FORM 10-K

           UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                       Washington, DC 20549

        [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

               For the fiscal year ended December 31, 2000.
                                  OR
       [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                          Commission File No. 1-8129.

                              US 1 INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)
Indiana
(State of Incorporation)
(I.R.S. Employer Identification No.)                 95-3585609

1000 Colfax, Gary, Indiana 46406
(Address of principal executive offices)
(ZipCode)
Registrant's telephone number, including area code: (219) 944-6116

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered
Common Stock, no par value                    None

Securities registered pursuant to Section 12(g) of the Act: None

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 __

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]

On March 15, 2001, there were 10,618,224 shares of registrant's common stock
were outstanding, and the aggregate market value of the voting stock held by
non affiliates of the registrant was approximately $1,000,000.  For purposes of
the forgoing statement, directors and officers of the registrant have been
assumed to be affiliates.



<PAGE>
                                PART 1
Item 1.  Business.

    The registrant, US 1 Industries, Inc. (hereinafter referred to, together
with its subsidiaries, as "US 1" or the "Company"), through its subsidiaries is
an interstate trucking company operating in 48 states. The Company's business
consists principally of a truckload operation for which the Company obtains
substantially all of its business through independent sales agents who then
arrange with independent truckers to haul the freight to the desired
destination.

    US 1 was incorporated in California under the name Transcon Incorporated on
March 3, 1981.  In March 1994, the Company changed its name to US 1 Industries,
Inc.  In February 1995, the Company was merged with an Indiana corporation for
purposes of re-incorporation under the laws of Indiana.  The Company's
subsidiaries consist of Blue and Grey Transport, Inc., an Indiana corporation,
("BGT"), Blue and Grey Brokerage, Inc., an Indiana corporation, ("BGB"),
Carolina National Logistics, Inc. an Indiana corporation,("CNL"), Carolina
National Transportation, Inc., an Indiana corporation ("CNT"), Accu Scan Drug
Testing, Inc., an Indiana corporation ("ACCU"), Keystone Logistics, Inc. an
Indiana corporation, ("KYL"), Unity Logistics, Inc. and Indiana Corporation,
("UNL"), Gulf Line Brokerage, Inc., an Indiana corporation ("GLB"), Gulf Line
Transportation, Inc., an Indiana corporation ("GLT"), Keystone Lines, a
California corporation ("Keystone"), CAM Transport, Inc., an Indiana
corporation,("CAM"), and TC Services, Inc., a California corporation ("TCS").
BGT, BGB, CAM, CNL, CNT, GLB, GLT,ACCU,KYL and Keystone operate under authority
granted by the United States Department of Transportation (the "DOT") and
various state agencies.

Operations

    The Company carries virtually all forms of freight transported by truck,
except bulk goods, including specialized trucking services such as
containerized, refrigerated, and flatbed transportation, and this year started
a division that hauls over-size and over-weight loads.

    The Company is a non-asset based business, contracting with independent
truckers (who generally own the truck they drive) and sales agents.  The
Company pays the independent truckers and agents a percentage of the revenue
received from customers for the transportation of goods.  The expenses related
to the operation of the trucks are the responsibility of the independent
contractors. Consequently, short-term fluctuations in operating activity have
less of an impact on the Company's net income than they have on the net income
of truck transportation companies that bear substantially all of the fixed cost
associated with the ownership of the trucks.  Like other truck transportation
companies, however, US 1's revenues are affected by competition and the state
of the economy.

    The Company's principal focus during 2000 was business growth.  The Company
focused on the expansion of Carolina National Transportation, Inc., the startup
of the division that specializes in over-weight/over-sized freight, the start
up of CAM Transportation, Inc., and controlling the cost of operations.

<PAGE>
Marketing and Customers

    The Company conducts its business through a network of independent sales
agents who are in regular contact with shippers at the local level.  The sales
agents have facilities and personnel to monitor and coordinate shipments and
respond to shipper' needs in a timely manner.

    These agents are typically paid a commission of 6% to 10% of the Company's
revenues from its trucking operations.

    During 2000, the Company utilized the services of approximately 40 sales
agents. One agent accounted for 13%,18%, and 15% of the Company's revenue for
the years ended December 31, 2000, 1999, and 1998 respectively. The Company
shipped freight for approximately 1,000 customers in 2000, none of which
accounted for more than of 10% of the Company's total revenues.

Independent Contractors

    The independent contractors used by the Company must enter into standard
equipment operating agreements.  The agreements provide that independent
contractors must bear many of the costs of operations, including drivers'
compensation, maintenance costs, fuel costs, collision insurance, taxes related
to the ownership and operation of the vehicle, licenses, and permits.  The
Company requires independent contractors to maintain their equipment to
standards established by the DOT, and the drivers are subject to qualification
and training procedures established by the DOT.  The Company is also required
to have random drug testing, enforce hours of service requirements, and monitor
maintenance of vehicles.

Employees

    At December 31, 2000, the Company had approximately fifty-five full-time
employees. The Company's employees are not covered by a collective bargaining
agreement.

Competition

    The trucking industry is highly competitive.  The Company competes for
customers primarily with other nationwide carriers, some of which have company-
owned equipment and company drivers, and many, have greater volume and
financial resources.  The Company also competes with private carriage conducted
by existing and potential customers.  In addition, the Company competes with
other modes of transportation including rail.

    The Company also faces competition for the services of independent trucking
contractors and sales agents.  Sales agents routinely do business with a number
of carriers on an ongoing basis.  The Company has attempted to develop a strong
sales agent network by maintaining a policy of prompt payment for services
rendered.

    Competition is based on several factors; principally cost, timely
availability of equipment and quality of service.

Insurance

    The Company insures the trucks with liability insurance coverage of up to
$2 million per occurrence with a $5,000 deductible.  The Company has cargo
insurance coverage of up to $1,000,000 per occurrence with a $10,000
deductible.  The Company also maintains a commercial general liability policy
with a limit of $1,000,000 per occurrence and no deductible.

<PAGE>
Independent Contractor Status

    From time to time, various legislative or regulatory proposals are
introduced at the federal or state levels to change the status of independent
contractors' classification to employees for either employment tax purposes
(withholding, social security, Medicare and unemployment taxes) or other
benefits available to employees.  Currently, most individuals are classified as
employees or independent contractors for employment tax purposes based on 20
"common-law" factors rather than any definition found in the Internal Revenue
Code or Internal Revenue Service regulations.  In addition, under Section 530
of the Revenue Act of 1978, taxpayers that meet certain criteria may treat
similarly situated workers as employees, if they have received a ruling from
the Internal Revenue Service or a court decision affirming their treatment, or
if they are following a long-standing recognized practice.      Although
management is unaware of any proposals currently pending to change the employee
/independent contractor classification, the costs associated with potential
changes, if any, in the employee/independent contractor classification could
adversely affect the Company's results of operations if the Company were unable
to reflect them in its fee arrangements with the independent contractors and
agent or in the prices charged to its customer.

Regulation

    The Company is a common and contract motor carrier regulated by the DOT and
various state agencies.  Historically, the Interstate Commerce Commission
(the "ICC") and various state agencies regulated motor carriers' operating
rights, accounting systems, mergers and acquisitions, periodic financial
reporting, and other matters.  In 1995 federal legislation preempted state
regulation of prices, routes, and services of motor carriers and eliminated the
ICC. Several ICC functions were transferred to the DOT. Management does not
believe that regulation by the DOT or by the states in their remaining areas of
authority will have a material effect on th Company's operations. The Company's
independent contractor drivers also must comply with the safety and fitness
regulation promulgated by the DOT, including those relating to drug and alcohol
testing and hours of service.

   The Company's operations are subject to various federal, state, and local
environmental laws and regulations, implemented principally by the EPA and
similar state regulatory agencies, governing the management of hazardous
wastes, other discharge of pollutants into the air and surface and underground
waters, and the disposal of certain substances.  Management believes that its
operations are in material compliance with current laws and regulations and
does not know of any existing condition that would cause compliance with
applicable environmental regulations to have a material effect on the Company's
earnings or competitive position.

Environmental Regulation

    The Company owns property in Phoenix, Arizona that was formerly leased to
Transcon Lines ("Lines") as a terminal facility, where soil contamination
problems existed or are known to exist currently.  State environmental
authorities notified the Company of potential soil contamination from
underground storage tanks, and management has been working with the regulatory
authorities to implement the required remediation.  The underground storage
tanks were removed from the Phoenix facility in February 1994.  Currently the
State environmental authorities are requiring further testing of the property.
The Company believes it is in substantial compliance with state and federal
environmental regulations relative to the trucking business.  However, the
Company is working with regulatory officials to eliminate any sources of
contamination and determine extent of existing problems.  Estimates of the
costs to complete the future remediation of approximately $141,000 are
considered in the land valuation allowance at December 31, 2000 and 1999.

<PAGE>
Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

    The statements contained in Item 1 (Description of Business) and Item 6
(Management Discussion and Analysis of Financial Condition and Results of
Operation); particularly the statements under "Future Prospects" contain
forward-looking statements that are subject to a variety of risks and
uncertainties.  The Company cautions readers that these risks and uncertainties
could cause the Compan's actual results in 2001 and beyond to differ materially
from those suggested by any forward-looking statements.  These risks and
uncertainties include, without limitation, a lack of historic information for
new operations on which expectations regarding their future performance can be
based, general economic and business conditions affecting the trucking
industry, competition from, among others, national and regional trucking
companies that have greater financial and marketing resources than the Company,
the availability of sufficient capital, and the Company's ability to
successfully attract and retain qualified owner operators and agents.

Item 2.  Properties

    The Company's administrative offices are at 1000 Colfax, Gary, Indiana.
The Company leases its administrative offices on a month to month basis for
$2,200 per month from Mr. Michael E. Kibler, President, Chief Executive Officer
and a director of the Company, and Mr. Harold Antonson, Treasurer, Chief
Financial Officer and a director of the Company.
    Carolina National Transportation, Inc. leases 3,900 sq. ft of office space
in Mt. Pleasant, SC for $5,700 per month. The current lease expires June 30,
2001.  The Company anticipates that the lease will be renewed in fiscal year
2001.
    Keystone Logistics, Inc. leases 1,591 sq. ft of office space in South Bend,
Indiana for $1,250 per month.  The current lease expires October 31, 2002.
    Cam Transport, Inc. leases an office building in Gulfport, Mississippi for
$2,250 per month.  The current lease expires November 1, 2003.
    Management believes that the Company' leased properties are adequate for
its current needs and can be retained or replaced at acceptable cost.

Item 3.  Legal Proceedings

    Cam Regional Transport filed a complaint against the Company in 1994 which
alleges breach of contract, claiming that Trailblazer Transportation, Inc., a
subsidiary of the Company which filed bankruptcy, failed to abide by a purchase
agreement entered into with Cam Regional Transport, Inc and Laurel Mountain
Leasing, Inc.  The complaint seeks damages of $284,000 plus interest from
November 1992.

    The Company is currently involved in two lawsuits, one of which is a class
action lawsuit, as a result of an August 1999 incident in which a Carolina
National Transportation, Inc., truck overturned leaking chemicals.  It is the
Company's position that it is not at fault.  The Company contends that the
materials inside the container were improperly packaged by a third party, that
the chemicals which leaked were not harmful in nature, and that those persons
alleging injuries were not harmed.

    The Company is also involved in two lawsuits as a result of a chemical
leak that occured in a container hauled by a Carolina National Transportation,
Inc., truck.  It is the Company's position that they are not at fault for this
incident because they are merely the shipper and a third party had the
responsibility to package the load for safe transportation.

    At this time, the Company and its legal counsel are unable to assess the
outcome of these complaints.  The Company intends to vigorously defend itself
in these matters.

    The Company is involved in other litigation in the normal course of its
business.  Management intends to vigorously defend these cases.  In the opinion
of management, the litigation now pending will not have a material adverse
effect on the consolidated financial position of the company.
<PAGE>

Item 4.  Submission of Matters to a Vote of Security Holders.

    No matters were submitted to a vote of the Company's shareholders during
the fourth quarter of 2000.

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

    Shares of Common Stock of the Company are listed and traded on the NASD
Electronic "bulletin board market" under the symbol USOO.

    The following table sets forth for the period indicated the high and low
sales prices per share of the Common Stock as reported from NASDAQ quotations
provided by North American Quotations and reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.

<TABLE>
     <S>                                     <C>                         <C>
     Calendar Year                            High                        Low
     ------------------------------------------------------------------------
      2000
      First Quarter                           .3750                      .0500
      Second Quarter                          .2500                      .0620
      Third Quarter                           .3120                      .0620
      Forth Quarter                           .1800                      .0625
      1999
      First Quarter                           .0937                      .0312
      Second Quarter                          .1250                      .0156
      Third Quarter                           .1250                      .0156
      Fourth Quarter                          .1406                      .0468

</TABLE>

    As of March 15, 2001, there were 3,246 holders of record of Common Stock.

    The Company has not paid any cash dividends on its Common Stock.
Management does not anticipate paying any dividends on the Common Stock in the
foreseeable future, and the Company's current credit agreement prohibits the
payment of dividends.

<PAGE>
Item 6. Selected Financial Data

    The selected consolidated financial data presented below have been derived
from the Company's consolidated financial statements.  The consolidated
financial statements for the years ended December 31, 2000,1999 and 1998 have
been audited by the Company's independent certified public accountants, whose
report on such consolidated financial statements is included herein under Item
8. The information set forth below should be read in conjunction with the
consolidated financial statements and notes thereto under Item 8 and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
<TABLE>
<CAPTION>
                       (in thousands, except per share data)

                           Fiscal Year Ended December 31,
<S>                                    <C>          <C>         <C>        <C>       <C>
                                       2000         1999        1998       1997      1996
                                       ----         ----        ----       ----      ----

STATEMENT OF OPERATIONS DATA:
Operating revenues                   $49,055     $32,333     $30,177    $25,422   $15,412
Purchased transportation              38,337      24,846      23,417     19,676    11,694
Commissions                            4,438       3,052       3,178      2,361     1,498
Other operating costs and expenses     4,988       3,481       3,408      3,806     2,394


Operating income (loss)                1,292         954         174       (421)     (174)

Interest expense                         623         661         744        435       282

Income(loss) before extraordinary item 1,602         412         173       (803)     (339)

Net income (loss)                      1,602         412         173       (192)      341

Income (loss) per common share before
  Net Income before extraordinary items:
        Basic                          $0.14       $0.03       $0.01     ($0.08)   ($0.01)
        Diluted                        $0.14       $0.03       $0.01     ($0.08)   ($0.01)
  Extraordinary item
        Basic                          $0.00       $0.00       $0.00      $0.06     $0.05
        Diluted                        $0.00       $0.00       $0.00      $0.06     $0.05
  Net Income
        Basic                          $0.14       $0.03       $0.01     ($0.02)    $0.04
        Diluted                        $0.14       $0.03       $0.01     ($0.02)    $0.04

  Weighted average shares outstanding:
        Basic                        10,618,224 10,618,224  10,618,224 10,616,397 9,879,077
        Diluted                      10,618,224 10,618,224  10,618,224 10,616,397 9,879,077





BALANCE SHEET DATA:
  Total assets                        11,891        5,352       4,499      6,261     2,198
  Long-term debt, including
   current portion                     4,259        2,547       2,967      2,571       583
  Working capital                      1,846         (712)       (861)    (1,451)   (3,016)
  Shareholders' deficiency            (2,459)      (3,968)     (4,298)    (4,399)   (4,020)

OTHER DATA:
  Cash (used in) provided by
   operating activities               (2,833)        (370)        490     (3,630)     (445)
  Cash (used in) provided by
   investing activities                 ( 84)          74          58       (269)      149
  Cash provided by (used in)
   financing activities                2,916          296        (848)     3,971       468

</TABLE>


<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation.

Overview

    Purchased  transportation  represents the amount an  independent
contractor is paid to haul freight and is primarily based on a contractually
agreed-upon percentage of revenue generated by the haul for truck capacity
provided by independent contractors.  Purchased transportation is the largest
component of operating expenses and, on a consolidated basis increases or
decreases in proportion to the revenue generated through independent
contractors.  Commission to agents and brokers are primarily based on
contractually agreed-upon percentages of revenue.  Commissions to agents and
brokers as a percentage of  consolidated  revenue will vary directly with
revenue generated through independent commission sales agents.

    A majority of the insurance and claims expense is based on a percentage of
revenue and, as a result, will increase or decrease, on a consolidated basis
with the Company's revenue.  Potential liability associated with accidents in
the trucking industry is severe and occurrences are unpredictable.  A material
increase in the frequency or severity of accidents or the unfavorable
development of existing claims could adversely affect the Company's operating
income.

    The following table set forth the percentage relationships of expense items
to revenue for the periods indicated:
<TABLE>
<CAPTION>
                                                      Fiscal Years
                                                --------------------------
                                                  2000      1999     1998
                                                 ------    ------   ------

<S>                                               <C>      <C>      <C>
Revenue                                           100.0%   100.0%   100.0%
Operating expenses:
    Purchased transportation                       78.2     76.8     77.6
    Commissions                                     9.0      9.4     10.5
    Insurance and claims                            3.2      3.3      3.1
    Salaries, wages and other                       3.5      3.9      4.1
    Other operating expenses                        3.5      3.6      4.1
                                                 -------   ------   ------
     Total operating expenses                      97.4     97.0     99.4
                                                  ------   ------   ------
Operating income                                    2.6      3.0      0.6
</TABLE>


<PAGE>
2000 Compared to 1999

    Revenue for the 2000 fiscal year was $49.1 million, an increase of $16.7
million, or 51.7%, over revenue for the 1999 fiscal year.  The increase was
attributable to continued growth at Carolina National Transportation, the
operations of a new agent who specialized in over-size loads at Keystone Lines,
expansion of Keystone Logistics, Inc. and the startup of two new Companies,
CAM Transport, Inc. and Unity Logistics, Inc.

    Purchased transportation was 78.2% of revenue in 2000 compared with 76.8%
in 1999.  Purchased transportation has increased 1.4% as a percentage of
revenue for the year ended December 31, 2000, compared to the year ended
December 31,1999.  Due to the increase in diesel fuel prices, the Company has
begun to bill their customers a fuel surcharge that is reimbursable to the
owner operator at 100%.  Because this portion of the revenue is reimbursed at
100% to the owner operator, the purchased transportation as a percentage
of revenue will increase.

    Commissions to agents were 9.0% of revenue in 2000 compared with 9.4% in
1999 primarily due to contracts with newer agents being negotiated at a lower
percentage rate.

    Insurance and claims were 3.2% of revenue in 2000 compared with 3.3% in
1999 primarily due to a decrease in claims relative to revenue and a slight
decrease in liability insurance rates.

    Salaries, wages and other expenses were 3.5% of revenue in 2000 and 3.9%
in 1999.  The slight decrease in salaries, wages and other expenses as a
percentage of revenue was due to the Company's continued efforts to control
overhead costs coupled with the increase in revenue.  Other operating expenses
were 3.5% of revenue in 2000 and 3.6% in 1999.  The decrease in other operating
expenses as a percentage of revenue was also primarily attributable to the cost
containment measures coupled with the increase in revenue.

    Based on the changes in revenue and expenses discussed above, operating
income increased by $337,814 from $953,859 in 1999 to $1,291,673 in 2000.

    Interest expense decreased slightly to $0.62 million in 2000 from $0.66
million in 1999. Although the Company's new lender is charging lower interest
rates, the loan balance is higher due to continued Company growth.  The net
effect was a small decrease in interest expense.

    Non-operating income (expense), exclusive of interest expense, increased
from $118,547 in 1999 to $132,988 in 2000.  The increase was primarily
attributable to a refund from the state of Alabama for permits paid in prior
years but was reversed by the courts and refunded to the Company.

    The Company has net operating loss carry-forwards of approximately $57
million at December 31, 2000.  These carry-forwards are available to offset
taxable income in future years and substantially all of these carry-forwards
will expire in the years 2003 through 2010.  Based on the Company's
profitability in recent years, at December 31, 2000, the Company has realized a
net deferred tax asset of $800,000.  The Company believes it is more likely
than not that this amount will be realized as a result of anticipated future
taxable income to be generated. Due to the uncertainty of the remaining tax
asset, a valuation allowance has been maintained for the remaining deferred tax
asset at December 31, 2000.

    Net income in 2000 was $1,601,671 compared with $411,897 in 1999.  Income
before Income Tax Benefit was $ 801,671 in 2000 compared with 411,897 in 1999
a 95% increase. Income available to common shareholders was $1,509,099, or
$0.14 per common share, in 2000 compared with $329,611, or $0.03 per common
share, in the prior year.

<PAGE>
1999 Compared to 1998

    Revenue for the fiscal year 1999 was $32.3 million, an increase of $2.2
million, or 7.1%, over revenue for the 1998 fiscal year.  The increase was
attributable to continued growth at Carolina National Transportation, and the
operations of a new agent at Keystone Lines.

    Purchased transportation was 76.8% of revenue in 1999 compared with 77.6%
in 1998.  The decrease in the percentage of purchased transportation to revenue
was primarily attributable to management having better control over the
ancillary costs.

    Commissions to agents were 9.4% of revenue in 1999 compared with 10.5% in
1998 primarily due to contracts with newer divisions negotiated a lower
percentage rate.

    Insurance and claims were 3.3% of revenue in 1999 compared with 3.1% in
1998 primarily due to higher premium costs associated with a new insurance
carrier for Carolina National Transportation, Inc.

    Salaries, wages and other expenses were 3.9% of revenue in 1999 and 4.1% in
1998.  The slight decrease in salaries, wages and other expenses as a
percentage of revenue was due to the Company's continued efforts to control
overhead costs.  Other operating expenses were 3.6% of revenue in 1999 and
4.1% in 1998.  The decrease in other operating expenses as a percentage of
revenue was also primarily attributable to the cost containment measures
established by the Company.

