company   will  enter  into  lease   agreements
substantially  in the form  attached  hereto as  Exhibits  "G-1" and "G-2"  with
Seller and Silver  Creek,  LLC,  for the  facilities  currently  occupied by the
Company in Jeffersonville,  Indiana, and Nashville,  Tennessee,  providing for a
total monthly  rental of $35,000 and $5,000,  respectively,  for a five (5) year
period.

5.9              SATISFACTION OF PAYABLE OWED TO SELLER.

           Prior to the Closing Date,  the Seller shall cause the Company to pay
off  in  full  satisfaction  of a  payable  owed  to  Seller  in the  amount  of
$328,653.68  for and in  exchange  for the  distribution  by the  Company to the
Seller of the following items:

                  1.        $130,153.68 in cash;

                  2.        Six (6)  vehicles,  to wit: 1 Ford  Expedition,  1
Custom  Van, 1 Ford  Taurus,  1 Ford Pick-Up Truck, 1 Jeep Cherokee and 1
Lincoln Navigator;

                  3.        One back-hoe;

                  4.        Two utility trailers; and

                  5.        One Farm Tractor.

         The Seller hereby represents that the fair market value of the vehicles
and equipment listed in items 2 through 5 above equals $198,500.00.

         Seller  shall also be entitled to  purchase  from the Company  prior to
Closing,  for a price of $24,660.28 (which Seller represents is equal to the net
book value, adjusted for tax depreciation), one dump truck owned by the Company.
All  taxes  due by the  Company  or  otherwise  as a result  of the  redemption,
distributions,  and  transactions set forth in this paragraph 5.9 shall be borne
by and shall be the exclusive  responsibility  of the Seller.  In addition,  any
indebtedness  associated with any of the above-referenced  items will be assumed
by the Seller,  and the release of the Company  will be obtained  simultaneously
with such transfer.

5.10             ASSET PURCHASE.

           Prior to the Closing,  the Company shall purchase good and marketable
title, free and clear of all liens, approximately 129 trailers from DLS Leasing,
Inc.  ("DLS") for an aggregate  purchase price of  $2,010,000,  which the Seller
represents is the fair value  therefor and which shall be on terms  satisfactory
to TGI, with a Promissory Note bearing no interest which shall be distributed to
the Seller in his capacity as the sole  shareholder of DLS prior to the Closing.
At the Closing Date, TGI shall pay in full the principal balance of such Note.

5.11             NAME CHANGE.

           Immediately  following the Closing,  Seller agrees to change the name
of all entities  owned by Seller which  include the name  "Bestway" and to cause
such entities to cease the use of such name and logo.
<PAGE>
6.      CONDITIONS PRECEDENT TO TGI'S OBLIGATION TO CLOSE

         TGI's obligation to consummate the Merger and to take the other actions
required to be taken by TGI at the Closing is subject to the satisfaction, at or
prior to the Closing,  of each of the following  conditions (any of which may be
waived by TGI, in whole or in part):

6.1              ACCURACY OF REPRESENTATIONS.

           All of Seller's representations and warranties in this Agreement must
have been accurate in all material respects as of the date of this Agreement and
as of the Closing Date as if made on the Closing Date.

6.2              SELLER'S PERFORMANCE.

           All of the covenants and obligations  that the Company and the Seller
are required to perform or to comply with pursuant to this Agreement at or prior
to the Closing must have been duly performed and complied with in all respects.

6.3              CONSENTS.

           Each  of the  consents  identified  in  Part  3.2  of  the  Company's
Disclosure  Letter  hereto must have been obtained and must be in full force and
effect.

6.4              ADDITIONAL DOCUMENTS.

           Each of the following documents must have been delivered to TGI:

(a) an opinion of counsel to the Company and the Seller, dated the Closing Date,
in form acceptable to TGI; and

(b) such other  documents  as TGI may  reasonably  request  (i)  evidencing  the
accuracy of any of Seller's representations and warranties;  (ii) evidencing the
performance  by either Seller of, or the  compliance by either Seller with,  any
covenant or obligation required to be performed or complied with by such Seller;
(iii) evidencing the  satisfaction of any condition  referred to in this Section
6; or (iv) otherwise  facilitating the consummation or performance of any of the
Contemplated Transactions.

