Exhibit 2.1
                      AGREEMENT AND PLAN OF REORGANIZATION


                                MDR CARTAGE, INC.







                              DATED: JULY 30, 1999
<PAGE>


                                TABLE OF CONTENTS


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


2.    PLAN OF REORGANIZATION.................................................4

   2.1    THE MERGER.........................................................4
   2.2    FRACTIONAL SHARES..................................................4
   2.3    EFFECTS OF THE MERGER..............................................4
   2.4    TAX-FREE REORGANIZATION............................................5
   2.5    PURCHASE ACCOUNTING TREATMENT......................................5
   2.6    WAIVER OF DISSENTERS RIGHTS........................................5
   2.7    CLOSING............................................................5
   2.8    CLOSING OBLIGATIONS................................................5
   2.9    RELATED TRANSACTIONS...............................................6
   2.10   ADJUSTMENT TO PURCHASE PRICE.......................................7

3.    REPRESENTATIONS AND WARRANTIES OF SELLERS..............................7

   3.1    ORGANIZATION AND GOOD STANDING.....................................7
   3.2    AUTHORITY; NO CONFLICT.............................................8
   3.3    CAPITALIZATION.....................................................9
   3.4    FINANCIAL STATEMENTS...............................................9
   3.5    BOOKS AND RECORDS..................................................9
   3.6    TITLE TO PROPERTIES; ENCUMBRANCES..................................10
   3.7    CONDITION AND SUFFICIENCY OF ASSETS................................10
   3.8    ACCOUNTS RECEIVABLE................................................10
   3.9    NO UNDISCLOSED LIABILITIES.........................................11
   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..........................................................15
   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..........................................19
   3.26   TAX REPRESENTATIONS................................................19
   3.27   AUTHORITY; NO CONFLICT REGARDING MERGER OF BF......................19

4.    REPRESENTATIONS AND WARRANTIES OF TGI..................................20

   4.1    ORGANIZATION AND GOOD STANDING.....................................20
   4.2    AUTHORITY; NO CONFLICT.............................................20
   4.3    CERTAIN PROCEEDINGS................................................21
   4.4    TAX REPRESENTATIONS................................................21

5.    COVENANTS..............................................................21

   5.1    ACCESS AND INVESTIGATION...........................................21
   5.2    OPERATION OF THE BUSINESSES OF THE COMPANY.........................21
   5.3    NEGATIVE COVENANT..................................................21
   5.4    NOTIFICATION.......................................................21
   5.5    PAYMENT OF INDEBTEDNESS BY RELATED PERSONS.........................22
   5.6    NO NEGOTIATION.....................................................22
   5.7    BEST EFFORTS.......................................................22
   5.8    LEASE AGREEMENTS...................................................22
   5.9    MERGER OF BF INTO THE COMPANY......................................22
<PAGE>
6.    CONDITIONS PRECEDENT TO TGI'S OBLIGATION TO CLOSE......................22

   6.1    ACCURACY OF REPRESENTATIONS........................................22
   6.2    SELLERS' PERFORMANCE...............................................23
   6.3    CONSENTS...........................................................23
   6.4    ADDITIONAL DOCUMENTS...............................................23
   6.5    NO PROCEEDINGS.....................................................23
   6.6    NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS................23
   6.7    SATISFACTORY DUE DILIGENCE.........................................23
   6.8    FINANCING..........................................................23
   6.9    ENVIRONMENTAL AUDIT................................................23
   6.10   HSR WAITING PERIOD.................................................24
   6.11   MERGER OF BF AND THE COMPANY.......................................24

7.    CONDITIONS PRECEDENT TO SELLERS'  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.................................................24

8.    TERMINATION............................................................24

   8.1    TERMINATION EVENTS.................................................24
   8.2    EFFECT OF TERMINATION..............................................25

9.    INDEMNIFICATION; REMEDIES..............................................25

   9.1    SURVIVAL...........................................................25
   9.2    INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS..................25
   9.3    INDEMNIFICATION AND PAYMENT OF DAMAGES BY TGI......................27
   9.4    ESCROW.............................................................27
   9.5    PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS..................27
   9.6    PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS........................28
   9.7    TIME LIMITATIONS...................................................28
   9.8    AMOUNT LIMITATIONS.................................................29