    Based on the changes in revenue and expenses discussed above, operating
income increased by $780,000 from $174,000 in 1998 to $964,000 in 1999.

    Interest expense remained constant at $0.7 million for fiscal year 1999
and 1998.  An increase in the Company's interest rate on its revolving line of
credit to a default rate of prime plus 4.75% was equally offset by a decrease
in the average outstanding balance in 1999.

    Non-operating income (expense), exclusive of interest expense, decreased
from $743,000 in 1998 to $119,000 in 1999.  The decrease was primarily
attributable to the write off of old payables in 1998 as discussed in Note 13
to the consolidated financial statements.

    Net income in 1999 was $412,000 compared with $173,000 in 1998.  Income
available to common shareholders was $330,000, or $0.03 per common share, in
1999 compared with $101,000, or $0.01 per common share, in the prior year.


<PAGE>
Liquidity and Capital Resources

    During fiscal 2000, the Company's financial position continued to improve.
The Company had a net deficiency in shareholders' equity of $2.5 million at
December 31, 2000 compared with $4.0 million at December 31, 1999.  Working
capital at December 31, 2000 was $1.8 million compared to a deficiency of
($0.7) million at the end of 1999.  This increase in working capital is due to
refinancing a portion of the former line of credit with long-term shareholder
debt and continuing profitability.

    Net cash used in operating activities increased $2.4 million from $0.4
million for the year ended December 31, 1999 to $2.8 million for the year ended
December 31, 2000.  The cash used in operations is due primarily to an increase
in accounts receivable of $5.0 million resulting from increased revenue in
fiscal 2000 as the Company continued to add new agents and expand operations.
The impact of the increased accounts receivable on cash flows is partially
offset by an increase in accounts payable of $1.3 million, an increase in
accrued expenses of $0.6 million, and net income of $1.6 million during fiscal
2000.

    Net cash used in investing activities was $84,000 for the year ended
December 31, 2000, compared to net cash provided by investing activities of
$74,000 for the year ended December 31, 1999.  Net cash used in investing
activities during 2000 related to the investment in additional equipment.
During 1999, the Company sold some equipment.

    Net cash provided by financing activities increased $2.6 million from $0.3
million for the year ended December 31, 1999 to $3.0 million for the year ended
December 31, 2000.  The cash provided by financing activities is primarily due
to a net increase in the Company's line of credit of $1.2 million, an increase
in the bank overdraft of $0.2 million, and an increase in shareholder loans of
$1.5 million.  The overall increase in debt is due to the increased revenues of
the company resulting in an increase in the accounts receivable balance.

    In April 2000, the Company refinanced its line of credit with a new lender.
The Company received a $2,000,000 line of credit that was subsequently
increased to $3,500,000 in June 2000.  In December 2000, the lender agreed to
further amend the Loan Agreement to establish a separate line of equipment
financing in the amount of $500,000 and increase the amount of the Revolving
Loan Commitment from $3,500,000 to $5,500,000.  Advances under this new
line-of-credit are limited to 70% of eligible accounts receivable.  Advances
bear interest at the lender's prime rate plus .5%.  This new line of credit is
secured by substantially all of the Company's assets and required personal
guarantees totaling $3 million from the Company's Chief Executive Officer and
Chief Financial Officer.  In connection with this debt refinancing, officers of
 the Company advanced approximately $1.5 million of subordinated debt to the
company.

<PAGE>
Environmental Liabilities

    The Company is not a party to any Super-fund litigation and otherwise does
not have any known environmental claims against it.  However, the Company does
have one property where soil contamination problems existed or are known to
exist currently.  The Company has preliminarily evaluated its potential
liability as this site and believes that it has reserved appropriately for its
remediation or that the fair market value of the property exceeds its net book
value by an amount in excess of any remediation cost.  There can be no
assurance, however, that the cost of remediation would not exceed the expected
amounts.  The Company continues to monitor soil contamination and may be
required to remediate the property in the near future.

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.

Recently Issued Accounting Standards

    During the second quarter of 1998, the FASB issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities."  In June 1999, the FASB issued SFAS No. 137, which amended
SFAS No. 133 to delay its effective date by one year.  SFAS No. 133 is
effective for the Company on January 1, 2001.  SFAS No. 133 required that all
derivative instruments be recorded on the consolidated balance sheet at their
fair value.  Changes in the fair value of derivatives will be recorded each
period in earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction.  In June 2000, the FASB issued SFAS No. 138, which
amended SFAS No. 133.  The Company's management has reviewed the terms of all
material contracts and financial instruments and has determined that the
adoption of SFAS No. 133, as amended, will have no material impact on its
financial position or results of operations.

Item 7a. Quantitative and Qualitative Disclosures about Market Risk

    The Company has a revolving line of credit with a bank which bears interest
at the prime rate (9.5% at December 31, 2000) plus .5%.  Beginning in January
2001, the interest rate will be based on certain financial covenants and may
range from prime to prime plus .5%.  The Company also has subordinated debt
with related parties which bears interest at rates ranging from prime + .75% to
prime plus 1%.


<PAGE>
Item 8.  Financial Statements and Supplementary Data.

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors of
US 1 Industries, Inc.
Gary, Indiana

    We have audited the accompanying consolidated balance sheets of US 1
Industries, Inc. and Subsidiaries as of December 31, 2000 and 1999 and the
related consolidated statements of operations, shareholders' deficiency, and
cash flows for each of the three years in the period ended December 31, 2000.
We have also audited the schedule listed in the accompanying index.  These
financial statements and schedule are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States.  Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements and the schedule are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and schedule.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statements and schedule.  We believe that our audits provide a reasonable basis
for our opinion.

    In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of US 1
Industries, Inc. and Subsidiaries at December 31, 2000 and 1999, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States.

    Also in our opinion, the schedule presents fairly, in all material
respects, the information set forth therein.



BDO Seidman, LLP

Chicago, Illinois
March 13, 2001

<PAGE>


                 US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                       DECEMBER 31, 2000 AND 1999
<TABLE>
<CAPTION>
ASSETS

<S>                                                    <C>            <C>
                                                       2000           1999
                                                       ----           ----
CURRENT ASSETS:
 Accounts receivable-trade, less allowance for
    doubtful accounts of $209,000 and $67,000
    respectively                                    $9,911,436   $4,972,846
 Other receivables                                     382,057      105,770
 Deposits                                              309,897      162,173
 Prepaid expenses                                      166,911        9,245
 Current Deferred tax asset                            400,000            0
                                                   ------------  ----------
      Total current assets                          11,170,301    5,250,034

FIXED ASSETS:
   Equipment                                           335,402      100,738
   Less accumulated depreciation and amortization      (68,797)     (52,756)
                                                   ------------  ----------
      Net fixed assets                                 266,605       47,982
                                                   ------------  ----------
ASSETS HELD FOR SALE:
   Land                                                195,347      195,347
   Valuation allowance                                (141,347)    (141,347)
                                                  -------------  -----------
      Net assets held for sale                          54,000       54,000
Noncurrent Deferred tax asset                          400,000            0
                                                  -------------  -----------
TOTAL ASSETS                                       $11,890,906  $ 5,352,016
                                                  =============  ===========


<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>

<PAGE>
                US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                       DECEMBER 31, 2000 AND 1999
<TABLE>
<CAPTION>

LIABILITIES AND SHAREHOLDERS' DEFICIENCY

<S>                                                   <C>            <C>
                                                      2000           1999
                                                      ----           ----
CURRENT LIABILITIES:
   Short-term debt                                 4,503,896        3,173,990
   Accounts payable                               $2,621,107      $ 1,341,134
   Bank overdraft                                    522,201          345,719
   Accrued expenses                                  244,446          215,505
   Insurance and claims                              418,450          204,592
   Accrued compensation                               33,891           17,314
   Accrued interest                                  836,019          613,567
   Fuel and other taxes payable                      143,796           49,948
                                                 -----------      -----------
      Total current liabilities                    9,323,806        5,961,769
                                                 -----------      -----------
LONG-TERM DEBT TO RELATED PARTIES                  4,026,210        2,451,028

COMMITMENTS AND CONTINGENCIES

REDEEMABLE PREFERRED STOCK:
    Authorized 5,000,000 shares; no par value,
    Series A shares issued and outstanding:
    2000 and 1999 - 1,094,224
    Liquidation preference $0.3125 per share       1,000,112          907,540
SHAREHOLDERS' DEFICIENCY:
   Common stock, authorized 20,000,000 shares;
    no par value; shares issued and outstanding:
    2000 and 1999 - 10,618,224                    40,844,296       40,844,296
   Accumulated deficit                           (43,303,518)     (44,812,617)
                                                 -----------      -----------
   Total shareholders' deficiency                 (2,459,222)      (3,968,321)
                                                 -----------     ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
    DEFICIENCY                                   $11,890,906     $5,352,016
                                                 ===========    =============


<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>


<PAGE>


                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                     YEARS ENDED DECEMBER 31, 2000, AND 1999

<TABLE>
<CAPTION>

<S>                                             <C>            <C>            <C>
                                                2000           1999           1998

OPERATING REVENUES                          $49,055,354    $32,333,528    $30,176,818
OPERATING EXPENSES:
   Purchased transportation                  38,336,905     24,846,421     23,416,624
   Commissions                                4,438,324      3,052,406      3,177,908
   Insurance and claims                       1,553,892      1,070,564        938,044
   Salaries, wages, and other                 1,719,291      1,248,089      1,223,113
   Other Operating expenses                   1,715,269      1,162,189      1,247,334
                                              ---------      ---------      ---------
            Total operating expenses         47,763,681     31,379,669     30,003,023
                                              ----------     ----------     ----------
OPERATING INCOME                              1,291,673        953,859        173,795
NON OPERATING INCOME (EXPENSE):
    Interest income                              19,003          9,840          7,702
    Interest expense                           (622,990)      (660,509)      (743,953)
    Write off of old payables                                                 530,674
    Other income, net                           113,985        108,707        204,419
                                                -------        -------        -------
      Total non operating expense              (490,002)      (541,962)      (  1,158)
NET INCOME BEFORE INCOME TAXES                  801,671        411,897        172,637
    Income tax benefit                          800,000              0              0
                                               _________       ________       _______
NET INCOME                                    1,601,671        411,897        172,637
DIVIDENDS ON PREFERRED SHARES                    92,572         82,286         72,000
NET INCOME AVAILABLE TO COMMON SHARES       $ 1,509,099    $   329,611    $  $100,637
                                            ===========    ===========    ===========



Basic and Diluted Net Income
Per Common Share                                  $0.14          $0.03          $0.01

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
   BASIC AND DILUTED                         10,618,224     10,618,224     10,618,224

<FN>
The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.
</FN>
</TABLE>

<PAGE>
                  US 1 INDUSTRIES AND SUBSIDIARIES
              STATEMENTS OF SHAREHOLDERS' DEFICIENCY
         YEARS ENDED DECEMBER 31, 2000,1999,1998, and 1997

<TABLE>

<CAPTION>
                              Common Stock          Accumulated
                          Shares         Amount       Deficit        Total
Balance at
<S>                       <C>          <C>          <C>           <C>
  December 31, 1997       10,618,224   $40,844,296  $(45,242,865) $(4,398,569)
Dividends on Preferred Stock                             (72,000)     (72,000)
Net income                                               172,637      172,637
Balance at                __________   ___________   ___________   __________
  December 31, 1998       10,618,224    40,844,296   (45,142,228)  (4,297,932)
Dividends on Preferred Stock                             (82,286)     (82,286)
Net Income                                               411,897      411,897
Balance at                __________   ___________    ___________   __________
  December 31, 1999       10,618,224    40,844.296   (44,812,617)  (3,968,321)
Dividends on Preferred Stock                             (92,572)     (92,572)
Net Income                                             1,601,671    1,601,671
Balance at                10,618,224   $40,844,296  $(43,303,518) $(2,459,222)
  December 31, 2000       ==========   ===========   ===========   ==========


<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>


<PAGE>

                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   YEARS ENDED DECEMBER 31, 2000,1999 AND 1998
<TABLE>
<CAPTION>
<S>                                                    <C>           <C>            <C>
                                                       2000          1999           1998
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net income                                        $ 1,601,671    $  411,897    $ 172,637
Adjustments to reconcile net income to net
  cash (used in) provided by operating activities:
    Depreciation and amortization                        26,818        30,795       74,963
    Deferred Income Tax benefit                        (800,000)            0            0
    Write off of old payables                                                     (530,674)
    Loss on disposal of equipment                         3,609        30,177       17,488
    Gain on sale of property                                                       (44,800)
    Changes in operating assets and liabilities:
      Accounts receivable-trade                      (4,938,590)     (930,880)   1,024,290
      Other receivables                                (276,287)      (46,116)     277,265
      Prepaid expenses                                 (147,724)       18,553       55,933
      Deposits                                         (157,666)      (29,744)      21,639
      Accounts payable                                1,279,973      (104,755)    (758,417)
      Accrued expenses                                   28,941        32,105      207,570
      Insurance and claims                              213,858        23,068      (60,083)
      Accrued interest                                  222,452       220,684      252,059
      Accrued compensation                               16,577          (277)     (20,711)
      Fuel and other taxes payable                       93,848       (25,747)    (198,206)
                                                     __________     __________    _________
         Net cash (used in) provided by operating
          activities                                 (2,832,520)     (370,240)     490,953
                                                     ___________    __________    _________
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property and equipment                   (92,500)       (5,183)      (2,566)
  Proceeds from sale of property and equipment            8,885        79,358       61,055
                                                     ___________    __________    _________
        Net cash (used in) provided by investing
         activities                                     (83,615)       74,175       58,489
                                                     ___________    __________    _________
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings (repayments) under line of credit    1,193,498       630,745     (741,720)
  Proceeds from long-term debt                          158,052             0            0
  Repayment of long-term debt                          (121,808)      (64,277)    (123,308)
  Net proceeds (repayments of) from shareholder loans 1,509,911      (355,718)     287,236
  Increase (decrease)in bank overdraft                  176,482        85,315     (269,729)
                                                      _________     __________    _________
          Net cash provided by (used in)financing
         activities                                   2,916,135       296,065     (847,521)
                                                      _________     __________    _________
NET INCREASE (DECREASE)IN CASH                                                     (298,079)

CASH, BEGINNING OF YEAR                                                             298,079
                                                                                  _________
CASH, END OF YEAR                                     $       0      $      0      $      0
-------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION--
  Cash paid during year for interest                  $400,538       $439,825     $491,894

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
  FINANCING ACTIVITIES
  Note payable incurred for purchase of equipment     $165,435       $      0     $232,700

The Company recorded $92,572, $82,286, and $72,000 in 2000,1999, and 1998
respectively, for dividends on preferred stock.










<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>


<PAGE>

                     US 1 INDUSTRIES, INC. AND SUBSIDIARIE
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2000, AND 1999


1.       OPERATIONS

    The Company is primarily an interstate truckload carrier of general
commodities, which uses independent agents and owner-operators to contract for
and haul freight for its customers in 48 states with a concentration in the
Southeastern United States.  One agent accounted for 13%,18%, and 15% of the
Company's revenue in 2000,1999, and 1998, respectively.  No other agent
represented more than 10% of sales for the year ended December 31, 2000,1999
and 1998.


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   Principles of Consolidation--The consolidated financial statements include
the accounts of US 1 Industries, Inc. and its subsidiaries.  All significant
intercompany accounts and transactions have been eliminated.

   Revenue Recognition--Revenue for freight in transit is recognized upon
delivery. Amounts payable for purchased transportation; commissions and
insurance expense are accrued when the related revenue is recognized.

   Fixed Assets--Fixed assets are stated at cost and depreciated using the
straight-line method over the estimated useful lives of the related assets,
which range from three to eight years.

   Assets Held for Sale--Such assets comprise real estate, not required for the
Company's operations, which is carried at the lower of historical cost or
estimated net realizable value.  See Note 12.

    Long-Lived Assets - The Company assesses the realizability of its long-
lived assets in accordance with statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be disposed of."

    Accounting Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the dates of
financial statements and the reported amounts of revenues and expenses during
the reporting periods.  Actual results could differ from those estimates.

   Recently Issued Accounting Standards-During the second quarter of 1998, the
FASB issued Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities."  In June 1999, the FASB
issued SFAS No. 137, which amended SFAS No. 133 to delay its effective date by
one year.  SFAS No. 133 is effective for the Company on January 1, 2001.  SFAS
No. 133 required that all derivative instruments be recorded on the
consolidated balance sheet at their fair value.  Changes in the fair value of
derivatives will be recorded each period in earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction.  In June 2000, the
FASB issued SFAS No. 138, which amended SFAS No. 133.  The Company's management
has reviewed the terms of all material contracts and financial instruments
and has determined that the adoption of SFAS No. 133, as amended, will have no
material impact on its financial position or results of operations.




<PAGE>

                         US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                         YEARS ENDED DECEMBER 31, 2000, AND 1999


    Income Taxes--Deferred income taxes are recognized for the tax consequences
of "temporary differences" by applying enacted statutory tax rates applicable
to future years to differences between the financial statement carrying amounts
and the tax bases of existing assets and liabilities.  In addition, the amount
of any future tax benefits are reduced by a valuation allowance to the
extent such benefits are not expected to be fully utilized.

    Earnings Per Common Share-The Company computes loss per share under
Statement of Financial Accounting Standards No. 128 "Earnings Per Share."  The
statement required presentation of two amounts, basic and diluted loss per
share.  Basic loss per share is computed by dividing loss available to common
stock holders by the weighted average common shares outstanding.  Dilutive
earnings per share would include all common stock equivalents.  There are no
common stock equiviliants at December 31, 2000, 1999, or 1998.


     Business Segments - Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" requires
public enterprises to report certain information about reporting segments in
financial statements.  The Company presents its operations in one business
segment.


3.  REDEEMABLE PREFERRED STOCK

    The Series A preferred shares are not convertible into common stock, are
non-voting, and earn dividends at the rate of $0.0375 per share per annum
(increasing by $0.0063 on each of January 1, 1995, 1996 and 1997, and by
$0.0094 on January 1, 1998 and on each January 1 thereafter until redeemed)
payable quarterly on the first day of February, May, August, and November.  The
Series A preferred stock is redeemable at the option of the Company or the
holders at any time.

    As of December 31, 2000, Series A cumulative preferred stock dividends are
in arrears by $452,000.  The Company's current line of credit prohibits the
payment of dividends.

4.  RELATED PARTY TRANSACTIONS

    One of the Company's subsidiaries provides safety, management, and
accounting services to companies controlled by the Chief Executive Officer and
Chief Financial Officer of the Company.  These services are priced to cover the
cost of the employees providing the services.  Revenues related to those
services totaled $100,251, $77,640, $70,607 in 2000, 1999, and 1998,
respectively.

The Company has an investment of $126,460 in American Inter-Fidelity Exchange
("AIFE"), an entity which provides the Company with truck liability insurance.
AIFE is currently in receivership and managed by the State of Indiana,thus, the
Company exercised no control over the operations of AIFE.  As a result, the
Company has recorded its investment in AIFE under the cost method of accounting
for these periods.

Under the cost method, the investment in AIFE is reflected at its original
amount and income is recognized only to the extent of dividends paid by the
investee. There were no dividends declared by AIFE for the years ended December
31, 2000, 1999 and 1998.


<PAGE>
                  US 1 INDUSTRIES, INC. AND SUBSIDIARIES
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


    If AIFE is released from the control of the State of Indiana, the
investment in AIFE will be determined based on the Company's ownership
percentage in and control over AIFE.

    A director of the company also manages an affiliated insurance carrier,
Indiana Truckers Exchange (ITE).  For the years ended December 31, 2000, 1999
and 1998, cash paid for related party insurance premiums and deductibles
amounted to $729,434, $532,586, and $751,123, respectively.  The Company also
has long term notes payable to AIFE and ITE as described in Note 8.

    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.

5.  LEASES

    The Company leases office space on a month-to-month basis for its
headquarters in Gary, Indiana for $2,200 per month from the Company's Chief
Executive Officer and Chief Financial Officer.  No formal lease agreement with
the Company existed at December 31, 2000.  The Company leases office space in
Mt. Pleasant, South Carolina for approximately $5,700 per month. The lease
agreement expires in June, 2001.  The Company leases office space in South
Bend, Indiana for approximately $1,250 per month.  The lease expires
in October, 2002. The Company leases an office building in Gulfport,
Mississippi for approximately $2,250 per month.  The lease expires in
November, 2003.  Rent expense for the years ended December 31, 2000, 1999, and
1998 was approximately $110,000, $59,000, and $59,000 respectively.

    Future commitments under these operating leases are as follows:
<TABLE>
<S>                  <C>    <C>
                     2001   76,200
                     2002   39,500
                     2003   24,750
                            ------
                           140,450
                           =======
</TABLE>

6. SHORT-TERM DEBT

     Short-term debt at December 31, 2000 and 1999 comprises:
<TABLE>
<CAPTION>
                                              December 31,       December 31,
                                                   2000               1999
                                              -----------          ----------
<S>                                        <C>                  <C>
Line of credit                             $4,271,104           $3,077,606
Current portion of long-term debt             232,792               96,384
                                           -----------          ----------
         Total                             $4,503,896           $3,173,990
                                           ===========          ==========
</TABLE>

    In April 2000, the Company refinanced its existing debt with a new lender.
The Company initially received a $2 million line of credit which was
subsequently increased to $5.5 million.  The difference between the amount
outstanding on the former line of credit and the initial amount of the new line
of credit has been financed through subordinated debt from the Company's Chief
Executive Officer and Chief Financial Officer or entities controlled by them.
During 2000, these officers advanced approximately $1.5 million to the Company
to fund the difference between the former line of credit and the new line of
credit agreement.