6.5 NO PROCEEDINGS.

           Since the date of this Agreement,  there must not have been commenced
or threatened against TGI, Seller, the Company or any Subsidiary, or against any
person  affiliated  with  TGI,  Seller,  the  Company  or  any  Subsidiary,  any
proceeding (a) involving any challenge to, or seeking damages or other relief in
connection  with,  any of the  Contemplated  Transactions,  or  (b)  that  could
reasonably  be  expected  to have the effect of  preventing,  delaying or making
illegal, any of the Contemplated Transactions.

6.6              NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS.

           There must not have been made or  threatened  by any person any claim
asserting that such person (a) is the holder or the beneficial  owner of, or has
the right to acquire or to obtain beneficial  ownership of, any stock of, or any
other voting,  equity, or ownership  interest in, the Company or any Subsidiary,
or  (b) is  entitled  to all or any  portion  of the  merger  consideration.  In
addition,  Seller must have entered into an agreement with Vincent  Benningfield
for the payment in full of the Benningfield  Indebtedness for a complete release
of all claims in  connection  therewith and the release of all shares of Company
stock pledged as security therefor.

6.7              SATISFACTORY DUE DILIGENCE.

           TGI shall have completed its  investigation of the Company's  assets,
business and financial condition and shall be satisfied with the results thereof
in its sole discretion.

6.8              HSR WAITING PERIOD.

           All applicable waiting periods, as extended,  under the HSR Act shall
have expired.

6.9              RELATED PURCHASES

           Simultaneously herewith, TGI and the Seller have entered into the DLS
Agreement and the Connection One Agreement.  All of the conditions  precedent to
TGI's obligation to close such transactions  shall have been satisfied as of the
Closing Date.
<PAGE>
7.      CONDITIONS PRECEDENT TO SELLER'S  OBLIGATION TO CLOSE

         The Company's obligation to consummate the Merger and to take the other
actions  required  to be taken by the  Company or the  Seller at the  Closing is
subject  to the  satisfaction,  at or  prior  to the  Closing,  of  each  of the
following  conditions (any of which may be waived by the Company, in whole or in
part):

7.1              ACCURACY OF REPRESENTATIONS.

           All of TGI's  representations  and  warranties in this Agreement must
have been accurate in all material respects as of the date of this Agreement and
must  be  accurate  in all  respects  as of the  Closing  Date as if made on the
Closing Date.

7.2              TGI'S PERFORMANCE.
           All of the covenants and obligations  that TGI is required to perform
or to comply with  pursuant to this  Agreement  at or prior to the Closing  must
have been performed and complied with in all respects.

7.3              NO PROCEEDINGS.

           Since the date of this Agreement,  there must not have been commenced
or threatened against TGI, Seller, the Company or any Subsidiary, or against any
person  affiliated  with  TGI,  Seller,  the  Company  or  any  Subsidiary,  any
proceeding (a) involving any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions,  or (b) that may have the
effect of  preventing,  delaying,  or making  illegal,  any of the  Contemplated
Transactions.

7.4              HSR WAITING PERIOD.

           All applicable waiting periods, as extended,  under the HSR Act shall
have expired.

7.5              CONSENTS.

           Each of the  consents  identified  in Schedule  4.2 hereto must have
been  obtained and be in full force ------------- and effect.

7.6              RELATED PURCHASES

           Simultaneously herewith, TGI and the Seller have entered into the DLS
Agreement and the Connection One Agreement.  All of the conditions  precedent to
Seller's  obligation to close such transactions  shall have been satisfied as of
the Closing Date.

7.7              RELEASE OF GUARANTEES.

           The personal  guarantees provided by the Seller to a third party with
respect to any debt or obligation of the Company shall have been released  prior
to Closing.