10.   GENERAL PROVISIONS.....................................................29

   10.1   EXPENSES...........................................................29
   10.2   PUBLIC ANNOUNCEMENTS...............................................29
   10.3   NOTICES............................................................29
   10.4   JURISDICTION; SERVICE OF PROCESS...................................30
   10.5   FURTHER ASSURANCES.................................................30
   10.6   WAIVER.............................................................30
   10.7   ENTIRE AGREEMENT AND MODIFICATION..................................30
   10.8   DISCLOSURE LETTER..................................................31
   10.9   ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS.................31
   10.10  SEVERABILITY.......................................................31
   10.11  SECTION HEADINGS, CONSTRUCTION.....................................31
   10.12  TIME OF ESSENCE....................................................31
   10.13  GOVERNING LAW......................................................31
   10.14  COUNTERPARTS.......................................................32
   10.15  EXECUTION AND CLOSING..............................................32



Exhibits and Schedules

         Exhibit A           --      Articles of Merger
         Exhibit B           --      Employment Agreements
         Exhibit C           --      Noncompetition Agreement
         Exhibit D           --      Escrow Agreement
         Exhibit E           --      Subscription Agreement

         Schedule 2.1        --      Allocation of Purchase Price Among Sellers
         Schedule 2.9        --      Schedule of Real Property
         Schedule 4.2(c)     --      TGI Consents
<PAGE>
                      AGREEMENT AND PLAN OF REORGANIZATION

         This Agreement and Plan of  Reorganization  ("Agreement") is made as of
July 30,  1999,  by and  between  Transit  Group,  Inc.,  a Florida  corporation
("TGI"), MDR Cartage,  Inc., an Arkansas  corporation (the "Company"),  C. Frank
Mitchell  and  Bobby  W.  Riley,  each a  resident  of  the  State  of  Arkansas
(individually a "Seller" and, collectively, the "Sellers"). TGI, the Company and
the Sellers 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  that will be organized in Arkansas as a wholly
owned subsidiary of Transit Group,  Inc.  ("Newco") 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 the  applicable  provisions
of the laws of Arkansas.

         B. Upon the  effectiveness of the Merger,  all the outstanding  capital
stock of the Company will be converted  into 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. Sellers are the sole shareholders of the Company,  and were the sole
shareholders of BF  Transportation,  Inc., an Arkansas  corporation ("BF") which
was merged into the Company immediately prior to the Effective Time.

                                    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.

         "BF Merger" --as defined in Section 3.27.

         "BF Merger Agreement" --as defined in Section 3.27.

         "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
Sellers 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:

         (a)      the Merger of Newco and the Company;

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

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

         "Damages"--as defined in Section 9.2.

         "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 requires or relates to:

         (a)      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;

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

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

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

         (e)      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 or any successor
law.

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

         "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 is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive,  or toxic or a pollutant or a contaminant  under or pursuant to any
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,  whether governmental or private (including
those   promulgated  or  sponsored  by  industry   associations   and  insurance
companies), designed to provide safe and healthful working conditions.

         "Securities  Act"--the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that act or any successor law.

         "Sellers"--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 interest.

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

         "Year 2000 Problem"--as defined in Section 3.21(c).
<PAGE>
2.       PLAN OF REORGANIZATION.

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 Arkansas on the Closing  Date.  The date and
time  specified  in the  Articles of Merger that will be filed with the Arkansas
Secretary of State, as the date and time that the Merger 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  Arkansas  law as
follows:

(a)  Conversion  of Company  Common  Stock.  Each  share of common  stock of the
Company, no par value ------------------------------------- (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 (i) 12,250  shares of fully paid and  nonassessable  common
stock of TGI,  $.01 par value per share  ("TGI  Common  Stock");  plus (ii) cash
consideration  in the  ----------------  amount of $9,000  per share of  Company
Common  Stock.  The  total  number  of  shares  of TGI  Common  Stock  and  cash
consideration  into which each Seller's  shares of Company  Common Stock will be
converted is set forth on Schedule 2.1 hereto.
                  ------------

(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.

