FORM 10-Q/A
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001.
Commission File No. 1-8129.
US 1 INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana 95-3585609
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(State of Incorporation) (I.R.S. Employer Identification No.)
1000 Colfax, Gary, Indiana 46406
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219) 944-6116
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes _X_ No ___
As of May 1, 2001, there were 10,618,224 shares of registrant's common stock
were outstanding.
Part I FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2001 (UNAUDITED) AND DECEMBER 31, 2000
ASSETS
March 31, December 31,
2001 2000
---- ----
(Unaudited)
CURRENT ASSETS:
Accounts receivable-trade, less allowance for
doubtful accounts of $309,000 and $209,000
respectively $9,587,157 $9,911,436
Other receivables 585,591 382,057
Deposits 85,750 40,450
Prepaid expenses 227,318 309,897
Current deferred tax asset 400,000 400,000
----------- ----------
Total current assets 10,885,816 11,043,840
FIXED ASSETS:
Equipment 948,975 335,402
Less accumulated depreciation and amortization (91,082) (68,797)
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Net fixed assets 857,893 266,605
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ASSETS HELD FOR SALE:
Land 195,347 195,347
Valuation allowance (141,347) (141,347)
---------- -----------
Net assets held for sale 54,000 54,000
Non-current deposits 126,461 126,461
Non-current deferred tax asset 400,000 400,000
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TOTAL ASSETS $12,324,170 $11,890,906
========== ===========
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2001 (UNAUDITED) AND DECEMBER 31, 2000
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
March 31, December 31,
2001 2000
---- ----
(Unaudited)
CURRENT LIABILITIES:
Short-term debt $ 4,976,833 $ 4,503,896
Accounts payable 2,695,238 2,621,107
Bank overdraft 309,775 522,201
Accrued expenses 208,365 244,446
Insurance and claims 335,050 418,450
Accrued compensation 39,890 33,891
Accrued interest 889,093 836,019
Fuel and other taxes payable 41,354 143,796
----------- ------------
Total current liabilities 9,495,598 9,323,806
----------- ------------
LONG-TERM DEBT (primarily to related parties) 4,096,057 4,026,210
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK:
Authorized 5,000,000 shares; no par value,
Series A shares outstanding:
2001 and 2000 - 1,094,224
Liquidation preference $0.3125 per share 1,025,826 1,000,112
SHAREHOLDERS' DEFICIENCY:
Common stock, authorized 20,000,000 shares;
no par value; shares outstanding 10,618,224 40,844,296 40,844,296
Accumulated deficit (43,137,607) (43,303,518)
----------- -----------
Total shareholders' deficiency (2,293,311) (2,459,222)
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
DEFICIENCY $ 12,324,170 $11,890,906
=========== ============
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
MARCH 31, 2001 AND MARCH 31, 2000 (UNAUDITED)
MARCH 31, MARCH 31,
2001 2000
---- ----
(Unaudited) (Unaudited)
OPERATING REVENUES $ 15,451,008 $ 9,030,927
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OPERATING EXPENSES:
Purchased transportation and commissions 13,547,198 7,822,783
Insurance and claims 410,283 324,628
Salaries, wages, and other 540,026 389,311
Operating supplies and expense 480,786 163,401
Other expenses 140,375 93,751
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Total operating expenses 15,118,668 8,793,874
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OPERATING INCOME 332,340 237,053
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NON-OPERATING INCOME (EXPENSE):
Interest income 2,435 2,007
Interest expense (206,916) (165,675)
Other income 63,766 8,955
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Total non-operating (expense) (140,715) (154,713)
------------ ------------
NET INCOME $ 191,625 $ 82,340
DIVIDENDS ON PREFERRED SHARES (25,714) (23,143)
------------ ------------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 165,911 $ 59,197
============ ============
INCOME PER COMMON SHARE:
Net Income:
Basic $0.02 $0.01
Diluted $0.02 $0.01
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
BASIC AND DILUTED 10,618,224 10,618,224
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
MARCH 31, 2001 (UNAUDITED) AND MARCH 31, 2000 (UNAUDITED)
Three Months Ended March 31, 2001 2000
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income 191,625 82,340
Adjustments to reconcile net income to net
Cash used for operations:
Depreciation and amortization 22,285 4,097
Provision for doubtful accounts 114,000 11,000
Changes in operating assets and liabilities:
Accounts receivable - trade 210,279 (202,890)
Other receivables (203,534) (409,722)
Prepaid assets 82,579 (8,567)
Deposits (45,300) (38)
Accounts payable 74,131 (40,336)
Accrued expenses (36,081) 11,943
Accrued interest 53,074 32,717
Insurance and claims (83,400) 158,273
Accrued compensation 5,999 8,309
Fuel and other taxes payable (102,442) (18,851)
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Net Cash provided by (used in) operating activities 283,215 (371,725)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (613,573) (3,482)
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Net cash used in investing activities (613,573) (3,482)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings(repayments)under line of credit 447,993 (597,672)
Proceeds from equipment line of credit 385,126 0
Principal payments on long term debt (73,024) (11,140)
Net(repayment of) proceeds from shareholder loans (217,311) 1,083,475
Decrease in bank overdraft (212,426) (99,456)
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Net cash provided by financing activities 330,358 375,207
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NET INCREASE IN CASH 0 0
CASH, BEGINNING OF PERIOD 0 0
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CASH, END OF PERIOD 0 0
========= ========
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
The accompanying notes are an integral part of the consolidated financial
statements.
1. BASIS OF PRESENTATION
The accompanying consolidated balance sheet as of March 31, 2001, and the
consolidated statements of operations and cash flows for the three month
periods ended March 31, 2001 and 2000 are unaudited, but, in the opinion of
management, include all adjustments (consisting of normal, recurring accruals)
necessary for a fair presentation of the financial position and the results of
operations for such periods. The year-end balance sheet data was derived from
audited financial statements. These statements should be read in conjunction
with the Company's audited consolidated financial statements for the year
ended December 31, 2000, and the notes thereto included in the Company's
annual report on Form 10-K. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted, as permitted by
the requirements of the Securities and Exchange Commission, although the
Company believes that the disclosures included in these financial statements
are adequate to make the information not misleading. The results of operations
for the three months ended March 31, 2001 and 2000 are not necessarily
indicative of the results for a full year.
2. RECLASSIFICATIONS
Certain reclassifications have been made to the previously reported 2000
financial statements to conform with the 2001 presentation.
3. EARNINGS PER COMMON SHARE
The Company calculates earnings per share ("EPS") in accordance with
Statement of Financial Accounting Standards No. 128. Following is the
reconciliation of the numerators and denominators of the basic and diluted
EPS. There were no outstanding common stock equivalents in these periods.
Numerator 2001 2000
---- ----
Net income $ 191,625 $ 82,340
Dividends on preferred shares (25,714) (23,143)
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Net income available to common
shareholders for basic and diluted EPS 165,911 59,197
Denominator
Weighted average common shares 10,618,224 10,618,224
outstanding for basic and diluted EPS
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--(Continued)
4. SHORT-TERM DEBT
Short-term debt at March 31, 2001, and December 31, 2000, comprises:
March 31, December 31,
2001 2000
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Line of credit 4,719,097 $4,271,104
Current portion of long-term debt 257,736 232,792
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Total 4,976,833 $4,503,896
========== ==========
The Company has a $5.5 million line of credit. Advances under the
revolving line of credit are limited to 70% of eligible accounts receivable
and bear interest at the prime rate (8.0% at March 31, 2001) plus .5%. The
interest rate is currently based on certain financial covenants and may range
from prime to prime plus .5%. This line of credit agreement expires in
September 2001. Advances under the agreement are collateralized by the
Company's accounts receivable, property, and other assets. Borrowings of up to
$1 million are guaranteed by the Chief Executive Officer and Chief Financial
Officer of the Company. At March 31, 2001, the outstanding borrowings on this
line of credit were $4.72 million.
In addition to the $5.5 million line of credit, the Company has also
established a separate line for equipment financing which has been increased
from $500,000 to $1,000,000 in the first quarter of 2001. The principal
balance of the Equipment Loan shall bear interest payable monthly, in an
amount equal to the Prime Rate in effect plus 1% per annum. The principal
balance on the equipment line is payable monthly based on a five-year
amortization of the outstanding balance. The equipment line expires on May 15,
2002. At March 31, 2001, the outstanding borrowings on the equipment line of
$467,986 were included in long term debt.
The lines of credit are subject to termination upon various events of
default, including failure to remit timely payments of interest, fees and
principal, any adverse change in the business of the Company or the insecurity
of the lender concerning the ability of the Company to repay its obligations
as and when due or failure to meet certain financial covenants. Financial
covenants include: minimum net worth requirements, total debt service coverage
ratio, capital expenditure limitations, and prohibition of additional
indebtedness without prior authorization.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--(Continued)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.
You should read the following discussion regarding the Company along with the
Company's consolidated financial statements and related notes included in this
quarterly report. The following discussion contains forward-looking statements
that are subject to risks, uncertainties and assumptions. The Company's actual
results, performance and achievements in 2001 and beyond may differ materially
from those expressed in, or implied by these forward-looking statements. See
cautionary note regarding forward-looking statements.
