EXHIBIT 2.1






                      AGREEMENT AND PLAN OF REORGANIZATION

                  [Stock for Stock - Reverse Triangular Merger]


                                     BETWEEN

                   Transit Group, Inc., a Florida corporation,
            Rainbow Trucking Services, Inc., an Indiana corporation,
            and Ellena A. Hawkins, an individual resident of Florida




                            DATED: December 12, 1997



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                                TABLE OF CONTENTS


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

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

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


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4.       REPRESENTATIONS AND WARRANTIES OF TGI.............................16
         -------------------------------------
         4.1      ORGANIZATION AND GOOD STANDING...........................16
         4.2      AUTHORITY; NO CONFLICT...................................16
         4.3      CERTAIN PROCEEDINGS......................................17
         4.4      BROKERS OR FINDERS.......................................17
         4.5      SEC FILINGS..............................................17
         4.6      TGI STOCK................................................17
         4.7      DISCLOSURE...............................................17

5.       COVENANTS OF SHAREHOLDER AND TGI..................................17
         --------------------------------
         5.1      PAYMENT OF INDEBTEDNESS BY RELATED PERSONS...............17
         5.2      SEC REPORTING............................................17
         5.3      DUE DILIGENCE............................................17
         5.4      RELEASE OF GUARANTORS....................................18
         5.5      AMENDMENT TO LEASE.......................................18
         5.6      RAINBOW GROUP MERGER.....................................18
         5.7      LOAN TO SHAREHOLDER......................................18

6.       CONDITIONS PRECEDENT TO TGI'S OBLIGATION TO CLOSE.................18
         -------------------------------------------------
         6.1      ACCURACY OF REPRESENTATIONS..............................18
         6.2      SHAREHOLDER'S PERFORMANCE................................19
         6.3      CONSENTS.................................................19
         6.4      ADDITIONAL DOCUMENTS.....................................19
         6.5      NO PROCEEDINGS...........................................19
         6.6      NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS......19
         6.7      DUE DILIGENCE............................................20
         6.8      CONCURRENT CLOSING.......................................20
         6.9      BOARD APPROVAL...........................................20

7.       CONDITIONS PRECEDENT TO SHAREHOLDER'S OBLIGATION TO CLOSE.........20
         ---------------------------------------------------------
         7.1      ACCURACY OF REPRESENTATIONS..............................20
         7.2      TGI'S PERFORMANCE........................................20
         7.3      CONSENTS.................................................20
         7.4      ADDITIONAL DOCUMENTS.....................................20
         7.5      NO PROCEEDINGS...........................................21
         7.6      CONCURRENT CLOSING.......................................21
         7.7      NO MATERIAL ADVERSE CHANGE...............................21

8.       TERMINATION.......................................................21
         8.1      TERMINATION EVENTS.......................................21
         8.2      EFFECT OF TERMINATION....................................21


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9.       INDEMNIFICATION; REMEDIES.........................................22
         9.1      SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY
                  KNOWLEDGE................................................22
         9.2      INDEMNIFICATION AND PAYMENT OF DAMAGES BY SHAREHOLDER
                   ........................................................22
         9.3      INDEMNIFICATION AND PAYMENT OF DAMAGES BY TGI............23
         9.4      TIME LIMITATIONS.........................................23
         9.5      ESCROW...................................................23
         9.6      PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS........24
         9.7      PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS..............25
         9.8      REMEDY...................................................25

10.      GENERAL PROVISIONS................................................25
         ------------------
         10.1     EXPENSES.................................................25
         10.2     PUBLIC ANNOUNCEMENTS.....................................25
         10.3     CONFIDENTIALITY..........................................26
         10.4     NOTICES..................................................26
         10.5     JURISDICTION; SERVICE OF PROCESS.........................27
         10.6     FURTHER ASSURANCES.......................................27
         10.7     WAIVER...................................................27
         10.8     ENTIRE AGREEMENT AND MODIFICATION........................27
         10.9     COMPANY DISCLOSURE LETTER................................28
         10.10    ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS.......28
         10.11    SEVERABILITY.............................................28
         10.12    SECTION HEADINGS, CONSTRUCTION...........................28
         10.13    TIME OF ESSENCE..........................................28
         10.14    GOVERNING LAW............................................28
         10.15    COUNTERPARTS.............................................28


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                      Agreement and Plan of Reorganization


         This Agreement and Plan of  Reorganization  ("Agreement") is made as of
December 12,  1997,  by Transit  Group,  Inc.,  a Florida  corporation  ("TGI"),
Rainbow Trucking  Services,  Inc., an Indiana  corporation (the "Company"),  and
Ellena A. Hawkins, an individual resident of Florida ("Shareholder").

                                    RECITALS

         A. The parties  intend that,  subject to the terms and  conditions  set
forth herein,  a new  corporation  that will be organized under Indiana law as a
wholly owned subsidiary of TGI ("Newco") will merge 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 Indiana.

         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)(D) of the Code.

                                    AGREEMENT

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

         1.       DEFINITIONS

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

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

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

         "Closing"--as defined in Section 2.7.


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          "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 of same.

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

          "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
Noncompetition Agreement, Subscription Agreement and the Escrow Agreement;

                  (c)      the loan by TGI to the Shareholder; and

                  (d) the performance by TGI, the Company and the Shareholder 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.

         "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


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                  (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)(iv).

         "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.

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

         "Noncompetition Agreement"--as defined in Section 2.8(a)(iii).

         "Occupational Safety and Health Law"--any law or regulation designed to
provide safe and healthful 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.

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

         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 Indiana on the Closing  Date.  The
date and time that the Articles of Merger is filed with the Indiana Secretary of
State and the Merger  thereby  becomes  effective  will be  referred  to in this
Agreement as the  "Effective  Time." Subject to the terms and conditions of this
Agreement  and the  Articles  of Merger,  Newco will be merged with and into the
Company  in a  statutory  merger  pursuant  to the  Articles  of  Merger  and in
accordance with applicable provisions of Indiana law as follows:

          (a) Conversion of Company Common Stock.  The shares of common stock of
the Company, no par value (the "Company Common Stock"), that are issued and
outstanding

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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 that number of shares of fully paid and  nonassessable  common
stock of TGI,  $.01 par value per share  ("TGI  Common  Stock"),  determined  by
dividing US Two  Million Two Hundred  Fifty  Thousand  Dollars  ($2,250,000)  by
$6.625, for a total of 339,623 shares of TGI Common Stock.

                  (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,  that is to be issued and outstanding  immediately after
the Effective  Time,  which shall be the only share of Company Common Stock that
is 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 and 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)
each share of Newco Common Stock outstanding  immediately prior to the Effective
Time will be converted as provided in Section 2.1(b) above; (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);  and (f) the Merger will, at and after the Effective
Time, have all of the effects provided by applicable law.