<PAGE>
                  US 1 INDUSTRIES, INC. AND SUBSIDIARIES
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)



6. SHORT-TERM DEBT (Continued)

    Under the new revolving line of credit agreement, borrowings are limited to
70% of eligible accounts receivable and bear interest at the prime rate (9.5%
at December 31, 2000) plus .5%.  Beginning in January 2001, the interest rate
will be 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 $3 million are guaranteed by
the Chief Executive Officer and Chief Financial Officer of the Company.  At
December 31, 2000, the
outstanding borrowings on this line of credit were $4.27 million.

    In addition to the $5.5 million line of credit with FIRSTAR BANK, the
Company has also established a separate line for equipment financing in the
amount of $500,000 with FIRSTAR BANK.  The principal balance of the Equipment
Loan shall bear interest in an amount equal to the Prime Rate in effect plus 1%
per annum.  At December 31, 2000, the outstanding borrowings were $82,860
(see note 8).

    The line of credit is 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.

<PAGE>

                  US 1 INDUSTRIES, INC. AND SUBSIDIARIES
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)



7. LONG-TERM DEBT

Long-term debt at December 31, 2000 and 1999 comprises:
<TABLE>
<S>                                                   <C>          <C>
                                                      2000         1999
Note payable to the Chief Executive Officer
 And Chief Financial Officer, interest at
 prime + .75%, interest only payments required,
 principal balance due October, 2002            $3,042,075       1,532,165

Mortgage note payable to the Chief Executive
 Officer and Chief Financial Officer
 collateralized by land, interest at
 prime + .75%, interest only payments
 required, principal balance due
 July  2003                                        500,000        500,000

Note payable to August Investment
 Partnership, interest at prime + .75%,
 interest only payments required, principal
 balance due October  2002                         250,000        250,000

Note payable, cargo insurance premium financing,
 monthly payments of $18,376 including
 interest at 11% through September 2001            141,124              0

Mortgage note payable to August Investment
 Partnership, interest at prime + .75%, interest
 only payments required, principal balance due
 October, 2002                                     100,000         100,000
</TABLE>

<PAGE>
                  US 1 INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  YEARS ENDED DECEMBER 31, 2000, AND 1999

7. LONG-TERM DEBT (Continued)

<TABLE>
<S>                                                <C>                  <C>
Note payable, collateralized by equipment,
monthly payments of $1,760.53 including interest
 at prime +1% through January, 2006                 82,860              0

Note payable, collateralized by equipment,
 monthly payments of $2,077 including
 interest at 9.55% through April 2004               70,899              0

Mortgage note payable to ITE,
 Monthly payments of $2,850 including
 Interest at 9% through March 2002                  39,217         68,443

Mortgage note payable to AIFE,
 monthly payments of $2,150 including
 interest at 9% through March 2002                  29,646         51,689

Note payable, collateralized by equipment,
 monthly payments of $3,181 including
 interest at 7.8% through February, 2001             3,181         45,115
                                                 ---------      ----------
     Total debt                                  4,259,002       2,547,412
Less current portion                               232,792          96,384
                                                 ---------      ----------
Total long-term debt                           $ 4,026,210     $ 2,451,028
                                                ==========      ==========
</TABLE>
<PAGE>

                    US 1 INDUSTRIES, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Interest expense on related party notes was approximately $342,500, $261,000,
and $325,000 for the years ended December 31, 2000, 1999, and 1998
respectively.

Scheduled maturities of the long-term debt at December 31, 2000 are due as
follows:

<TABLE>

<S>               <C>                      <C>
                  2001                     $  232,792
                  2002                      3,439,272
                  2003                        539,210
                  2004                         26,120
                  2005                         19,862
                  Thereafter                    1,746
                  ----                         ------
                                           $4,259,002
                                           ==========
</TABLE>

8.  STOCK OPTIONS

    The Company has a stock option plan which allows the Board of Directors to
grant options to officers and certain key employees to purchase common stock at
the fair market value on the date of the grant.  At December 31, 2000 and 1999,
96,500 share were available for future option grants under the stock option
plan.  There were no options outstanding under the stock option plan as of
December 31, 2000 and 1999.

9.  INCOME TAXES

    The composition of taxes on income (benefit) is as follows:
<TABLE>
<CAPTION>

<S>                                   <C>         <C>         <C>
Current                               2000        1999        1998
                                      ----        ----        ----

  Federal                            273,000     140,000     59,000
  State                               48,000      25,000     10,000
  Utilization of net operating loss (321,000)   (165,000)   (69,000)
  carry-forward
  Adjustment of valuation allowance (800,000)          0          0
  ------------------------------------------------------------------


  Income tax expense (benefit)      (800,000)          0          0
  ------------------------------------------------------------------------


</TABLE>


    The Company and its subsidiaries file a consolidated federal income tax
return.

Deferred income taxes consist of the following:
<TABLE>
<CAPTION>
<S>                                  <C>         <C>          <C>
  December 31,                       2000        1999         1998
  -------------------------------------------------------------------

  Total deferred tax assets, relating
   principally to net operating
  loss carry-forwards              22,728,000   23,049,000   23,214,000

   Deferred tax liabilities                0            0            0
   -------------------------------------------------------------------
                                   22,728,000   23,049,000   23,214,000
  Less valuation allowance        (21,928,000) (23,049,000) (23,214,000)
  ----------------------------------------------------------------------
  Total net deferred tax asset       800,000           0            0
</TABLE>

<PAGE>

                   US 1 INDUSTIRES, INC. AND SUBSIDARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)

    At December 31, 2000, the Company has realized a net deferred tax asset of
$800,000 as it is more likely than not that this amount will be realized as a
result of anticipated future taxable income to be generated by the Company.
Due to the uncertainty of realization, a valuation allowance has been
maintained for the remaining deferred tax asset at December 31, 2000.

    The Company has net operating loss carry-forwards of approximately $57
million at December 31, 2000.  These carry-forwards are available to offset
taxable income in future years and substantially all of these carry-forwards
will expire in the years 2003 through 2010.

10.  COMMITMENTS AND CONTINGENCIES

    Cam Regional Transport filed a complaint against the Company in 1994 which
alleges breach of contract, claiming that Trailblazer Transportation, Inc.,
a subsidiary of the Company which filed bankruptcy, failed to abide by a
purchase agreement entered into with Cam Regional Transport, Inc. and Laurel
Mountain Leasing, Inc.  The complaint seeks damages of $284,000 plus interest
from November 1992.

    The Company is currently invloved in two lawsuits, one of which is a class
action lawsuit, as a result of an August 1999 incident in which a Carolina
National Transportation, Inc. truck overturned leaking chemicals.  It is the
Company's position that it is not at fault.  The Company contends that the
materials inside the container were improperly packaged by a third party, that
the chemicals which leaked were not harmful in nature, and that those persons
alleging injuries were not harmed.

    The Company is also involved in two lawsuits as a result of a chemical
leak that occured in a container hauled by a Carolina National Transportation,
Inc., truck.  It is the Company's position that they are not at fault for this
incident because they are merely the shipper and a third party had the
responsibility to package the load for safe transportation.

    At this time, the Company and its legal counsel are unable to assess the
outcome of these complaints.  The Company intends to vigorously defend itself
in these matters.

    The Company is involved in other litigation in the normal course of its
business.  Management intends to vigorously defend these cases.  In the opinion
of management, the litigation now pending will not have a material adverse
effect on the consolidated financial position of the Company.

    The Company has entered into an agreement with certain key employees of
Carolina National Transportation, Inc. ("Carolina"), a wholly owned subsidiary
of the Company, in which these employees will receive up to 40% ownership in
Carolina.

    These key employees will earn the 40% ownership interest in Carolina over
a three year period beginning in the year in which Carolina achieves positive
retained earnings.  Carolina has a negative retained earnings of $18,195 and
$482,000 at December 31, 2000 and 1999, respectively.

    The Company carries insurance for public liability and property damage, and
cargo loss and damage through various programs. The Company's insurance
liabilities are based upon the best information currently available and are
subject to revision in future periods as additional information becomes
available.  Management believes it has adequately provided for insurance
claims.

11.  ENVIRONMENTAL MATTERS

    The Company owns a piece of property in Phoenix where soil contamination
problems exist.  The Company has been working with regulatory officials to
eliminate new contamination sources and determine the extent of existing
problems.  Estimates of the cost to complete the future remediation of
approximately $141,000 are considered in the land valuation allowance at
December 31, 2000 and 1999.

<PAGE>
                    US 1 INDUSTIRES, INC.  AND SUBSIDIARIES
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)


12.  OTHER MATTERS

a)       In 1999 and 1998, other income (expense), net, in the consolidated
         statement of operations is comprised primarily of a write off net
         payables from fiscal years 1996 and 1997 relating to revisions of
         estimates of amounts due from or payable to drivers and agents.

b)       During 1998, the Company has written off approximately $531,000 in
         vendor accounts payable which are no longer considered by
         management and the Company's legal Counsel to be valid obligations of
         the Company.  These payables relate to fiscal years prior to 1994 and
         no claims have been made against these amounts since September 1993.

13.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>

        (In thousands, except per share data)                    Net
                                                   Net          Income
                   Operating     Operating        Income        (loss)
                   Revenue        Income          (loss)       per share
                                                            (basic and diluted)
<S>                 <C>           <C>            <C>               <C>
_______________________________________________________________________________
        2000
                      $49,055        $1,292         $1,602          $0.14
_______________________________________________________________________________
        Quarters:
         Fourth     15,671           449          1,161             0.10
         Third      12,761           324            189             0.02
         Second     11,593           282            170             0.01
         First       9,030           237             82             0.01
_______________________________________________________________________________
        1999
                   $32,334        $  954           $412            $0.03
_______________________________________________________________________________
        Quarters:
         Fourth      8,666           261            185             0.02
         Third       8,078           233             78             0.00
         Second      8,198           279            106             0.01
         First       7,392           181             43             0.00
_______________________________________________________________________________
        1998
                   $30,177        $  174           $173            $0.01
_______________________________________________________________________________
       Quarters:
         Fourth      7,287          (327)            95             0.00
         Third       7,682           108            ( 1)           (0.00)
         Second      8,082           230             77             0.01
         First       7,126           163              2             0.00
</TABLE>


<PAGE>
                             US 1 INDUSTRIES, INC.
                       VALUATION AND QUALIFYING ACCOUNTS
                   YEARS ENDED DECEMBER 1, 1998,1999 AND 2000


Item 9.  Changes in and Disagreements with Accountants' on Accounting and
         Financial Disclosure.

          None.

<TABLE>

<CAPTION>
                                   Schedule II

                                  Balance At     Charged to      Write-Offs,
                                 Beginning of     Costs and     Retirements &     Balance At
                                     Year         Expenses       Collection       End of Year
                                     ----         --------       ----------       -----------
<S>                              <C>            <C>              <C>              <C>
Description


Year Ended December 31, 1998

Allowance for Doubtful Accounts
   Receivable                    $195,000        $319,256        $419,256         $ 95,000


Year Ended December 31, 1999

Allowance for Doubtful Accounts
   Receivable                    $ 95,000        $ 49,027        $ 77,027         $ 67,000

Year Ended December 31, 2000

Allowance for Doubtful Accounts
   Receivable                    $ 67,000        $186,233        $ 44,233         $209,000
</TABLE>

<PAGE>
                            PART III

Item 10.  Directors and Executive Officers of the Registrant.

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The executive officers of the company as of March 15, 2001 were as follows
<TABLE>

<CAPTION>
NAME                       AGE          POSITION
----                       ---          --------
<S>                         <C>         <C>
Michael E. Kibler           60          President, Chief Executive
Officer,
                                        and Director
Harold E. Antonson          61          Chief Financial Officer, treasurer,
                                        and Director
Lex Venditti                48          Director
Robert I. Scissors          67          Director
Gage Blue                   30          Director
Brad James                  45          Director
</TABLE>

Name                          Office and Experience
----                          ---------------------
Michael E. Kibler                Mr. Kibler is President and Chief Executive
                              Officer of the Company  and has  held these
                              positions since September 13, 1993.  He also has
                              been President of Enterprise Truck Lines, Inc.,
                              an interstate trucking company engaging in
                              operations similar to the Company's, since 1972.
                              Mr. Kibler is also a director of American
                              Inter-Fidelity Exchange, an insurance reciprocal
                              located in Indiana that is the subject of an
                              Order of Rehabilitation by the Indiana
                              Department of Insurance.  Mr. Kibler has served
                              as a Director of the Company since 1993.

Harold E. Antonson            Mr. Antonson is Chief Financial Officer of the
                              Company, a position he has held since March
                              1998. Mr. Antonson is a certified public
                              accountant.  Prior to joining the Company,
                              he was Secretary/Treasurer of American
                              Inter-fidelity Exchange.  Mr Antonson is also a
                              partner in August Investment Partnership.  Mr.
                              Antonson was elected a director and Treasurer of
                              the Company in November 1999.

Lex Venditti                  Mr. Venditti has served as a Director of the
                              Company since 1993.  Mr. Venditti has been the
                              General Manager of American Interfidelity, an
                              insurance reciprocal located in Indiana that is
                              the subject of an order of rehabilitation by the
                              Indiana Department of Insurance, since 1995.

Robert Scissors               Mr. Scissors has been a Director of the Company
                              since 1993.  Mr. Scissors  began his career in
                              the Insurance Industry  in 1957.  Later, in
                              1982, Mr. Scissors joined a brokerage firm
                              called Alexander/Alexander where he worked until
                              retiring in 1992.  Mr. Scissors currently serves
                              as an insurance consultant and broker.




<PAGE>
Directors and Executive Officers of the Registrant (continued)



Gage Blue                     Mr. Blue was elected Director in 1999.  Mr. Blue
                              is Vice President of Operations for Carolina
                              National, a subsidiary of US1 Industries, which
                              began operations in 1996.  Mr. Blue has held the
                              position of Vice President of Operations since
                              December 1996.

Brad James                    Mr. James is the President of Seagate
                              Transportation Services, Inc.  Mr. James
                              graduated from Bowling Green University with a
                              Bachelors Degree in Science in Business
                              Administration.  He has been in the trucking
                              industry since 1977.
                              Mr. James was elected Director of the Company in
                              1999.

Item 11.  Executive Compensation

    The following Summary Compensation Table sets forth compensation paid by
the Company during the years ended December 31,2000,1999 and 1998 to its Chief
Executive Officer.  No other officer earned in excess of $ 100,000.
<TABLE>
<CAPTION>
                       Summary Compensation Table

                              Annual Compensation
Name and Position        Year          Salary       Bonus         Other
-----------------        ----          ------       -----         -----
<S>                      <C>           <C>             <C>           <C>
Michael Kibler           2000          33,048          0             0
President                1999          33,048          0             0
                         1998          33,048          0             0
</TABLE>

EMPLOYEE STOCK OPTIONS

    The company's 1987 Stock Option Plan (Nonqualified) (the "Option Plan")
authorizes the Board of Directors or a committee thereof to grant to officers,
including officers who are also directors, and employees of the Company options
to purchase from the Company shares of Common Stock.  The Option Plan
originally covered an aggregate of 570,000 shares of Common Stock.  At
December 31, 2000, there were no options outstanding under the Option Plan and
96,500 shares remained available for future grants of options thereunder.


<PAGE>

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

Security Ownership of Management

    The following table sets forth the number and percentage of shares of
Common Stock that as of March 15, 2001 are deemed to be beneficially owned by
each director of the company and director nominee, by each executive officer of
the Company and by all directors and executive officers of the company as a
group.

<TABLE>
<CAPTION>
                              Number of Shares of
                              Common Stock
Name and position             Beneficially Owned        Percentage of Class
-----------------             ------------------        -------------------
<S>                                  <C>       <C>        <C>
Michael E Kibler                     3,489,507 (1,2)      32.9%
Director, President and
Chief Executive Officer

Robert I. Scissors,                     36,770               0
Director

Lex L. Venditti                         20,000               0
Director


Harold E. Antonson                   3,489,507  (1,3)     32.9%
Chief Financial Officer,
Treasurer and Director

All Directors and Executive Officers 3,735,919            35.2%
</TABLE>


(1)      As partners of August Investment Partnership (AIP), Messrs. Kibler and
         Antonson, may be deemed to be beneficial owners of 3,067,840 shares of
        common stock owned by AIP

(2)     As Director of Eastern Refrigerated Express Inc, )an entity under
        common control) Messrs. Kibler, Antonson may be deemed to
        be beneficial owner of 366,667 Shares of Common Stock owned by Eastern.

(3)  Mr. Antonson disclaims beneficial ownership of 197,500 shares of Common
     Stock owned by American Inter-Fidelity Exchange, of which Mr Antonson is
     Secretary and Treasurer

Security Ownership of Certain Beneficial Owners

    The following table sets forth the number and percentage of shares of
Common Stock beneficially owned as of March 15, 2001 by any person who is known
to the Company to be the beneficial owner of more than five percent of the
outstanding shares of Common Stock:
<TABLE>
<CAPTION>

                              Number of Shares of
Name and Address of           Common Stock                Percentage
Beneficial Owner              Beneficially Owned          of Class
----------------              ------------------          --------
<S>                           <C>        <C>               <C>
Harold E. Antonson            3,489,507  (1,2,3)           32.9%
8400 Louisiana Street
Merrillville, IN 46410

August Investment Partnership 3,067,840                    28.9%
8400 Louisiana Street
Merrillville, IN 46410


Michael Kibler                3,489,507  (1,3)             33.0%
8400 Louisiana Street
Merrillville, IN 46410

<PAGE>
Security Ownership of Certain Beneficial Owners and Management (continued)

John K. Lavery                3,438,507  (1,3)             32.4%
8400 Louisiana Street
Merrillville, IN 46410
</TABLE>


(1)  As partners of AIP, Messrs. Kibler, and Antonson, and Lavery may be deemed
     to be beneficial owners of the shares of Common Stock owned by AIP.

(2)  Mr. Antonson disclaims beneficial ownership of 197,500 shares of Common
     Stock owned by American Inter-Fidelity Exchange, of which Mr. Antonson is
     Secretary and Treasurer.

(3) As directors of Eastern Refrigerated Express, Inc. Messrs. Antonson,
    Kibler and Lavery may be deemed to be beneficial owners of 366,667 shares
    of Common Stock owned by Eastern.



Item 13.  Certain Relationships and Related Transactions.

    The company leases office space for its headquarters in Gary, Indiana, for
$2,200 per month from Michael E. Kibler, the presiden 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.  Revenues related to those services
totaled $100,251, $77,640, and $70,607 in 2000, 1999, and 1998 respectively.

    One of the Company's insurance providers, American Inter-Fidelity Exchange
(AIFE) is managed by a Director of the Company and the Company has an
investment in the Provider. In addition, the Director also manages an
affiliated insurance carrier, Indiana Truckers Exchange (ITE).   For the years
ended December 31, 2000, 1999, and 1998 cash paid for related party
insurance premiums and deductibles amounted to $729,434, $532,586, and $751,123
respectively.  The Company also has long term notes payable to AIFE and ITE as
described in Note 8 to the consolidated financial statements.

    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.



<PAGE>
                         PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)(1)    Financial Statements:

          Reports of Independent Certified Public Accountants               13

          Consolidated Balance Sheets as of December 31, 1999 and 1998      14
                                                                            15

          Consolidated Statements of Operations for the years ended         16
          December 31, 2000, 1999, 1998 and 1997

          Consolidated Statements of Shareholders' Deficiency               17
          for the years ended December 31, 2000, 1999,1998, and 1997

          Consolidated Statements of Cash Flows                             18
          for the years ended December 31, 2000, 1999,1998, and 1997

          Notes to Consolidated Financial Statements                        19

(a)(2)    Financial Statement Schedules:

     Schedules are not included because of the absence of the conditions under
which they are required or because the required information is included in the
consolidated financial statements or notes thereto.

(a)(3)    List of Exhibits

     The following exhibits, numbered in accordance with Item 601 of Regulation
S-K, are filed as part of this report:


Exhibit 3.1   Articles of Incorporation of the Company.
              (incorporated herein by reference to the Company's Proxy
              Statement of November 9, 1993).

Exhibit 3.2   By-Laws of the Company.
              (incorporated herein by reference to the Company's Annual Report
              on Form 10-K for the year ended December 31, 1994).

Exhibit 10.1  Loan and Security Agreement with FIRSTAR and Carolina National
              Transportation Inc., Keystone Lines, Inc., Gulfline Transporet
              Inc., and US1 Industries, Inc.

Exhibit 10.2  Loan agreements with August Investment Partnership and US 1
              Industries.

Exhibit 10.3  Loan agreements with Michael Kibler/Harold Antonson and US 1
              Industries.

Exhibit 10.4  First Amendment of Loan and Security Agreement with Firstar and
              Carolina National Transportation Inc., Keystone Lines, Gulfline
              Transport Inc., and US 1 Industries, Inc.
              (by reference to the Company's Form 10-Q for the quarterly period
              ended June 30, 2000, filed on August 14, 2000) Loan agreements
              with AIFE/ITE and US 1 Industries.

Exhibit 10.5  Second Amendment of Loan and Security Agreement with Firstar and
              Carolina National Transportation Inc., Keystone Lines, Gulfline
              Transport Inc., and US 1 Industries, Inc.

(b)      Reports on Form 8-K

NONE
<PAGE>
                                SIGNATURES

     Pursuant to the requirements of Sections 13 and 15(d) 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.

<TABLE>
                                    US 1 INDUSTRIES, INC.