Results of Operations
The financial statements and related notes contained elsewhere in this Form
10-Q as of and for the three months ended March 31, 2001 and in the Company's
Form 10-K for its fiscal year ended December 31, 2000, are essential to an
understanding of the comparisons and are incorporated by reference into the
discussion that follows.
Three months ended March 31, 2001 Compared to the three months ended March 31,
2000
The Company's operating revenues increased from $9.0 million for the three
months ended March 31, 2000 to $15.4 million for the same period in 2001. This
is an increase of 71.1%. This increase is attributable to the continued growth
at Carolina National Transportation and Keystone Lines, the expansion of
Keystone Logistics, Inc. and the start up of two new Companies, CAM Transport,
Inc. and Unity Logistics, Inc.
The following table set forth the percentage relationships of expense
items to revenue for the three months ended March 31, 2001 and March 31, 2000:
2001 2000
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Revenue 100.0% 100.0%
Operating expenses:
Purchased transportation and commissions 87.7 86.7
Insurance and claims 2.7 3.6
Salaries, wages and other 3.5 4.3
Other operating expenses 4.0 2.8
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Total operating expenses 97.9 97.4
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Operating income 2.1 2.6
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION (continued)
The Company has three direct variable costs which are purchased
transportation, commissions, and insurance. At March 31, 2000 the sum of these
direct variable costs was 90.3% of revenue in comparison to 90.4% at March 31,
2001. As reflected in the table above, the overall cost of the direct variable
items is almost identical between periods. However, insurance and claims
decreased .9% as a percentage from revenues while purchased transportation and
commissions increased 1% as a percentage of revenues. This decrease in
insurance and corresponding increase in purchased transportation and
commissions is due to the Company brokering a higher percentage of its freight
in 2001 as compared to 2000. When the Company brokers freight, the Company
does not pay insurance on this freight. However, the purchased transportation
expense is greater for brokered freight.
Salaries, wages and other expenses were 3.5% of revenue at March 31, 2001
and 4.3% for the same period in 2000. This is a decrease of 0.8% as related to
revenue. Salaries and wages do not increase at the same rate as revenue due to
economies of scale, improved productivity, and the implementation of
technological solutions. Other operating expenses were 4.0% of revenue at
March 31, 2001 and 2.8% at March 31, 2000. The increase in other operating
expenses as a percentage of revenue is primarily the result of the Company
increasing the allowance for doubtful accounts. The addition to the allowance
for doubtful accounts during the first quarter ended March 31, 2001 was
$99,159 and $10,830 for the same period of 2000. The Company has two large
customers whose credit has declined. Management believes the current allowance
adequately provides for the possibility that not all accounts receivable for
these two larger customers will be collected.
Based on the changes in revenue and expenses discussed above, operating
income increased by $95,287 from $237,053 for the three months ended March 31,
2000 to $332,340 for the three months ended March 31, 2001.
Interest expense increased by $41,241 in 2001. Interest at March 31, 2000
was $165,675 and at March 31, 2001 interest was $206,916. This increase in
interest expense is attributable to the additional borrowing against the
Company's line of credit.
Non-operating income (expense), exclusive of interest expense, increased
from $10,962 for the three months ended March 31, 2000 to $66,201 for the
three months ended March 31, 2001. The increase was primarily attributable to
income generated through the financing of receivables by T.C. Services.
Net income for the three months ended March 31, 2001 was $191,625
compared with $82,340 for the same period in 2000.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Liquidity and Capital Resources
As of March 31, 2001, the Company's financial position continues to
improve in comparison to prior fiscal period. The Company had a net deficiency
in shareholder equity of $2.3 million at March 31, 2001, an improvement of
$165,911 over year-end December 31, 2000. Working capital decreased by
$329,816 over year-end December 31, 2000. Working capital at March 31, 2001
was $1.4 million as compared to a working capital at December 31, 2000 of $1.7
million.
Net cash provided by (used in) operating activities increased $0.7
million from $(0.4) million for the three months ended March 31, 2000 to $0.3
million for the three months ended March 31, 2001. The cash provided by
operations is due primarily to a decrease in accounts receivable of $0.2
million. In addition, cash used in operating activities relating to other
receivables decreased by $0.2 million from $0.4 million for the three months
ended March 31, 2000 to $0.2 million for the three months ended March 31,
2001.
Net cash used in investing activities increased $610,091 from $3,482 for
the three months ended March 31, 2000 to $613,573 for the three months ended
March 31, 2001. Net cash used in investing activities during the first quarter
of 2001 related to the investment in additional equipment.
Net cash provided by financing activities, primarily related to
additional borrowings, decreased $44,849 from $375,207 the three months ended
March 31, 2000 to $330,358 for the three months ended March 31, 2001.
In March 2001, the Company's line of credit agreement with Firstar Bank
was amended in order to increase the equipment line of credit from $500,000 to
$1,000,000. The principal balance on this equipment line is payable monthly
based on a five-year amortization of the outstanding balance. The equipment
line expires on May 15, 2002. $467,986 was outstanding on this equipment loan
at March 31, 2001. In conjunction with the March 2001 amendment of the Firstar
agreement, the personal guarantees of this debt by the Chief Executive
Officer and Chief Financial Officer of the Company were reduced from a total
of $3 million to a total of $1 million.
In addition to the $1,000,000 equipment line of credit, the Company also
has a $5.5 million line of credit with Firstar Bank. $4.72 million was
outstanding under this line at March 31, 2001.
Quantitative and Qualitative Disclosures About Market Risk
Inflation
Changes in freight rates charged by the Company to its customers are
generally reflected in the cost of purchased transportation and commissions
paid by the Company to independent contractors and agents, respectively.
Therefore, management believes that future operating results of the Company
will be affected primarily by changes in volume of business. However, due to
the highly competitive nature of the truckload motor carrier industry, it is
possible that future freight rates and cost of purchased transportation may
fluctuate, affecting the Company's profitability.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--(Continued)
Certain Relationships and Related Transactions.
The company leased office space for its headquarters in Gary, Indiana,
for $2,200 per month for the first quarter of 2001, with an increase in April
of $800 a month, from Michael E. Kibler, the president and Chief Executive
Officer and a director of the Company, and Harold E. Antonson, the Chief
Financial Officer, treasurer and a director of the Company. Messrs. Kibler and
Antonson own the property as joint tenants.
One of the Company's subsidiaries provides safety, management, and
accounting services to companies controlled by the President and Chief
Financial Officer of the Company. These services are priced to cover the cost
of the employees providing the services.
One of the Company's insurance providers, American Inter-Fidelity
Exchange (AIFE) is managed by a Director of the Company and the Company has a
deposit with the Provider.
The Company has notes payable due to its Chief Executive Officer, Chief
Financial Officer, and August Investment Partnership, an entity affiliated
through common ownership, as described in Note 8 to the consolidated financial
statements.
PART II. OTHER INFORMATION
Item 6(b). Reports on Form 8-K
No Reports on Form 8-K have been filed during the quarter.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.
US 1 Industries, Inc.
Michael E. Kibler
President
Harold E. Antonson
Chief Financial Officer
May 14, 2001
THIRD AMENDMENT TO LOAN AGREEMENT
This Amendment, dated as of March 1, 2001, is between CAROLINA
NATIONAL TRANSPORTATION INC., an Indiana corporation ("Carolina"), KEYSTONE
LINES, a California corporation ("Keystone"), GULF LINE TRANSPORT INC., an
Indiana corporation ("Gulf Line"), FIVE STAR TRANSPORT, INC., an Indiana
corporation, ("Five Star") and CAM TRANSPORT, INC. ("Cam") (Carolina,
Keystone, Gulf Line, Five Star and Cam, hereinafter, collectively, referred to
as "Borrowers" or individually as "Borrower"), US 1 INDUSTRIES, INC., an
Indiana corporation ("Guarantor") and FIRSTAR BANK N.A., a national banking
association ("Lender").
PRELIMINARY STATEMENT:
Borrowers have previously entered into a Loan Agreement with Lender
dated April 18, 2000, which was amended by Amendment to Loan Agreement dated
June 9, 2000 and further amended by a Second Amendment to Loan Agreement dated
December 7, 2000 ("Loan Agreement"). Lender has agreed to further amend such
Loan Agreement to increase the line of equipment financing from $500,000 to
$1,000,000. Capitalized terms not defined herein shall have the meanings
ascribed to such terms in the Loan Agreement as amended hereby.
NOW, THEREFORE, it is hereby agreed as follows:
1. The parties hereby agree to amend and restate the definitions of the
following terms in Section 1.1 to read in their entirety as follows:
"Equipment Loan Commitment: $1,000,000;
Equipment Loan Note: the promissory note executed by Borrowers
payable to the order of Lender, dated as of December 7, 2000 and
amended and restated as March 1, 2000, in the amount of the
Equipment Loan Commitment and in form and substance satisfactory to
Lender."
2. Sections 2.1A.1 and 2.1.A.3 of the Loan Agreement are hereby amended
and restated in their entirety to read as follows:
"2.1.A Equipment Loan.
--------------
2.1.A.1 Amount and Disbursement.