         2.4 TAX-FREE REORGANIZATION. The parties intend to adopt this Agreement
as a tax-free plan of reorganization  and to consummate the Merger in accordance
with the provisions of Section  368(a)(1)(A)  of the Code.  The parties  believe
that the value of the TGI Common  Stock to be received 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.  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. The Shareholder  acknowledges that it has no present plan or intention
to sell,  exchange or dispose of more than 50% of the shares of TGI Common Stock
received in the Merger. The provisions and representations contained or referred
to in this Section 2.4 shall  survive  until the  expiration  of the  applicable
statute of limitations.  The Shareholder  acknowledges that she has received her
own  independent  tax  advice  and  counsel  with  respect to the Merger and the
transactions

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contemplated  herein and is not  relying on  representations  made by TGI or its
counsel, accountants or advisors with respect to such tax matters.

         2.5 PURCHASE ACCOUNTING TREATMENT.   The parties intend that the Merger
be treated as a "purchase" for accounting purposes.

         2.6 WAIVER OF DISSENTERS RIGHTS.  The Shareholder hereby waives any and
all rights she has to dissent from the Merger under Indiana law.

         2.7 CLOSING.   The consummation  of the purchase and  sale provided for
in this Agreement  (the  "Closing")  will take  place  at the  offices  of TGI's
counsel, Womble  Carlyle  Sandridge  & Rice,  PLLC,  located at  Suite 700, 1275
Peachtree Street, N.E.,  Atlanta, Georgia 30309,  at 10:00 a.m. (local time)  on
December 31, 1997, or at such time and place as the parties may agree.

         2.8      CLOSING OBLIGATIONS.  At the Closing:

                  (a)      The Shareholder will deliver to TGI:

                           (i)  certificates  representing her shares of Company
                  Common   Stock,   duly   endorsed  for  transfer  to  TGI  (or
                  accompanied by duly executed stock powers);

                           (ii) releases and resignations  from the officers and
                  directors of the Company duly executed by such parties;

                           (iii)  a  noncompetition  agreement  in the  form  of
                  Exhibit "B," executed by the Shareholder (the  "Noncompetition
                  Agreement");

                           (iv) an escrow  agreement in the form of Exhibit "C,"
                  executed by the Shareholder (the "Escrow Agreement");

                           (v) a  subscription  agreement  for the shares of TGI
                  Common Stock to be issued in the Merger in the form of Exhibit
                  "D" (the "Subscription Agreement");

                           (vi) a  promissory  note in the amount of $300,000 in
                  the  form  of  Exhibit  "E,"  executed  by  the   Shareholder,
                  guaranteed  by Robert L.  Hawkins,  and secured by a pledge of
                  TGI Common  Stock,  issued to the  Shareholder  in  connection
                  herewith   (the    "Shareholder's    Promissory    Note")   in
                  consideration  of a loan  by TGI  to  the  Shareholder  in the
                  amount of $300,000; and

                           (vii) an unconditional guarantee (the "Guarantee") of
                  the $200,000  Promissory Note of Robert L. Hawkins to TGI in a
                  form to be agreed upon.


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                  (b) TGI will deliver to the  Shareholder  a share  certificate
representing  the TGI  Common  Stock  issued  in the  Merger  in the name of the
Shareholder, and the face amount of the Shareholder's Promissory Note in cash.

         3.       REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER

         The Shareholder represents and warrants to TGI as follows:

         3.1      ORGANIZATION AND GOOD STANDING.

                  (a) Part  3.1 of the  Company  Disclosure  Letter  contains  a
statement of the Company'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 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  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)  The  Shareholder  has  delivered  to  TGI  copies  of the
Articles of Incorporation and Bylaws of the Company, as currently in effect.

         3.2      AUTHORITY; NO CONFLICT.

                  (a) This Agreement  constitutes the legal,  valid, and binding
obligation of the  Shareholder,  enforceable  against her in accordance with its
terms.  Upon  the  execution  and  delivery  by the  Shareholder  of the  Escrow
Agreement, the Noncompetition  Agreement, the Shareholder's Promissory Note, the
Guarantee  and the  Subscription  Agreement  (collectively,  the  "Shareholder's
Closing  Documents"),  the  Shareholder's  Closing Documents will constitute the
legal,  valid, and binding  obligations of the Shareholder,  enforceable against
her in accordance with their respective  terms. The Shareholder has the absolute
and unrestricted  right, power,  authority,  and capacity to execute and deliver
this  Agreement  and the  Shareholder's  Closing  Documents  and to perform  her
obligations under this Agreement and the Shareholder's 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 (B) any  resolution  adopted by the board of
         directors or the  stockholders of the Company;  or (C) any of the terms
         or

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<PAGE>



         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 that otherwise relates to
         the business of, or any of the assets owned or used by, the Company; 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 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.

                  (c) Except as set forth in Part 3.2 of the Company  Disclosure
Letter,  neither the  Shareholder nor the Company 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.

         3.3  CAPITALIZATION.  The authorized  equity  securities of the Company
consist of one thousand  (1,000) shares of common stock, no par value per share,
of which one hundred (100) shares are issued and  outstanding and constitute the
"Shares."  The  Shareholder  is and will be on the  Closing  Date the record and
beneficial owner and holder of the Shares,  free and clear of all liens,  claims
or  encumbrances.  With the  exception  of the  Shares  (which  are owned by the
Shareholder),  there  are  no  other  outstanding  equity  securities  or  other
securities  of  the  Company.  Other  than  standard  legends  with  respect  to
securities  matters,  no legend or other reference to any purported  encumbrance
appears upon any certificate  representing equity 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.

         3.4 FINANCIAL  STATEMENTS.  The  Shareholder  has delivered to TGI: (a)
unaudited  balance sheet of the Company as at December 31, 1996, and the related
unaudited statements of income,  changes in stockholders'  equity, and cash flow
for the fiscal  year then  ended,  and (b) a balance  sheet of the Company as at
September  30, 1997 (the "Balance  Sheet") and an income  statement for the nine
(9) 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 as at the respective dates of
and for the periods referred to in such financial statements,  all in accordance
with sound accounting  principles,  consistently  applied throughout the periods
involved.

          3.5 BOOKS AND  RECORDS.  The books of  account,  minute  books,  stock
record books, and other records of the Company, all of which have been made
available to TGI, are

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complete  and  correct in all  material  respects  and have been  maintained  in
accordance with applicable law. The minute books of the Company contain accurate
and complete  records of all meetings of, and  corporate  actions  taken by, the
stockholders, the Boards of Directors, and committees of the Boards of Directors
of the Company, and no 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.