<S>                                <C>
Date:_________________              By:  _________________________
                                         Michael E. Kibler
                                         President & Chief Executive Officer
                                         (Principal Executive Officer)


Date:_________________              By:  _________________________
                                         Harold Antonson
                                         Chief Financial Officer & Treasurer
                                         (Principal Financial & Accounting
                                         Officer)

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


Date:_________________                   _________________________
                                         Michael E. Kibler, Director

Date:_________________                   _________________________
                                         Robert I. Scissors, Director

Date:_________________                   _________________________
                                         Lex L. Venditti, Director

Date:_________________                   _________________________
                                         Gage Blue, Director

Date:_________________                   _________________________
                                         Brad James, Director

Date:_________________                   _________________________
                                         Harold Antonson, Director
</TABLE>
<PAGE>
Exhibit 10.1

                                 LOAN AGREEMENT
                                     between

                     CAROLINA NATIONAL TRANSPORTATION, INC.,

                                 KEYSTONE LINES,

                           GULF LINE TRANSPORT, INC.,

                                       and

                            FIVE STAR TRANSPORT, INC.
                                   as Borrower

                                       and

                             US 1 INDUSTRIES, INC.,
                                  as Guarantor

                                       and

                               FIRSTAR BANK N.A.,
                                    as Lender

                          Dated as of April ____, 2000

<PAGE>


                                TABLE OF CONTENTS

ARTICLE I.....................................................................6
   DEFINITIONS AND DETERMINATIONS.............................................6
      1.1   Definitions.......................................................6
      1.2   Time Periods.....................................................15
      1.3   Accounting Terms and Determinations..............................16
      1.4   References.......................................................16
      1.5   Lender's Discretion..............................................16
      1.6   Borrower's or Guarantor's Knowledge..............................16
ARTICLE II...................................................................17
   REVOLVING LOANS AND TERMS OF PAYMENT......................................17
      2.1   Revolving Loan...................................................69
         2.1.1    Amount and Disbursement....................................69
         2.1.2    Revolving Loan Note........................................69
         2.1.3    Reborrowing................................................69
         2.1.4    Conditions of Advances of the Revolving Loan...............69
      2.2   Use of Proceeds of the Revolving Loan............................18
      2.3   Interest.........................................................70
         2.3.1    Interest Rate..............................................18
         2.3.2    Interest Computation.......................................18
         2.3.3    Maximum Interest...........................................71
         2.3.4    Increased Costs............................................72
      2.4   Principal and Interest Payments..................................73
         2.4.1    Interest...................................................73
         2.4.2    Principal..................................................73
      2.5   Mandatory Prepayments of the Revolving Loan......................73
      2.6   Payments after Event of Default..................................20
      2.7   Method of Payment................................................20
ARTICLE III..................................................................20
   SECURITY..................................................................20
ARTICLE IV...................................................................21
   CONDITIONS OF CLOSING.....................................................21
      4.1   Representations and Warranties...................................21
      4.2   Delivery of Documents............................................21
      4.3   Performance; No Default..........................................22
      4.4   Opinions of Counsel..............................................22
      4.5   Approval of Loan Instruments and Security Interests; Consents....22
      4.6   Security Interests...............................................22
      4.7   Financial Statements, Reports and Projections....................22
      4.8   Year 2000 Compliance.............................................22
      4.9   Material Adverse Change..........................................23
      4.10  Use of Assets....................................................23
      4.11  Fees and Expenses................................................23
      4.12  Insurance........................................................23
<PAGE>
      4.13  Existing Indebtedness............................................23
ARTICLE V....................................................................23
   REPRESENTATIONS AND WARRANTIES............................................23
      5.1   Existence and Power..............................................23
      5.2   Authority........................................................24
      5.3   Binding Agreements...............................................24
      5.4   Business and Property of Borrower and Guarantor..................24
         5.4.1    Business and Property......................................24
         5.4.2    Operating Agreements.......................................24
         5.4.3    Facility Sites.............................................24
         5.4.4    Leases.....................................................25
         5.4.5    Real Property..............................................25
         5.4.6    Operation and Maintenance of Equipment.....................25
         5.4.7    Existing Indebtedness......................................25
      5.5   Title to Property; Liens.........................................25
      5.6   Financial Statements.............................................26
      5.7   Litigation.................................,.....................26
      5.8   Defaults in Other Agreements; Consents; Conflicting Agreements...26
      5.9   Taxes............................................................26
      5.10  Compliance with Applicable Laws..................................27
      5.11  Patents, Trademarks, Franchises and Agreements...................27
      5.12  Regulatory Matters...............................................27
      5.13  Environmental Matters............................................27
      5.14  Application of Certain Laws and Regulations......................28
         5.14.1   Investment Company Act.....................................28
         5.14.2   Holding Company............................................28
         5.14.3   Foreign or Enemy Status....................................28
         5.14.4   Regulations as to Borrowing................................28
      5.15  Margin Regulations...............................................28
      5.16  Other Indebtedness...............................................29
      5.17  No Misrepresentation.............................................29
      5.18  Employee Benefit Plans...........................................29
         5.18.1   No Other Plans.............................................29
         5.18.2   ERISA and Code Compliance and Liability....................29
         5.18.3   Funding....................................................30
         5.18.4   Prohibited Transactions and Payments.......................30
         5.18.5   No Termination Event.......................................30
         5.18.6   ERISA Litigation...........................................30
      5.19  Employee Matters.................................................30
         5.19.1   Collective Bargaining Agreements; Grievances...............30
         5.19.2   Claims Relating to Employment..............................31
      5.20  Burdensome Obligations...........................................31
      5.21  Subsidiaries.....................................................31
ARTICLE VI...................................................................31

<PAGE>
   AFFIRMATIVE COVENANTS.....................................................31
      6.1   Legal Existence; Good Standing...................................32
      6.2   Inspection.......................................................32
      6.3   Financial Statements and Other Information.......................32
         6.3.1    Monthly Statements.........................................32
         6.3.2    Quarterly Statements.......................................32
         6.3.3    Annual Statements..........................................33
         6.3.4    Compliance Certificate.....................................33
         6.3.5    Accountants' Certificate...................................33
         6.3.6    Audit Reports..............................................34
         6.3.7    Notice of Defaults; Loss...................................34
         6.3.8    Notice of Suits; Adverse Events............................34
         6.3.9    Reports to Members, Creditors and Governmental Bodies......34
         6.3.10   ERISA Notices and Requests.................................35
         6.3.11   Other Information..........................................36
      6.4   Reports to Governmental Bodies and Other Persons.................36
      6.5   Maintenance of Licenses and Other Agreements.....................36
      6.6   Insurance........................................................36
         6.6.1    Maintenance of Insurance...................................36
         6.6.2    Claims and Proceeds........................................36
      6.7   Future Leases....................................................37
      6.8   Environmental Matters............................................37
      6.9   Compliance with Laws.............................................38
      6.10  Taxes and Claims.................................................38
      6.11  Maintenance of Properties........................................38
      6.12  Governmental Approvals...........................................38
      6.13  Payment of Indebtedness..........................................38
      6.14  Maintenance of Accounts..........................................39
ARTICLE VII..................................................................39
   NEGATIVE COVENANTS........................................................39
      7.1   Borrowing........................................................39
      7.2   Liens............................................................39
      7.3   Merger and Acquisition...........................................39
      7.4   Contingent Liabilities...........................................39
      7.5   Dividends and Distributions......................................39
      7.6   Capital Expenditures.............................................40
      7.7   Payments of Indebtedness for Borrowed Money......................40
      7.8   Investments, Revolving Loans.....................................40
      7.9   Fundamental Business Changes.....................................40
      7.10  Facility Sites...................................................40
      7.11  Sale or Transfer of Assets.......................................41
      7.12  Amendment of Certain Agreements..................................41
      7.13  Acquisition of Additional Properties.............................41
      7.14  Transactions with Affiliates.....................................41
      7.15  Compliance with ERISA............................................41
<PAGE>
      7.16  Unsubordinated Indebtedness to Tangible Net Worth Ratio..........42
      7.17  Net Income for 1999..............................................42
      7.18  Minimum Net Worth................................................42
      7.19  Minimum Debt Service Ratio.......................................42
      7.20  Testing of Financial Covenants...................................43
ARTICLE VIII.................................................................43
   DEFAULT AND REMEDIES......................................................43
      8.1   Events of Default................................................43
         8.1.1    Default in Payment.........................................43
         8.1.2    Breach of Covenants........................................43
         8.1.3    Breach of Warranty.........................................43
         8.1.4    Default Under Other Indebtedness for Borrowed Money........43
         8.1.5    Bankruptcy.................................................44
         8.1.6    Judgments..................................................44
         8.1.7    Impairment of Licenses; Other Agreements...................44
         8.1.8    Collateral.................................................44
         8.1.9    Plans......................................................45
         8.1.10   Change in Control; Sale of Borrower........................45
         8.1.11   Material Adverse Effect....................................45
      8.2   Acceleration of Borrower's Obligations...........................46
      8.3   Remedies on Default..............................................46
         8.3.1    Enforcement of Security Interests..........................46
         8.3.2    Other Remedies.............................................46
      8.4   Application of Funds.............................................46
         8.4.1    Expenses...................................................46
         8.4.2    Borrowers' Obligations.....................................47
         8.4.3    Surplus....................................................47
      8.5   Performance of Borrower's Obligations............................47
ARTICLE IX...................................................................47
   CLOSING...................................................................47
ARTICLE X....................................................................48
   EXPENSES AND INDEMNITY....................................................48
      10.1  Attorney's Fees and Other Fees and Expenses......................48
         10.1.1   Fees and Expenses for Preparation of Loan Instruments......48
         10.1.2   Fees and Expenses in Enforcement of Rights or Defense
                  of Loan Instruments........................................48
      10.2  Indemnity........................................................49
         10.2.1   Brokerage Fees.............................................49
         10.2.2   General....................................................49
         10.2.3   Operation of Collateral; Joint Venturers...................49
         10.2.4   Environmental Indemnity....................................49
ARTICLE XI...................................................................50
   MISCELLANEOUS.............................................................50
      11.1  Notices..........................................................50
      11.2  Survival of Loan Agreement; Indemnities..........................51
      11.3  Further Assurance................................................51
      11.4  Taxes and Fees...................................................51

<PAGE>
      11.5  Severability.....................................................51
      11.6  Waiver...........................................................52
      11.7  Modification of Loan Instruments.................................52
      11.8  Captions.........................................................52
      11.9  Successors and Assigns...........................................52
      11.10    Remedies Cumulative...........................................52
      11.11    Entire Agreement; Conflict....................................52
      11.12    Applicable Law................................................53
      11.13    JURISDICTION AND VENUE........................................53
      11.14    WAIVER OF RIGHT TO JURY TRIAL.................................54
      11.15    Time of Essence...............................................54
      11.16    Estoppel Certificate..........................................54
      11.17    Consequential Damages.........................................54
      11.18    Counterparts..................................................54
      11.19    No Fiduciary Relationship.....................................54

<PAGE>


                                 LOAN AGREEMENT

         This LOAN  AGREEMENT,  dated as of April _, 2000,  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") and FIVE STAR  TRANSPORT,  INC.,
an Indiana corporation, ("Five  Star") (Carolina, Keystone, Gulf Line and
Five  Star 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 desire to borrow the Revolving Loan from Lender, the
proceeds of which shall be used (i) to refinance  Borrowers' and Guarantor's
secured loan obligations  to  Finova  Capital  Corporation  ("Finova");  (ii)
for  Borrowers' working capital;  and (iii) to pay related transactions costs.
Lender has agreed to make the  Revolving  Loan upon the terms and  subject to
the  conditions set forth herein.

         NOW, THEREFORE, it is hereby agreed as follows:

                                      1.

                         DEFINITIONS AND DETERMINATIONS

Definitions.

         As used in this  Loan  Agreement  and in the  other Loan Instruments,
unless otherwise expressly indicated herein or therein, the following terms
shall have the following meanings (such  meanings to be applicable equally to
both the singular and plural forms of the terms defined):

         Accountants: any independent certified public accounting firm selected
by Borrower and reasonably satisfactory to Lender, and shall include Borrower's
current independent public accounting firm.

         Accounting Changes: as defined in Section 1.3.

         Accounts:  all presently existing and hereafter arising accounts
receivable and other rights to payment owing to any of Borrowers or Guarantor
for goods sold or leased or services rendered by any of Borrowers or Guarantor,
whether or not earned by performance, and any and  all credit insurance,
guaranties or security therefor.

         Advance: any advance of the Revolving Loan.

         Affiliate: any Person that directly or indirectly, through one or more
intermediaries,  controls or is controlled  by or is under common  control with
another Person.  The term  "control" means having the possession, direct or

<PAGE>
indirect, of the power to direct or cause the direction of the  management and
policies of a Person, whether through the ownership of voting securities  or
equity interests, by contract or otherwise.  For the purposes hereof any Person
which owns or controls, directly or indirectly, 10% or more of the securities
or equity interests, as applicable, whether voting or non-voting, of any other
Person shall be deemed to "control" such Person.

         Bankruptcy Code: the United States Bankruptcy Code and any successor
statute thereto, and the rules and regulations issued thereunder, as in effect
from time to time.

         Basic Financial Statements: as defined in subsection 6.3.3.

         Borrowers: has the meaning assigned to that term in the Preamble to
this Revolving Loan Agreement.

         Borrowers' Obligations: (i) any and all Indebtedness due or to become
due, whether contingent or otherwise, now existing, or hereafter  arising, of
Borrowers to Lender pursuant to the terms of this Loan Agreement or any other
Loan  Instrument,  and  (ii)  the  performance  of the  covenants of Borrowers
contained in the Loan Instruments, for all of which each of Borrowers shall be
jointly and severally liable.

         Business Day: any day other than a Saturday, Sunday or other day on
which banks in Chicago, Illinois are required or authorized to close.

         Business  Insurance:  such property, casualty, liability, business
interruption and other insurance as Lender from time to time requires Borrowers
and Guarantor to maintain other than cargo insurance insuring the value of
goods being transported by Borrowers.

         Capital  Expenditures: payments that are made or liabilities that are
incurred by a Person for the lease, purchase, improvement, construction or use
of any  Property,  the  value  or cost of which  under GAAP is  required to be
capitalized  and  appears on such  Person's  balance  sheet in the category of
property,  plant or  equipment,  without  regard  to the  manner in which such
payments or the instruments  pursuant to which they are made are characterized,
and shall include, without limitation, payments for or liabilities incurred
with respect to the installment purchase of Property and payments under
Capitalized Leases.

         Capitalized Lease: any lease of Property, the obligations for the
rental of which are required to be capitalized in accordance with GAAP.

         Closing: the initial disbursement of the Revolving Loan.

         Closing Certificate: a closing certificate executed by each Borrower
to Lender.

         Closing Date: the date upon which the Closing occurs.

         Code: the Internal Revenue Code of 1986, as amended, and any successor
statute thereto, and the rules and regulations issued thereunder, as in effect
from time to time.
<PAGE>

         Collateral:  the Accounts and all existing and after-acquired Property
of Borrowers and Guarantor (other than the real property in Arizona currently
owned by Guarantor or a Borrower), including without limitation all existing
and after-acquired, equipment, inventory and general intangibles, and all
proceeds of the foregoing.

         Compliance Certificate: a compliance certificate executed by Borrowers
in the form of Exhibit 1.1(A) attached hereto.

         Corporate Guaranty: the unlimited secured corporate guaranty of US 1
Industries, Inc., Borrowers' parent company, in form and substance satisfactory
to Lender, wherein Guarantor shall guarantee all of Borrowers' Obligations.

         Default Rate: the Interest Rate, as defined herein, plus 2.0% per
annum.

         Default Rate Period: a period of time commencing on the date that an
Event of Default has occurred and ending on the date that such Event of Default
is cured or waived.

         Dollars: lawful currency of the United States.

         EBITDA: for any period, without duplication, the Net Income of
Borrowers or Guarantor for such period:

1.1.1 plus the sum of the following,  to the extent deducted in determining
such Net Income for such period:

(a)      losses from sales, exchanges and other dispositions of Property not in
the ordinary course of business;

(b)               interest paid or accrued on Indebtedness, including, without
                  limitation, interest on Capitalized Leases that is imputed in
                  accordance with GAAP;

(c)      depreciation and amortization of assets during such period; and

(d)      charges against net income for taxes;

1.1.2    minus gains from sales, exchanges and other dispositions of Property
         or other extraordinary gains not in the ordinary course of business.

         Eligible  Accounts  Receivable:  the total amount of the Accounts from
completed transactions after deducting (i) Accounts over 75 days past invoice
date, (ii) intercompany Accounts, (iii) foreign Accounts, (iv) Accounts to the
extent  subject to customer  setoffs (v) Accounts for which the portion of the
Account aged 75 days past the invoice date is in excess of 25% of the total
indebtedness owed to any of Borrowers by the account debtor, and (vi) such
other reserves as Lender may reasonably deem appropriate.

<PAGE>
         Employee  Benefit Plan: any employee benefit plan within the meaning
of Section 3(3) of ERISA which (i) is maintained  for employees of any of
Borrowers or any ERISA  Affiliate or (ii) has at any time within the preceding
six years been  maintained  for the employees of any of Borrowers or any
current or former ERISA Affiliate.

         Environmental  Laws:  any and all federal, state and local laws that
relate to or impose liability or standards of conduct concerning public or
occupational health and safety or  protection of the environment, as now or
hereafter in effect and as have been or hereafter may  be amended or
reauthorized, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C.  ss.9601  et seq.),  the
Hazardous Materials Transportation Act (42 U.S.C. ss.1802 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C.  ss.1251 et seq.), the Toxic Substances
Control Act (15 U.S.C.  ss.2601 et seq.), the Clean Air Act (42 U.S.C. ss.7901
et seq.), the National  Environmental Policy Act (42 U.S.C.  ss.4231, et seq.),
the Refuse Act(33 U.S.C.ss.407, et se .), the Safe Drinking Water Act(42 U.S.C.
ss.300(f) et seq.), the Occupational Safety and Health Act (29 U.S.C. ss.651 et
seq.),  and all rules,  regulations, codes, ordinances and guidance  ocuments
promulgated or published thereunder, and the provisions of any licenses,
permits, orders and decrees issued pursuant to any of the foregoing.

         ERISA: the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute, thereto, and the rules and regulations
issued thereunder, as in effect from time to time.

         ERISA  Affiliate:  any Person who is a member of a group which is
under common control with Borrowers or Guarantor, who together with Borrowers
or Guarantor is treated as a single employer within the meaning of Section
414(b), (c) and (m) of the Code.

         Event of Default: any of the Events of Default set forth in Section
8. 1.

         Excess Interest: as defined in subsection 2.3.3.

         Existing Indebtedness: all Indebtedness for Borrowed Money owed by
any of Borrowers or Guarantor, immediately prior to the Closing.

         Funding Date: the date of disbursement of any Advance, which shall be
a Business Day.

         GAAP: generally accepted accounting principles in effect from time to
time, which shall include but shall not be limited to the official
interpretations thereof by the Financial Accounting Standards Board or any
successor thereto.

         Good Funds: Dollars available in federal funds to Lender at or before
2:00 p.m., Chicago time, on a Business Day.

         Governmental Body: any foreign, federal, state, municipal or other
government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof or any court or arbitrator.


<PAGE>
         Hazardous Materials: any hazardous, toxic, dangerous or other waste,
substance or material defined as such in, regulated by or for purposes of any
Environmental Law.

         Incipient Default: any event or condition which, with the giving of
notice or the lapse of time, or both, would become an Event of Default.

         Indebtedness: all liabilities, obligations and reserves,contingent or
otherwise, which, in accordance with GAAP, would be reflected as a liability on
a balance sheet or would be required to be disclosed in a financial  statement,
including, without  duplication:  (i)  Indebtedness  for Borrowed  Money, (ii)
obligations secured by any Lien upon Property, (iii) guaranties and letters of
credit, and (iv) liabilities in respect of unfunded  vested benefits under any
Pension Plan or in respect of withdrawal liabilities incurred under ERISA by
any of Borrowers, Guarantor or any ERISA Affiliate to any Multi-employer Plan.

         Indebtedness for Borrowed Money: without duplication, all Indebtedness
(i) in respect of money borrowed, (ii) evidenced by a note, debenture or other
like written  obligation to pay money  (including,  without limitation, all of
Borrowers' Obligations, Permitted Senior Indebtedness and Permitted
Subordinated Indebtedness), (iii) in respect of rent or hire of Property under
Capitalized Leases or for the deferred purchase price of Property, (iv) in
respect of obligations under conditional sales or other title retention
agreements, and (v) all guaranties of any or all of the foregoing.

         Instruments: the Loan Instruments.

         Intellectual Property: collectively, all of Borrowers' and Guarantor's
patents, trademarks, service marks, trade names, copyrights, franchises and all
other intellectual property rights with respect thereto.

         Interest Rate: the interest which the Revolving Loan bears, other than
during a Default Rate Period, as provided in subsection 2.3.1 hereunder.

         Inventory: all present and future inventory in which any Borrower has
any interest, including, without limitation, all goods held for sale, lease or
other disposition by a Borrower, or to be furnished under a contract of
service, and all of Borrowers' present and future raw materials, work in
process, finished goods, goods consigned to any Borrower to the extent of such
Borrower's interest therein as consignee, materials and supplies of any kind,
nature or description which are or might be used in connection with the
manufacture, packing, shipping, advertising, selling or furnishing of any such
goods and all documents of title or other documents representing the same.

         Landlord: a lessor under a Lease.

         Landlord's Consent: a landlord's consent in form and substance
reasonably satisfactory to Lender.
<PAGE>
         Lease: any lease of real estate under which a Borrower or Guarantor
is, or will be, the lessee.