Upon the terms and subject to the conditions herein set
forth, Lender agrees to make Advances of the Equipment Loan to
Borrowers from time to time from the Closing Date to June 15,
2001, in an aggregate amount outstanding at any one time not in
excess of the Equipment Loan Commitment. Lender may remit
Advances of the Equipment Loan directly to the equipment
seller. Each of Borrowers shall remain jointly and severally
liable with the other Borrowers for the repayment of all such
Advances of the Equipment Loan with interest.
2.1A.3 Reborrowing.
-----------
Subject to the conditions set forth in this Section 2.1A,
Borrowers may from time to time prior to June 15, 2001,
reborrow all or any portion of any Advance of the Equipment
Loan which is repaid."
3. Simultaneously with the execution hereof, Borrowers and Guarantor
shall deliver to Lender the following, duly executed by the parties
thereto other than Lender:
(i) Equipment Loan Note, dated as of December 7, 2000, as
amended and restated as of March 1, 2000, attached hereto
as Exhibit "B";
(iii) Acknowledgements (Security Agreement) executed by
Guarantor and Borrowers other than Cam in the forms
attached hereto as Exhibits "D-1", "D-2", "D-3", "D-4" and
"D-5";
(iii) Amended and Restated Personal Guaranties of Michael
Kibler and Harold Antonson in the forms and attached
hereto as Exhibit "F-1" and "F-2";
(iv) Amended and Restated Corporate Guaranty of US 1
Industries, Inc. in the form attached hereto as Exhibit
"G";
(v) Acknowledgements (Subordinated Debt) in the form
attached hereto as Exhibit "I-1" or "I-2";
(vi) Certified Resolutions of the Board of Directors of
the respective Borrowers and Guarantors authorizing the
execution and delivery and performance of this Amendment
and other documents referred to herein; and
(vii) Articles of Incorporation of each of Borrowers and
Guarantor certified as of date not earlier than March 1,
2001.
4. Borrowers shall reimburse Lender for all of Lender's out-of-pocket
costs related to the transaction contemplated herein, including
without limitation any lien searches ordered by Lender's counsel and
legal fees incurred by Lender in connection with the preparation of
documents, due diligence review or closing regarding the transaction
contemplated herein or the enforcement of the terms hereof or of any
of the Loan Instruments.
5. From time to time, Borrowers and Guarantor shall execute and deliver
to Lender such additional documents as Lender reasonably may require
to carry out the purposes of this Amendment and the Loan Instruments
and to protect Lender's rights hereunder and thereunder, and shall
not take any action inconsistent with the purposes of the Loan
Instruments.
6. Except as expressly amended hereby, the terms and conditions of the
Loan Agreement as originally set forth therein shall remain in full
force and effect.
IN WITNESS WHEREOF, the undersigned Borrowers have signed and Lender
has executed this Amendment as of the date first above written.
CAROLINA NATIONAL TRANSPORTATION INC., an Indiana corporation
By: _____________________________
Name: ___________________________
Title: ____________________________
KEYSTONE LINES, a California corporation
By: _____________________________
Name: ___________________________
Title: ____________________________
GULF LINE TRANSPORT INC. an Indiana corporation
By: _____________________________
Name: ___________________________
Title: ____________________________
FIVE STAR TRANSPORT, INC., an Indiana corporation
By: _____________________________
Name: ___________________________
Title: ____________________________
CAM TRANSPORT, INC., an Indiana corporation
By: _____________________________
Name: ___________________________
Title: ____________________________
US 1 INDUSTRIES, INC., an Indiana corporation
By: _____________________________
Name: ___________________________
Title: ____________________________
FIRSTAR BANK N.A., a national banking association
By: _____________________________
Name: Craig B. Collinson
Title: Senior Vice President
EXHIBIT "B"
EQUIPMENT LOAN NOTE
$1,000,000.00 Dated as of December 7, 2000
Chicago, Illinois Amended and Restated as of March 1, 2001
FOR VALUE RECEIVED, the undersigned, CAROLINA NATIONAL
TRANSPORTATION INC., an Indiana corporation ("Carolina"), KEYSTONE LINES, a
California corporation ("Keystone"), GULF LINE TRANSPORT INC., an Indiana
corporation ("Gulf Line"), FIVE STAR TRANSPORT, INC., an Indiana corporation
("Five Star") and CAM TRANSPORT, INC., an Indiana corporation (Carolina,
Keystone, Gulf Line, Five Star and Cam hereinafter collectively referred to as
"Maker")), hereby promise, jointly and severally, to pay to the order of
FIRSTAR BANK N.A., a national banking association ("Lender"), the principal
sum of ONE MILLION AND NO/100ths DOLLARS ($1,000,000.00), or, if less, the
aggregate unpaid amount of the Equipment Loan made by Lender pursuant to and
in accordance with the applicable provisions of that certain Loan Agreement
dated April 18, 2000, and amended as of June 12, 2000 and December 7, 2000,
and as further amended as of the date hereof (as the same may be amended,
modified, supplemented or restated from time to time, the "Loan Agreement")
between Lender, Maker and US 1 INDUSTRIES, INC., an Indiana corporation
("Guarantor") and Lender, at the office of Lender at 30 N. Michigan Avenue,
Chicago, Illinois 60602, or at such other place as the holder hereof may
appoint, plus interest thereon as set forth below.
This Equipment Loan Note is delivered by Maker to Lender pursuant to
and in accordance with the applicable provisions of the Loan Agreement. All
capitalized terms used but not elsewhere defined herein shall have the
respective meanings ascribed to such terms in the Loan Agreement.
The principal balance of this Equipment Loan Note ("Principal
Balance") shall bear interest at the per annum rate of interest set forth in
subsection 2.3 of the Loan Agreement.
Accrued and unpaid interest on, and the Principal Balance of, this
Equipment Loan Note shall be paid in the manner set forth in Section 2.4 of
the Loan Agreement.
Interest shall be: (i) computed on the basis of a year consisting of
360 days and (ii) charged for the actual number of days during the period for
which interest is being charged.
During a Default Rate Period, the Principal Balance shall bear
interest at the Default Rate, which interest at such Default Rate shall be
paid by Maker to Lender immediately upon demand.
Subject to the provisions of Section 8.2 of the Loan Agreement, at
the election of the holder hereof, upon the occurrence of an Event of Default,
without further notice or demand, the Principal Balance, and all accrued and
unpaid interest thereon, shall be and become immediately due and payable in
full. Failure to exercise this option shall not constitute a waiver of the
right to exercise the same in the event of any subsequent Event of Default,
and such failure shall not be deemed to establish a custom or course of
dealing or performance between Maker and Lender.
This Equipment Loan Note may be prepaid, in whole or in part,
without penalty and in accordance with the terms and conditions of the Loan
Agreement applicable thereto.
All funds received by Lender during the existence of an Event of
Default shall be applied in the manner set forth in Section 8.4 of the Loan
Agreement.
All payments to be made by Maker pursuant to this Note shall be made
in accordance with the instructions therefor set forth in the Loan Agreement.
Payment shall not be deemed to have been received by Lender until Lender is in
receipt of Good Funds.
Notwithstanding any provision to the contrary contained herein or in
any other Loan Instrument, Lender shall not collect a rate of interest on any
obligation or liability due and owing by Maker in excess of the maximum
contract rate of interest permitted by applicable law ("Excess Interest"). If
any Excess Interest is provided for or determined by a court of competent
jurisdiction to have been provided for in this Equipment Loan Note or any
other Loan Instrument, then in such event (i) Maker shall not be obligated to
pay such Excess Interest, (ii) any Excess Interest collected by Lender shall
be, (A) if any Event of Default exists and is continuing, applied to the
Principal Balance or to accrued and unpaid interest not in excess of the
maximum rate permitted by applicable law or (B) if no Event of Default exists
and is continuing, refunded to the payor thereof, (iii) the interest rates
provided for herein (collectively the "Stated Rate") shall be automatically
reduced to the maximum rate allowed from time to time under applicable law
(the "Maximum Rate") and this Equipment Loan Note and the other Loan
Instruments, as applicable, shall be deemed to have been, and shall be,
modified to reflect such reduction, and (iv) Maker shall not have any action
against Lender for any damages arising out of the payment or collection of
such Excess Interest; provided, however, that if at any time thereafter the
Stated Rate is less than the Maximum Rate, Maker shall, to the extent
permitted by law, continue to pay interest at the Maximum Rate until such time
as the total interest received by Lender is equal to the total interest which
Lender would have received had the Stated Rate been (but for the operation of
this provision) the interest rate payable. Thereafter, the interest rate
payable shall be the Stated Rate unless and until the Stated Rate again
exceeds the Maximum Rate, in which event the provisions contained in this
paragraph again shall apply.
If any suit or action is instituted or attorneys are employed to
collect this Equipment Loan Note or any part thereof, Maker promises and
agrees, jointly and severally, to pay all costs of collection, including all
court costs and reasonable attorneys' fees.
Maker hereby waives presentment for payment, protest and demand and
notice of protest, demand, dishonor and nonpayment of this Equipment Loan
Note, and expressly agrees that this Equipment Loan Note, or any payment
hereunder, may be extended from time to time before, at or after maturity,
without in any way affecting the liability of Maker hereunder or any guarantor
hereof.