8.      TERMINATION

8.1              TERMINATION EVENTS.

           This  Agreement  may, by notice given prior to or at the Closing,  be
terminated:

(a)      by either TGI or the Company if a material  breach of any  provision of
         this  Agreement  has been  committed by the other party and such breach
         has not been waived;

(b)      by:
(i)               TGI if any  of  the  conditions  in  Section  6 has  not  been
                  satisfied as of the Closing Date or if  satisfaction of such a
                  condition  is or becomes  impossible  (other than  through the
                  failure  of TGI to  comply  with its  obligations  under  this
                  Agreement)  and TGI has not waived such condition on or before
                  the Closing Date; or

(ii) Seller, if any of the conditions in Section 7 has not been satisfied of the
Closing Date or if  satisfaction  of such a condition  is or becomes  impossible
(other than through the failure of Seller to comply with their obligations under
this  Agreement)  and Seller  have not waived  such  condition  on or before the
Closing Date;

(c) by mutual consent of TGI and Seller; or
<PAGE>
(d) by either TGI or Seller if the Closing has not occurred  (other than through
the failure of any party  seeking to  terminate  this  Agreement to comply fully
with its  obligations  under this Agreement) on or before July 31, 1999, or such
later date as the Parties may agree upon.

8.2 EFFECT OF TERMINATION.

           Each Party's right of termination under Section 8.1 is in addition to
any  other  rights  it may have  under  this  Agreement  or  otherwise.  If this
Agreement is terminated  pursuant to Section 8.1, all further obligations of the
Parties under this  Agreement  will  terminate,  except that the  obligations in
Sections 10.1 and 10.2 will survive.

9.      INDEMNIFICATION; REMEDIES

9.1              SURVIVAL.

           All representations,  warranties,  covenants, and obligations in this
Agreement,  the Company's Disclosure Letter, the certificates delivered pursuant
to  Section  2.8(a)(viii),  2.8(b)(ii)  and any other  certificate  or  document
delivered  pursuant to this  Agreement  will survive the  Closing.  The right to
indemnification,  payment of Damages (as defined below) or other remedy based on
such  representations,  warranties,  covenants,  and  obligations  will  not  be
affected  by any  investigation  conducted  with  respect  to, or any  knowledge
acquired  (or  capable  of being  acquired),  with  respect to the  accuracy  or
inaccuracy of or compliance with, any such representation,  warranty,  covenant,
or obligation.

9.2              INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER.

           Seller will  indemnify and hold harmless TGI, the Company,  and their
respective  representatives,  stockholders,  controlling persons, and affiliates
(collectively,  the "Indemnified  Persons") for, and will pay to the Indemnified
Persons the amount of, any loss, liability,  claim, damage (including incidental
and  consequential  damages),  expense  (including  costs of  investigation  and
defense and reasonable  attorneys' fees) or diminution of value,  whether or not
involving a third-party claim (collectively,  "Damages"),  arising,  directly or
indirectly, from or in connection with:

(a)      any breach of any  representation  or  warranty  made by Seller in this
         Agreement,  the Company's Disclosure Letter or any other certificate or
         document delivered by Seller or the Company pursuant to this Agreement,
         unless such breach is cured to TGI's  satisfaction or waived in writing
         by TGI prior to Closing;
<PAGE>
(b) any breach by Seller or the Company of any  covenant or  obligation  in this
Agreement,  unless  such  breach  is cured to TGI's  satisfaction  or  waived in
writing by TGI,  prior to  Closing;  (c) any  product  shipped  or any  services
provided by the Company or any  Subsidiary  prior to the Closing Date,  less the
net amount of any  insurance  proceeds  received  by the  Company in  connection
therewith;  (d) any claim or assessment  for unpaid taxes or for failure to file
accurate or appropriate  returns,  in excess of the amounts accrued  therefor on
the Balance Sheet, (in part relating to the pending IRS audit of the Company for
the tax year 1995 the outcome of which may affect open tax years 1995, 1997, and
1998)  including  without,  United States,  state and/or local income,  profits,
franchise,  sales,  use,  occupancy,  property (real and personal),  ad valorem,
excise, value added,  withholding,  payroll, transfer and other taxes (including
interest,  penalties  and any  additions  to tax) due from  the  Company  or any
Subsidiary or claimed to be due from the Company or any Subsidiary by any taxing
authority for all periods  through the Closing Date,  including  taxes which may
accrue for  periods up to Closing  Date but which have not become due and owing,
and including  taxes which are  attributable  to the  distribution  described in
Section  5.9  hereof;  (e)  any  use,  release,  threatened  release,  emission,
generation, storage,  transportation,  disposal, or arrangement for the disposal
of  Hazardous  Materials  prior  to  the  Closing  Date  by the  Company  or any
Subsidiary  or the  presence  of any  Hazardous  Materials  or  circumstance  or
condition at any Facility which would require  remediation or other action under
any  Environmental  Laws,  including,   without  limitation,  the  cost  of  any
environmental response action or liability under the Comprehensive Environmental
Response,  Compensation and Liability Act whether such loss accrues, is required
or is necessary  prior to the Closing Date, to the full extent that such loss is
attributable, in whole or in part, directly or indirectly, to the presence, use,
emission,  generation,  storage,  transportation,  release,  threatened release,
disposal, or arrangements for disposal of Hazardous Materials at any Facility or
on any other properties to which the Company,  its Subsidiaries or affiliates or
any other prior owner or operator of any  Facility  has sent or arranged for the
disposal of Hazardous  Materials  prior to the Closing  Date.  All terms used in
this  paragraph  and not  otherwise  defined  herein  shall be given the meaning
provided under the  Environmental  Laws; (f) the lawsuits and claims asserted in
the following actions:  American Builders & Contractors Supply Co., Inc., et al.
v. Bestway Trucking Co., et al. and The Metropolitan Government of Nashville and
Davidson County,  et al. v. Bestway Trucking et al.; and any matter disclosed in
Part 3.17(b) of the Company's Disclosure Letter; (g) any claim by any person for
brokerage or finder's fees or  commissions  or similar  payments  based upon any
agreement  or  understanding  alleged to have been made by any such  person with
either  Seller  or the  Company  (or any  person  acting  on  their  behalf)  in
connection  with  any of the  Contemplated  Transactions,  except  the  fees  of
Scopelitis,  Garvin, Light & Hanson to the extent included in the amount paid by
the Company  under  Section 10.1  hereof;  (h) any claim made by any creditor or
other third party with  respect to the  distributions  and/or  transactions  set
forth in Section 5.9 hereof,  related to the purchase of a portion of the assets
of DLS Leasing,  Inc. as provided in Section 5.10;  and (i) any claim by Vincent
Benningfield,  his heirs,  representatives,  assigns or any other third party in
any way relating to the  redemption by the Company of his ownership  interest in
the  Company,  other than for  payment of the  Benningfield  Indebtedness.

9.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY TGI.

           TGI will indemnify and hold harmless  Seller,  and will pay to Seller
the  amount of any  Damages  (as  defined  in 9.2 above)  arising,  directly  or
indirectly,  from or in connection with (a) any breach of any  representation or
warranty made by TGI in this  Agreement or in any  certificate  delivered by TGI
pursuant to this Agreement, unless such breach is cured to Seller's satisfaction
or waived in writing by the Seller prior to Closing (b) any breach by TGI of any
covenant or obligation of TGI in this Agreement,  unless such breach is cured to
Seller's  satisfaction or waived in writing by the Seller,  in either case prior
to Closing,  or (c) any claim by any person for  brokerage  or finder's  fees or
commissions  or similar  payments  based  upon any  agreement  or  understanding
alleged to have been made by such person  with TGI (or any person  acting on its
behalf) in connection with any of the Contemplated Transactions.

9.4              ESCROW.

           At the  Closing,  the Seller  will  deposit  596,273  shares of TGI's
Common Stock that are issued to the Seller in the Merger (the  "Escrow  Shares")
with a bank or trust company  located within the State of Georgia which will act
as an escrow  agent (the  "Escrow  Agent"),  who will hold the Escrow  Shares in
escrow as collateral  for the  indemnification  obligations  of the Seller under
this  Agreement,  the DLS Agreement,  the Connection One Agreement,  and the DLS
Asset Agreement in accordance with the terms of the Escrow Agreement.
<PAGE>
9.5              PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.