         Leasehold Property: any real estate which is the subject of a Lease.

         Lender: Firstar Bank N.A., a national banking association, its
successors and assigns.

         Lien: any mortgage, deed of trust, pledge, assignment, lien, charge,
encumbrance or security interest of any kind, or the interest of a vendor or
lessor under any conditional sale agreement, Capitalized Lease or other title
retention agreement.

         Loan Agreement: this Loan Agreement and any amendments or supplements
hereto.

         Loan Instruments:

(a)      Loan Agreement;

(b)      Note;

(c)      Corporate Guaranty;

(d)      Security Instruments;

(e)      Closing Certificate;

(f)      Subordination Agreements;

(g)      Uniform Commercial Code financing statements required by Lender;

(h)      the Personal Guaranties; and

(i)               such other instruments and documents as Lender reasonably may
                  require in connection with the transactions contemplated by
                  this Loan Agreement.

         Material  Adverse  Effect: (i) a material adverse effect upon the
business, operations, Property, prospects, profits or financial condition of
any Borrowers or Guarantor or upon the validity, enforceability or priority of
the Security Interests or (ii) a material impairment of the ability of any
Borrower or Guarantor to perform its obligations under any Loan Instrument to
which it is a party or of Lender to enforce or collect any of Borrowers'
Obligations or the Obligations (as defined in the Corporate Guaranty) of
Guarantor.

         Maximum Rate: as defined in subsection 2.3.3.

         Multiemployer  Plan:  any multiemployer plan as defined pursuant to
Section 3(37) of ERISA to which a Borrower or Guarantor or any ERISA Affiliate
makes, or accrues an obligation to make, contributions, or has made, or been
obligated to make, contributions within the preceding six years.


<PAGE>
         Net Income: shall have the meaning accorded to such term by GAAP.

         Operating  Agreement:  any joint venture agreement, supply agreement,
requirements contracts, equipment  lease,  right-of-entry  agreement,  access
agreement,  vendor agreement,  distributing agreement,  service agreement,
advertising contract, employment agreement, management agreement, collective
bargaining agreement or other similar agreement relating to the operation of a
Borrower's or Guarantor's business.

         Overadvance: as defined in subsection 2.5.

         Pay-Off Letter: a pay-off letter from each holder of the Existing
Indebtedness addressed to Lender.

         PBGC: the Pension Benefit Guaranty Corporation or any Governmental
Body succeeding to the functions thereof

         Pension Plan:  any Employee  Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Part 3 of Title I of ERISA, Title
IV of ERISA, or Section 412 of the Code and which (i) is maintained for
employees of any Borrower or Guarantor  or any ERISA  Affiliate, or (ii) has at
any time within the preceding six years been maintained for the employees of
any Borrower or Guarantor or any of its current or former ERISA Affiliates.

         Permitted Liens: any of the following Liens:

                                    (i)     the Security Interests;

                                    (ii)    the Permitted Senior Indebtedness
                                            Liens;

                                    (iii)  Liens for taxes or assessments and
                           similar charges, which either are (A) not delinquent
                           or (B) being  contested diligently and in good faith
                           by appropriate proceedings, and as to which
                           Borrowers and Guarantor have set aside reserves on
                           its books in accordance with GAAP;

                                    (iv)  statutory Liens, such as mechanic's,
                           material-man's, repairmen's, warehouseman's,
                           carrier's, landlord's, banks and related  rights of
                           set-off, or other like Liens, incurred in good faith
                           in the ordinary course of business, provided that
                           the underlying obligations relating to such Liens
                           are paid in the ordinary course of business, or are
                           being contested diligently and in good faith by
                           appropriate proceedings and as to which Borrowers
                           and Guarantor have set aside reserves on its books
                           in accordance with GAAP, or the payment of which
                           obligations are otherwise secured in a manner
                           satisfactory to Lender;

                                    (v) zoning ordinances, easements, licenses,
                           reservations, provisions, covenants, conditions,
                           waivers or restrictions on the use of Property and
                           other title exceptions, in each case, that are
                           acceptable to Lender;

                                    (vi) Liens in respect of judgments or
                           awards with respect to which no Event of Default
                           would exist pursuant to subsection 8.1.6;
<PAGE>
                                    (vii) Liens to secure payment of insurance
                           premiums (A) to be paid in accordance with
                           applicable laws in the ordinary course of business
                           relating to payment of worker's compensation, or (B)
                           that are required for the participation in any fund
                           in connection with worker's compensation,
                           unemployment insurance, old-age pensions or other
                           social security programs; and

                                    (viii) the interest or title of a lessor
                           under  the  stated terms of any Lease to which a
                           Borrower is a party.

         Permitted Prior Liens: any of the following Liens:

                                    (i)     the Permitted Senior Indebtedness
                           Liens;

                                    (ii)  the Permitted  Liens described in
                           clauses (iii), (iv) and (viii) of the definition of
                           Permitted Liens that are accorded priority to the
                           Security Interests by law; and

                                    (iii)  the  Permitted   Liens  described in
                           clauses (v) and (vii) of the definition of Permitted
                           Liens, subject to the limitations or requirements
                           set forth therein.

         Permitted  Senior  Indebtedness:  Existing Indebtedness, other than
Borrowers' Obligations, and less  Indebtedness  to Finova  Capital  Corp. and
Permitted Subordinated Indebtedness ("Permitted Senior Existing Indebtedness"),
together with any other Indebtedness for Borrowed Money incurred after the date
hereof, provided (i) no Event of Default exists at the time or will be caused
as a result of the incurrence of any Indebtedness, and (ii) the aggregate
amount of Permitted Senior Indebtedness at any one time outstanding may not
exceed the sum of the Permitted Senior Existing Indebtedness as of the date
hereof  plus $50,000.

         Permitted Senior Indebtedness Liens: Liens that secure Permitted
Senior Indebtedness,  provided  that (i) each such Lien  attaches only to the
Property purchased or leased with the proceeds of the Permitted Senior
Indebtedness incurred  with  respect to such  Property and (ii) Lender is
granted a Lien upon suc  Property, subordinate only to the Lien granted to the
holder of the applicable Permitted Senior Indebtedness.

         Permitted Subordinated Indebtedness:  means the indebtedness of any
Borrower or Guarantor to Michael Kibler and/or Harold Antonson or August
Investment Partnership as set forth in Schedule 5.16 hereto,  which the holders
of such indebtedness have agreed to subordinate to the senior rights of Lender,
pursuant to Subordination Agreements of even date between Lender and the holders
of such indebtedness, and any additional indebtedness of any Borrower or
Guarantor to Michael Kibler and/or  Harold Antonson or August Investment
Partnership which has been made expressly subordinate to the senior rights of
Lender by execution of subordination agreements between Lender and the holders
of such indedebtedness having the same terms and conditions as the
Subordination Agreements.

         Person: any individual, firm, corporation, limited liability company,
business enterprise, trust, association, joint venture, partnership,
Governmental Body or other entity, whether acting in an individual, fiduciary
or other capacity.

<PAGE>
         Personal Guaranties: the individual guaranties of Michael Kibler and
Harold Antonson limited to $500,000 per guaranty.

         Personal Guarantors:  Michael Kibler and Harold Antonson, both of whom
are directors and officers and who together, indirectly or directly,  hold or
control in the aggregate at least 22% of the outstanding voting  tock of
Guarantor and each of Borrowers.

         Prime  Rate:  the per annum rate of interest announced or published
publicly from time to time by Lender as its corporate base (or equivalent) rate
of  interest,  which  rate  shall change automatically without  notice and
simultaneously with each change in such corporate base rate. The Prime Rate is
a reference rate and does not  necessarily represent the lowest or prime rate
actually charged to any customer by Lender.

         Principal Balance: the unpaid principal balance of the Revolving Loan
or any specified portion thereof outstanding from time to time.

         Property: all types of real, personal or mixed property and all types
of tangible or intangible property.

         Qualified Depository : a member bank of the Federal Reserve System
having a combined capital and surplus of at least $ 100,000,000.

         Real Property: all interests in real estate owned, or which, upon the
Closing Date, will be owned, by Borrower other than the Leasehold Property.

         Revolving Loan: the revolving loan made by Lender to Borrower pursuant
to Section 2.1.

         Revolving Loan Commitment: $2,000,000.

         Revolving Loan Maturity Date: the earlier of (i) September 30, 2001 or
(ii) the date on which Borrowers' Obligations are accelerated pursuant to this
Loan Agreement.

         Revolving Loan Note: the promissory note executed by Borrower payable
to the order of Lender in the amount of the Revolving Loan Commitment, dated as
of the Closing Date and in form and substance satisfactory to Lender.

         Securities Act: the Securities Act of 1933, as amended, or any similar
Federal statute, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder, as in effect from time to time.

         Security Agreements: the security agreements executed by Borrowers and
Guarantor in favor of Lender.

         Security Instruments: collectively, the Security Agreements and any
other document now or hereafter executed by Borrowers or Guarantor which
purports to create a Lien on the Property of any of Borrowers or Guarantor in
favor of Lender.

<PAGE>
         Security Interests: the Liens in the Collateral granted to Lender
pursuant to the Security Instruments.

         Stated Rate: as defined in subsection 2.3.3.

         Subordinated Indebtedness:  Indebtedness for Borrowed Money at any
date of Guarantor  and all of its  subsidiaries  (on a  consolidated  basis)
which is subordinated  to  Borrowers'  Obligation  by written  agreement  of
the obligees thereof.

         Subordination  Agreements:  means subordination agreements of even
date between  Lender and the holders of the Permitted Subordinated
Indebtedness, wherein the holders of such junior and subordinate indebtedness
have agreed to subordinate their rights and claims to the senior rights of
Lender.

         Tangible  Net Worth:  at any date means Guarantor's net worth at such
date  after subtracting therefrom the aggregate amount at such date of any
intangible assets of Borrowers and any other subsidiaries of Guarantor,
including, without limitation, prepaid amounts, goodwill, franchises, licenses,
patents, trademarks, trade names, copyrights, service marks and brand names.

         Termination  Event: (i) a "Reportable  Event" described in Section
4043 of ERISA and the regulations issued  thereunder; or (ii) the withdrawal
of any Borrower, Guarantor or any ERISA Affiliate from a Pension Plan during a
plan year in which it was a "substantial employer" as defined in Section 4001
(a)(2); or (iii) the  termination of a Pension Plan, the filing of a notice of
intent to terminate a Pension Plan or the treatment of a Pension Plan amendment
as a termination under Section 4041 of ERISA; or (iv) the institution of
proceedings to terminate, or the appointment of a trustee with respect to, any
Pension Plan by the PBGC; or (v) any other event or condition which would
constitute  grounds under Section  4042(a) of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan; or (vi) the
partial or complete withdrawal of any Borrower, Guarantor or any ERISA
Affiliate from a Multiemployer Plan; or (vii) the imposition of a lien pursuant
to Section 412 of the Code or Section 302 of ERISA; or (viii) any event or
condition which results in the  reorganization or insolvency of a Multiemployer
Plan under Sections 4241 or 4245 of ERISA; or (ix) any event or condition which
results in the termination of a Multiemployer Plan under Section 4041A of ERISA
or the institution by the PBGC of proceedings to terminate a Multiemployer Plan
under Section 4042 of ERISA.

         Unsubordinated Indebtedness:  Indebtedness for Borrowed Money at any
date of Guarantor and all of its subsidiaries (on a consolidated basis) other
than Subordinated Indebtedness.


<PAGE>
Time Periods.

         In  this  Loan  Agreement  and  the  other  Loan  Instruments, in the
computation of periods of time from a specified date to a later specified date,
(i) the word "from" means "from and including,"  (ii) the words "to" and "until"
each mean "to, but excluding" and (iii) the words "through,"  "end of' and
"expiration" each mean "through and including." Unless otherwise specified, all
references in this Loan Agreement and the other Loan Instruments to (i) a
"month" shall be deemed to refer to a calendar month, (ii) a "quarter" shall be
deemed to refer to a calendar quarter and (iii) a "year" shall be deemed to
refer to a calendar year.

Accounting Terms and Determinations.

         All  accounting  terms  not specifically defined herein shall  be
construed,  all  accounting  determinations hereunder shall be made and all
financial statements required to be delivered pursuant hereto shall be prepared
in  accordance  with  GAAP as in  effect  at the  time  f such interpretation,
determination or preparation, as applicable.  In the event that any Accounting
Changes occur and such changes  result in a change in the method of calculation
of financial covenants, standards or terms  contained in this Loan Agreement,
then  Borrower  and  Lender agree to enter into  negotiations to amend  such
provisions of this Loan Agreement so as to reflect such Accounting Changes with
the desired result that the criteria for evaluating the financial condition of
Borrower shall be the same after such Accounting Changes as if such Accounting
Changes had not been made. For purposes hereof, "Accounting Changes" shall mean
(i)  changes in GAAP  required  by the promulgation of any rule, regulation,
pronouncement or opinion by the  Financial  Accounting  Standards Board of the
American Institute of Certified Public Accountants (or any successor thereto)
or other appropriate  authoritative body and (ii) changes in accounting
principles as approved by the Accountants.

References.

         All  references  in  this  Loan  Agreement to "Article,"  "Section,"
"subsection," "subparagraph," "clause" or "Exhibit," unless otherwise
indicated, shall be  deemed  to refer to an  Article, Section, subsection,
subparagraph, clause or Exhibit, as applicable, of this Loan Agreement.

Lender's Discretion.

         Whenever the terms  "satisfactory  to Lender,"  "determined by
Lender," "acceptable to Lender,"  "Lender shall elect,"  "Lender shall
request," "at the option  or  election  of  Lender,"  or  similar  terms  are
used  in  the  Loan Instruments, except as otherwise specifically provided
therein, such terms shall mean satisfactory to, at the election or option of,
determined by, acceptable to or requested by Lender, in its sole and unlimited
discretion.

Borrower's or Guarantor's Knowledge.

         Any statements, representations or warranties that are based upon the
best  knowledge of Borrowers or Guarantor or an officer thereof shall be deemed
to have been made after due inquiry by Borrowers, Guarantor or such officer, as
applicable, with respect to the matter in question.

<PAGE>
                                    2.

                      REVOLVING LOANS AND TERMS OF PAYMENT

Revolving Loan.

1.2      Amount and Disbursement.

                           Upon the terms and subject to the conditions herein
                  set forth, Lender agrees to make  Advances of the Revolving
                  Loan to Borrowers from time to time from the Closing Date to
                  the  Revolving  Loan  Maturity  Date in an aggregate amount
                  outstanding  at any one time not in excess of the Revolving
                  Loan  Commitment  then in effect.  If at any  time, however,
                  Borrowers'  Obligations exceed the Revolving Loan  Commitment
                  then  in effect, all of such excess  nevertheless shall
                  constitute  a part of  Borrowers' Obligations and shall be
                  secured by the Security  Interests.  Each of  Borrower shall
                  remain jointly and severally liable with the other Borrowers
                  for all of Borrowers' Obligations.

1.3      Revolving Loan Note.

                           The Revolving Loan shall be evidenced by the
Revolving Loan Note.

1.4      Reborrowing.

                           Subject to the  conditions set forth in this Section
                  2.1,  Borrowers  may from time to time prior to the Revolving
                  Loan  Maturity Date reborrow all or any portion of any
                  Advance of the Revolving Loan which is repaid.

1.5      Conditions of Advances of the Revolving Loan.

                           The  obligation of Lender to disburse any Advance of
                  the  Revolving  Loan is subject to the satisfaction of the
                  following conditions precedent:

1.5.1    no  Event of  Default  or  Incipient  Default shall exist or would be
         created by the making of any such Advance;

1.5.2    each such Advance shall be in a minimum amount of $1,000 and integral
multiples of $1,000 in excess of that amount;

1.5.3    Lender shall have received, no later than 2:00 p.m., Chicago time, on
         the applicable Funding Date, a Notice of Borrowing from Borrower in
         the orm of Exhibit 2.1.4 with respect to such Advance;

<PAGE>
1.5.4    on the applicable Funding Date, each of Borrowers' and Guarantor's
         representations and warranties set forth in the Loan Instruments shall
         be true and correct in all material respects when made and at and as
         of the time of the Funding Date, except to the extent that any such
         representations and warranties expressly relate to an earlier date;
         and

1.5.5    availability shall be limited to Lender's  dvance  of  funds  not
         exceeding seventy percen  (70%) of  Borrowers'  Eligible Accounts
         Receivable.

Use of Proceeds of the Revolving Loan.

         The  proceeds  of the  Revolving  Loan  shall be used (i) to refinance
Borrowers'  and  Guarantor's  secured  loan  obligations  to  Finova; (ii) for
Borrowers' working capital; and (iii) to pay related transactions costs.

Interest.

1.6      Interest Rate.

                           The  Principal  Balance  shall  bear interest in an
                  amount  equal to:  (i) the Prime  Rate in effect from time to
                  time; plus (ii) 0.5% per annum, provided, however, that
                  during a Default Rate Period, Borrowers' Obligations shall
                  bear interest at the applicable Default Rate.

1.7      Interest Computation.

                           Interest  shall be computed on the  basis of a year
                  consisting of 360 days and charged for the actual  number of
                  days during the period for which interest is being charged.
                  In computing interest, the Funding Date shall be included and
                  the date of payment shall be excluded.

1.8      Maximum Interest.

                           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  Borrowers to Lender 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 Loan Agreement or any other
                  Loan Instrument, then in such  event (i)  Borrowers shall not
                  be obligated to pay such Excess Interest, (ii) any Excess
                  Interest collected by Lender shall be, at Lender's option,
                  (A) applied to the  Principal Balance or to accrued and unpaid
                  interest not in excess of the maximum rate permitted by
                  applicable law or (B) 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 Loan Agreement and the other Loan
                  Instruments, as applicable, shall be deemed to have been, and
                  shall be, modified to reflect such reduction, and (iv)
                  Borrowers shall not have any action against Lender for any

<PAGE>
                  damages arising out of  the payment or collection of such
                  Excess Interest; provided, however, thatif at any time
                  thereafter the Stated Rate is less than the Maximum Rate,
                  Borrowers 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 subsection 2.3.3 again shall apply.

1.9      Increased Costs.

                           If, after the Closing Date, either (i) any change in
                  or  in  the   interpretation  of  any law or regulation  is
                  introduced (other than changes in taxation of the net income
                  of Lender), including, without limitation,  with respect to
                  reserve  requirements applicable to Lender,  (ii)  Lender
                  complies with any future guideline or request from any
                  central bank or other Governmental Body proposed or
                  promulgated after the Closing Date or (iii) Lender determines
                  that the adoption of any applicable law, rule or regulation
                  (other than changes in taxation  f the net income of Lender)
                  regarding capital adequacy or any change  therein, or any
                  change in the interpretation or administration thereof by any
                  Governmental Body, central bank or comparable agency charged
                  with the interpretation or administration thereof announced
                  after the Closing Date has or would have the effect described
                  below, or Lender complies with any request or directive
                  regarding capital adequacy (whether or not having the force
                  of law) of any such Governmental Body, central bank or
                  comparable agency announced after the Closing Date and in
                  case of any event set forth in  this clause (iii), such
                  adoption, change or compliance has or would have the direct
                  or indirect effect of reducing the rate of return on any of
                  Lender's  capital as a consequence of its obligations
                  hereunder to a level below that which Lender could have
                  achieved but for such adoption, change or compliance (taking
                  into consideration Lender's policies with respect to capital
                  adequacy) by an amount deemed by Lender to be  material, and
                  any of the foregoing events described in clauses (i), (ii) or
                  (iii) increases the cost to Lender of (A) funding or
                  maintaining the Revolving Loan or the Revolving Loan
                  Commitment or (B) issuing, causing the issuance of making or
                  maintaining any Letter of Credit, or reduces the amount
                  receivable in respect thereof by Lender, then Borrowers
                  shall upon demand by Lender at any time within 180 days after
                  the date on which  an  officer  of  Lender  responsible  for
                  overseeing this Loan Agreement knows or has reason to know of
                  its right to additional compensation under this Section
                  2.3.4, pay to Lender additional amounts sufficient to
                  reimburse Lender against such increase in cost or reduction
                  in amount receivable; provided, however, such entity shall
                  only be entitled to additional compensation for any such

<PAGE>
                  costs incurred from and after the date that is 30 days prior
                  to the date Borrowers receive such demand. A certificate as
                  to the amount of such increased cost, and setting forth in
                  reasonable detail the calculation thereof, shall be submitted
                  to Borrowers by Lender, and shall be conclusive absent
                  manifest error.  Lender will promptly notify Borrowers of any
                  event of which it has knowledge that would entitle Lender to
                  additional compensation under this subsection 2.3.4. Lender
                  shall not request any additional compensation under this
                  subsection 2.3.4 unless it is generally making similar
                  requests of other borrowers similarly situated, and Lender
                  agrees to use a reasonable basis for calculating amounts
                  allocable to its Commitments hereunder.

Principal and Interest Payments.

1.10     Interest.

                           Interest on (i) the Revolving Loan shall be payable
                  monthly  in arrears on the first Business Day of each month
                  beginning with May 1, 2000.

1.11     Principal.

                           The Principal Balance of the Revolving Loan,
                  together with all other sums due to Lender pursuant to the
                  terms of the Loan Instruments, shall be due and payable in
                  full on the Revolving Loan Maturity Date.

Mandatory Prepayments of the Revolving Loan.

         If at any time or for any reason, Borrowers' Obligation exceeds the
Revolving Loan Commitment or, if for any reason, Borrowers' Obligation exceeds
the availability requirements set forth in Section 0 hereof (any such excess
being referred to herein as an "Overadvance"), Borrowers shall immediately pay
to Lender, in Good Funds, the amount of such Overadvance.