           No fractional shares of TGI Common Stock will be issued in connection
with the Merger.

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 and the cash  consideration  to be  received by the Sellers 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.  Sellers  acknowledge that
they have received their own  independent tax advice and counsel with respect to
the  Merger and the  transactions  contemplated  herein  and are 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.

           Each of the Sellers hereby waives any and all rights such shareholder
has to dissent from the Merger under Arkansas 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,  1201 West Peachtree  Street,  Atlanta,
Georgia 30309,  at 10:00 a.m. (local time) on July 30, 1999, or at such time and
place as the Parties may agree;  provided,  however,  as follows:  (a) if one or
more  conditions  to this  Agreement is not  satisfied  by such date,  the party
benefiting  from such condition may elect, in its sole  discretion,  one or more
postponements  of the Closing for the purpose of enabling  such  condition to be
satisfied and (b) the Closing shall occur no earlier than the fifth business day
after the date of the expiration of the waiting period,  as extended,  under the
HSR Act.

2.8               CLOSING OBLIGATIONS.

           At the Closing:

(a)               Sellers will deliver to TGI:

(i)  certificates  representing  their  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  "B"  executed  by each of the Sellers and Mr. Gene Dowty
(collectively,  "Employment Agreements");  (iv) noncompetition agreements in the
form of  Exhibit  "C",  executed  by  each of the  Sellers  and Mr.  Gene  Dowty
(collectively,  the "Noncompetition Agreements"); (v) an escrow agreement in the
form of Exhibit "D",  executed by each of the Sellers (the "Escrow  Agreement");
(vi) a subscription  agreement executed by each of the Sellers for the shares of
TGI  Common  Stock to be  received  by the  Sellers  in the  Merger  in the form
attached  hereto  as  Exhibit  "E";  (vii) a  certificate  executed  by  Sellers
certifying to TGI that each of Sellers'  representations  and warranties in this
Agreement  was accurate in all respects as of the date of this  Agreement and is
accurate in all respects as of the Closing Date as if made on the Closing  Date;
(viii)  evidence of the expiration of all applicable  waiting  periods under the
HSR Act; (ix) evidence of the completion of the merger of BF into the Company as
provided in Section 5.9 of this Agreement;  and (x) the Patent License Agreement
between Mr. Gene Dowty, TGI and other relevant parties.  (b) TGI will deliver to
Sellers:

(i) share certificates  representing the TGI Common Stock, issued in the name of
the Sellers in the amounts  indicated  in Section  2.1(a),  to be  delivered  as
promptly as  practicable  after the  Closing  and at Closing TGI will  deliver a
certificate or other form of documentary  evidence  representing  their right to
receive the share certificates;

(ii)     the cash consideration referred to in Section 2.1(a) hereof;

(iii) 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;  and (iv) evidence of the expiration
of all applicable waiting periods under the HSR Act.

2.9               RELATED TRANSACTIONS.

(a)      Prior to the  preparation of the Balance  Sheet,  the Parties agreed on
         certain accruals for compensation and interest as follows:

(i) Non-cash  bonuses to the Sellers as of June 30, 1999 in the aggregate amount
of $499,071 were approved and accrued;

(ii)   Accrual  of   interest   on  the   previous   balance  of  the   Accounts
Payable-Affiliates  account,  as of June 30, 1999 in the amount of $517,531  was
approved   and   accrued.   Both   items   are   reflected   in   the   Accounts
Payable-Affiliates account balance shown in the Balance Sheet