(a)  Promptly  after  receipt  by  an  Indemnified   Person  of  notice  of  the
commencement of any proceeding  against it, such  Indemnified  Person will, if a
claim is to be made against an indemnifying party hereunder,  give notice to the
indemnifying  party of the commencement of such claim, but the failure to notify
the indemnifying  party will not relieve the indemnifying party of any liability
that it may  have to any  Indemnified  Person,  except  to the  extent  that the
indemnifying party demonstrates that the defense of such action is prejudiced by
the Indemnified Person's failure to give such notice.
(b) If any  proceeding  is brought  against an  Indemnified  Person and it gives
notice to the indemnifying  party of the  commencement of such  proceeding,  the
indemnifying  party will be entitled to participate in such  proceeding  and, to
the extent that it wishes (unless (i) the indemnifying  party is also a party to
such proceeding and the Indemnified  Person  determines in good faith that joint
representation  would be inappropriate,  or (ii) the indemnifying party fails to
provide reasonable assurance to the Indemnified Person of its financial capacity
to defend such  proceeding  and  provide  indemnification  with  respect to such
proceeding),  to assume the defense of such proceeding with counsel satisfactory
to the Indemnified  Person and, after notice from the indemnifying  party to the
Indemnified Person of its election to assume the defense of such proceeding, the
indemnifying party will not, as long as it diligently  conducts such defense, be
liable to the  Indemnified  Person  under  this  Section 9 for any fees of other
counsel or any other expenses with respect to the defense of such proceeding, in
each case subsequently incurred by the Indemnified Person in connection with the
defense of such proceeding, other than reasonable costs of investigation. If the
indemnifying  party  assumes  the  defense  of a  proceeding,  (i)  it  will  be
conclusively  established for purposes of this Agreement that the claims made in
that proceeding are within the scope of and subject to indemnification;  (ii) no
compromise  or  settlement  of such claims may be  effected by the  indemnifying
party without the Indemnified Person's consent unless (A) there is no finding or
admission of any violation of applicable  laws or any violation of the rights of
any  person  and no effect  on any other  claims  that may be made  against  the
Indemnified  Person,  and (B) the sole relief provided is monetary  damages that
are paid in full by the  indemnifying  party;  and (iii) the Indemnified  Person
will have no liability  with respect to any  compromise  or  settlement  of such
claims effected without its consent. If notice is given to an indemnifying party
of the  commencement  of any  proceeding  and the  indemnifying  party does not,
within ten (10) days after such notice is given,  give notice to the Indemnified
Person  of  its  election  to  assume  the  defense  of  such  proceeding,   the
indemnifying party will be bound by any determination made in such proceeding or
any compromise or settlement effected by the Indemnified Person. Notwithstanding
the  foregoing,  the filing of an answer by the  indemnifying  party in order to
preserve the rights of the Indemnified  Party due to a filing deadline shall not
in itself  constitute  its election to assume the defense of a claim  hereunder.
(c) Notwithstanding  the foregoing,  if an Indemnified Person determines in good
faith that there is a reasonable  probability  that a proceeding  may  adversely
affect it or its affiliates other than as a result of monetary damages for which
it would be entitled to  indemnification  under this Agreement,  the Indemnified
Person may, by notice to the indemnifying  party,  assume the exclusive right to
defend,  compromise, or settle such proceeding,  but the indemnifying party will
not be bound by any  determination of a proceeding so defended or any compromise
or  settlement  effected  without  its  consent  (which may not be  unreasonably
withheld).  (d) Seller hereby consents to the non-exclusive  jurisdiction of any
court in which a  proceeding  is  brought  against  any  Indemnified  Person for
purposes of any claim that an  Indemnified  Person may have under this Agreement
with respect to such proceeding or the matters alleged therein,  and agrees that
process  may be served on Seller  with  respect to such a claim  anywhere in the
world.

9.6 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS.

           A  claim  for   indemnification   for  any  matter  not  involving  a
third-party   claim  may  be   asserted   by  notice  to  the  party  from  whom
indemnification is sought.

9.7 If the Closing occurs,  Seller will have no liability (for  indemnification
or otherwise) with respect to any representation or warranty other than those in
Sections 3.3,  3.10,  3.12,  3.18 and 3.19,  unless on or before the third (3rd)
anniversary of the Closing Date, TGI notifies  Seller of a claim  specifying the
factual  basis of that claim in  reasonable  detail to the extent  then known by
TGI. A claim with  respect to Section  3.3,  or a claim for  indemnification  or
reimbursement  based upon any covenant or obligation  may be made at any time. A
claim with respect to Sections 3.10,  3.12, 3.18 or 3.19 may be made at any time
prior to the expiration of the applicable  statute of limitations  for the cause
of action giving rise to such Damages.  If the Closing occurs,  TGI will have no
liability (for  indemnification or otherwise) with respect to any representation
or warranty, unless on or before the third (3rd) anniversary of the Closing Date
Seller  notifies TGI of a claim  specifying  the factual  basis of that claim in
reasonable detail to the extent then known by Seller.
<PAGE>
9.8              LIMITATION.