Payments after Event of Default.

         All  payments received by Lender during the existence of an Event of
Default shall be applied in accordance with Section 8.4.

Method of Payment.

         All payments to be made pursuant to the Loan Instruments by Borrowers
to Lender shall be made by (i) direct debit from Borrowers' operating account;
or (ii) wire transfer of Good Funds to Lender.

<PAGE>

                                     3.

                                  SECURITY

         Borrowers'  Obligations shall be secured  by a Lien  upon all of the
Collateral,  which Lien at all times shall be superior and prior to all other
Liens, except Permitted Prior Liens.

                                    4.

                              CONDITIONS OF CLOSING

         The obligation of Lender to make the Revolving Loan shall be subject
to the satisfaction or waiver of all of the following conditions in a manner,
form and substance satisfactory to Lender:

Representations and Warranties.

         On the Closing Date, Borrowers', Guarantor's and Personal Guarantors'
representations and warranties set forth in the Loan Instruments shall be true
and correct.

Delivery of Documents.

         The following shall have been delivered to Lender, each duly
authorized and executed, where applicable, and in form and substance
satisfactory to Lender:

1.11.1   the Loan Instruments;

1.11.2   a  certificate  of good  standing or similar certification  for each
         Borrower and Guarantor  from the  states in which each Borrower and
         Guarantor are organized and from all states in which the laws thereof
         require each Borrower and Guarantor to be licensed and/or qualified to
         do  business, except any state  where the  failure to be so  qualified
         could not reasonably be expected to result  in a  Material Adverse
         Effect, in each case dated not more than 10 days prior to the Closing
         Date;

1.11.3   copies of the corporate charter or articles of incorporation for each
         Borrower and Guarantor, certified by the Secretary of State of the
         state of each Borrower's and Guarantor's organization, together with
         all effective and proposed amendments thereto;

1.11.4   certified copies of resolutions adopted by the board of directors of
         each Borrower and Guarantor, authorizing the execution and delivery of
         the Loan Instruments and the  consummation of the transactions
         contemplated therein;

1.11.5   signature and incumbency certificates for each Borrower and Guarantor;

1.11.6   copies  of  each of the  following, certified as true, correct and
         complete by a duly authorized officer of each Borrower and Guarantor:
         all instruments and documents evidencing Permitted Senior Indebtedness
         and Permitted Subordinated Indebtedness  existing  as of the Closing
         Date;

<PAGE>
1.11.7   a Landlord's Consentfrom the Landlord under the Lease for Borrowers'
         headquarters;

1.11.8   the Pay-Off Letter; and

1.11.9   such other instruments, documents, certificates, consents, waivers and
         opinions as Lender reasonably may request.

Performance; No Default.

         Borrower and Guarantor shall have  performed and complied  with all
agreements and conditions contained in the Loan  Instruments to be performed by
or complied with by such Person  prior to or at the  Closing, and no Event of
Default shall then exist or result from the making of the initial  disbursement
of the Revolving Loan.

Opinions of Counsel.

         Lender shall have received the opinion of Borrowers' and Guarantor's
counsel, Troutman Sanders, dated the Closing Date and any special counsel
required by Lender, each addressed to Lender, in such form and covering such
matters as Lender may require.

Approval of Loan Instruments and Security Interests; Consents.

         Lender shall have received evidence that the approval or consent shall
have been obtained from all Governmental Bodies and all other  Persons whose
approval or consent is required to enable (i) each  Borrower to enter into and
perform its obligations under the Loan Instruments; and (ii) each Borrower and
Guarantor to grant to Lender the Security Interests contemplated in the
Security Instruments.

Security Interests.

         All filings of Uniform Commercial Code financing statements and all
other filings and actions  necessary  to perfect and maintain the Security
Interests as first, valid and perfected Liens in the Property covered thereby,
subject only to Permitted Prior Liens, shall have been filed or taken and
Lender shall have received such UCC, state and federal tax Lien, pending suit,
judgment and other Lien searches as it deems reasonably necessary to confirm
the foregoing.

Financial Statements, Reports and Projections.

         Lender shall have received such financial reports and other
information with respect to each Borrower and Guarantor as Lender shall
request, all in form and substance satisfactory to Lender.

Year 2000 Compliance.

         Lender  shall  be  satisfied  that  there  are no material Year 2000
compliance issues pertaining to any Borrower or Guarantor.


<PAGE>
Material Adverse Change.

         No event shall have occurred since February 28, 2000, which has had or
could have a Material Adverse Effect, and no laws,  statute, rule, regulation,
order or decree  shall be in effect or  proceedings  pending which prevent  or
enjoin the Closing.

Use of Assets.

         Lender shall be satisfied that each Borrower and Guarantor at all times
shall be entitled to the use and quiet enjoyment of all Property  necessary
for the continued ownership and operation of its business, including, without
limitation, the use of equipment, fixtures, licenses, offices and means of
ingress and egress thereto, and any easements or rights-of-way necessary to
reach any equipment or other items necessary for the operation of such
business.

Fees and Expenses.

         Lender  shall have received evidence that all fees and expenses
described in subsection 10.1.1 have been paid in full.

Insurance.

         At least two (2) Business Days prior to the Closing  Date, Borrowers
shall have delivered to Lender evidence satisfactory to Lender that all
Business Insurance coverage required pursuant to Section 6.6 is in full force
and effect and all premiums then due thereon have been paid in full.

Existing Indebtedness.

         Lender shall have received  evidence that the Existing Indebtedness
(including all indebtedness owed to Finova) has been paid in full or will be
paid in full concurrently with the Closing.

                                      5.

                         REPRESENTATIONS AND WARRANTIES

         Borrowers and Guarantor, jointly and severally, represent and warrant
to Lender as follows:

Existence and Power.

         Each Borrower and Guarantor are business corporations, duly formed and
validly existing under the laws  of the  jurisdiction of their respective
formation. Each Borrower and Guarantor are in good standing under the laws of
each other jurisdiction in which the failure to be in good standing could have
a Material Adverse Effect. Each Borrower and Guarantor have all requisite power
and authority to own their property and to carry on their business as has been
conducted prior to the Closing Date and as proposed to be conducted  by each
Borrower and Guarantor following the Closing Date.

<PAGE>
Authority.

         Each  Borrower  and  Guarantor  have full power and authority to enter
into, execute, deliver and carry out the terms of the Loan Instruments and to
incur the obligations  provided for therein, all of which have been  duly
authorized by all proper and necessary action and, are not prohibited by the
organizational instruments of any Borrower or Guarantor.

Binding Agreements.

         This Loan Agreement and the other Loan Instruments,  when executed and
delivered,  will  constitute the valid and legally binding obligations of each
Borrower  and  Guarantor,  enforceable against each Borrower and  Guarantor in
accordance with their respective  terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, oratorium or
similar laws now or hereafter in effect affecting the enforcement of creditors'
rights  generally and (ii)  equitable  principles (whether or not any action to
enforce such document is brought at law or in equity).

Business and Property of Borrower and Guarantor.

1.12     Business and Property.

         Each     Borrower and  Guarantor  (i) own, and upon the Closing  Date,
                  will own, all Property necessary to conduct their business as
                  presently  conducted and as has been conducted  prior to the
                  Closing  Date and (ii) have not engaged in and do not propose
                  to engage in any business activity other than the business in
                  which  they  are  presently engaged, provided  Borrowers  or
                  Guarantor   may  acquire  or  initiate  additional trucking
                  brokerage  businesses  within the United States provided any
                  such action does not cause a violation of any other term or
                  covenant of this Agreement  including without  limitation
                  Sections 7.1, 7.2 and 7.6  hereunder, and further  provided
                  that, to the extent such  business is conducted in an entity
                  other than one of Borrowers or Guarantor, such entity is
                  added as a Borrower under this facility and agrees to be
                  bound by the terms hereof and executes a Security Agreement
                  in favor of Lender and appropriate financing statements
                  granting a lien in its Property junior only to Permitted
                  Senior  Indebtedness Liens.

1.13     Operating Agreements.

                           All Operating Agreements are in full force and effect
                  and no event has occurred  which could result in  the
                  cancellation or termination of any such Operating Agreement
                  or the imposition thereunder of any liability upon any
                  Borrower or Guarantor which could have a Material Adverse
                  Effect.

1.14     Facility Sites.

                           There is set forth in Schedule 5.4.3 the locations
                  of Borrowers' and Guarantor's (i) chief executive office,
                  (ii) Property and (iii) books and records.


<PAGE>
1.15     Leases.

                           There is set forth in  Schedule 5.4.4 a list of all
                  Leases, together  with a complete and accurate address and
                  legal description of each parcel of Leasehold Property
                  subject to such Leases. Each Lease is in full force and
                  effect, there has been no default in the  performance of any
                  of its terms or conditions  by any  Borrower or Guarantor or,
                  to the best knowledge of any Borrower or Guarantor, any other
                  party thereto, and, to the best knowledge of any Borrower or
                  Guarantor, no claims of default have been asserted with
                  respect thereto.

1.16     Real Property.

                           Except for  certain Real Property owned in Arizona
                  which has been  identified  to Lender, none of  Borrowers or
                  Guarantors own any Real Property.

1.17     Operation and Maintenance of Equipment.

                           No equipment owned or operated  will be owned or
                  operated by a Borrower which is necessary for the operation
                  of its business has been used, operated or maintained in a
                  manner which now or hereafter could result in the
                  cancellation or termination of the right of a Borrower to use
                  or make use of the same or which could be expected to result
                  in any  material liability of a Borrower for damages in
                  connection  therewith.  All of the equipment and other
                  tangible personal property which will be owned by Borrowers
                  upon the Closing Date and necessary to the operation of each
                  Borrowers' businesses is, in all material respects, in good
                  operating condition and repair (subject to normal wear and
                  tear) and has been used, operated and maintained in
                  substantial compliance with all applicable laws, rules and
                  regulations.

1.18     Existing Indebtedness.

                           There is set forth in Schedule 5.4.7 a complete
                  description of the Existing Indebtedness.

Title to Property; Liens.

         Each Borrower has (i)good and marketable title to all of its Property,
except the portion thereof consisting  of a leasehold  estate and (ii) a valid
leasehold estate in each portion of its Property which consists of a leasehold
estate.  All of such Property is free and clear of all Liens, except Permitted
Liens.  Upon the proper filing with the appropriate Governmental Bodies of
appropriate Uniform Commercial Code financing statements, the applicable Loan
Instruments will create valid and perfected first Liens in the Collateral,
subject only to Permitted Prior Liens.


<PAGE>

Financial Statements.

         Each of Borrowers and Guarantor have delivered to Lender the financial
statements described in Schedule  5.6. To the best of each of  Borrowers' and
Guarantor's knowledge, such financial statements present fairly in all material
respects the results of their operations for the periods covered  thereby and
their financial condition as of the  dates indicated therein.  All of such
financial statements  have been prepared in conformity  with GAAP consistently
applied. Since the date of the most recent financial statement, there has been
no change which has had a Material Adverse Effect.

Litigation.

         There is set forth in Schedule 5.7 a description of all actions,suits,
arbitration  proceedings and claims  pending or, to the best knowledge of each
Borrower and Guarantor, threatened against any Borrower or Guarantor, at law or
in equity or before any  Governmental Body on the  Closing  Date.  There are no
actions, suits, arbitration proceedings  or  claims  pending, or to the best
knowledge of any  Borrower or Guarantor, threatened  against any  Borrower or
Guarantor, at law or in equity or before any Governmental Body,  including the
matters set forth in such Schedule 5.8, which could  reasonably be expected to
have a Material Adverse Effect.

Defaults in Other Agreements; Consents; Conflicting Agreements.

         No Borrower or Guarantor is in default under any agreement to which it
is a party or by which it or any of its Property is bound, the effect of which
default  could  reasonably  be expected to have a Material Adverse Effect.  No
authorization, consent, approval or other action by, and no notice to or filing
with, any Governmental Body or any other Person  which has not already been
obtained, taken or filed, as applicable, is required (i) for the due execution,
delivery or performance by each Borrower and Guarantor of any of the
Instruments to which any Borrower or Guarantor is a party or (ii) as a
condition to the validity or enforceability of any of the Instruments to which
any Borrower or Guarantor is a party or any of the transactions contemplated
thereby or the priority of the Security Interests, except for certain filings
to establish and perfect the Security Interests.  No provision of any mortgage,
indenture, contract, agreement, statute, rule, regulation, judgment, decree or
order binding on any Borrower or Guarantor or affecting its Property conflicts
with, or requires any consent which has not already been obtained  under,  or
would in any way prevent the execution, delivery or performance of the terms of
any of the Instruments or affect the validity or priority of the Security
Interests.  The execution, delivery and performance of the terms of the
Instruments will not constitute a default under, or result in the creation or
imposition of, or obligation to create, any Lien upon the Property of any
Borrower or Guarantor pursuant to the terms of any such mortgage, indenture,
contract or agreement.

Taxes.

         Borrowers and Guarantor have each filed all tax returns required to be
filed,  and have paid, or made adequate provision for the payment of, all taxes
shown to be due and payable on such returns or in any  assessments made against
it, and no tax liens have been filed and, to the best knowledge of each
Borrower and Guarantor, no claims are being asserted in respect of such taxes
which are required by GAAP to be reflected in the financial statements of
Borrowers and Guarantor and are not so reflected therein.  The charges,
accruals and reserves on the books of Borrowers and Guarantor with respect to
all federal, state, local and other taxes are considered by the management of
Borrowers and Guarantor to be adequate, and no Borrower or Guarantor knows of
any unpaid assessment which is or might be due and payable by a Borrower or
Guarantor or creates a Lien against any of a Borrowers' or Guarantor's
Property, except such assessments as are being contested in good faith and by
appropriate proceedings diligently conducted, and for which adequate reserves
have been set aside in accordance with GAAP. None of the tax returns of any
Borrower and Guarantor are under audit.

Compliance with Applicable Laws.

         None  of  Borrowers  or  Guarantor is in default in respect of any
judgment, order, writ, injunction, decree or decision of any Governmental Body,
which default could have a Material Adverse Effect. Each Borrower and Guarantor
is in compliance in all material respects with all applicable  statutes and
regulations, including, without limitation, all Environmental Laws, ERISA and
all laws and regulations relating to unfair labor practices, equal employment
opportunity and employee safety, of all  Governmental  Bodies.  No material
condemnation, eminent domain or expropriation has been commenced or, to the
best knowledge of any Borrower or Guaranty, threatened against the Property
which any Borrower or Guarantor owns or will own upon the Closing.

Patents, Trademarks, Franchises and Agreements.

         There is set forth in Schedule 5.11 a complete and accurate list of
all of the  Intellectual Property material to the operation of the business of
Borrowers and Guarantor. Each Borrower and Guarantor owns, possesses or has the
right to use such Intellectual Property (i) which is necessary for the conduct
of the business proposed to be conducted by such Borrower after the Closing
date and (ii) for which the failure to own, possess or have the right to use
could have a Material Adverse Effect, in each case, without any known conflict
with the rights of others and free of any Liens other than the Security
Interests.

Regulatory Matters.

         Each Borrower and Guarantor have duly and timely filed all reports and
other filings which are required to be filed by each such Borrower and
Guarantor under any applicable law, rule or regulation of any Governmental
Body, the non-filing of which could have a Material Adverse Effect, and is in
compliance with all such laws, rules and regulations, the  noncompliance with
which could have a Material Adverse Effect.


<PAGE>

Environmental Matters.

         Each  Borrower is in compliance in all material  respects  with all
applicable Environmental Laws and no portion of any of the Leasehold Property
or the Real Property has been used as a landfill. There currently are not any
known Hazardous Materials generated, manufactured,  released, stored, buried or
deposited over, beneath, in or on (or used in the construction and/or
renovation of) the Real Property or Leasehold Property in violation of
applicable Environmental Laws.

Application of Certain Laws and Regulations.

         No Borrower is and Guarantor is not and no Affiliate of Borrower or
Guarantor is:

1.19     Investment Company Act.

                           An "investment company," or a company "controlled"
                  by an "investment  company," within the meaning of the
                  Investment Company Act of 1940, as amended.

1.20     Holding Company.

                           A "holding company," or a "subsidiary company" of a
                  "holding company," or an "affiliate" of a "holding company"
                  or of a  "subsidiary company" of a "holding  company," as
                  such terms are defined in the Public Utility Holding Company
                  Act of 1935, as amended.

1.21     Foreign or Enemy Status.

                           (i) An  "enemy" or an "ally of an enemy" within the
                  meaning of Section 2 of the Trading with the Enemy Act, (ii)
                  a "national" of a foreign country designated in Executive
                  Order No. 8389, as amended, or of any "designated enemy
                  country" as defined in Executive Order No. 9095, as amended,
                  of the President of the United States of America, in each
                  case within the meaning of such Executive Orders, as amended,
                  or of any regulation issued thereunder, (iii) a "national of
                  any designated foreign country" within the meaning of the
                  Foreign Assets Control Regulations or the Cuban Assets
                  Control Regulations of the United States of America (Code of
                  Federal Regulations, Title 31, Chapter V, Part 515, Subpart
                  B, as amended) or (iv) an alien or a representative of any
                  alien or foreign government within the meaning of Section 310
                  of Title 47 of the United States Code.

1.22     Regulations as to Borrowing.

                           Subject to any statute or regulation which regulates
                  the  incurrence of any Indebtedness for  Borrowed  Money,
                  including,  without limitation, statutes or regulations
                  relative to common or interstate carriers or to the sale of
                  electricity, gas, steam, water, telephone, telegraph or other
                  public utility services.


<PAGE>

Margin Regulations.

         None of the transactions contemplated by this Loan Agreement or any of
the other Instruments, including the use of the proceeds of the Revolving
Loans, will violate or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulations issued pursuant thereto,
including, without limitation, Regulations G, T, U and X, and no Borrower owns
or intends to carry or purchase any "margin security" within the meaning of
such Regulation U or G.

Other Indebtedness.

         Upon the Closing there will be no Indebtedness for Borrowed Money owed
by any  Borrower  to any Person,  except (i)  Borrowers' Obligations, and (ii)
Permitted Senior Indebtedness and Permitted Subordinated Indebtedness permitted
to exist as of the  Closing  Date pursuant  to this Loan Agreement. All such
Permitted Subordinated Indebtedness is listed and described in Schedule 5.16
hereto.

No Misrepresentation.

         Neither this Loan Agreement nor any other Loan Instrument,
certificate, information or report furnished or to be furnished by or on behalf
of a Borrower or Guarantor to Lender in connection with any of the transactions
contemplated hereby or thereby, contains or will contain a misstatement of
material fact, or omits or will omit to state a material fact required to be
stated in order to make  the  statements contained  herein or therein, taken
as a  whole, not misleading in the light of the circumstances under which such
statements were made. There is no fact, other than information known to the
public generally, known to any Borrower or Guarantor after diligent inquiry,
that could have a Material Adverse Effect that has not expressly been disclosed
to Lender in writing.

Employee Benefit Plans.

1.23     No Other Plans.

                           Neither any Borrower,  Guarantor nor any ERISA
                  Affiliate maintains or contributes to, or has any obligation
                  under, any Employee Benefit Plan other than those identified
                  on Schedule 5.18.1. Each Borrower has provided Lender
                  accurate and complete copies of all contracts, agreements and
                  documents described on Schedule 5.18.1.


<PAGE>
1.24     ERISA and Code Compliance and Liability.

                           Each Borrower, Guarantor and each ERISA Affiliate
                  are in compliance with all applicable provisions of ERISA and
                  the regulations and published interpretations thereunder with
                  respect to all Employee Benefit Plans except where failure to
                  comply would  not  result in a material liability to any
                  Borrower or Guarantor and except for any required amendments
                  for which the remedial amendment period as defined in Section
                  401(b) of the Code has not yet expired. Each Employee Benefit
                  Plan that is intended to be qualified under Section 401(a) of
                  the Code has been determined by the Internal Revenue Service
                  to be so  qualified, and each trust related to such plan has
                  been determined to be exempt under Section 401(a)of the Code.
                  No material liability has been  ncurred by any Borrower or
                  Guarantor or any ERISA Affiliate which remains unsatisfied
                  for any taxes or penalties with respect to any Employee
                  Benefit Plan or any Multiemployer Plan.

1.25     Funding.

                           No Pension Plan  has been  terminated,  nor has any
                  accumulated funding deficiency (as defined in Section 412 of
                  the Code) been insured (without regard to any waiver granted
                  under  Section 412 of the Code), nor has any  funding  waiver
                  from the Internal Revenue  Service been received or requested
                  with respect to any Pension Plan, nor has  Borrower or any
                  ERISA Affiliate failed to make any contributions or to pay
                  any amounts due and owing as required by Section 412 of the
                  Code, Section 302 of ERISA or the terms of any Pension Plan
                  prior to the due dates of such contributions under Section
                  412 of the Code or Section 302 of ERISA, nor has there been
                  any event requiring any disclosure under Section 4041(c)(3)(
                  C), 4063(a) or 4068 of ERISA with respect to any Pension
                  Plan.

1.26     Prohibited Transactions and Payments.

                           Neither any  Borrower,  Guarantor nor any  ERISA
                  Affiliate  has: (i) engaged in a nonexempt  "prohibited
                  transaction" as such term is defined in Section  406 of ERISA
                  or Section 4975 of the Code; (ii) incurred any liability to
                  the PBGC which remains outstanding other than the payment of
                  premiums and there are no premium  payments which are due and
                  unpaid; (iii) failed  to  make a  required contribution  or
                  payment to a  Multiemployer Plan; or (iv) failed to make a
                  required installment or other required payment under Section
                  412 of the Code.