(b) The real  property  described  in Schedule 2.9 has been  transferred  by the
Company to  Sellers,  or  Sellers'  assigns,  prior to the Closing for an agreed
consideration of $919,500. Such amount of consideration will be paid by an equal
amount of reduction,  and partial  satisfaction,  of the amounts owed to Sellers
and  affiliates as reflected in the Accounts  Payable-Affiliates  account on the
Balance Sheet.
<PAGE>
(c) After the reduction of the Accounts Payable-Affiliates account by the sum of
$919,500,  the  balance  of the  Accounts  Payable-Affiliates  account  will  be
$1,760,000 and that amount will be paid to the Sellers or their assigns in equal
monthly installments of $36,666.67. (d) If the Company recognizes a taxable gain
as a result of the transfer of the real property, as described in (b) above, and
if the amount of income  taxes  payable by the Company on such gain is in excess
of the amount of income tax benefits  realized by the Company as a result of the
deductions  of the  accruals  described  in (a)(i) and (a)(ii)  above,  then the
Sellers  will be  responsible  to the Company  for such excess  amount of income
taxes.

2.10 ADJUSTMENT TO PURCHASE PRICE.

           Any  Damages  satisfied  pursuant  to Section  9.2 of this  Agreement
through the surrender of TGI Stock,  shall be deemed a reduction in the purchase
price provided for in Section 2.1(a).


3.       REPRESENTATIONS AND WARRANTIES OF SELLERS

         Sellers jointly and severally represent and warrant to TGI as follows:

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.

(b) Sellers have  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
Sellers and the Company  enforceable  against them in accordance with its terms.
Upon the execution  and delivery by Sellers of the  Employment  Agreements,  the
Escrow Agreement, the Subscription Agreements and the Noncompetition  Agreements
(collectively, the "Sellers' Closing Documents"), the Sellers' Closing Documents
will  ----------------------------  constitute  the legal,  valid,  and  binding
obligations  of  Sellers,  enforceable  against  them in  accordance  with their
respective  terms.  Each of the Sellers and the  Company  has the  absolute  and
unrestricted  right,  power,  authority and capacity to execute and deliver this
Agreement and the Sellers'  Closing  Documents  and to perform their  respective
obligations under this Agreement and the Sellers' Closing Documents.

(b) 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 Sellers,  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 2,000 shares of
common  stock,  no par value per  share,  of which 200  shares  are  issued  and
outstanding  (the  "Shares").  There are no  classes of ------  preferred  stock
authorized.  Sellers  are  and  will  be on the  Closing  Date  the  record  and
beneficial owners and holders of the Shares, free and clear of all liens, claims
or encumbrances,  and were acquired by Sellers free of any preemptive  rights or
rights of first refusal.  The shares are owned of record as shown on Part 3.3 of
the  Company's  Disclosure  Letter.  With the exception of the Shares (which are
owned by Sellers),  there are 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. There are no
contracts relating to the issuance, sale or transfer of any equity securities or
other securities of the Company.  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.  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 other than the merger of BF into the Company.
(b)      Notwithstanding references herein to Subsidiaries, the parties
understand that there are no Subsidiaries.

3.4               FINANCIAL STATEMENTS.

           Sellers have  delivered to TGI:  (a) reviewed  balance  sheets of the
Company and its Subsidiaries at their fiscal year ends in each of the years 1996
through  1998,  and the  related  reviewed  statements  of  income,  changes  in
stockholders' equity, and cash flow for each of the fiscal years then ended, and
(b) compiled  balance sheets of the Company and its  Subsidiaries as at June 30,
1999 (the "Balance  Sheet") and income  statements for the six month period then
ended.  Such  financial  statements  and the notes  thereto  fairly  present 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,  consistently applied, with the exception of certain items
listed in Section 2.9, throughout the periods involved.

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 in all material  respects and have
been maintained in accordance  with applicable law through proper  authorization
or ratification. The minute books of the Company and each Subsidiary do not omit
any  material  records of  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.  There have
been no material transactions that have not been properly authorized or ratified
by the Corporation's stockholders or directors.