           Notwithstanding  the foregoing,  neither Party shall make a claim for
indemnification  under Section 9.2(a) or (b) or Section 9.3(a) or (b) unless and
until the amount of such claim, or the aggregate amount of all such claims, made
by such Party under this Agreement,  and the DLS Asset Agreement, the Connection
One Agreement,  and the DLS Agreement  equals or exceeds  Seventy-five  Thousand
Dollars ($75,000).


10.      GENERAL PROVISIONS

10.1              EXPENSES.

           Each  Party  to this  Agreement  will  bear its  respective  expenses
incurred in connection with the preparation,  execution, and performance of this
Agreement and the Contemplated Transactions,  including all fees and expenses of
agents,  representatives,  counsel,  and  accountants,  provided that the Seller
shall be responsible  for all such fees incurred by the Seller or the Company in
excess of $400,000 in the aggregate, owed by the Company.

10.2              PUBLIC ANNOUNCEMENTS.

           Any public  announcement  or similar  publicity  with respect to this
Agreement or the  Contemplated  Transactions  will be issued at such time and in
such manner as mutually agreed, except TGI may make such disclosures as it deems
necessary to comply with applicable  securities laws. Unless consented to by TGI
in advance or required by applicable law, prior to the Closing Seller shall, and
shall cause the Company to, keep this Agreement  strictly  confidential  and may
not make any  disclosure  of this  Agreement to any person.  Seller and TGI will
mutually agree upon the means by which the Company's employees,  customers,  and
suppliers  and others  having  dealings with the Company will be informed of the
Contemplated  Transactions,  and TGI will have the right to be  present  for any
such communication.

10.3              NOTICES.

           All notices,  consents,  waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with  written  confirmation  of  receipt),  provided  that a copy is  mailed by
registered  mail,  return  receipt  requested,  or  (c)  when  received  by  the
addressee,  if  sent  by a  nationally  recognized  overnight  delivery  service
(receipt  requested),  in each case to the appropriate  addresses and telecopier
numbers set forth below (or to such other addresses and telecopier  numbers as a
party may designate by notice to the other parties):

         Seller:                    David L. Summitt
                                    3205 Magnolia Court
                                    Sellersburg, Indiana  47172

         with a copy to:            Norman R. Garvin, Esq.
                                    Scopelitis, Garvin, Light & Hanson
                                    Suite 1500
                                    10 West Market Street
                                    Indianapolis, Indiana  46204-2971
                                    Facsimile No.:  (317) 687-2414

         TGI:                       Transit Group, Inc.
                                    Overlook III, Suite 1740
                                    2859 Paces Ferry Road
                                    Atlanta, Georgia  30339
                                    Attention:  Philip A. Belyew, President
                                    Facsimile No.:  (770) 444-0246

         with a copy to:            Sharon L. McBrayer, Esq.
                                    Womble Carlyle Sandridge & Rice, PLLC
                                    Suite 3500, One Atlantic Center
                                    1201 West Peachtree Street
                                    Atlanta, Georgia  30309
                                    Facsimile No.:  (404) 870-4825
<PAGE>
10.4              JURISDICTION; SERVICE OF PROCESS.

           Any action or  proceeding  seeking to enforce  any  provision  of, or
based on any right  arising out of, this  Agreement  may be brought by any Party
against  any of the other  Parties in the  courts of the  States of Georgia  and
Indiana,  or,  if it has or  can  acquire  jurisdiction,  in the  United  States
District Court for the Northern District of Georgia and the Southern District of
Indiana. Each of the Parties consents to the jurisdiction of such courts (and of
the  appropriate  appellate  courts) in any such action or proceeding and waives
any  objection  to venue  laid  therein.  Process  in any  action or  proceeding
referred to in the preceding sentence may be served on any party anywhere in the
world.