1.27     No Termination Event.

                    No Termination Event has occurred or is reasonably expected
                  to occur.

1.28     ERISA Litigation.

                           No material proceeding,  claim, lawsuit and/or
                  investigation is existing or, to the best knowledge of any
                  Borrower or Guarantor, threatened concerning or involving any
                  (i) employee welfare benefit plan (as defined in Section 3(l)
                  of ERISA) currently maintained or contributed to by Borrower
                  or any ERISA  Affiliate, (ii) Pension Plan or (iii)
                  Multiemployer Plan.


<PAGE>
Employee Matters.

1.29     Collective Bargaining Agreements; Grievances.

                           Except as set forth in Schedule  5.19.1, (i) none of
                  the  employees of any Borrower or Guarantor is subject to any
                  collective bargaining agreement with  such  Borrower  or
                  Guarantor, (ii)  no  petition  for  certification or union
                  election  is  pending  with  respect to the employees of any
                  Borrower or Guarantor  and no union or collective bargaining
                  unit has sought such certification or recognition with
                  respect to the employees of any Borrower and (iii) there are
                  no strikes, slowdowns, work stoppages, unfair labor practice
                  complaints, grievances, arbitration  proceedings or
                  controversies pending or, to the best knowledge of any
                  Borrower or Guarantor, threatened against any Borrower or
                  Guarantor by any of such Borrower's or Guarantor's employees,
                  other than employee grievances or controversies arising in
                  the ordinary course of business that could not in the
                  aggregate be expected to have a Material Adverse Effect.

1.30     Claims Relating to Employment.

                           Neitherany  Borrower or  Guarantor is subject to any
                  non-competition agreement  with  any  Person.  To the best of
                  Borrowers' or Guarantor's  knowledge,  no  employees  of any
                  Borrower or Guarantor is subject to an  employment  agreement
                  which would have a  Material  Adverse  Effect due to (i) any
                  information which any  Borrower or  Guarantor  would  be
                  prohibited from using  under the terms of such agreement or
                  (ii) any legal considerations relating to unfair competition,
                  trade secrets or proprietary information.

Burdensome Obligations.

         After giving effect to the transactions contemplated by the
Instruments (i) neither any Borrower nor Guarantor (A) will be a party to or be
bound by any franchise, agreement, deed, lease or other instrument, or be
subject to any restriction, which  is  so unusual or burdensome so as to cause,
in the foreseeable future, a Material  Adverse Effect or (B intends to incur,
or believes that it will incur, debts beyond its ability to pay such debts as
they become due.  No Borrower or Guarantor  presently  anticipates that future
expenditures needed to meet the provisions of federal or state statutes,
orders, rules or regulations will be so burdensome so as to have a Material
Adverse Effect.

Subsidiaries.

         None of Borrowers have any subsidiaries.


<PAGE>

                                     6.

                              AFFIRMATIVE COVENANTS

         Until all of Borrowers'  bligations  and the Obligations of Guarantor
under the Corporate Guaranty are paid and performed in full, each of Borrowers
and Guarantor agree that they will:

Legal Existence; Good Standing.

         Maintain their existence and their good standing in the jurisdiction
of their formation and maintain their qualification to transact business in
each jurisdiction in which the failure so to qualify would have a Material
Adverse Effect.

Inspection.

         Permit  representatives of Lender, at any time without notice, to (i)
visit their  offices, (ii) examine  their  books and records and Accountants'
reports relating thereto, (iii) make copies or extracts therefrom, (iv) discuss
their affairs with their employees, (v) examine and inspect their Property and
(vi) meet and discuss their affairs with the Accountants, and such Accountants,
as a condition to their retention by Borrowers and Guarantor, are hereby
irrevocably authorized by Borrowers and Guarantor to fully discuss and disclose
all such affairs with Lender.

Financial Statements and Other Information.

         Maintain a standard  system of accounting in accordance with GAAP and
furnish to Lender:

1.31     Monthly Statements.

                           As soon as is available and in any event within
                  forty (40) days after the close of each month (except the
                  months of January and February, as to which the following
                  must be furnished within seventy-five (75) days after the
                  close of the month):

1.31.1   copy of the consolidating balance sheets of Borrowers and Guarantor,
as of the end of such month;

1.31.2   statements of operations and EBITDA of Borrower and Guarantor for
such month; and

1.31.3  an  accounts  receivable aging and borrowing base certificate from
Borrowers, as of the end of such month.


<PAGE>
1.32     Quarterly Statements.

                           As  soon as is available and in any event within
                  forty-five (45) days after the close of each quarter:

1.32.1    copy of the balance sheet of Borrowers and Guarantor, as of the end
          of such quarter;

1.32.2    statements of operations and EBITDA of Borrowers and Guarantor for
          such quarter; and

1.32.3   such other financial information for the Borrowers and Guarantor as is
         contained in Guarantor's 10-Q Report for such quarter.

1.33     Annual Statements.

                           As soon as available and in any event within 90 days
                  after the close of Guarantor's fiscal year:

1.33.1   the consolidated  balance sheet of Guarantor and its subsidiaries as
         of the end of such fiscal year and the statements of operations, cash
         flows,  shareholders'  equity and EBITDA of  Guarantor for such fiscal
         year (collectively, the "Basic Financial Statements");

1.33.2   an opinion of the Accountants which shall accompany the Basic
         Financial Statements which opinion (except the opinion as to 12/31/99
         Basic Financial Statement, which may be so qualified) shall be
         unqualified as to going concern and scope of audit, stating that (i)
         the  examination by the Accountants in connection  with such Basic
         Financial Statements has been made in accordance with generally
         accepted auditing standards, (ii) such Basic Financial Statements have
         been prepared in conformity with GAAP and in a manner consistent with
         prior periods, and (iii) such Basic Financial Statements fairly
         present in all material respects the financial position and results of
         operations of Guarantor and its subsidiaries;

1.33.3   a letter from the  Accountants stating that the  statements of EBITDA
         were computed  in  accordance with the requirements of this Loan
         Agreement; and

1.33.4   the personal financial statements of each of the Personal Guarantors
         certified as true and correct by the respective Personal Guarantors.

1.34     Compliance Certificate.

                         As soon as is available and in any event within
                 forty-five (45) days after the close of each quarter, a
                 Compliance Certificate as of the end of such quarter.


<PAGE>
1.35     Accountants' Certificate.

                         Simultaneously with the delivery of the certified
                 Basic Financial statements required by subsection 1.33, copies
                 of a certificate of the Accountants stating that (i) they have
                 checked the computations delivered by Guarantor in compliance
                 with subsection 1.33, and (ii) in making the examination
                 necessary for their audit of the Basic Financial Statements
                 for such year, nothing came to their attention of a financial
                 or accounting nature that caused them to believe that (A)
                 Guarantor was not in compliance with the terms, covenants,
                 provisions or conditions of any of the Loan Instruments, or
                 (B) there shall have occurred any condition or event which
                 would constitute an Event of Default, or, if so, specifying in
                 such certificate all such instances of non-compliance and the
                 nature and status thereof.

1.36     Audit Reports.

                         Promptly upon receipt thereof, a copy of each report,
                 other than the reports referred to in subsection 1.33,
                 including any so-called "Management Letter" or similar report,
                 submitted to any Borrower or Guarantor by the Accountants in
                connection with any annual, interim or special audit made by
                 the Accountants of the books of any Borrower or Guarantor.

1.37     Notice of Defaults; Loss.

                         Prompt written notice if: (i) any Indebtedness of any
                 Borrower or Guarantor is declared or shall become due and
                 payable prior to its declared or stated maturity, or called
                 and not paid when due, (ii) an event has occurred that enables
                 the holder of any note, or other evidence of such
                 Indebtedness, certificate or security evidencing any such
                 Indebtedness of any Borrower or Guarantor to declare such
                 Indebtedness due and payable prior to its stated maturity,
                 (iii) there shall occur and be continuing an Event of Default,
                 accompanied by a statement setting forth what action a
                 Borrower or Guarantor proposes to take in respect thereof, or
                 (iv) any event shall occur which has a Material Adverse
                 Effect, including the amount or the estimated amount of any
                 loss or adverse effect.

1.38     Notice of Suits; Adverse Events.

                         Prompt written notice of: (i) any citation, summons,
                 subpoena, order to show cause or other order naming any
                 Borrower or Guarantor a party to any proceeding before any
                 Governmental Body which might reasonably be expected to have a
                 Material Adverse Effect, including with such notice a copy of
                 such citation, summons, subpoena, order to show cause or other
                 order, (ii) any lapse or other termination of any license,
                 permit, franchise, agreement or other authorization issued to
                 any Borrower or Guarantor by any Governmental Body or any
                 other Person that is material to the operation of the business
                 of Borrower or Guarantor, (iii) any refusal by any
                 Governmental Body or any other Person to renew or extend any
                 such license, permit, franchise, agreement or other
                 authorization and (iv) any dispute between Borrower or
                 Guarantor and any Governmental Body or any other Person, which
                 lapse, termination, refusal or dispute referred to in clauses
                 (ii) and (iii) above or in this clause (iv) could have a
                 Material Adverse Effect.


<PAGE>
1.39      Reports to Members, Creditors and Governmental Bodies.

1.39.1    Promptly upon becoming available, copies of all regular and periodic
          reports sent by any Borrower or Guarantor to any of its creditors,
          and all registration statements and prospectuses filed by Guarantor
          with any securities exchange or with the Securities and Exchange
          Commission or any Governmental Body succeeding to any of its
          functions, and of all statements generally made available by a
          Borrower or Guarantor concerning material developments in the
          business of such Borrower or Guarantor.

1.39.2    Promptly upon becoming available, copies of any periodic or special
          reports filed by a Borrower or Guarantor with any Governmental Body
          or Person, if such reports indicate any material change in the
          business, operations, affairs or condition of such Borrower or
          Guarantor, or if copies thereof are requested by Lender, and copies
          of any material notices and other communications from any
          Governmental Body or Person which specifically relate to a Borrower
          or Guarantor.

1.40      ERISA Notices and Requests.

1.40.1    With reasonable promptness, and in any event within 30 days after
          occurrence of any of the following, notice and/or copies of: (i) the
          establishment of any new Employee Benefit Plan, Pension Plan or
          Multiemployer Plan; (ii) the commencement of contributions to any
          Employee Benefit Plan, Pension Plan or Multiemployer Plan to which a
          Borrower or any of its ERISA Affiliates was not previously
          contributing or any increase in the benefits of any existing
          Employee Benefit Plan, Pension Plan or Multiemployer Plan; (iii) each
          funding waiver request filed with respect to any Employee Benefit
          Plan and all communications received or sent by a Borrower or any
          ERISA Affiliate with respect to such request; and (iv) the failure
          of a Borrower or any of its ERISA Affiliates to make a required
          installment or payment under Section 302 of ERISA or Section 412 of
          the Code by the due date.

1.40.2    Promptly and in any event within 10 days of becoming aware of the
          occurrence of or forthcoming occurrence of any (i) Termination Event
          or (ii) "prohibited transaction," as such term is defined in Section
          406 of ERISA or Section 4975 of the Code, in connection with any
          Pension Plan or any trust created thereunder, a notice specifying the
          nature thereof, what action Borrower or Guarantor has taken, is
          taking or proposes to take with respect thereto and, when known, any
          action taken or threatened by the Internal Revenue Service, the
          Department of Labor or the PBGC with respect thereto.

1.40.3    With reasonable promptness but in any event within 10 days after the
          occurrence of any of the following, copies of: (i) any favorable or
          unfavorable determination letter from the Internal Revenue Service
          regarding the qualification of an Employee Benefit Plan under Section
          401 (a) of the Code; (ii) all notices received by a Borrower or any
          ERISA Affiliate of the PBGC's intent to terminate any Pension Plan
          or to have a trustee appointed to administer any Pension Plan; (iii)
          each Schedule B (Actuarial Information) to the annual report (Form
          5500 Series) filed by a Borrower or any ERISA Affiliate with the
          Internal Revenue Service with respect to each Pension Plan; and (iv)
          all notices received by Borrower or any ERISA Affiliate from a
          Multiemployer Plan sponsor concerning the imposition or amount of
          withdrawal liability pursuant to Section 4202 of ERISA; and written

<PAGE>
          notice within two Business Days of Borrower's or any ERISA
          Affiliate's filing of or intention to file a notice of intent to
          terminate any Pension Plan under a distress termination within the
          meaning of Section 4041(c) of ERISA.

1.41      Other Information.

1.41.1    Immediate notice of any change in the location of any Property of any
          Borrower or Guarantor which is material to or necessary for the
          continued operation of Borrower's business, any change in the name of
          a Borrower, any sale or purchase of Property outside the regular
          course of business of a Borrower, any change in the residence of any
          Personal Guarantor and any change in the business or financial
          affairs of Borrower, which change could have a Material Adverse
          Effect.

1.41.2    Promptly upon request therefor, such other information and reports
          relating to the past, present or future financial condition,
          operations, plans and projections of Borrowers or Guarantor as Lender
          reasonably may request from time to time.

Reports to Governmental Bodies and Other Persons.

          Timely file all material reports, applications, documents,
instruments and information required to be filed pursuant to all rules and
regulations of any Governmental Body or other Person having jurisdiction over
the operation of the business of a Borrower or Guarantor, including, but not
limited to, such of the Loan Instruments as are required to be filed with any
such Governmental Body or other Person pursuant to applicable rules and
regulations promulgated by such Governmental Body or other Person.

Maintenance of Licenses and Other Agreements.

          Maintain in full force and effect at all times, and apply in a timely
manner for renewal of, all licenses, trademarks, trade names and agreements
necessary for the operation of their business, the loss of any of which could
have a Material Adverse Effect.

Insurance.

1.42     Maintenance of Insurance.

                         Maintain in full force and effect Business Insurance
                 as may be required by law or by the Loan Instruments and as
                 may be customarily maintained by a similarly situated
                 business, all of which shall be written by insurers and in
                 amounts and forms satisfactory to Lender. Lender shall be
                 named as an additional insured on each policy of liability
                 insurance. Each policy of casualty insurance shall contain a
                 standard "Lender loss payable" endorsement in favor of Lender.


<PAGE>
1.43     Claims and Proceeds.

                         Each Borrower and Guarantor hereby direct all
                 insurers under all policies of Business Insurance to pay all
                 proceeds payable thereunder directly to Lender and each
                 Borrower and Guarantor hereby authorize Lender to collect all
                 such proceeds. Each Borrower and Guarantor irrevocably appoint
                 Lender (and all officers, employees of Lender), as such
                 Borrower and Guarantor's true and lawful attorney and agent in
                 fact for the purpose of and with power to make, settle and
                 adjust claims under such policies of insurance, endorse the
                 name of such Borrower or Guarantor on any check, draft,
                 instrument or other item of payment for the proceeds of such
                 policies of insurance, and to make all determinations and
                 decisions with respect to such policies of insurance.
                 Borrowers and Guarantor acknowledge that such appointment as
                 attorney and agent in fact is a power, coupled with an
                 interest, and therefore is irrevocable. Borrowers and
                 Guarantor shall promptly notify Lender of any loss, damage,
                 destruction or other casualty to the Collateral. The insurance
                 proceeds received on account of any loss, damage, destruction
                 or other casualty at the option of Lender may be (i) applied
                 to the payment of Borrowers' Obligations in the following
                 order of priority: (A) first, to the payment of any and all
                 sums which then are due and payable pursuant to the terms of
                 the Loan Instruments, other than the Principal Balance and
                 interest accrued thereon, (B) next, to accrued and unpaid
                 interest on the Principal Balance, and (C) then, to the
                 Principal Balance, or (ii) held by Lender and applied to pay
                 for the cost of repair or replacement of the Property which
                 was the subject of such loss, damage, destruction or other
                 casualty, in which event such proceeds shall be made available
                 in the manner and under such conditions as Lender reasonably
                 may require. In the event such proceeds are to be applied to
                 the repair or replacement of Property, the Property shall be
                 repaired or replaced so as to be of at least equal value and
                 substantially the same character as prior to such loss,
                 damage, destruction or other casualty.

Future Leases.

         Deliver to Lender, concurrently with the execution by any Borrower or
Guarantor, as lessee, of any lease pertaining to real property, (i) an executed
copy thereof, and (ii) a Landlord's Consent from the lessor under such lease.

Environmental Matters.

         At all times comply with, and be responsible for, their respective
obligations under all Environmental Laws applicable to the Real Property and
Leasehold Property and any other Property owned by any Borrower or Guarantor or
used by Borrower in the operation of Borrowers' business. At their sole cost
and expense, Borrowers and Guarantor shall (i) comply in all respects with (A)
any notice of any violation or administrative or judicial complaint or order
having been filed against Borrower or Guarantor, any portion of any Real
Property or Leasehold Property or any other Property owned by any Borrowers or
Guarantor or used by any Borrower or Guarantor in the operation of its business
alleging violations of any law, ordinance and/or regulation requiring any of
Borrowers or Guarantor to take any action in connection with the release,

<PAGE>
transportation and/or clean-up of any Hazardous Materials, and (B) any notice
from any Governmental Body or any other Person alleging that any Borrower or
Guarantor is or may be liable for costs associated with a response or clean-up
of any Hazardous Materials or any damages resulting from such release or
transportation, or (ii) diligently contest in good faith by appropriate
proceedings any demands set forth in such notices, provided (A) reserves in an
amount reasonably satisfactory to Lender to pay the costs associated with
complying with any such notice are established by any Borrower or Guarantor and
(B) no Lien would or will attach to the Property which is the subject of any
such notice as a result of any compliance by Borrowers or Guarantor which is
delayed during any such contest. Promptly upon receipt of any notice described
in the foregoing clause (i), a Borrower or Guarantor shall deliver to Lender a
copy thereof. At the request of Lender, a Borrower or Guarantor shall deliver
to Lender an environmental audit with respect to any real estate acquired or
leased by such Borrower or Guarantor.

Compliance with Laws.

         Comply with all federal, state and local laws, ordinances,
requirements and regulations and all judgments, orders, injunctions and decrees
applicable to any Borrower or Guarantor and their operations, the failure to
comply with which would reasonably be expected to have a Material Adverse
Effect.

Taxes and Claims.

          Pay and discharge all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any Property
belonging to it, prior to the date on which penalties attach thereto, and all
lawful claims which, if unpaid, might become a Lien (other than a Permitted
Lien) upon the Property of any Borrower or Guarantor, provided that neither
Borrowers nor Guarantor shall be required by this Section 6.10 to pay any such
amount if the same is being contested diligently and in good faith by
appropriate proceedings and as to which Borrowers and Guarantor have set aside
reserves on their books reasonably satisfactory to Lender.

Maintenance of Properties.

          Maintain all of its Properties necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted.

Governmental Approvals.

          Upon the exercise by Lender of any power, right or privilege pursuant
to the provisions of any of the Loan Instruments requiring any consent,
approval or authorization of any Governmental Body, promptly execute and cause
the execution of all applications, certificates, instruments and other
documents that Lender may be required to obtain for such consent, approval or
authorization.


<PAGE>
Payment of Indebtedness.

          Except as to matters being contested in good faith and by appropriate
proceedings, promptly pay when due, or in conformance with customary trade
terms, all of its Indebtedness.

Maintenance of Accounts.

          Commencing on the Closing Date, maintain its primary disbursement
account and all of its collection accounts (including all such accounts for its
affiliates) with Lender under Lender's customary terms and conditions. No
Borrower shall be required to maintain a compensating balance in its
disbursement accounts other than balances sufficient to cover disbursement
activities and to pay service charges.

                                     7.

                               NEGATIVE COVENANTS

          Until all of Borrowers' Obligations are paid and performed in full,
no Borrower or Guarantor shall:

Borrowing.

          Create, incur, assume or suffer to exist any liability for
Indebtedness for Borrowed Money except (i) Borrowers' Obligations; (ii)
Permitted Senior Indebtedness; and (iii) Permitted Subordinated Indebtedness.

Liens.

          Create, incur, assume or suffer to exist any Lien upon any of its
Property, including Guarantor's capital stock ownership of Borrower, whether
now owned or hereafter acquired, except Permitted Liens.

Merger and Acquisition.
          Consolidate with or merge with or into any Person, or acquire
directly or indirectly all or substantially all of the capital stock, equity
interests or Property of any Person without Lender's prior written consent.

Contingent Liabilities.

          Assume, guarantee, endorse, contingently agree to purchase, become
liable in respect of any letter of credit, or otherwise become liable upon the
obligation of any Person, except for liabilities arising from the endorsement
of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business.

<PAGE>
Dividends and Distributions.

          Make any dividends, distributions or other expenditures with respect
to any Borrower's or Guarantor's capital stock ownership interests or apply
any of its Property to the purchase, redemption or other retirement of, or set
apart any sum for the payment of, or make any other distribution by reduction
of capital or otherwise in respect of, any Borrower's or Guarantor's capital
stock ownership interests, except that up to $50,000 in cash may be paid to
shareholders of Guarantor in connection with a reverse stock split.

Capital Expenditures.

          In any year, make or incur, any Capital Expenditures, other than
Capital Expenditures not in excess of the sum of $150,000 without Lender's
prior written consent.

Payments of Indebtedness for Borrowed Money.

          Make any voluntary or optional prepayment of any Indebtedness for
Borrowed Money other than Borrowers' Obligations and other than interest
payments due to the holders of the Permitted Subordinated Indebtedness. Such
interest payments with respect to the Permitted Subordinated Indebtedness may
only be made upon regular terms and conditions and only so long as no Event of
Default exists or has been declared.

Investments, Revolving Loans.