3.6               TITLE TO PROPERTIES; ENCUMBRANCES.

           Part 3.6 of the Company's  Disclosure  Letter contains a complete and
accurate list of all real property and material items of personal property owned
by the Company and each  Subsidiary.  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,  other than the properties
being  transferred  out of the  Company as  provided  in Part 3.6 of the Company
Disclosure  Letter,  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 real property listed on Part 3.6 of the Company's Disclosure Letter is owned
in fee simple title. 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.  All buildings,  plants, and structures owned by the Company or
any  Subsidiary  lie wholly within the  boundaries of the real property owned by
the Company or any  Subsidiary  and do not  encroach  upon the  property  of, or
otherwise conflict with the property rights of, any other person.
<PAGE>
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 and are adequate for the uses to which they are being put,
and none of such  buildings,  plants,  structures,  or  equipment  is in need of
maintenance or repairs except for ordinary, routine maintenance and repairs that
are not  material  in  nature or cost,  individually  or in the  aggregate.  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 collectible  net of the respective  reserves for
bad debts shown on the Balance Sheet.  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 Sellers are 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 Sellers will be assigned to
the Sellers for collection and receipt.

3.9               NO UNDISCLOSED LIABILITIES.

           Except as  disclosed  in Part 3.9 of the Company  Disclosure  Letter,
neither the Company nor any Subsidiary has any liabilities or obligations of any
nature (whether known or unknown and whether absolute,  accrued,  contingent, or
otherwise)  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) 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 for all periods  prior to
and through  Closing.  All tax returns filed by the Company any each  Subsidiary
are true,  correct and complete.  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.

(b) 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. Neither Sellers, 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).  There exists no proposed tax  assessment  against the
Company or any Subsidiary  except as disclosed in the Balance Sheet.  (d) Proper
and accurate amounts have been withheld by Company and its Subsidiaries from its
employees  for all  periods  through  the  Closing  Date in  full  and  complete
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.
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.

           Except as  disclosed in Part 3.11 of the Company  Disclosure  Letter,
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 no event has occurred or  circumstance  exists that may
result in such a material adverse change.
<PAGE>
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. All  contributions due from the Company or any Subsidiary
with  respect to any of the Plans  have been made or  accrued  on the  Company's
financial  statements,  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 result in an
excise tax.

3.13              COMPLIANCE.

(a) Except as  disclosed  in Part 3.13 of the  Company  Disclosure  Letter,  the
Company and each  Subsidiary  is and at all times has conducted its business and
the ownership and use of its assets in compliance with all applicable laws.

(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  Sellers,  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 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 Sellers,
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,  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;
<PAGE>
(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) 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 $25,000.00;  (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;  (i) indebtedness  incurred for borrowed money, and
the  Company  has  not  assumed,   guaranteed,   endorsed  or  otherwise  become
responsible for the obligations of any other person or entity,  or made loans or
advances  to any person or entity;  (j) joint  venture,  partnership  or similar
arrangement entered into; (k) acquisition (by merger, consolidation, acquisition
or stock,  other securities or assets or otherwise),  capital investment made in
(whether through the acquisition of an equity interest,  the making of a loan or
advance or otherwise) or indebtedness  guaranteed for borrowed money of, (i) any
person  (other  than a  Subsidiary)  or (ii) any  portion of the assets that any
person that constitutes a division or operating unit of any Person (other than a
Subsidiary);  or (l) 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 Sellers have 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 $25,000.00 in the aggregate or which is not  terminable by the Company or its
Subsidiaries without penalty or premium upon 60 days' or less notice;

(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 in any way  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 full compliance with all applicable  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  full  compliance  with  all  applicable   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.
<PAGE>
(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) provide reasonably  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) will continue 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) 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 claims  that may be insured  thereby.

3.18  ENVIRONMENTAL MATTERS.

(a) The Company  and each  Subsidiary  is  presently  in full,  and at all times
heretofore has been in substantial  compliance with, and has not been and is not
currently in  violation  of or liable  under,  any  Environmental  Law. All real
property owned, leased or on which the Company otherwise operates by the Company
and its  Subsidiaries  (each,  a "Facility") is free of  contamination  from any
Hazardous  Material which may result in liability under any  Environmental  Law.
Sellers  have no basis  to  expect,  nor  have  Sellers  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. 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.