This Equipment Loan Note shall be construed in accordance with and
governed by the laws and decisions of the State of Illinois, without regard to
conflict of laws principles. All funds disbursed to or for the benefit of
Maker will be deemed to have been disbursed in Chicago, Illinois.
Maker hereby agrees that all actions or proceedings initiated by any
Maker and arising directly or indirectly out of this Equipment Loan Note shall
be litigated in either the Circuit Court of Cook County, Illinois or in the
United States District Court for the Northern District of Illinois, or, if
Lender initiates such action, in addition to the foregoing courts, any court
in which Lender shall initiate or to which Lender shall remove such action, to
the extent such court has jurisdiction. Maker hereby expressly submits and
consents in advance to such jurisdiction in any action or proceeding commenced
by Lender in or removed by Lender to any of such courts, and hereby agrees
that personal service of the summons and complaint, or other process or papers
issued therein may be made by registered or certified mail addressed to Maker
at the address to which notices are to be sent pursuant to Section 11.1 of the
Loan Agreement. Maker waives any claim that either the Circuit Court of Cook
County, Illinois or the United States District Court for the Northern District
of Illinois is an inconvenient forum or an improper forum based on lack of
venue. To the extent provided by law, should any Maker, after being so served,
fail to appear or answer to any summons, complaint, process or papers so
served within the number of days prescribed by law after the mailing thereof,
Maker shall be deemed in default and an order and/or judgment may be entered
by the court against Maker as demanded or prayed for in such summons,
complaint, process or papers. The exclusive choice of forum for Maker set
forth in this paragraph shall not be deemed to preclude the enforcement by
Lender of any judgment obtained in any other forum or the taking by Lender of
any action to enforce the same in any other appropriate jurisdiction, and
Maker hereby waives the right to collaterally attack any such judgment or
action.
Maker acknowledges and agrees that any controversy which may arise
under this Equipment Loan Note would be based upon difficult and complex
issues and, therefore, Maker agrees that any lawsuit arising out of any such
controversy will be tried in a court of competent jurisdiction by a judge
sitting without a jury.
This Equipment Loan Note may not be changed or amended orally, but
only by an instrument in writing signed by the party against whom enforcement
of the change or amendment is sought.
This Equipment Loan Note shall be binding upon Maker and upon
Maker's successors and assigns, and shall inure to the benefit of the
successors and permitted assigns of Lender. If more than one party shall sign
this Equipment Loan Note as Maker, their obligations hereunder as Maker shall
be joint and several.
In the event that any provision hereof shall be deemed to be invalid
by reason of the operation of any law, or by reason of the interpretation
placed thereon by any court or any Governmental Body, this Equipment Loan Note
shall be construed as not containing such provision and the invalidity of such
provision shall not affect the validity of any other provisions hereof, and
any and all other provisions hereof which otherwise are lawful and valid shall
remain in full force and effect.
Time for the performance of Maker's obligations under this Equipment
Loan Note is of the essence.
This Equipment Loan Note is entitled to the benefit of certain
collateral security, all as more fully set forth in the Loan Agreement.
This Equipment Loan Note amends and restates in its entirety an
original Equipment Loan Note dated December 7, 2000.
IN WITNESS WHEREOF, this Equipment Loan Note has been executed and
delivered by Maker by its duly authorized officer on the date first set forth
above.
CAROLINA NATIONAL TRANSPORTATION INC., an Indiana corporation
By: _____________________________
Name: ___________________________
Title: ____________________________
KEYSTONE LINES, a California corporation
By: _____________________________
Name: ___________________________
Title: ____________________________
GULF LINE TRANSPORT INC., an Indiana corporation
By: ______________________________
Name: ____________________________
Title: _____________________________
FIVE STAR TRANSPORT, INC., an Indiana corporation
By: _______________________________
Name: _____________________________
Title: ______________________________
CAM TRANSPORT, INC., an Indiana corporation
By: _____________________________
Name: ___________________________
Title: ___________________________
EXHIBIT "D-1"
ACKNOWLEDGEMENT
(Security Agreement)
The undersigned ("Borrower") hereby acknowledges that it has
previously entered into and executed a Security Agreement dated as of April
18, 2000 ("Security Agreement"), with Firstar Bank N.A. ("Lender), wherein
property of Borrower was pledged to secure Borrowers' Obligations (as that
term is defined in that certain Loan Agreement dated as of April 18, 2000,
between the undersigned and others and which was amended by that certain
Amendment to Loan Agreement dated June 9, 2000, Second Amendment to Loan
Agreement dated December 7, 2000, and Third Amendment to Loan Agreement of
even date herewith ("Loan Agreement")). Borrower acknowledges that Borrowers'
Obligations, as that term is used in the Loan Agreement and the Security
Agreement, means Borrowers' Obligations under the Loan Agreement, as amended
by the Amendment to Loan Agreement, the Second Amendment to Loan Agreement,
and the Third Amendment to Loan Agreement of even date herewith, and includes,
without limitation, the obligation to repay as and when due any and all
amounts advanced by Lender to Borrowers (as defined in the Loan Agreement), or
any of them, together with interest thereon, as provided in the Revolving Loan
Note in the face amount of $5,500,000, as amended and restated as of December
7, 2000, and the Equipment Loan Note in the face amount of $1,000,000, as
amended and restated as of the date hereof, made by Borrowers and payable to
Lender.
IN WITNESS WHEREOF, this Acknowledgement has been executed and
delivered by a duly-authorized officer of the Borrower as of March 1, 2001.
FIVE STAR TRANSPORT, INC.
By ______________________________
EXHIBIT "D-2"
ACKNOWLEDGEMENT
(Security Agreement)
The undersigned ("Borrower") hereby acknowledges that it has
previously entered into and executed a Security Agreement dated as of April
18, 2000 ("Security Agreement"), with Firstar Bank N.A. ("Lender), wherein
property of Borrower was pledged to secure Borrowers' Obligations (as that
term is defined in that certain Loan Agreement dated as of April 18, 2000,
between the undersigned and others and which was amended by that certain
Amendment to Loan Agreement dated June 9, 2000, Second Amendment to Loan
Agreement dated December 7, 2000, and Third Amendment to Loan Agreement of
even date herewith ("Loan Agreement")). Borrower acknowledges that Borrowers'
Obligations, as that term is used in the Loan Agreement and the Security
Agreement, means Borrowers' Obligations under the Loan Agreement, as amended
by the Amendment to Loan Agreement, the Second Amendment to Loan Agreement,
and the Third Amendment to Loan Agreement of even date herewith, and includes,
without limitation, the obligation to repay as and when due any and all
amounts advanced by Lender to Borrowers (as defined in the Loan Agreement), or
any of them, together with interest thereon, as provided in the Revolving Loan
Note in the face amount of $5,500,000, as amended and restated as of December
7, 2000, and the Equipment Loan Note in the face amount of $1,000,000, as
amended and restated as of the date hereof, made by Borrowers and payable to
Lender.
IN WITNESS WHEREOF, this Acknowledgement has been executed and
delivered by a duly-authorized officer of the Borrower as of March 1, 2001.
CAROLINA NATIONAL TRANSPORTATION, INC.
By ________________________________________
EXHIBIT "D-3"
ACKNOWLEDGEMENT
(Security Agreement)
The undersigned ("Borrower") hereby acknowledges that it has
previously entered into and executed a Security Agreement dated as of April
18, 2000 ("Security Agreement"), with Firstar Bank N.A. ("Lender), wherein
property of Borrower was pledged to secure Borrowers' Obligations (as that
term is defined in that certain Loan Agreement dated as of April 18, 2000,
between the undersigned and others and which was amended by that certain
Amendment to Loan Agreement dated June 9, 2000, Second Amendment to Loan
Agreement dated December 7, 2000, and Third Amendment to Loan Agreement of
even date herewith ("Loan Agreement")). Borrower acknowledges that Borrowers'
Obligations, as that term is used in the Loan Agreement and the Security
Agreement, means Borrowers' Obligations under the Loan Agreement, as amended
by the Amendment to Loan Agreement, the Second Amendment to Loan Agreement,
and the Third Amendment to Loan Agreement of even date herewith, and includes,
without limitation, the obligation to repay as and when due any and all
amounts advanced by Lender to Borrowers (as defined in the Loan Agreement), or
any of them, together with interest thereon, as provided in the Revolving Loan
Note in the face amount of $5,500,000, as amended and restated as of December
7, 2000, and the Equipment Loan Note in the face amount of $1,000,000, as
amended and restated as of the date hereof, made by Borrowers and payable to
Lender.
IN WITNESS WHEREOF, this Acknowledgement has been executed and
delivered by a duly-authorized officer of the Borrower as of March 1, 2001.