         3.6  TITLE TO  PROPERTIES;  ENCUMBRANCES.  The  Company  owns  good and
marketable title to the properties and assets located in the facilities owned or
operated  by the Company or  reflected  as owned in the books and records of the
Company,  including all of the  properties  and assets  reflected in the Balance
Sheet, and all of the properties and assets  purchased or otherwise  acquired by
the Company since the date of the Balance Sheet, and acquired all such assets in
a bona fide  transaction for fair value.  All material  properties and assets of
the Company are listed on Part 3.6(a) of the  Company's  Disclosure  Letter and,
except as set forth on Part 3.6(b) of the Company  Disclosure  Letter,  are free
and clear of all liens,  claims or encumbrances  and are not, to the best of the
Shareholder's  knowledge,  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  identified  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 lie wholly  within the  boundaries  of the real
property  owned by the  Company and do not  encroach  upon the  property  of, or
otherwise conflict with the property rights of, any other person.

         3.7 CONDITION AND  SUFFICIENCY  OF ASSETS.  Except as set forth on Part
3.7 of the Company  Disclosure Letter, the buildings,  plants,  structures,  and
equipment  owned or leased by the Company are, to the best of the  Shareholder's
knowledge,  structurally sound, are not in need of extraordinary 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. The building,  plants,  structures,  and equipment  owned or leased by the
Company are  sufficient  for the continued  conduct of the Company's  businesses
after the Closing if  conducted  in  substantially  the same manner as conducted
prior to the  Closing.  The lease for the  Company's  facility  located at Ralph
Avenue, Louisville, Kentucky (the "Facility Lease"), is in full force and effect
and is on market rates and terms for  comparable  facilities in the  surrounding
area.

         3.8 ACCOUNTS  RECEIVABLE.  All accounts receivable of the Company as of
the date hereof and 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,  except
as set  forth  on  Part  3.8 of the  Company  Disclosure  Letter,  the  accounts
receivable are or will be as of the Closing Date current and  collectible net of
the respective reserves

                                        8

<PAGE>



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.

         3.9 NO UNDISCLOSED LIABILITIES. The Company has no material liabilities
or  obligations of any nature  (whether  known or unknown and whether  absolute,
accrued,  contingent,  or otherwise)  except for  liabilities or obligations (i)
reflected or reserved against in the Balance Sheet; (ii) current liabilities not
in excess of $25,000, individually or in the aggregate, incurred in the ordinary
course of  business  since the date  thereof;  or (iii)  specifically  disclosed
herein or in Part 3.9 of the Company Disclosure Letter.

         3.10     TAXES.

                  (a) The  Company  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  has paid,  or made  provision  for the payment of, all taxes
that have or may have become due for all periods prior to Closing.

                  (b) Except as set forth on Part 3.10 of the Company Disclosure
Letter,  no United  States,  federal or state  income tax returns of the Company
have been  audited by the IRS or  relevant  state tax  authorities.  Neither the
Shareholder  nor the  Company  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 and are at least equal to the Company's
liability for taxes. There exists no proposed tax assessment against the Company
except as disclosed in the Balance  Sheet.  All taxes that the Company is or was
required to withhold or collect have been duly withheld or collected and, to the
extent required, have been paid to the proper governmental body or other person.

                  (d) The  Shareholder  has  delivered  to TGI true and accurate
copies of all  federal  and state tax  returns  for the  Company for each of the
three years ended December 31, 1994, 1995 and 1996. All tax returns filed by the
Company are true,  correct,  and  complete.  The Company is not,  and within the
five-year period preceding the Closing Date has not been, an "S" corporation.

         3.11 NO MATERIAL  ADVERSE  CHANGE.  Except as set forth on Part 3.11 of
the Company  Disclosure  Letter,  since the date of the Balance Sheet, there has
not been any material  adverse change in the business,  operations,  properties,
prospects,  assets, or condition of the Company, and the Shareholder knows of no
event which has occurred or circumstance  which exists that may result in such a
material adverse change.

         3.12  EMPLOYEE  BENEFITS.  Part 3.12 of the Company  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

                                        9

<PAGE>



incentive plans,  vacation,  sick, holiday or other paid leave plans,  severance
plans or other similar  employee  benefit  plans  maintained by the Company (the
"Plans"), including, without limitation, all "employee benefit plans" as defined
in Section  3(3) of ERISA.  Plans as defined  hereunder  shall not include  such
plans  maintained by Laxus Group,  from whom the Company  leases  certain of its
employees,  and  with  respect  to  which  the  Company  has no  liability.  All
contributions  due from the Company  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  sponsors  as  employer  or in  which  the  Company  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) The Company is and at all times has conducted its business
and the  ownership  and use of its  assets in  substantial  compliance  with all
applicable laws.

                  (b) Part 3.13 of the  Company  Disclosure  Letter  contains  a
complete  and  accurate  list  of  each  permit  or   governmental   consent  or
authorization  that is held by the  Company  or that  otherwise  relates  to the
business of, or to any of the assets  owned or used by, the  Company.  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 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 Disclosure
Letter,  there is no pending or to the knowledge of the Shareholder,  threatened
action, arbitration, audit, hearing, investigation, litigation, or suit (whether
civil, criminal, administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving,  any governmental body
or  arbitrator  (i) that has been  commenced  by or against  the Company or that
otherwise  relates to or may affect the  business of, or any of the assets owned
or used by, the Company; or (ii) that challenges, or that may have the effect of
preventing,  delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.


                                       10

<PAGE>



                  (b) There is no order or court  decision to which the Company,
the Shareholder or, to the knowledge of the Shareholder, 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.  Since the date of the  Balance  Sheet,  the
Company has conducted its business only in the ordinary course and there has not
been any:

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

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

                  (c)  payment  or  increase  by the  Company  of  any  bonuses,
salaries,  or other  compensation  to any  stockholder,  director,  officer,  or
employee  (except  normal  payments  and  increases  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;

                  (e) damage to or  destruction or loss of any material asset or
property of the Company, 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 of at least $25,000 other than
the entry into  contracts  with  customers for the  provision of  transportation
services by the Company in the ordinary course of business;

                  (g) sale, lease, or other disposition of any material asset or
property of the Company or mortgage,  pledge, or imposition of any lien or other
encumbrance on any material asset or property of the Company;

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

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

         3.16     CONTRACTS; NO DEFAULTS.


                                       11

<PAGE>



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

                           (i) (x) each contract that  involves  performance  of
         services or delivery of goods or  materials to the Company of an amount
         or value in excess of $25,000; (y) each contract with the Company's ten
         (10) largest  customers  (based on 1997 revenue to date) that  involves
         the  performance  of  services  by the  Company  in an  amount or value
         exceeding $25,000;

                           (ii) each lease, license, installment and conditional
         sale 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 collective  bargaining agreement and other
         contract to or with any labor union or other employee representative or
         a group of employees;

                           (iv)  each  joint  venture,  partnership,  and  other
         contract involving a sharing of profits,  losses, costs, or liabilities
         by the Company with any other person;

                           (v) each contract  containing  covenants  that in any
         way purport to restrict the business activity of the Company;

                           (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.