(b) Except as described in Part 3.18 of the Company Disclosure Letter, there are
no above or  underground  storage  tanks,  landfills,  land  deposits,  or dumps
present on or at any Facility  owned by the Company or, to the  knowledge of the
Sellers, any other Facilities or at any adjoining property, or incorporated into
any structure  therein or thereon.  Neither the Company nor any  Subsidiary  has
transported  Hazardous  Materials in the operation of its business.  (c) Sellers
have  delivered  to TGI true and  complete  copies and  results of any  reports,
studies,  analyses,  tests, or monitoring possessed or initiated by Sellers, the
Company or any Subsidiary pertaining to Hazardous Materials in, on, or under the
facilities owned or leased by the Company or any Subsidiary, and no such reports
indicate any  contamination  or release of Hazardous  Materials at a Facility or
recommend  further  testing or remedial  action by the Company.

3.19 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) No employee or, to the knowledge of the Sellers,  no 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 do Sellers have any reason to believe  that,  such
treatment  will be  challenged by the IRS or  otherwise.
<PAGE>
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 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.  The Company and each  Subsidiary  has complied in all respects with
all legal  requirements  relating to employment,  equal employment  opportunity,
nondiscrimination,  immigration,  wages, hours, benefits, collective bargaining,
the  payment of social  security  and  similar  taxes,  occupational  safety and
health, and plant closing.

(b) The Company  and each  Subsidiary  is  presently  in full,  and at all times
heretofore has been in substantial  compliance with, and has not been and is not
in violation of or liable under, any 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.

3.21 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;

(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. The manufacture and use by the Company of products
and  devices  licensed  under  the  patent  licenses  listed on Part 3.21 of the
Company Disclosure Letter does not violate, infringe or misappropriate the trade
secrets or intellectual property rights of any third party.

(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  (collectively the "Computer  Devices") will not suffer a Year
2000 Problem (as defined below). The Company has prepared and implemented, prior
to the date hereof, a written plan of action to ensure that the Computer Devices
will not have a Year 2000 Problem. 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
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.
<PAGE>
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 Sellers or of the Company has,
or has  had,  any  interest  in  any  property  used  in  the  Company's  or any
Subsidiary's  business.  No Seller or any related person or affiliate of Sellers
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
Sellers 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.

           Neither the Company, Sellers or 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 Sellers 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
Sellers  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.

3.25              INVESTMENT REPRESENTATION.

           Each of the Sellers 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 for a minimum period of one (1) year
following the Closing Date.

3.26              TAX REPRESENTATIONS.

           Except as  disclosed in Part 3.26 of the Company  Disclosure  Letter,
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 Sellers 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              AUTHORITY; NO CONFLICT REGARDING MERGER OF BF.

(a) The merger  agreement  between  BF and the  Company  constitutes  the legal,
valid, and binding  obligation of BF and the Company (the "BF Merger Agreement")
enforceable  against them in accordance  with its terms.  Each of the BF and the
Company has the absolute and unrestricted right,  power,  authority and capacity
to execute and deliver the BF Merger  Agreement and to perform their  respective
obligations thereunder.
<PAGE>
(b) Neither  the  execution  and  delivery  of the BF Merger  Agreement  nor the
consummation or performance of the merger provided for therein (the "BF Merger")
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 BF; or (B) any resolution
adopted by the board of directors or the  stockholders  of the Company or BF; 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 BF or that otherwise relates to the
business  of, or any of the assets  owned or used by, the  Company or BF; 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 BF 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 BF.

(c)  Neither  the Company nor BF 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 the BF Merger Agreement or the consummation or performance of the BF Merger.

4.       REPRESENTATIONS AND WARRANTIES OF TGI

         TGI  has  delivered  to  Sellers,   simultaneously  herewith,  the  TGI
Disclosure Letter. TGI represents and warrants to Sellers 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 its incorporation.

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(c) hereto.

4.3               CERTAIN PROCEEDINGS.

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

4.4               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,  Sellers
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")  full and free access 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.  TGI acknowledges that it has not been denied access to
such information as of the date hereof.
<PAGE>
5.2               OPERATION OF THE BUSINESSES OF THE COMPANY.