10.5              FURTHER ASSURANCES.

           The  Parties  agree (a) to  furnish  upon  request to each other such
further  information,  (b) to  execute  and  deliver  to each  other  such other
documents,  and (c) to do such other acts and things, all as the other party may
reasonably  request for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement.

10.6              WAIVER.

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

10.7              ENTIRE AGREEMENT AND MODIFICATION.

           This Agreement  supersedes all prior  agreements  between the parties
with respect to its subject  matter and  constitutes  (along with the  documents
referred to in this  Agreement) a complete and exclusive  statement of the terms
of the agreement  between the parties with respect to its subject  matter.  This
Agreement may not be amended except by a written agreement executed by the Party
to be charged with the amendment.

10.8              DISCLOSURE LETTER.

           The disclosures in the Company's  Disclosure Letter, and those in any
supplement  thereto,  relate only to the  representations  and warranties in the
Section of the  Agreement  to which they  expressly  refer.  In the event of any
inconsistency  between the statements in the body of this Agreement and those in
the Company's  Disclosure Letter (other than an exception expressly set forth as
such  in  the  Company's  Disclosure  Letter  with  respect  to  a  specifically
identified  representation  or  warranty),  the  statements  in the body of this
Agreement will control.

10.9              ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS.

           Neither  the Seller nor the  Company  may assign any of their  rights
under this Agreement  without the prior consent of TGI. TGI and Newco may assign
this Agreement,  the Seller's Closing Documents,  or any one of them at any time
to any affiliated entity without obtaining the consent of or notifying any other
Party.  This Agreement will apply to, be binding in all respects upon, and inure
to the benefit of the successors and permitted  assigns of the Parties.  Nothing
expressed or referred to in this  Agreement will be construed to give any person
other than the Parties to this Agreement any legal or equitable  right,  remedy,
or claim  under or with  respect  to this  Agreement  or any  provision  of this
Agreement.  This  Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the Parties to this Agreement and their successors
and permitted assigns.
<PAGE>
10.10             SEVERABILITY.

           If any provision of this  Agreement is held invalid or  unenforceable
by any court of competent  jurisdiction,  the other provisions of this Agreement
will remain in full force and  effect.  Any  provision  of this  Agreement  held
invalid or  unenforceable  only in part or degree  will remain in full force and
effect to the extent not held invalid or unenforceable. The remedies provided in
this  Agreement will not be exclusive of or limit any other remedies that may be
available.

10.11             SECTION HEADINGS, CONSTRUCTION.

           The  headings  of  Sections  in  this   Agreement  are  provided  for
convenience  only and will not affect its  construction or  interpretation.  All
references  to "Section" or  "Sections"  refer to the  corresponding  Section or
Sections of this  Agreement.  All words used in this Agreement will be construed
to be of such gender or number as the  circumstances  require.  Unless otherwise
expressly  provided,  the word "including" does not limit the preceding words or
terms.

10.12             TIME OF ESSENCE.

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

10.13             GOVERNING LAW.

           This  Agreement  will be governed by the laws of the State of Indiana
without regard to conflicts of laws principles, other than the merger provisions
contained  in  Article 2, which  shall be  governed  by the laws of the State of
Kentucky.

10.14             COUNTERPARTS.

           This Agreement may be executed in one or more  counterparts,  each of
which will be deemed to be an original copy of this  Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the date first written above.


"TGI":

TRANSIT GROUP, INC.


BY: /s/ Philip A. Belyew
PHILIP A. BELYEW, President



THE "COMPANY":

BESTWAY TRUCKING, INC.


BY: /s/ David L. Summitt
DAVID L. SUMMITT, President


SELLER:


/s/ David L. Summitt
DAVID L. SUMMITT


<PAGE>
                                  SCHEDULE 4.2

                                  TGI CONSENTS



1.        AmSouth Bank, N.A.

2.        GE Capital Equity Investments, Inc.

<PAGE>
                                  SCHEDULE 5.5


The following  indebtedness owed to the Company by affiliates of the Seller will
be cancelled as of the Closing and  satisfied by the  reduction of the number of
shares of TGI Common Stock  issued  hereunder,  which has been  reflected in the
share calculations set forth in Section 2.1(a) hereof:


                    Debtor                         Dollar Amount

                  Cinci, LLC                           $126,781
                  Silver Creek, LLC                    $362,511
                                                       $489,292