                  (b) Each  contract  identified or required to be identified in
Part 3.16 of the  Company  Disclosure  Letter is in full force and effect and is
valid and enforceable in accordance  with its terms.  The Company is, and at all
times  has  been,  in  compliance  with  all  material   applicable   terms  and
requirements of each contract. To the best of the Shareholder's knowledge,  each
third party to any contract  with the Company is, and at all times has been,  in
compliance with all material applicable terms and requirements of such contract.
The Company has not 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 material  default or event of default has occurred
thereunder.

         3.17     INSURANCE.

                  (a) The  Shareholder  has  delivered  to TGI true and complete
copies of all insurance  policies to which the Company is a party or under which
the  Company  is or has  been  covered  at any  time  within  the two (2)  years
preceding  the  date of this  Agreement,  and true and  complete  copies  of all
pending applications for policies of insurance.


                                       12

<PAGE>



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

                  (c)  Except  as set  forth  on  Part  3.17  of  the  Company's
Disclosure Letter,  neither the Shareholder nor the Company 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 has paid all premiums due, and have  otherwise
performed  all of its  obligations,  under each policy to which the Company is a
party or that provides coverage to the Company.  The Company has given notice to
the insurer of all claims that may be insured thereby.

         3.18     ENVIRONMENTAL MATTERS.

                  (a) Except as set forth on Part 3.18 of the Company Disclosure
Letter,  the Company is, and at all times has been,  in  substantial  compliance
with,  and  has  not  been  and is not in  violation  of or  liable  under,  any
Environmental  Law.  The  Shareholder  has no  basis  to  expect,  nor  has  the
Shareholder or the Company 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,  of any actual or  potential  violation  or failure to comply  with any
Environmental Law.

                  (b) Except as set forth on Part 3.18 of the Company Disclosure
Letter,  (i) there are no Hazardous  Materials  present on or at the  facilities
owned or leased by the Company,  except such Hazardous Materials as are commonly
used in the operation of a transportation  business and which are maintained and
used by the Company in compliance  with applicable law, or (ii) to the knowledge
of the Shareholder, at any adjoining property, including any Hazardous Materials
contained  in barrels,  above or  underground  storage  tanks,  landfills,  land
deposits,  dumps or equipment,  or  incorporated  into any structure  therein or
thereon.

                  (c) The  Shareholder  has  delivered  to TGI true and complete
copies and results of any  reports,  studies,  analyses,  tests,  or  monitoring
possessed or initiated by the Shareholder or the

                                       13

<PAGE>



Company pertaining to Hazardous  Materials in, on, or under the facilities owned
or leased by the Company.

         3.19     EMPLOYEES; INDEPENDENT CONTRACTORS.

                  (a) To  the  knowledge  of the  Shareholder,  no  employee  or
independent  contractor of the Company is a party to, or is otherwise  bound by,
any agreement or arrangement, including any confidentiality,  noncompetition, or
proprietary  rights  agreement,  between  such  employee  and any  other  person
("Proprietary  Rights  Agreement")  that in any way  adversely  affects  or will
affect (i) the performance of her duties to the Company,  or (ii) the ability of
the Company to conduct its business.

                  (b) All persons  rendering  services to the Company  have been
properly   characterized   and  treated  as  either   employees  or  independent
contractors,  and  the  Company  has  not  received  notice  of,  nor  does  the
Shareholder  have any reason to believe that,  such treatment will be challenged
by the IRS or otherwise.

         3.20     LABOR RELATIONS; COMPLIANCE.

                  (a) The  Company  has not  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, to the Shareholder's knowledge,  threatened, (a) any
strike, slowdown,  picketing,  work stoppage, or employee grievance process, (b)
any  proceeding  against  or  affecting  the  Company  relating  to the  alleged
violation of any  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, and no such action is contemplated by the Company. The
Company has substantially  complied in all respects with the 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 is, and at all times 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. The Shareholder has no basis to expect,
nor has the Shareholder or the Company 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:


                                       14

<PAGE>



                           (i) the Company name, all fictional  business  names,
               trade names,  registered  and  unregistered  trademarks,  service
               marks, and applications (collectively, "Marks");

                           (ii) all patents, patent applications, and inventions
               and discoveries that may be patentable (collectively, "Patents");

                           (iii)  all  copyrights  in both  published  works and
               unpublished works (collectively, "Copyrights"); and

                           (iv)  all  know-how,   trade  secrets,   confidential
               information,  customer lists,  software,  technical  information,
               data,  process  technology,  plans,  drawings,  and  blue  prints
               (collectively,  "Trade Secrets"), owned, used, or licensed by the
               Company.

                  (b) The Company 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.

         3.22  RELATIONSHIPS  WITH RELATED PERSONS.  Except as set forth on Part
3.22 of the Disclosure Letter, neither the Shareholder nor any related person or
affiliate of the  Shareholder or of the Company has, or has had, any interest in
any property used in the Company's  business.  Neither the  Shareholder  nor any
related  person or  affiliate  of the  Shareholder  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 (a) had business  dealings or a material
financial  interest  in any  transaction  with the  Company;  or (b)  engaged in
competition  with  the  Company  with  respect  to any line of the  products  or
services of the  Company.  Neither  the  Shareholder  nor any related  person or
affiliate of the  Shareholder  or of the Company is a party to any contract with
the Company.

         3.23 BROKERS OR FINDERS. Neither the Company, the Shareholder nor their
respective  agents have  incurred any  obligation  or  liability,  contingent or
otherwise,  for  brokerage  or  finders'  fees or agents'  commissions  or other
similar payment in connection with this Agreement.

         3.24 DISCLOSURE.  No  representation  or warranty of the Shareholder in
this Agreement and no statement in the Company  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 the Shareholder that has specific application to the Shareholder or the
Company (other than general economic or industry conditions) and that materially
adversely  affects  or,  as far  as  the  Shareholder  can  reasonably  foresee,
materially threatens, the assets, business,  prospects,  financial condition, or
results  of  operations  of the  Company  that has not  been  set  forth in this
Agreement or the Company Disclosure Letter.