           Between  the date of this  Agreement  and the Closing  Date,  Sellers
will,  and will cause the Company  and its  Subsidiaries  to: (a) conduct  their
businesses  only in the  ordinary  course;  (b) pay their  accounts  payable and
indebtedness  within terms,  and (c) 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,  Sellers  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,  each Seller will
promptly  notify TGI in writing if such Seller or the Company  becomes  aware of
any fact or  condition  that causes or  constitutes  a breach of any of Sellers'
representations  and  warranties  as of the date of this  Agreement,  or if such
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               PAYMENT OF INDEBTEDNESS BY RELATED PERSONS.

           Except as expressly  provided in this  Agreement,  Sellers 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.

5.6               NO NEGOTIATION.

           Until such time, if any, as this Agreement is terminated  pursuant to
Section  8,  Sellers  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, Sellers will
use their best efforts to cause the conditions in Section 6 to be satisfied. TGI
and Sellers 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  with the
owner or owners of the property  for the  facilities  currently  occupied by the
Company in Jonesboro,  Arkansas, and Olive Branch, Mississippi,  providing for a
three (3) year period,  renewable at the Company's option for one (1) additional
three (3) year term.
<PAGE>
5.9               MERGER OF BF INTO THE COMPANY.

           Prior  to the  Closing  Date,  BF shall be  merged  into the  Company
pursuant to applicable Arkansas laws with the Company being the survivor of said
Merger.


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 Sellers' representations and warranties in this Agreement must
have been  substantially true and correct in all respects as of the date of this
Agreement and as of the Closing Date as if made on the Closing Date.

6.2               SELLERS' PERFORMANCE.

           All of the covenants and obligations that the Company and the Sellers
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 and on Schedule 4.2 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  Sellers,
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 Sellers' 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, Sellers,  the Company or any Subsidiary,  or against
any person  affiliated with TGI,  Sellers,  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.

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.

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. In addition, nothing shall have occurred which TGI could
reasonably  determine  could  have a  material  adverse  effect  on the  assets,
business or operation of the Company.

6.8               FINANCING.

           TGI shall have obtained  financing for the cash  consideration  to be
paid in the Merger on terms satisfactory to TGI in its sole discretion.
<PAGE>
6.9               ENVIRONMENTAL AUDIT.

           The  Sellers  shall  cause an  independent  environmental  consultant
acceptable to TGI to inspect,  audit,  and test the Facilities for the existence
of  any  and  all  environmental  conditions  and  any  and  all  violations  of
Environmental  Laws,  and to  deliver  a  report  describing  the  findings  and
conclusions  of the  inspection  (hereafter  referred  to as the  "Environmental
Assessment").  All expenses of the Environmental Assessment shall be paid by the
Sellers.  The results of the  Environmental  Assessment shall be satisfactory in
all respects to TGI.

6.10              HSR WAITING PERIOD.

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

6.11              MERGER OF BF AND THE COMPANY.

           BF shall have been merged into the Company as provided in Section 5.9
of this Agreement.


7.       CONDITIONS PRECEDENT TO SELLERS'  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  Sellers 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 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, Sellers,  the Company or any Subsidiary,  or against
any person  affiliated with TGI,  Sellers,  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.


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
<PAGE>
(ii) Sellers,  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 Sellers to comply  with their  obligations
under this  Agreement)  and Sellers have not waived such  condition on or before
the Closing Date;

(c) by mutual consent of TGI and Sellers; or

(d) by either TGI or Sellers 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)(vii),  2.8(b)(iii)  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) at any time, whether before or after the
execution and delivery of this  Agreement or the Closing  Date,  with respect to
the accuracy or  inaccuracy  of or  compliance  with,  any such  representation,
warranty, covenant, or obligation.