KEYSTONE LINES
By ______________________________
EXHIBIT "D-4"
ACKNOWLEDGEMENT
(Security Agreement)
The undersigned ("Borrower") hereby acknowledges that it has
previously entered into and executed a Security Agreement dated as of April
18, 2000 ("Security Agreement"), with Firstar Bank N.A. ("Lender), wherein
property of Borrower was pledged to secure Borrowers' Obligations (as that
term is defined in that certain Loan Agreement dated as of April 18, 2000,
between the undersigned and others and which was amended by that certain
Amendment to Loan Agreement dated June 9, 2000, Second Amendment to Loan
Agreement dated December 7, 2000, and Third Amendment to Loan Agreement of
even date herewith ("Loan Agreement")). Borrower acknowledges that Borrowers'
Obligations, as that term is used in the Loan Agreement and the Security
Agreement, means Borrowers' Obligations under the Loan Agreement, as amended
by the Amendment to Loan Agreement, the Second Amendment to Loan Agreement,
and the Third Amendment to Loan Agreement of even date herewith, and includes,
without limitation, the obligation to repay as and when due any and all
amounts advanced by Lender to Borrowers (as defined in the Loan Agreement), or
any of them, together with interest thereon, as provided in the Revolving Loan
Note in the face amount of $5,500,000, as amended and restated as of December
7, 2000, and the Equipment Loan Note in the face amount of $1,000,000, as
amended and restated as of the date hereof, made by Borrowers and payable to
Lender.
IN WITNESS WHEREOF, this Acknowledgement has been executed and
delivered by a duly-authorized officer of the Borrower as of March 1, 2001.
GULF LINE TRANSPORT INC.
By ______________________________
EXHIBIT "D-5"
ACKNOWLEDGEMENT
(Security Agreement)
The undersigned ("Borrower") hereby acknowledges that it has
previously entered into and executed a Security Agreement dated as of April
18, 2000 ("Security Agreement"), with Firstar Bank N.A. ("Lender), wherein
property of Borrower was pledged to secure Borrowers' Obligations (as that
term is defined in that certain Loan Agreement dated as of April 18, 2000,
between the undersigned and others and which was amended by that certain
Amendment to Loan Agreement dated June 9, 2000, Second Amendment to Loan
Agreement dated December 7, 2000, and Third Amendment to Loan Agreement of
even date herewith ("Loan Agreement")). Borrower acknowledges that Borrowers'
Obligations, as that term is used in the Loan Agreement and the Security
Agreement, means Borrowers' Obligations under the Loan Agreement, as amended
by the Amendment to Loan Agreement, the Second Amendment to Loan Agreement,
and the Third Amendment to Loan Agreement of even date herewith, and includes,
without limitation, the obligation to repay as and when due any and all
amounts advanced by Lender to Borrowers (as defined in the Loan Agreement), or
any of them, together with interest thereon, as provided in the Revolving Loan
Note in the face amount of $5,500,000, as amended and restated as of December
7, 2000, and the Equipment Loan Note in the face amount of $1,000,000, as
amended and restated as of the date hereof, made by Borrowers and payable to
Lender.
IN WITNESS WHEREOF, this Acknowledgement has been executed and
delivered by a duly-authorized officer of the Borrower as of March 1, 2001.
US 1 INDUSTRIES, INC.
By ______________________________
EXHIBIT "F-1"
Date: April 18, 2000
Amended and Restated as of June 9, 2000
Further Amended and Restated as of December 7, 2000
Further Amended and Restated as of March 1, 2001
LIMITED GUARANTY
The undersigned, Michael Kibler ("Kibler") ("Guarantor"), does
hereby absolutely and unconditionally, subject to the limitation as to amount
set forth below, guarantee to Firstar Bank N.A. ("Lender"), (i) prompt payment
when due, whether at stated maturity, upon acceleration or otherwise, and at
all times thereafter, of that certain Revolving Loan Note, dated April 18,
2000, as amended and restated in its entirety as of June 9, 2000, executed by
Carolina National Transportation, Inc., an Indiana corporation ("Carolina")
Keystone Lines, a California corporation ("Keystone"), Gulf Line Transport,
Inc., an Indiana corporation ("Gulf Line") and Five Star Transport, Inc., an
Indiana corporation ("Five Star") (Carolina, Keystone, Gulf Line and Five Star
hereinafter collectively referred to as "Borrowers") in the principal amount
of $3,500,000 (including all renewals, extensions and modifications thereof
and all court costs, expert witness fees and reasonable attorneys' fees
incurred by Lender in connection with the collection or enforcement thereof)
(the "Note") and (ii) prompt performance and payment of all of Borrowers'
Obligations (as defined in that certain Loan Agreement dated April 18, 2000,
as amended as of June 9, 2000, between Borrowers, Lender and US 1 Industries,
Inc. (the "Loan Agreement")) (any and all indebtedness represented or
evidenced by or arising with respect to the Note in favor of Lender and
Borrower's Obligations hereinafter sometimes collectively referred to as the
"Guaranteed Debt").
The undersigned waives notice of the acceptance of this Guaranty and
of the extension or continuation of the Guaranteed Debt or any part thereof.
The undersigned further waives presentment, protest, notice, demand or action
on delinquency and any other formalities required to charge the undersigned
with liability hereunder, in respect of the Guaranteed Debt or any part
thereof, or otherwise to enforce payment thereof against any collateral
securing the Guaranteed Debt or any part thereof. It is the intent hereof that
Guarantor remain liable as a principal until all of the Guaranteed Debt is
paid in full notwithstanding any act or thing that might otherwise operate as
a legal or equitable discharge of a surety.
In the event of default under the Note or the Loan Agreement,
Guarantor agrees to pay on demand by Lender all sums then or thereafter due
under the Note and Loan Agreement regardless of any defense, right of setoff
or claims which any Borrowers or Guarantor might have against Lender.
This is a guaranty of payment and performance, not collection. It is
expressly understood and agreed that the liability of the undersigned
Guarantor hereunder for the Guaranteed Debt shall be limited to the sum of (i)
the principal sum of $500,000 and (ii) all interest, fees, charges, costs and
attorneys' fees applicable thereto which may accrue or be incurred after
demand for payment of such principal sum. It is further expressly understood
and agreed that separate recovery may be had by Lender for such sum regardless
of whether action is taken or suit is brought by Lender against any other
person liable for the Guaranteed Debt and regardless of whether any action is
taken by Lender to enforce its rights against any collateral for the
Guaranteed Debt.
In any right of action which shall accrue to Lender by reason of
this Guaranty, Lender may, at its sole election, proceed against Guarantor
with or without (a) joining any of Borrowers or the Corporate Guarantor, US 1
Industries, Inc., in such action or (b) commencing any action against, or
obtain any judgment against any of Borrowers.
The validity and enforceability of this Guaranty shall not be
impaired or affected by any of the following, whether occurring before or
after receipt by Lender of notice of termination of this Guaranty: (a) any
extension, modification or renewal of, or indulgence with respect to, or
substitutions for, the Guaranteed Debt or any part thereof or any agreement
relating thereto at any time; (b) any failure or omission to enforce any
right, power or remedy with respect to the Guaranteed Debt or any part thereof
or any agreement relating thereto, or any collateral securing the Guaranteed
Debt or any part thereof; (c) any waiver of any right, power or remedy or of
any default with respect to the Guaranteed Debt or any part thereof or any
agreement relating thereto or with respect to any collateral securing the
Guaranteed Debt or any part thereof; (d) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any collateral securing the Guaranteed Debt or any part
thereof, any other guaranties with respect to the Guaranteed Debt or any part
thereof, or any other obligation of any person or entity with respect to the
Guaranteed Debt or any part thereof; (e) the enforceability or validity of the
Guaranteed Debt or any part thereof or the genuineness, enforceability or
validity of any agreement relating thereto or with respect to any collateral
securing the Guaranteed Debt or any part thereof; or (f) the application of
payments received from any source to the permitted payment of indebtedness
other than the Guaranteed Debt, any part thereof or amounts which are not
covered by this Guaranty even though Lender might lawfully have elected to
apply such payments to any part or all of the Guaranteed Debt or to amounts
which are not covered by this Guaranty, all whether or not the undersigned
shall have had notice or knowledge of any act or omission referred to in the
foregoing clauses (a) through (f) of this paragraph. It is agreed that the
undersigned's liability hereunder is joint and several and independent of any
other guaranties or other obligations at any time in effect with respect to
the Guaranteed Debt or any part thereof and that the undersigned's liability
hereunder may be enforced regardless of the existence, validity, enforcement
or non-enforcement of any such other guaranties or other obligations.
The undersigned further agrees that if at any time all or any part
of any payment heretofore applied by Lender to the Guaranteed Debt hereby is
or must be rescinded or returned by Lender for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy, or reorganization
of Chicago Industrial or any Guarantor), such indebtedness shall for the
purposes of this Guaranty, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence,
notwithstanding such application by Lender, and this Guaranty shall continue
to be effective or be reinstated as the case may be, as to such guaranteed
indebtedness, all as though such application by Lender had not been made.
Until the Guaranteed Debt is paid in full (i) the undersigned waives
any benefit of the collateral, if any, which may from time to time secure the
Guaranteed Debt or any part thereof and (ii) the undersigned authorizes Lender
to take any action or exercise any remedy with respect thereto, which Lender
in its sole discretion shall determine, without notice to the undersigned. In
the event Lender in its sole discretion elects to give notice of any action
with respect to the collateral, if any, securing the Guaranteed Debt or any
part thereof, ten (10) days' written notice shall be deemed reasonable notice
of any matters contained in such notice. The payment by the undersigned of any
amount pursuant to this Limited Guaranty shall not entitle the undersigned to
any right, title or interest, whether by way of subrogation or otherwise, in
and to any of the Obligations, including, but not limited to, any indebtedness
evidenced by the Note, or any collateral therefor. The undersigned does hereby
release Borrowers from any and all obligations of indemnification,
contribution, subrogation and exoneration which may arise or come into
existence as a result of the undersigned's assumption or performance of its
obligations in this Limited Guaranty on behalf of Borrowers in favor of Lender
or its successors and assigns.