         3.25     SUBSIDIARIES.  The Company has no subsidiaries.

                                       15

<PAGE>



         3.26 MERGER WITH RAINBOW GROUP. The Company currently  contemplates the
merger of  Rainbow  Group,  Inc.  ("Rainbow  Group")  with and into the  Company
pursuant  to an  Agreement  and Plan of Merger by an  between  the  Company  and
Rainbow Group to be entered into prior to the Closing Date (the "Rainbow  Merger
Agreement").  The Rainbow Merger  Agreement,  when entered into, will constitute
the legal,  valid,  and binding  obligations  of the Company and Rainbow  Group,
enforceable  against  each in  accordance  with its terms.  The  Rainbow  Merger
Agreement  will  be  properly  executed  by  duly  authorized  officers  of  the
respective  parties  thereto and will be  sufficient  to transfer to the Company
good and marketable  title to all of the assets and properties of Rainbow Group,
whether tangible or intangible,  real or personal,  choate or inchoate, fixed or
contingent,  of every kind and description and wherever situated,  other than as
set  forth  on Part  3.26 of the  Company  Disclosure  Letter,  which  shall  be
distributed to the shareholder of Rainbow Group prior to said merger. The merger
of the Company and Rainbow  Group will have  occurred  prior to the Closing Date
and the merger contemplated thereby will be effective under Indiana law prior to
such time.  The terms of the Rainbow  Merger  Agreement  will  provide  that the
Company will be fully and completely  indemnified by the shareholders of Rainbow
Group for any  damages  relating to any breach of any  representation,  warrant,
covenant or  obligation  or any  liability of Rainbow Group arising prior to the
date of said merger,  other than those specifically  identified and agreed to in
the Rainbow Merger Agreement.

         4.       REPRESENTATIONS AND WARRANTIES OF TGI

         TGI has delivered to the Shareholder  herewith TGI's Disclosure Letter.
TGI represents and warrants to the Shareholder 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.

         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. TGI has
the absolute and unrestricted right, power, and authority to execute and deliver
this Agreement and to perform its obligations hereunder.

                  (b) Neither the  execution  and delivery of this  Agreement by
TGI nor the consummation or performance of any of the Contemplated  Transactions
by TGI will  contravene,  conflict  with,  result in a violation  of or 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 Articles of Incorporation or
               Bylaws;

                         (ii) any  resolution  adopted by the board of directors
               or the stockholders of TGI;


                                       16

<PAGE>



                         (iii) any legal  requirement or  order to which TGI may
               be subject; or

                         (iv) any contract to  which TGI is a party  or by which
               TGI may be bound.

                  (c) TGI is not and will not 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.

         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 interfering with, any of the Contemplated
Transactions.

         4.4 BROKERS OR FINDERS.  Except as set forth in Schedule  4.4,  TGI and
its officers and agents have incurred no obligation or liability,  contingent or
otherwise,  for  brokerage  or  finders'  fees or agents'  commissions  or other
similar payment in connection with this Agreement.

         4.5 SEC FILINGS.  TGI has filed all reports  required to be filed prior
to the date hereof under the  Securities  Exchange Act of 1934, as amended.  All
such filings complied in all material  respects with applicable law, and no such
filing contained a material misstatement or omission on the date of such filing.
Since their  respective  filing  dates,  no event has  occurred of which TGI has
knowledge which would result in TGI's being required to amend any such reports.

         4.6 TGI STOCK.  Upon  consummation of the Merger and fulfillment of the
conditions set forth herein,  the shares of TGI Common Stock to be issued to the
Shareholder in connection with the Merger will be fully paid,  duly  authorized,
validly issued and  non-assessable.  The delivery by TGI of the TGI Common Stock
to the Shareholder  will transfer and convey to the  Shareholder  valid title to
such TGI Common Stock,  free and clear of all liens,  pledges,  encumbrances and
claims of any kind, except restrictions  referred to in this Agreement and under
applicable  securities laws. All voting rights of TGI are vested  exclusively in
the TGI Common Stock.

         4.7 DISCLOSURE.  No representation or warranty of TGI in this Agreement
or in the TGI  Disclosure  Letter  contains a material  misstatement  or omits a
material fact necessary to make the statements herein or therein not misleading.

         5.       COVENANTS OF SHAREHOLDER AND TGI

         5.1 PAYMENT OF  INDEBTEDNESS  BY RELATED  PERSONS.  Except as expressly
provided in this Agreement,  the Shareholder will cause all indebtedness owed to
the Company by the  Shareholder or any related  person of the  Shareholder to be
paid in full prior to Closing.


                                       17

<PAGE>



         5.2 SEC  REPORTING.  TGI agrees to file all reports  required under the
Securities  Exchange  Act of  1934,  as  amended,  and,  at the  expense  of the
Shareholder  to take such other steps as necessary to allow the  Shareholder  to
avail herself of the resale provisions of Rule 144.

         5.3 DUE  DILIGENCE.  The  Company  agrees  that TGI  may,  prior to the
Closing  Date,  through  its  representatives,  make such  investigation  of the
properties,  books and  records of the Company  and of its  financial  and legal
condition as TGI may deem necessary or advisable in order to familiarize  itself
with the Company.  TGI agrees that it shall conduct its  investigation in such a
manner as to minimize disruption to the Company's business.

         5.4 RELEASE OF GUARANTORS.  TGI, the Company and the  Shareholder  will
work  together in good faith to obtain the release  prior to the Closing Date of
any  personal  guarantees  provided  by the  Shareholder  to a third  party with
respect to any debt or obligation of the Company.  In the event such release has
not been  obtained  prior to the  Closing,  TGI  agrees to obtain  such  release
thereafter  within  thirty  (30) days  following  the  receipt of all  necessary
information  related thereto from the  Shareholder.  Until such time as all such
Shareholder  guarantees  have been fully released or the underlying  obligations
fully  satisfied,  TGI  will  cause  the  Company  to  perform  all  obligations
thereunder and will fully indemnify the Shareholder  against any loss,  claim or
payment made with respect thereto.

         5.5  AMENDMENT TO LEASE.  Shareholder  and the Company  shall amend the
Facility  Lease prior to Closing to provide  for a term of eighteen  (18) months
following the Closing Date at a monthly rental of $4,000 per month.

         5.6 RAINBOW GROUP MERGER.  The  Shareholder and the Company shall cause
the Rainbow  Group Merger  Agreement to be entered  into and  performed  and the
merger contemplated  thereunder to be consummated prior to the Closing Date, all
on terms satisfactory to TGI in its sole discretion.