9.2               INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS.

           Sellers, jointly and severally, 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  Sellers  in this
Agreement,  the Company's Disclosure Letter or any other certificate or document
delivered by Sellers or the Company pursuant to this Agreement;

(b) any breach by Sellers or the Company of any covenant or  obligation  in this
Agreement;

(c)  any  product  shipped  or  any  services  provided  by the  Company  or any
Subsidiary prior to the Closing Date;
<PAGE>
(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,  including  without  limitation,
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;  (e) any use,
release,  threatened release,  emission,  generation,  storage,  transportation,
disposal,  or arrangement for the disposal of Hazardous Materials 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,   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) 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;  and (g)  any  claim  arising  from  the  automobile
accident in Cumberland  County,  North  Carolina which occurred on May 23, 1999,
involving a company truck driven by Tommy Joe Wilson,  a vehicle driven by Annie
W. Brown, and a vehicle driven by Stephen Nathaniel Fox.

9.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY TGI.

           TGI will indemnify and hold harmless Sellers, and will pay to Sellers
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,  (b) any breach by TGI of any covenant or obligation
of TGI in this  Agreement,  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 Sellers will deposit  1,375,000  shares of TGI's
Common Stock that are issued to the Sellers 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 Sellers under
this  Agreement.  The Escrow Shares will be released to the Sellers at the times
and in the manner set forth in the Escrow  Agreement  and will serve as security
for the Sellers' indemnity obligations as set forth in the Escrow Agreement.

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.
<PAGE>
(b) If any  proceeding is brought  against an  Indemnified  Person for which the
Indemnified Person claims a right to indemnification from an indemnifying party,
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 prejudicial to Indemnified  Person,  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 to the  extent of any
indemnification  obligations 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 in a manner other than 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) Sellers hereby consent 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 agree that
process may be served on Sellers  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               TIME LIMITATIONS.

           If  the  Closing   occurs,   Sellers  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 Sellers 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 Sellers  notifies TGI of a claim  specifying the
factual  basis of that claim in  reasonable  detail to the extent  then known by
Sellers.
<PAGE>
9.8               AMOUNT LIMITATIONS.

 Notwithstanding   the   foregoing,   neither   Party   shall  be   liable   for
indemnification hereunder in excess of $16,500,000.

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.

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  Sellers shall,
and shall cause the Company to, keep this Agreement  strictly  confidential  and
may not make any  disclosure  of this  Agreement to any person.  Sellers 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):

         Sellers: .........         C. Frank Mitchell
                                    P.O. Box 1577
                                    Jonesboro, Arkansas 72403

                                    -and-

                                    Bobby W. Riley
                                    P.O. Box 1577
                                    Jonesboro, Arkansas 72403

         with a copy to:...         Randall W. Ishmael, Esq.
                                    603 Southwest Drive
                                    P. O. Box 4096
                                    Jonesboro, Arkansas  72403-4096
                                    Facsimile No.:  (870) 972-5492

         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 a party
hereto  against any of the other  Parties in the courts of the State of Georgia,
County of Cobb, or, if it has or can acquire jurisdiction,  in the United States
District  Court for the  Northern  District  of  Georgia or in the courts of the
State of Arkansas, County of Craighead, or, the United States District Court for
the  Eastern  District  of  Arkansas.  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 or referenced therein. 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.

           None of the Sellers  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
after the Closing 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 Arkansas
without regard to conflicts of laws principles.

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.

10.15             EXECUTION AND CLOSING.

           Notwithstanding anything specifically or by implication stated herein
to the  contrary,  it is the intent and the effect that this  Agreement is being
executed as a part of and  simultaneously  with the  Contemplated  Transactions,
provided,  however,  that this  Section  10.15 shall not  constitute a waiver or
diminution of the covenants and conditions precedent herein.

                    [EXECUTIONS CONTINUED ON FOLLOWING PAGE]

<PAGE>
         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":

MDR CARTAGE, INC.



BY: /s/ C. Frank Mitchell
C. FRANK MITCHELL, President


SELLERS:



/s/ C. Frank Mitchell
 ......... C. FRANK MITCHELL


/s/ Bobby W. Riley
 ......... BOBBY W. RILEY
<PAGE>
                                  SCHEDULE 2.1


                               Shares of
Seller                      TGI Common Stock                         Cash

C. Frank Mitchell              1,225,000                           $900,000

Bobby W. Riley                 1,225,000                           $900,000