The undersigned shall pay all costs, fees and expenses (including
court costs, expert witness fees and reasonable attorneys' fees) incurred by
Lender in collecting or enforcing the undersigned's obligations under this
Guaranty.
Any notice, demand or request which may be permitted, required or
desired to be given in connection therewith shall be given in writing and
directed to Lender and Guarantor as follows:
Lender: Firstar Bank N.A.
30 N. Michigan Avenue
Chicago, IL 60602
Fax: (312) 696-1397
With a copy to
its attorneys: Christopher J. Horvay
Gould & Ratner
222 N. LaSalle Street
Suite 800
Chicago, IL 60601
Fax: (312) 235-3241
Guarantor: Michael Kibler
1000 Colfax Street
Gary, Indiana 46406
Fax: (219) 977-5227
With a copy to W. Brinkley Dickerson, Jr.
his attorneys: Troutman Sanders, L.L.P.
100 Peachtree Street
Atlanta, Georgia 30342
Fax: (404) 885-3827
Notices shall be deemed properly delivered and received when and if
(i) personally delivered; (ii) delivered by Federal Express or other overnight
courier; or (iii) delivered by facsimile provided a hard copy of any such
notice delivered by facsimile is delivered to the addressee within one
business day thereafter by either of the methods listed in (i) or (ii) above.
This Guaranty shall (i) bind the undersigned and their successors
and assigns, (ii) inure to the benefit of Lender, its successors and assigns
and (iii) be governed by the internal laws of the State of Illinois.
This Guaranty amends and restates in its entirety an original
Guaranty made by the Guarantor dated April 18, 2000, in favor of Lender.
Chicago, Illinois
- -------------------------
Michael Kibler
EXHIBIT "F-2"
Date: April 18, 2000
Amended and Restated as of June 9, 2000
Further Amended and Restated as of December 7, 2000
Further Amended and Restated as of March 1, 2001
LIMITED GUARANTY
The undersigned, Harold Antonson ("Antonson") ("Guarantor"), does
hereby absolutely and unconditionally, subject to the limitation as to amount
set forth below, guarantee to Firstar Bank N.A. ("Lender"), (i) prompt payment
when due, whether at stated maturity, upon acceleration or otherwise, and at
all times thereafter, of that certain Revolving Loan Note, dated April 18,
2000, amended and restated in its entirety as of ___________, 2000 executed by
Carolina National Transportation, Inc., an Indiana corporation ("Carolina")
and Keystone Lines, a California corporation ("Keystone"), Gulf Line
Transport, Inc., an Indiana corporation ("Gulf Line") and Five Star Transport,
Inc., an Indiana corporation ("Five Star") (Carolina, Keystone, Gulf Line and
Five Star hereinafter collectively referred to as "Borrowers") in the
principal amount of $3,500,000 (including all renewals, extensions and
modifications thereof and all court costs, expert witness fees and reasonable
attorneys' fees incurred by Lender in connection with the collection or
enforcement thereof) (the "Note") and (ii) prompt performance and payment of
all of Borrowers' Obligations (as defined in that certain Loan Agreement dated
April 18, 2000, as amended as of _________, 2000, between Borrowers, Lender
and US 1 Industries, Inc. (the "Loan Agreement")) (any and all indebtedness
represented or evidenced by or arising with respect to the Note in favor of
Lender and Borrower's Obligations hereinafter sometimes collectively referred
to as the "Guaranteed Debt").
The undersigned waives notice of the acceptance of this Guaranty and
of the extension or continuation of the Guaranteed Debt or any part thereof.
The undersigned further waives presentment, protest, notice, demand or action
on delinquency and any other formalities required to charge the undersigned
with liability hereunder, in respect of the Guaranteed Debt or any part
thereof, or otherwise to enforce payment thereof against any collateral
securing the Guaranteed Debt or any part thereof. It is the intent hereof that
Guarantor remain liable as a principal until all of the Guaranteed Debt is
paid in full notwithstanding any act or thing that might otherwise operate as
a legal or equitable discharge of a surety.
In the event of default under the Note or the Loan Agreement,
Guarantor agrees to pay on demand by Lender all sums then or thereafter due
under the Note and Loan Agreement regardless of any defense, right of setoff
or claims which any of Borrowers or Guarantor might have against Lender.
This is a guaranty of payment and performance, not collection. It is
expressly understood and agreed that the liability of the undersigned
Guarantor hereunder for the Guaranteed Debt shall be limited to the sum of (i)
the principal sum of $500,000 and (ii) all interest, fees, charges, costs and
attorneys' fees applicable thereto which may accrue or be incurred after
demand for payment of such principal sum. It is further understood and agreed
that separate recovery may be had by Lender for such sum regardless of whether
action is taken or suit is brought by Lender against any other person liable
for the Guaranteed Debt and regardless of whether any action is taken by
Lender to enforce its rights against any collateral for the Guaranteed Debt.
In any right of action which shall accrue to Lender by reason of
this Guaranty, Lender may, at its sole election, proceed against Guarantor
with or without (a) joining any of Borrowers or the Corporate Guarantor, US 1
Industries, Inc., in such action or (b) commencing any action against, or
obtain any judgment against any of Borrowers.
The validity and enforceability of this Guaranty shall not be
impaired or affected by any of the following, whether occurring before or
after receipt by Lender of notice of termination of this Guaranty: (a) any
extension, modification or renewal of, or indulgence with respect to, or
substitutions for, the Guaranteed Debt or any part thereof or any agreement
relating thereto at any time; (b) any failure or omission to enforce any
right, power or remedy with respect to the Guaranteed Debt or any part thereof
or any agreement relating thereto, or any collateral securing the Guaranteed
Debt or any part thereof; (c) any waiver of any right, power or remedy or of
any default with respect to the Guaranteed Debt or any part thereof or any
agreement relating thereto or with respect to any collateral securing the
Guaranteed Debt or any part thereof; (d) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any collateral securing the Guaranteed Debt or any part
thereof, any other guaranties with respect to the Guaranteed Debt or any part
thereof, or any other obligation of any person or entity with respect to the
Guaranteed Debt or any part thereof; (e) the enforceability or validity of the
Guaranteed Debt or any part thereof or the genuineness, enforceability or
validity of any agreement relating thereto or with respect to any collateral
securing the Guaranteed Debt or any part thereof; or (f) the application of
payments received from any source to the permitted payment of indebtedness
other than the Guaranteed Debt, any part thereof or amounts which are not
covered by this Guaranty even though Lender might lawfully have elected to
apply such payments to any part or all of the Guaranteed Debt or to amounts
which are not covered by this Guaranty, all whether or not the undersigned
shall have had notice or knowledge of any act or omission referred to in the
foregoing clauses (a) through (f) of this paragraph. It is agreed that the
undersigned's liability hereunder is joint and several and independent of any
other guaranties or other obligations at any time in effect with respect to
the Guaranteed Debt or any part thereof and that the undersigned's liability
hereunder may be enforced regardless of the existence, validity, enforcement
or non-enforcement of any such other guaranties or other obligations.
The undersigned further agrees that if at any time all or any part
of any payment heretofore applied by Lender to the Guaranteed Debt hereby is
or must be rescinded or returned by Lender for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy, or reorganization
of Chicago Industrial or any Guarantor), such indebtedness shall for the
purposes of this Guaranty, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence,
notwithstanding such application by Lender, and this Guaranty shall continue
to be effective or be reinstated as the case may be, as to such guaranteed
indebtedness, all as though such application by Lender had not been made.
Until the Guaranteed Debt is paid in full (i) the undersigned waives
any benefit of the collateral, if any, which may from time to time secure the
Guaranteed Debt or any part thereof and (ii) the undersigned authorizes Lender
to take any action or exercise any remedy with respect thereto, which Lender
in its sole discretion shall determine, without notice to the undersigned. In
the event Lender in its sole discretion elects to give notice of any action
with respect to the collateral, if any, securing the Guaranteed Debt or any
part thereof, ten (10) days' written notice shall be deemed reasonable notice
of any matters contained in such notice. The payment by the undersigned of any
amount pursuant to this Limited Guaranty shall not entitle the undersigned to
any right, title or interest, whether by way of subrogation or otherwise, in
and to any of the Obligations, including, but not limited to, any indebtedness
evidenced by the Note, or any collateral therefor. The undersigned does hereby
release Borrowers from any and all obligations of indemnification,
contribution, subrogation and exoneration which may arise or come into
existence as a result of the undersigned's assumption or performance of its
obligations in this Limited Guaranty on behalf of Borrowers in favor of Lender
or its successors and assigns.
The undersigned shall pay all costs, fees and expenses (including
court costs, expert witness fees and reasonable attorneys' fees) incurred by
Lender in collecting or enforcing the undersigned's obligations under this
Guaranty.
Any notice, demand or request which may be permitted, required or
desired to be given in connection therewith shall be given in writing and
directed to Lender and Guarantor as follows:
Lender: Firstar Bank N.A.