         5.7 LOAN TO  SHAREHOLDER.  TGI agrees to deliver to the  Shareholder on
the  Closing  Date,  in  exchange  for,  and in  accordance  with the  terms and
conditions  of, the  Shareholder's  Promissory  Note in the form of Exhibit "E",
which shall be secured by Shareholder's  pledge of the Escrow Shares as provided
in Section 9.5 hereof, the sum of US Three Hundred Thousand Dollars  ($300,000).
The  Shareholder's  Promissory  Note shall be non-recourse to the extent that on
the maturity date of the  Shareholder's  Promissory  Note, the per share closing
trade price of the TGI Common Stock, as defined in the Wall Street  Journal,  is
less than Six and 625/1000 Dollars  ($6.625) per share. The parties  acknowledge
that the loan  described  herein is not intended to serve as  additional  merger
consideration and is intended to be repaid in cash in accordance with its terms.


                                       18

<PAGE>



         6.       CONDITIONS PRECEDENT TO TGI'S OBLIGATION TO CLOSE

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

         6.1   ACCURACY   OF   REPRESENTATIONS.   All   of   the   Shareholder'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,  without giving effect to
any  supplement to the Company  Disclosure  Letter.  TGI  acknowledges  that the
Company  Disclosure  Letter  shall be updated for the merger of the Company with
Rainbow  Group,  Inc. and may otherwise be updated as of the Closing  Date,  but
such update must be satisfactory to TGI in its sole discretion.

         6.2  SHAREHOLDER'S  PERFORMANCE.  All of the covenants and  obligations
that the Company and the  Shareholder  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,  including,  without  limitation,
those set forth in Article V hereof.

         6.3  CONSENTS.  Each of the  consents  identified  in  Part  3.2 of the
Company  Disclosure Letter 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  Shareholder,
dated the Closing Date, in form acceptable to TGI;

               (b) an opinion of counsel to Rainbow Group and its owners,  dated
the closing date of the Rainbow Merger Agreement,in a form agreeable to TGI; and

               (c) a certificate of the  Shareholder (i) evidencing the accuracy
of any of the Shareholder's  representations and warranties; (ii) evidencing the
performance by the Shareholder  of, or the compliance by the  Shareholder  with,
any covenant or  obligation  required to be  performed  or complied  with by the
Shareholder;  (iii) evidencing the satisfaction of any condition  referred to in
this Section 6; and (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 or the Shareholder or the Company,
or against any person affiliated with TGI or the Shareholder or the Company, any
proceeding (a) involving any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions, or

                                       19

<PAGE>



(b) that may have  the  effect  of  preventing,  delaying,  making  illegal,  or
otherwise interfering with 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 (b) is entitled to all or any portion of
the Merger consideration provided for herein.

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

         6.8 CONCURRENT CLOSING. The transactions  contemplated by the Agreement
and Plan of  Reorganization  dated  December 12,  1997,  by and  between TGI and
Hawk  Enterprises,  Inc. and the  Agreement  and  Plan of  Reorganization  dated
December 12,  1997, by and  between  TGI  and  T.W. Transport,  Inc. shall  have
been consummated on or before the Closing Date.

         6.9 BOARD  APPROVAL.  The Board of Directors of TGI shall have approved
the Merger.

         7.       CONDITIONS PRECEDENT TO SHAREHOLDER'S OBLIGATION TO
                  CLOSE

         The Shareholder's and the Company's obligation to consummate the Merger
and to take the other actions  required to be taken by the  Shareholder  and the
Company  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
Shareholder, 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,  without giving effect to any supplement to
the TGI Disclosure Letter.

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

         7.4  ADDITIONAL DOCUMENTS. TGI must have caused the following documents
to be delivered to the Shareholder:

                                       20

<PAGE>



                  (a) an opinion of Womble Carlyle Sandridge & Rice, PLLC, dated
the Closing Date, in form acceptable to the Shareholder; and

                  (b) a certificate  of the officers of TGI (i)  evidencing  the
accuracy  of  any  representation  or  warranty  of  TGI;  (ii)  evidencing  the
performance by TGI of, or the compliance by TGI with, any covenant or obligation
required  to be  performed  or  complied  with  by  TGI;  (iii)  evidencing  the
satisfaction of any condition  referred to in this Section 7; and (iv) otherwise
facilitating the consummation of any of the Contemplated Transactions.

         7.5 NO PROCEEDINGS.  Since the date of this  Agreement,  there must not
have been commenced or threatened against TGI or the Shareholder or the Company,
or against any person affiliated with TGI or the Shareholder or the Company, 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,  making illegal, or otherwise  interfering with
any of the Contemplated Transactions.

         7.6 CONCURRENT CLOSING.  The transactions contemplated by the Agreement
and Plan of Reorganization  dated December 12, 1997, by and between TGI and Hawk
Enterprises, Inc.  and the  Agreement and Plan of  Reorganization dated December
12, 1997,  by  and  between  TGI  and   T.W.  Transport, Inc.  shall  have  been
consummated on or before the Closing Date.

         7.7 NO MATERIAL ADVERSE CHANGE.  There shall not have been any material
adverse change in the business of TGI.

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

                  (c) by mutual consent of TGI and the Shareholder; or


                                       21

<PAGE>



                  (d) by either TGI or the  Shareholder  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 December 31, 1997, 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 10.3 will survive.

         9.       INDEMNIFICATION; REMEDIES

         9.1 SURVIVAL;  RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE.  All
representations,  warranties,  covenants, and obligations in this Agreement, the
Company Disclosure Letter, the supplements to the Company Disclosure Letter, the
TGI Disclosure  Letter,  the  supplements  to the TGI Disclosure  Letter 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  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 SHAREHOLDER.  Subject to
the  limitations  set forth  below,  the  Shareholder  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 the
Shareholder in this Agreement, the Company Disclosure Letter, the supplements to
the Company Disclosure Letter, or any other certificate or document delivered by
the Company or the Shareholder pursuant to this Agreement;

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

                  (c) any  material  liability  not  otherwise  disclosed to TGI
herein or in the  Company  Disclosure  Letter  and any  supplement  thereto  for
product  shipped or  manufactured  by, or any services  provided by, the Company
prior to the Closing Date;


                                       22

<PAGE>



                  (d) the  allegations  set  forth in  Manson  Avery,  et al. v.
Denver S. Wade, et al.,  Civil Action No.  97-0054 filed in the Circuit Court of
Noxubee  County,  Mississippi  (the  "Mississippi  Lawsuit")  and such  items as
disclosed in the Company  Disclosure  Letter which are  identified by TGI within
five (5) days of the date hereof,  as agreed upon by the  Shareholder,  provided
that if the parties do not so agree,  TGI may  withdrawn  such item or terminate
this Agreement upon written notice to the Shareholder; or

                  (e) 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 the Shareholder or the Company
(or  any  person  acting  on  their  behalf)  in  connection  with  any  of  the
Contemplated Transactions.

                  Notwithstanding  anything to the  contrary in this  Agreement,
the Shareholder's  liability  hereunder to TGI and to Indemnified  Persons shall
not exceed the value of the Escrow Shares (as defined below), as determined from
time to time at the time a claim is made hereunder.

         9.3  INDEMNIFICATION  AND PAYMENT OF DAMAGES BY TGI. TGI will indemnify
and hold harmless the Shareholder, and will pay to the Shareholder the amount of
any Damages arising, directly or indirectly,  from or in connection with (a) any
breach of any representation or warranty made by TGI in this Agreement,  the TGI
Disclosure  Letter, any supplement to the TGI Disclosure Letter, any Schedule to
this Agreement or in any  certificate  or document  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 TIME LIMITATIONS.  If the Closing occurs, the Shareholder 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 the  Shareholder  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 Sections 3.3, 3.10,  3.12,  3.18 or 3.19, or a claim for  indemnification  or
reimbursement  not based upon any  representation or warranty or any covenant or
obligation to be performed  and complied with prior to the Closing Date,  may be
made at any  time.  If the  Closing  occurs,  TGI will  have no  liability  (for
indemnification  or otherwise)  with respect to any  representation  or warranty
other than those in Section 4.6, unless on or before the third (3rd) anniversary
of the Closing Date,  the  Shareholder  notifies TGI of a claim  specifying  the
factual basis of that claim in reasonable detail to the extent then known by the
Shareholder. A claim with respect to Section 4.6, or a claim for indemnification
or reimbursement  not based upon any  representation or warranty or any covenant
or obligation  to be performed and complied with prior to the Closing Date,  may
be made at any time.


                                       23

<PAGE>



         9.5 ESCROW.  At the Closing,  the  Shareholder  will deposit all of the
shares of TGI  Common  Stock  that are  issued to the  Shareholder  pursuant  to
Section 2.1 hereof (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 Shareholder under this Agreement, the payment
in  full  of the  Shareholder's  Promissory  Note  and  the  obligations  of the
Shareholder under the Guarantee.  On the second (2nd) anniversary of the Closing
Date,  the Escrow  Shares (or such portion as then  remaining in escrow) will be
released to the Shareholder as provided in the Escrow  Agreement;  provided that
in the event that prior to the second (2nd) anniversary of the Closing Date, the
litigation  Mississippi  Lawsuit is dismissed  with prejudice or settled with no
liability against the Company and Rainbow Group, Inc., then eighty percent (80%)
of the Escrow  Shares  will be  released  to the  Shareholder  upon proof of the
dismissal  or  settlement  satisfactory  to TGI,  all as  provided in the Escrow
Agreement.  In addition,  after the first  anniversary  of the Closing Date, the
Shareholder  shall have the right to direct the Escrow  Agent to sell the Escrow
Shares; provided that (i) the resulting sales proceeds equal at least $6.625 per
share;  and (ii) eighty  percent  (80%) of the proceeds from any such sale shall
continue  to be held by the Escrow  Agent as  collateral  for the  Shareholder's
obligations  hereunder,  in replacement of the Escrow Shares.  The Escrow Shares
will serve as security for the Shareholder's  indemnity obligations as set forth
in the Escrow Agreement.

         9.6   PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.

                  (a) Promptly  after  receipt by an  Indemnified  Person (which
term shall include the  Shareholder  for purposes of this Section 9.6) 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 under such Section,  give
notice to the  indemnifying  party of the  commencement  of such claim,  but the
failure to notify the indemnifying party will not relieve the indemnifying party
of any  liability  that it may have to any  Indemnified  Person,  except  to the
extent that the indemnifying  party demonstrates that the defense of such action
is prejudiced by the Indemnified Person's failure to give such notice.

                  (b) If any proceeding referred to in Section 9.6(a) is brought
against an Indemnified  Person and it gives notice to the indemnifying  party of
the commencement of such proceeding,  the  indemnifying  party will,  unless the
claim involves  taxes, be entitled to participate in such proceeding and, to the
extent that it wishes (unless (i) the indemnifying party is also a party to such
proceeding  and the  Indemnified  Person  determines  in good  faith  that joint
representation  would be inappropriate,  or (ii) the indemnifying party fails to
provide reasonable assurance to the Indemnified Person of its financial capacity
to defend such  proceeding  and  provide  indemnification  with  respect to such
proceeding),  to assume the defense of such proceeding with counsel satisfactory
to the Indemnified  Person and, after notice from the indemnifying  party to the
Indemnified Person of its election to assume the defense of such proceeding, the
indemnifying party will not, as long as it diligently  conducts such defense, be
liable to the  Indemnified  Person  under  this  Section 9 for any fees of other
counsel or any other expenses with respect to the defense of such proceeding, in
each case subsequently incurred by the Indemnified Person in connection with the
defense of such proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the

                                       24

<PAGE>



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  (which  may not be  unreasonably  withheld).  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  written
notice to the  Indemnified  Person of its election to assume the defense of such
proceeding or  specifically  deny all liability  and  responsibility  therefore,
including the basis for such denial, the indemnifying party will be bound by any
determination  made in such proceeding or any compromise or settlement  effected
by the Indemnified  Person,  reasonably and in good faith. In the event that the
Shareholder  denies  liability  hereunder as provided above, and the parties are
required to litigate or arbitrate  such  denial,  the  prevailing  party in such
action  shall  also be  entitled  to  recover  its  attorneys'  fees and cost of
collection or defense, as appropriate.

                  (c)  Notwithstanding  the foregoing,  if an Indemnified Person
determines  in  good  faith  that  there  is a  reasonable  probability  that  a
proceeding may adversely  affect it or its affiliates  other than as a result of
monetary  damages for which it would be entitled to  indemnification  under this
Agreement,  the  Indemnified  Person may, by notice to the  indemnifying  party,
assume the exclusive right to defend, compromise, or settle such proceeding, but
the indemnifying party will not be bound by any determination of a proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).

         9.7  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.

         9.8  REMEDY.   The  sole  and  exclusive  remedy  of  TGI  against  the
Shareholder for any liability  arising under this Agreement or the Shareholder's
Closing  Documents  (except for the Employment  Agreement,  the  Non-Competition
Agreement,  Escrow Agreement and Subscription  Agreement) is the indemnification
contained in Section 9.2 hereinabove. TGI acknowledges that the dollar amount of
any  claim  made  under the  Escrow  Agreement  is  subject  to the  limitations
contained in Section 9.2 hereof.