30 N. Michigan Avenue
Chicago, IL 60602
Fax: (312) 696-1397
With a copy to
its attorneys: Christopher J. Horvay
Gould & Ratner
222 N. LaSalle Street
Suite 800
Chicago, IL 60601
Fax: (312) 235-3241
Guarantor: Harold Antonson
1000 Colfax Street
Gary, Indiana 46406
Fax: (219) 977-5227
With a copy to W. Brinkley Dickerson, Jr.
his attorneys: Troutman Sanders, L.L.P.
600 Peachtree Street
Atlanta, Georgia 30342
Fax: (404) 885-3827
Notices shall be deemed properly delivered and received when and if
(i) personally delivered; (ii) delivered by Federal Express or other overnight
courier; or (iii) delivered by facsimile provided a hard copy of any such
notice delivered by facsimile is delivered to the addressee within one
business day thereafter by either of the methods listed in (i) or (ii) above.
This Guaranty shall (i) bind the undersigned and their successors
and assigns, (ii) inure to the benefit of Lender, its successors and assigns
and (iii) be governed by the internal laws of the State of Illinois.
This Guaranty amends and restates in its entirety an original
Guaranty made by the Guarantor dated March 7, 2001, in favor of Lender.
Chicago, Illinois
- -------------------------
Harold Antonson
EXHIBIT "G"
Date: April 18, 2000
Amended and Restated as of June 9, 2000
Further Amended and Restated as of December 7, 2000
Further Amended and Restated as of March 1, 2001
CORPORATE GUARANTY
To induce Firstar Bank N.A., whose address is 30 N. Michigan Avenue,
Chicago, Illinois 60602 ("Lender"), to advance funds to Carolina National
Transportation, Inc., an Indiana corporation, Keystone Lines, a California
corporation ("Keystone"), Gulf Line Transport, Inc., an Indiana corporation
("Gulf Line"), Five Star Transport, Inc. an Indiana corporation ("Five Star")
and Cam Transport Services, Inc., an Indiana corporation ("Cam") (Carolina,
Keystone, Gulf Line, Five Star and Cam hereinafter collectively referred to as
"Borrowers") and to enter into a Third Amendment to Loan Agreement of even
date herewith between Borrowers and Lender (which Third Amendment to Loan
Agreement together with the original Loan Agreement dated April 18, 2000,
Amendment to Loan Agreement dated June 9, 2000 and First Amendment to Loan
Agreement dated December 7, 2000 between Borrowers and Lender and U.S.1
Industries, Inc. is hereafter referred to as "Loan Agreement") and to
otherwise extend credit to Borrowers, the undersigned hereby irrevocably,
absolutely and unconditionally guarantees payment and performance when due of
all presently existing or hereafter incurred direct, indirect, absolute or
contingent indebtedness, liabilities and other obligations of Borrowers to
Lender arising out of or incurred in connection with the Revolving Loan Note
dated April 18, 2000 from Borrowers to Lender, as amended and restated in its
entirety as of June 9, 2000, and as further amended and restated as of
December 7, 2000 (the "Revolving Loan Note") and the Equipment Loan Note from
Borrowers to Lender dated as of December 7, 2000 and as amended and restated
as of the date hereof (the Revolving Loan Note and Equipment Loan Note herein
collectively referred to as the "Notes"), or any document, instrument,
mortgage, guaranty, or security agreement given or delivered to evidence or
secure the indebtedness evidenced by the Notes, and all modifications,
amendments and supplements thereto including, but not limited to, charges,
interest and the principal, interest and other sums payable pursuant to the
Notes or the Loan Agreement or any of the Loan Instruments (as defined in the
Loan Agreement) (collectively, the "Obligations"). The undersigned further
agrees to pay all costs of collection and attorneys' fees paid or incurred by
Lender in the collection of the Obligations and the enforcement of this
Corporate Guaranty. This Corporate Guaranty shall continue in full force and
effect until all of the Obligations, including, but not limited to, all
indebtedness evidenced by the Notes, have been fully and irrevocably paid and
discharged. This is a guarantee of payment and not of collection and shall be
enforceable directly without resorting to any other right, remedy or security.
If Borrowers do not pay or otherwise fully perform the Obligations
in a timely manner as provided in the Notes and Loan Agreement, the
undersigned will promptly pay the amount due and payable by Borrowers to
Lender upon demand. The undersigned acknowledges that it will benefit from the
extension of credit described herein made by Lender to Borrowers and that, in
order to induce Lender to accept the Notes and to otherwise extend credit to
Borrowers that it has agreed to execute and deliver this Corporate Guaranty on
the understanding that doing so is a condition precedent to Lender accepting
the Notes and otherwise agreeing to extend credit. The undersigned represents
and warrants that it (i) has personal knowledge of and is familiar with
Borrowers' business affairs, books and records; and (ii) has the ability to
influence Borrowers' decision making process. The undersigned further
represents and warrants that Borrowers are in sound financial condition, that
all financial statements of Borrowers and the undersigned heretofore provided
to Lender are true, correct and complete and that Borrowers are able to and
will perform their obligations in accordance with the terms and conditions of
the Notes. The undersigned acknowledges that Lender is relying upon the
undersigned's representations, warranties and covenants herein in accepting
the Notes and agreeing to otherwise extend credit to Borrowers, and undertakes
to perform or cause Borrowers to perform the Obligations promptly and in good
faith. If Borrowers do not pay any sum when due under the Notes or Loan
Agreement, upon the expiration of the applicable cure period, if any, Lender
in its sole discretion, may proceed directly against the undersigned under
this Corporate Guaranty without first proceeding against any of Borrowers or
any of the collateral or exhausting any of its remedies against any of
Borrowers. The payment by the undersigned of any amount pursuant to this
Corporate Guaranty shall not entitle the undersigned to any right, title or
interest, whether by way of subrogation or otherwise, in and to any of the
Obligations, including, but not limited to, any indebtedness evidenced by the
Notes, or any collateral therefor. The undersigned does hereby release
Borrowers from any and all obligations of indemnification, contribution,
subrogation and exoneration which may arise or come into existence as a result
of the undersigned's assumption or performance of its obligations in this
Corporate Guaranty on behalf of Borrowers in favor of Lender or its successors
and assigns.
The liability and obligation of the undersigned hereunder shall not
be affected or impaired in any manner by (and Lender is hereby expressly
authorized to make, from time to time, without notice to the undersigned) any
sale, pledge, surrender, compromise, release, renewal, extension,
modification, or other disposition of or with respect to any of the
Obligations, including, without limitation, the indebtedness evidenced by the
Notes, or any collateral therefor, and such obligation and liability of the
undersigned shall not in any manner be affected or impaired by any acceptance
of security for or other guarantees of any such indebtedness or by any
forbearance or indulgence in the collection thereof or any failure, neglect or
omission to realize upon any collateral therefor. Diligence in collection and
presentment for payment, demand, protest and/or notice of dishonor, default or
nonpayment and notice of the creation or existence of any and all Obligations
and security therefor and of the acceptance of this Corporate Guaranty are
hereby expressly waived.
The undersigned agrees that, if at any time all or any part of any
payment theretofore applied to any of the Obligations is rescinded or returned
for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy, liquidation, receivership, arrangement or reorganization of any
party or by any defense which any Borrower or any shareholder thereof may have
by reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding), such Obligation shall, for the purposes
of this Corporate Guaranty, be deemed to have continued in existence to the
extent of such payment, notwithstanding such application by Lender, and this
Corporate Guaranty shall continue to be effective or be reinstated, as the
case may be, as to such Obligation, all as though such application had not
been made.
The undersigned agrees that the obligations, covenants and
agreements of the undersigned under this Corporate Guaranty shall not be
affected or impaired by any act of Lender, or any event or condition except
full performance of the Obligations and any other sums due hereunder. The
undersigned agree that, without full performance of the Obligations, the
liability of the undersigned hereunder shall not be discharged or diminished
by: (i) the renewal or extension of time for the performance of the
Obligations under the Loan Instruments or any other agreement relating to the
Obligations, whether made with or without the knowledge or consent of the
undersigned; (ii) any transfer, waiver, compromise, settlement, modification,
surrender, or release of the Loan Instruments or any collateral assigned,
pledged or hypothecated thereby; (iii) the existence of any defenses to
enforcement of the Loan Instruments; (iv) any failure, omission, delay or
inadequacy, whether entire or partial, of Lender to exercise any right, power
or remedy under the Loan Instruments regarding the Obligations; (v) the
existence of any setoff, claim, reduction, or diminution of the Obligations,
or any defense of any kind or nature, which the undersigned may have against
any of the Borrowers or which any party has against Lender; (vi) the
application of payments received from any source to the payment of any
obligation other than the Obligations, even though Lender might lawfully have
elected to apply such payments to any part or all of the Obligations; or (vii)
the addition of any and all other endorsers, guarantors, obligors and other
persons liable for the performance of the Obligations and the acceptance of
any and all other security for the performance of the Obligations, all whether
or not the undersigned shall have had notice or knowledge of any act or
omission referred to in the foregoing clauses (i) through (vii) of this
paragraph. The undersigned intends that the undersigned shall remain liable
hereunder as a principal until all Obligations shall have been performed in
full, notwithstanding, any fact, act, event or occurrence which might
otherwise operate as a legal or equitable discharge of a surety or guarantor
other than payment and performance in full of the Obligations.