         10.      GENERAL PROVISIONS

         10.1  EXPENSES.  Each party to this  Agreement will bear its respective
expenses incurred in connection with the preparation, execution, and performance
of this  Agreement  and the  Contemplated  Transactions,  including all fees and
expenses of agents, representatives,  counsel, and accountants, provided that if
the Shareholder is required to travel to Atlanta for the Closing, all

                                       25

<PAGE>



expenses of the Shareholder  and its counsel,  including  reasonable  attorneys'
fees, will be paid by the Company.

         10.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar publicity
with respect to this Agreement or the Contemplated  Transactions  will be issued
at such time and in such  manner as the parties  hereto  shall  mutually  agree,
provided  that TGI shall be entitled  to make such  announcements  with  respect
hereto as may be required by securities laws or  regulations,  provided that TGI
will provide  Shareholder with a copy of the first  announcement  regarding this
transaction  in advance of the release  thereof.  Unless  consented to by TGI in
advance or  required by  applicable  law,  prior to the Closing the  Shareholder
shall, and shall cause the Company to, keep this Agreement strictly confidential
and may not make any disclosure of this Agreement to any person. The Shareholder
and TGI will consult with each other concerning the means by which the Company's
employees,  customers, and suppliers and others having dealings with the Company
will be informed of the Contemplated  Transactions,  and TGI will have the right
to be present for any such communication.

         10.3  CONFIDENTIALITY.  Between  the  date  of this  Agreement  and the
Closing Date,  TGI and the  Shareholder  will maintain in  confidence,  and will
cause the directors,  officers,  employees,  agents, and advisors of TGI and the
Company to maintain  in  confidence,  any  information  received  from the other
party,  or from anyone on behalf of the other  party,  in  connection  with this
Agreement  or the  Contemplated  Transactions,  unless (a) such  information  is
already known to such party or to others not bound by a duty of  confidentiality
or such information  becomes publicly  available through no fault of such party,
(b) the use of such information is necessary or appropriate in making any filing
or  obtaining  any  consent or approval  required  for the  consummation  of the
Contemplated  Transactions,  or (c) the furnishing or use of such information is
required by or necessary or appropriate in connection with legal proceedings. If
the Contemplated  Transactions  are not  consummated,  each party will return or
destroy as much of such written  information  as the other party may  reasonably
request.   The  parties   acknowledge  that  they  have  previously  executed  a
Confidentiality Agreement and agree that all documents received by them from any
other party prior to the date hereof  shall be and remain  subject to such prior
Confidentiality Agreement.

         10.4 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):


                                       26

<PAGE>



         Shareholder:               Ms. Ellena A. Hawkins
                                    2425 Ralph Avenue
                                    Post Office Box 16250
                                    Louisville, Kentucky 40256

         with a copy to:            Gary L. Stage, Esq.
                                    Stoll, Keenon & Park, LLP
                                    Suite 1000
                                    201 East Main Street
                                    Lexington, Kentucky 40507

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

         with a copy to:            G. Donald Johnson, Esq.
                                    Womble Carlyle Sandridge & Rice, PLLC
                                    1275 Peachtree Street, N.E., Suite 700
                                    Atlanta, Georgia 30309
                                    Facsimile No.: (404) 888-7490

         10.5 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  against any of the 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,  and each of
the parties  consents to the  non-exclusive  jurisdiction of such courts (and of
the  appropriate  appellate  courts) in any such action or proceeding and waives
any objection to venue laid therein.

         10.6 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.

         10.7 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.

                                       27

<PAGE>



         10.8 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.

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

         10.10 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. Neither party
may assign any of its rights under this  Agreement  without the prior consent of
the other parties.  Subject to the preceding sentence, 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 assigns.

         10.11 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.

         10.12 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.

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

         10.14 GOVERNING LAW. This Agreement will be governed by the laws of the
State of Kentucky  (other  than the  Merger,  which shall be governed by Indiana
law) without regard to conflicts of laws principles.


                                       28

<PAGE>


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

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

                                      TGI:

                                      TRANSIT GROUP, INC.


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



                                      THE SHAREHOLDER:


                                      /s/ Ellena A. Hawkins
                                      ELLENA A. HAWKINS



                                      THE "COMPANY":

                                      RAINBOW TRUCKING SERVICES, INC.


                                      BY:  /s/ Ellena A. Hawkins
                                      ELLENA A. HAWKINS, President





                                       29

<PAGE>

                               FIRST AMENDMENT TO
                      AGREEMENT AND PLAN OF REORGANIZATION


                  This First  Amendment to Agreement and Plan of  Reorganization
("Agreement")  is made and entered  into by and  between  Ellena A.  Hawkins,  a
Florida  resident  (the  "Shareholder"),  Rainbow  Trucking  Services,  Inc., an
Indiana  corporation  (the  "Company"),   and  Transit  Group,Inc.,   a  Florida
corporaiton ("TGI"), as of the 30th day of December, 1997.

                                    RECITALS

A.  The  parties  hereto  are  parties  to that  certain  Agreement  and Plan of
Reorganization dated as of December 12, 1997 (the "Reorganization Agreement").

B. The parties hereto desire to amend the  Reorganization  Agreement as provided
herein.


         NOW  THEREFORE,  for  and  in  consideration  of the  mutual  covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:

         1.       Amendment to Agreement.     Reorganization Agreement is hereby
                  -----------------------
amended as follows:

                  1.1      Section 3.26 is hereby deleted in its entirety and is
replaced with the following:

                  "3.26  ACQUISITION OF ASSETS OF RAINBOW GROUP.On  December 12,
                  1997, the Company  purchased  certain of the assets of Rainbow
                  Group,  Inc.,  a  Kentucky  corporation  owned  by  Robert  L.
                  Hawkins,  husband of the Shareholder  ("Rainbow  Group") which
                  are  set  forth  on  Part  3.26  of the  Supplemental  Company
                  Disclosure Letter (the "Rainbow  Assets").  The Rainbow Assets
                  were   purchased   by  the  Company  for  good  and   valuable
                  consideration,  and are owned by the Company free and clear of
                  any and all liens, claims or encumbrances whatsoever."

                  1.2      Section 5.6 is hereby  deleted in its entirety and is
replaced with the following:

                  "5.6     INTENTIONALLY OMITTED"

                  2. Continued Effect of Agreement.  Except as  specifically set
                  forth  herein, the  Reorganization  Agreement  remains in full
                  force and effect as of the date hereof.  This  Agreement shall
                  be governed by and  construed in accordance  with the  laws of
                  the  state of  Kentucky  and may not  be amended  or  modified
                  other than in writing signed by all parties hereto.


<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 SHAREHOLDER:


                                /s/ Ellena A. Hawkins
                               ELLENA A. HAWKINS



                               THE "COMPANY":

                               RAINBOW TRUCKING SERVICES, INC.


                               BY:  /s/ Ellena A. Hawkins
                               ELLENA A. HAWKINS, President