If this Corporate Guaranty is signed by more than one person, firm
or corporation, every obligation of each signatory shall be joint and several.
No release or discharge of any one or more of the undersigned, if there be
more than one, shall release or discharge any other or others of the
undersigned unless and until all of the Obligations shall have been fully
paid. This Corporate Guaranty and each and every part hereof shall be binding
upon the undersigned jointly and severally (if there be more than one) and
upon the heirs, legal representatives, successors and assigns of the
undersigned, and shall inure to the benefit of Lender and its successors and
assigns.
The undersigned expressly waives: (i) notice of the acceptance by
Lender of this Corporate Guaranty; (ii) notice of the existence, creation,
payment or nonpayment of the Obligations; (iii) presentment, demand at
maturity, notice of dishonor, protest, and all other notices whatsoever; and
(iv) any failure by Lender to inform the undersigned of any facts Lender may
now or hereafter know about any of Borrowers or the transactions contemplated
by the Loan Instruments, it being understood and agreed that Lender has no
duty so to inform and that the undersigned is fully responsible for being and
remaining informed by Borrowers of all circumstances bearing on the existence,
creation, or risk of nonpayment of the Obligations. Credit may be granted or
continued from time to time by Lender to Borrowers without notice to or
authorization from the undersigned, regardless of the financial or other
condition of any of Borrowers at the time of any such grant or continuation.
Lender shall have no obligation to disclose or discuss with the undersigned
its assessment of the financial condition of any Borrower. No modification or
waiver of any of the provisions of this Corporate Guaranty will be binding
upon Lender except as expressly set forth in a writing duly signed and
delivered on behalf of Lender. The undersigned further agrees that any
exculpatory language pertaining to any Borrower contained in the Loan
Instruments or any document executed and delivered by any Borrower thereunder
shall in no event apply to this Corporate Guaranty, and will not prevent
Lender from proceeding against the undersigned to enforce this Corporate
Guaranty.
This Corporate Guaranty has been executed in Chicago, Illinois, and
shall be governed by the laws of the State of Illinois. If any provision of
this Corporate Guaranty, or any paragraph, sentence, clause, phrase, or word,
or the application thereof, in any circumstances, is adjudicated by a court of
competent jurisdiction to be invalid, the validity of the remainder of this
Corporate Guaranty shall be construed as if such invalid part were never
included herein. Time is of the essence of this Corporate Guaranty. All
payments to be made hereunder shall be made in currency and coin of the United
States of America which is legal tender for public and private debts at the
time of payment.
This Corporate Guaranty is secured by a Security Agreement dated
April 18, 2000 from Guarantor to Lender and by all collateral described
therein.
The undersigned hereby submits to personal jurisdiction in the State
of Illinois for the enforcement of this Corporate Guaranty and waives any and
all personal rights to object to such jurisdiction for the purposes of
litigation to enforce this Corporate Guaranty. The undersigned hereby consents
to the jurisdiction of either the Circuit Court of Cook County, Illinois, or
the United States District Court for the Northern District of Illinois,
Eastern Division, in any action, suit or proceeding which Lender may at any
time wish to file in connection with this Corporate Guaranty or any related
matter. The undersigned hereby agrees that any action, suit or proceeding to
enforce this Corporate Guaranty may be. brought in any State or Federal Court
in the State of Illinois and hereby waive any objection which the undersigned
may have to the laying of the venue of any such action, suit or proceeding in
any such Court; provided, however, that the provisions of this paragraph shall
not be deemed to preclude Lender from filing any such action, suit or
proceeding in any other appropriate forum. THE UNDERSIGNED HEREBY IRREVOCABLY
WAIVES THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ALL ACTIONS OR PROCEEDINGS
IN ANY WAY, MANNER OR RESPECT ARISING OUT OF OR RELATING. TO THIS CORPORATE
GUARANTY.
Any notice, demand or other communication which either party may
desire or may be required to give to the other party shall be in writing, and
shall be deemed given (i) if and when personally delivered, or (ii) upon
receipt via facsimile transmission provided that a copy is also sent via
overnight mail, addressed to the intended recipient at its address set forth
below, or to such other address as such party may have designated to all other
parties by notice furnished in accordance herewith:
if to Lender:_____ Firstar Bank N.A.
30 N. Michigan Avenue Drive
Chicago, Illinois 60602
Attention: Craig B. Collinson,
Senior Vice President
Fax No.: (312) 696-1397
With a copy to:___ Gould & Ratner
222 North LaSalle Street
Suite 800
Chicago, Illinois 60601
Attention: Christopher J. Horvay
Fax No.: (312) 236-3241
and if to the undersigned: at the address set forth below its name
Except as otherwise specifically required herein, notice of the exercise
of any right, option or power granted to Lender by this Corporate
Guaranty is not required to be given.
This Corporate Guaranty amends and restates in its entirety an
original Corporate Guaranty in favor of Lender made by the undersigned dated
April 18, 2000, and amended and restated as of June 9, 2000 and December 7,
2000.
US 1 INDUSTRIES, INC., an Indiana corporation
By:_________________________________
Name:_______________________________
Title:________________________________
Address: 1000 Colfax Street
Gary, IN 46406
Fax No.: (219) 977-5227
Bank One, N.A.
July 19, 2000
Page 2
EXHIBIT "I-1"
ACKNOWLEDGEMENT
(Subordination Agreement)
The undersigned, August Investment Partnership, hereby acknowledges that
Firstar Bank N.A ("Lender") has agreed to loan additional sums to Carolina
National Transportation Inc., Keystone Lines, Gulf Line Transport Inc., Five
Star Transport, Inc. and Cam Transport, Inc. (collectively "Borrowers")
pursuant to a Third Amendment to Loan Agreement dated as of the date hereof
between Borrowers and Lender and US 1 Industries, Inc., the parent of
Borrowers ("Borrowers' Parent"), and further acknowledge and agree that the
Subordinated Debt (as defined in that certain Subordination Agreement dated
April 18, 2000, as amended as of December 7, 2000, between Lender and the
undersigned (the "Subordination Agreement")) is and shall continue to be
subordinate, all as provided in the Subordination Agreement, to any such
additional sums loaned to the Borrowers or any of them as provided in such
Third Amendment to Loan Agreement in addition to being subordinate to any
amounts otherwise advanced to Borrowers or any of them by Lender prior to or
subsequent to the date hereof under that certain Loan Agreement among
Borrowers, Lender and Borrowers' Parent dated April 18, 2000, or the Amendment
to Loan Agreement dated June 9, 2000, or Second Amendment to Loan Agreement
dated December 7, 2000, among Borrowers, Lender and Borrowers' Parent and that
any amounts advanced to any of Borrowers prior to or subsequent to the date
hereof under said Loan Agreement, as amended by such Amendment to Loan
Agreement, Second Amendment to Loan Agreement, or Third Amendment to Loan
Agreement shall constitute Senior Debt for purposes of the Subordination
Agreement.
IN WITNESS WHEREOF, this Acknowledgement has been executed and
delivered as of March 1, 2001.
- ------------------------------
Harold Antonson
- ------------------------------
Michael Kibler
14
EXHIBIT "I-2"
ACKNOWLEDGEMENT
(Subordination Agreement)
The undersigned, Harold Antonson and Michael Kibler, hereby
acknowledge that Firstar Bank N.A ("Lender") has agreed to loan additional
sums to Carolina National Transportation Inc., Keystone Lines, Gulf Line
Transport Inc., Five Star Transport, Inc. and Cam Transport, Inc.
(collectively "Borrowers") pursuant to a Third Amendment to Loan Agreement
dated as of the date hereof between Borrowers and Lender and US 1 Industries,
Inc., the parent of Borrowers ("Borrowers' Parent"), and further acknowledge
and agree that the Subordinated Debt (as defined in that certain Subordination
Agreement dated April 18, 2000, as amended as of December 7, 2000, between
Lender and the undersigned (the "Subordination Agreement")) is and shall
continue to be subordinate, all as provided in the Subordination Agreement, to
any such additional sums loaned to the Borrowers or any of them as provided in
such Third Amendment to Loan Agreement in addition to being subordinate to any
amounts otherwise advanced to Borrowers or any of them by Lender prior to or
subsequent to the date hereof under that certain Loan Agreement among
Borrowers, Lender and Borrowers' Parent dated April 18, 2000, or the Amendment
to Loan Agreement dated June 9, 2000, or Second Amendment to Loan Agreement
dated December 7, 2000, among Borrowers, Lender and Borrowers' Parent and that
any amounts advanced to any of Borrowers prior to or subsequent to the date
hereof under said Loan Agreement, as amended by such Amendment to Loan
Agreement, Second Amendment to Loan Agreement, or Third Amendment to Loan
Agreement shall constitute Senior Debt for purposes of the Subordination
Agreement.
IN WITNESS WHEREOF, this Acknowledgement has been executed and
delivered as of March 1, 2001.
AUGUST INVESTMENT PARTNERSHIP
By: ______________________________
General Partner