          At any time purchase or otherwise acquire, hold or invest in the
capital stock of, or any other interest in, any Person, or make any loan or
advance to, or enter into any arrangement for the purpose of providing funds
or credit to, or make any other investment, whether by way of capital
contribution or otherwise, in or with any Person, including, without
limitation, any Affiliate, except (i) investments in direct obligations of, or
instruments unconditionally guaranteed by, the United States of America or in
certificates of deposit issued by a Qualified Depository, (ii) investments in
commercial or finance paper which, at the time of investment, is rated "A" or
better by Moody's Investors Service, Inc., or Standard & Poor's Corporation,
respectively, or at the equivalent rate by any of their respective successors,
(iii) any interests in any money market account maintained, at the time of
investment, with a Qualified Depository, the investments of which, at the time
of investment, are restricted to the types specified in clause (i) above, and
(iv)advances to sales agents or other third parties not exceeding $200,000 in
the aggregate to all such parties at any point in time. All investments
permitted pursuant to clauses (i), (ii), (iii) and (iv) of this Section 7.8
shall have a maturity date not exceeding one year.

Fundamental Business Changes.

          Materially change the nature of its business.


<PAGE>
Facility Sites.

          Change the locations of its chief executive office or other Property
used in the operation of its business unless (i) Lender shall have received at
least 30 days' prior written notice thereof, (ii) Lender shall have received
satisfactory evidence that such change could not reasonably be expected to
have a Material Adverse Effect and (iii) each Borrower and Guarantor shall
have executed and delivered to Lender any documents Lender reasonably may
require in order to maintain the validity and priority of the Security
Interests.

Sale or Transfer of Assets.

          Sell, lease, assign, transfer or otherwise dispose of any Property
(other than in the ordinary course of business), including but not limited to
Guarantor's stock ownership interests in Borrower, except for the sale or
disposition of (A) Property which is not material to or necessary for the
continued operation of its business and (B) obsolete or unusable items of
equipment which promptly are replaced with new items of equipment of like
function and comparable value to the unusable items of equipment when the same
were new or not obsolete or unusable, provided such replacement items of
equipment shall become subject to the Security Interests.

Amendment of Certain Agreements.

          Amend, modify or waive any material term or provision of its articles
of organization, the Leases or any of the instruments, or agreements relating
to any of the Permitted Senior Indebtedness or Permitted Subordinate
Indebtedness.

Acquisition of Additional Properties.

          Acquire any additional Property except such Property as is necessary
to or useful in the operation of its business, provided such acquisitions shall
be subject to the conditions and limitations set forth in this Loan Agreement.

Transactions with Affiliates.

          Sell, lease, assign, transfer or otherwise dispose of any Property to
any of its Affiliates, lease Property, render or receive services or purchase
assets from any such Affiliate, or otherwise enter into any contractual
relationship with any such Affiliate, except in the ordinary course of business
on terms no less favorable to any Borrower or Guarantor than would be
obtainable on an arm's-length basis by such Borrower or Guarantor from a Person
who is not an Affiliate of such Borrower or Guarantor.

Compliance with ERISA.

1.43.1   Permit the occurrence of any Termination Event which would result in
         a liability to any Borrower or any ERISA Affiliate in excess of
         $50,000;

1.43.2   Permit the present value of all benefit  liabilities  under all
         Pension Plans to exceed the current  value of the assets of such
         Pension  Plans allocable to such benefit liabilities by more than
         $50,000;


<PAGE>
1.43.3   Permit any  accumulated  funding  deficiency  in excess of $50,000
         (as defined  in  Section  302 of ERISA and  Section  412 of the Code)
         with respect to any Pension Plan, whether or not waived;

1.43.4   Fail to make any  contribution or  payment to any Multiemployer Plan
         which any Borrower or any ERISA Affiliate may be required to make
         under any  agreement  relating  to  such  Multiemployer   Plan,  or
         any law pertaining thereto which results in or is likely to result in
         a liability in excess of $50,000;

1.43.5   Engage, or permit any ERISA Affiliate to engage, in any  "prohibited
         transaction" as such term is defined in Section 406 of ERISA or
         Section 4975 of the Code for which a civil penalty  pursuant to
         Section  502(i) of ERISA or a tax  pursuant to Section 4975 of the
         Code in excess of $50,000 is imposed;

1.43.6   Permit the establishment of any Employee  Benefit  Plan  providing
         post-retirement welfare benefits or establish or amend any Employee
         Benefit Plan which establishment or amendment could result in
         liability to any Borrower or any ERISA  Affiliate or increase the
         obligation  of any  Borrower  or any ERISA  Affiliate  to a
         Multiemployer  Plan which liability  or  increase,  individually  or
         together  with all  similar liabilities  and  increases,  is material
         to any  Borrower or any ERISA Affiliate; or

1.43.7   Fail, or permit any ERISA Affiliate to fail, to establish, maintain
         and operate each Employee  Benefit Plan in compliance in all material
         respects  with  ERISA,  the  Code  and all  other applicable laws and
         regulations and interpretations thereof.

Unsubordinated Indebtedness to Tangible Net Worth Ratio.

         Permit the ratio of Unsubordinated Indebtedness to the sum of
         Tangible Net Worth plus Subordinated Indebtedness to exceed 4 to 1.

Net Income for 1999.

         Fail to report Net Income for Guarantor and its subsidiaries  (on a
         consolidated basis)of less than $200,000 for the year ending December
         31, 1999.

Minimum Net Worth.

         Fail  to  Maintain  Tangible  Net  Worth plus Permitted Subordinated
         Indebtedness of at least $1,000,000.


<PAGE>
Minimum Debt Service Ratio.

         Fail to maintain a minimum debt service ratio for Grantor and its
subsidaries (on a consolidated basis)of 1.25:1 based on a rolling four (4)
quarter average, to be calculated as follows: the sum of Net Income before
taxes plus  depreciation and  amortization  expense plus interest expense
minus taxes, dividends and distributions divided by the sum of the current
maturity of long term debt plus  interest  expense.  For purposes of testing
the  minimum  debt service ratio,  interest expense in the denominator shall
be defined as interest expense  on  Unsubordinated  Indebtedness  plus
interest  paid on  Subordinated Indebtedness.

Testing of Financial Covenants.

         All of the financial covenants set forth in paragraphs 0 through 0
shall be fully satisfied by Guarantor and Borrowers on a quarterly reporting
basis.

                                    8.

                              DEFAULT AND REMEDIES

Events of Default.

         The occurrence of any of the following shall constitute an "Event of
Default" under the Loan Instruments:

1.44     Default in Payment.

         If any Borrowers shall fail to pay all or any portion of Borrowers'
         Obligations  when  the  same become due and payable.

1.45     Breach of Covenants.

1.45.1   If any  Borrower or Guarantor shall fail to observe or perform  any
         covenant or agreement made by Borrower contained in Section 6.1, 6.2,
         6.6, or in Article VII;

1.45.2   If any Borrower or Guarantor shall fail to  observe or perform any
         covenant or agreement contained in Section 6.3, and such failure
         shall continue for 10 days after the occurrence of such Event of
         Default; or

1.45.3   If Borrower or Guarantor shall fail to observe or perform any covenant
         or agreement (other than those referred to in subparagraph (a) or (b)
         above or specifically addressed elsewhere in this Section 8.1) in any
         of the Loan Instruments, and such failure shall continue for a period
         of 30 days after the occurrence of such Event of Default.

1.46     Breach of Warranty.

         If  any  representation  or  warranty  made  by or on
         behalf of any  Borrower or  Guarantor in or pursuant to any of
         the  Loan   Instruments  or  in  any  instrument  or  document
         furnished in compliance with the Loan Instruments  shall prove
         to be false or misleading in any material respect.

<PAGE>
1.47     Default Under Other Indebtedness for Borrowed Money.

         If any  Borrower  or  Guarantor  at any time shall in
         default (as  principal or  guarantor  or other  surety) in the
         payment of any  principal  of or premium  or  interest  on any
         Indebtedness   for  Borrowed  Money  (other  than   Borrower's
         Obligations or the Permitted Subordinated Indebtedness) beyond
         the grace period, if any, applicable thereto.

1.48     Bankruptcy.

1.48.1   If any Borrower, Guarantor or any  Personal  Guarantor  shall  (i)
         generally not be paying its debts as they become due, (ii) file, or
         consent, by answer or otherwise, to the filing against it of a
         petition for relief or reorganization or arrangement or any other
         petition in bankruptcy or insolvency under the laws of any
         jurisdiction, (iii) make an assignment for the  benefit of creditors,
         (iv)  consent  to the appointment of a custodian, receiver, trustee
         or other  officer with similar powers for it or for any substantial
         part of its Property, or (v) be adjudicated insolvent.

1.48.2   If any Governmental Body of competent jurisdiction shall enter an
         order appointing, without consent of any Borrower or Guarantor, a
         custodian, receiver, trustee or other officer with similar powers with
         respect to it or with respect to any substantial part of its Property,
         or if an order for relief shall be entered in any case or proceeding
         for liquidation or reorganization or otherwise to take advantage of
         any bankruptcy or insolvency law of any jurisdiction, or ordering the
         dissolution, winding-up or liquidation of any Borrower or Guarantor or
         if any petition for any such relief shall be filed against it and such
         petition shall not be dismissed or stayed within 60 days.

1.49     Judgments.

                           If  there  shall  exist final judgments or awards
                  against any Borrower which shall have been  outstanding for a
                  period of 30 days or more from the date of the entry thereof
                  and shall not have been discharged in full or stayed pending
                  appeal,  if the  aggregate amount of all such  judgments and
                  awards not covered by insurance exceeds $10,000.

1.50     Impairment of Licenses; Other Agreements.

                         If (i) any Governmental Body shall revoke, terminate,
                 suspend or adversely modify any license of any Borrower, the
                 adverse modification or non-continuation of which could have a
                 Material Adverse Effect, or (ii) there shall exist any
                 violation or default in the performance of, or a material
                 failure to comply with, any agreement, or condition or term of
                 any license, which violation, default or failure has a
                 Material Adverse Effect, or (iii) any agreement which is
                 necessary to the operation of the business of any Borrower
                 shall be revoked or terminated and not replaced by a
                 substitute reasonably acceptable to Lender within 30 days
                 after the date of such revocation or termination, and such
                 revocation or termination and non-replacement could have a
                 Material Adverse Effect.


<PAGE>
1.51     Collateral.

                           If any material  portion of the Collateral shall be
                  seized  or  taken by a  Governmental  Body or Person, or any
                  Borrower or Guarantor shall fail to maintain or cause to be
                  maintained the Security  Interests and priority of the Loan
                  Instruments as against any Person, or the title and rights of
                  any  Borrower or Guarantor to any  material portion of the
                  Collateral shall have become the subject matter of litigation
                  which could reasonably be expected to result in impairment or
                  loss of the security provided by the Loan Instruments.

1.52     Plans.

                         If an event or condition specified in subsection 1.40
                 hereof shall occur or exist with respect to any Pension Plan
                 or Multiemployer Plan and, as a result of such event or
                 condition, together with all other such events or conditions,
                 any Borrower or any ERISA Affiliate shall incur, or in the
                 opinion of Lender be reasonably likely to incur, a liability
                 to a Pension Plan or Multiemployer Plan or the PBGC (or any of
                 them) which, in the reasonable judgment of Lender, would have
                 a Material Adverse Effect.

1.53     Change in Control; Sale of Borrower.

                         If, absent consent of the Lender, at least (i) 22% of
                 the Guarantor's common stock and 100% of its preferred Class A
                 stock is not owned by the Personal Guarantors or if either of
                 the Personal Guarantors dies or resigns from his position as
                 officer or director of any Borrower or Guarantor or (ii)
                 Guarantor ceases to own all of the stock of Borrower or any of
                 such stock is pledged, mortgaged, hypothecated or assigned to
                 anyone other than Lender, provided that, so long as the other
                 one of the Personal Guarantors survives, the death of one of
                 the Personal Guarantors shall not become an Event of Default
                 until the 60th day after such event, it being understood that
                 the death of the last to survive of the Personal Guarantors
                 shall be an immediate Event of Default.

1.54     Material Adverse Effect.

                           If, in Lender's  reasonable opinion, the occurrence
                  and  continuance  of any  event  or condition, financial  or
                  otherwise,  could  reasonably be likely  to have a  Material
                  Adverse Effect.


<PAGE>
1.55     Payments on Indebtness.

                         If Guarantor or any of its subsidiaries, including
                 without limitation TC Services, Inc. or any of Borrowers,
                 shall (i) make any principal payments with respect to any
                 Indebtedness for Borrowed Money other than Permitted Senior
                 Indebtedness or (ii) make any interest payments or agree to
                 pay interest to the Personal Guarantors or either of them or
                 to anyone related o them or any entity in which either of
                 Personal Guarantors or anyone related to them have an
                 interest, other than with respect to Permitted Senior
                 Indebtedness, at interest rates higher than the interest rates
                 provided for with respect to the Permitted Subordinated
                 Indebtedness as of the date of this Agreement.

1.56     Affiliate Dividends.

                         If any subsidiary of Guarantor (other than a Borrower
                 as permitted in Section 7.5 above) shall make any distribution
                 or pay any dividend or the like to any of their respective
                 shareholders .

Acceleration of Borrower's Obligations.

         Upon the occurrence of:

1.56.1    any Event of Default described in clauses (ii), (iii), (iv) and (v)
          of subsection 8.1.5(a) or in 8.1.5(b), the Revolving Loan Commitment
          shall automatically terminate and all of Borrowers' Obligations at
          that time outstanding automatically shall mature and become due; and

1.56.2    any other Event of Default, Lender, at any time, at its option,
          without further notice or demand, may declare all of Borrowers'
          Obligations due and payable, whereupon the Revolving Loan Commitment
          shall automatically terminate and all of Borrowers' Obligations
          immediately shall mature and become due and payable, all without
          presentment, demand, protest or notice (other than notice of the
          declaration referred to in clause (b) above), all of which hereby are
          waived.

Remedies on Default.

         If Borrowers'  Obligations  have been  accelerated  pursuant to
Section 8.2, Lender may:

1.57     Enforcement of Security Interests.

                           Enforce its rights  and  remedies  under  the  Loan
                  Instruments in accordance with their respective terms; and/or

1.58     Other Remedies.

                           Enforce  any of the rights or remedies accorded  to
                  Lender at equity or law, by virtue of statute or otherwise.


<PAGE>
Application of Funds.

         Any funds  received by Lender  pursuant  to the exercise of any rights
accorded to Lender pursuant to, or by the operation of any of the terms of, any
of the Loan Instruments, including, without limitation, insurance  proceeds,
condemnation proceeds or proceeds from the sale of Collateral,  hall be applied
to Borrowers' Obligations in the following order of priority:

1.59     Expenses.

                         First to the payment of (i) all fees and expenses
               actually incurred, including, without limitation, court costs,
               fees of appraisers, title charges, costs of maintaining and
               preserving the Collateral, costs of sale, and all other costs
               incurred by Lender in exercising any rights accorded to such
               Persons pursuant to the Loan Instruments or by applicable law,
               including, without limitation, reasonable attorney's fees, and
               (ii) all Liens superior to the Liens of Lender except such
               superior Liens subject to which any sale of the Collateral may
               have been made.

1.60     Borrowers' Obligations.

                           Next, to Lender, in such order as Lender may
                    determine, to repay the Borrowers' Obligation.

1.61     Surplus.

                           Any surplus, to the Person or Persons entitled
                    thereto.

Performance of Borrower's Obligations.

If any Borrower or Guarantor fails to (i) maintain in force and pay for
any insurance policy or bond which any Borrower or Guarantor is required to
provide pursuant to any of the Loan Instruments, (ii) keep the Collateral free
from all Liens except for Permitted Liens, (iii) pay when due all taxes, levies
and assessments on or in respect of the Collateral, except as otherwise
permitted pursuant to the terms hereof, (iv) make all payments and perform all
acts on the part of any Borrower or Guarantor to be paid or performed in the
manner required by the terms hereof and by the terms of the other Loan
Instruments with respect to any of the Collateral, including, without
limitation, all expenses of protecting, storing, warehousing, insuring,
handling and maintaining the Collateral, (v) keep fully and perform promptly
any other of the obligations of any Borrower or Guarantor hereunder or under
any of the other Loan Instruments, and (vi) keep fully and perform promptly the
obligations of any Borrower with respect to any issue of Indebtedness for
Borrowed Money secured by a Permitted Prior Lien, then Lender may (but shall
not be required to) procure and pay for such insurance policy or bond, place
such Collateral in good repair and operating condition, pay, contest or settle
such Liens or taxes or any judgments based thereon or otherwise make good any
other aforesaid failure of such Borrower or Guarantor. Borrowers shall
reimburse Lender immediately upon demand for all sums paid or advanced on
behalf of any Borrower for any such purpose, together with costs and expenses
(including reasonable attorney's fees) paid or incurred by Lender in connection
therewith and interest on all sums advanced from the date of advancement until
repaid to Lender shall be calculated at the Default Rate. All such sums
advanced by Lender, with interest thereon, immediately upon advancement
thereof, shall be deemed to be part of Borrowers' Obligations.


<PAGE>

                                      9.

                                     CLOSING

          The Closing Date shall be such date as the parties shall determine,
and the Closing shall take place on such date, provided all conditions for the
Closing as set forth in this Loan Agreement have been satisfied or otherwise
waived by Lender. Unless the Closing occurs on or before April ___, 2000, this
Loan Agreement shall terminate and be of no further force or effect and, except
for any obligation of Borrowers to Lender pursuant to Article X, none of the
parties hereto shall have any further obligation to any other party.

10.

                             EXPENSES AND INDEMNITY

Attorney's Fees and Other Fees and Expenses.

          Whether or not any of the transactions contemplated by this Loan
Agreement shall be consummated, Borrowers agree, jointly and severally to pay
to Lender on demand, except as otherwise expressly provided hereunder, all
expenses incurred by Lender in connection with the transactions contemplated
hereby (including, without limitation, any appraisal fees, environmental audit
fees and title and recording charges) and in connection with any amendments,
modifications or waivers (whether or not the same become effective) under or in
respect of any of the Loan Instruments, including, without limitation:

1.62     Fees and Expenses for Preparation of Loan Instruments.

                         All expenses, disbursements (including, without
                 limitation, charges for required mortgagee's title insurance,
                 lien searches, reproduction of documents, long distance
                 telephone calls and overnight express carriers) and reasonable
                 attorney's fees, actually incurred of special counsel and
                 other counsel retained by Lender in connection with (i) the
                 preparation and negotiation of the Loan Instruments or any
                 amendments, modifications or waivers hereto or thereto and
                 (ii) the administration of the Revolving Loan, except for
                 one-half of the Lender's legal fees relating to the initial
                 documentation of the Loan and Lender's due diligence review,
                 which portion of such legal fees shall be borne by Lender.

1.63     Fees and Expenses in Enforcementof Rights or Defense of Loan
         Instruments.

                         Any expenses or other costs, including reasonable
                 attorney's fees actually incurred by Lender, in connection
                 with the enforcement or collection against any Borrower or
                 Guarantor of any provision of any of the Loan Instruments, and
                 in connection with or arising out of any litigation,
                 investigation or proceeding instituted by any Governmental
                 Body or any other Person with respect to any of the Loan
                 Instruments, whether or not suit is instituted, including, but
                 not limited to, such costs or expenses arising from the
                 enforcement or collection against any of Borrowers or
                 Guarantor of any provision of any of the Loan Instruments, in
                 any workout or restructuring or in any state or federal
                 bankruptcy or reorganization proceeding, except that no
                 payment shall be due with respect to the expenses, costs and
                 fees attendant to litigation if a judgment is entered in favor
                 of Borrowers or Guarantor against Lender.
<PAGE>
Indemnity.

         Borrowers and Guarantor agree, jointly and severally, to indemnify and
save Lender harmless of and from the following:

1.64     Brokerage Fees.

                           The fees, if any, of brokers and finders engaged by
any Borrower or Guarantor.

1.65     General.

                         Any loss, cost, liability, damage or expense
                 (including reasonable attorneys' fees and expenses) incurred
                 by Lender in investigating, preparing for, defending against,
                 providing evidence, producing documents or taking other action
                 in respect of any commenced or threatened litigation,
                 administrative proceeding, suit instituted by any Person or
                 investigation under any law, including any federal securities
                 law, the Bankruptcy Code, any relevant state corporate statute
                 or any other securities law, bankruptcy law or law affecting
                 creditors generally of any jurisdiction, or any regulation
                 pertaining to any of the foregoing, or at common law or
                 otherwise, relating, directly or indirectly, to the
                 transactions contemplated by or referred to in, or any other
                 matter related to, the Loan Instruments, whether or not Lender
                 is a party to such litigation, proceeding or suit, or is
                 subject to such investigation, except to the extent of any
                 gross negligence or willful misconduct of Lender.

1.66     Operation of Collateral; Joint Venturers.

                           Any loss,  cost,  liability, damage or expense
                  (including reasonable attorneys' fees and expenses) incurred
                  in connection with the ownership, operation or maintenance of
                  the Collateral, the construction of Lender and Borrowers or
                  Guarantor as having the relationship of joint venturers or
                  partners or the determination that Lender has acted as agent
                  for any Borrower.

1.67     Environmental Indemnity.

                         Any and all claims, losses, damages, response costs,
                 clean-up costs and expenses suffered and/or incurred at any
                 time by Lender arising out of or in any way relating to the
                 existence at any time of any Hazardous Materials in, on,
                 under, at transported to or from, or used in the construction
                 and/or renovation of, any of the Leasehold Property, or
                 otherwise with respect to any Environmental Law, and/or the

<PAGE>
                 failure of any Obligor to perform its obligations and
                 covenants hereunder with respect to environmental matters,
                 including, but not limited to: (i) claims of any Persons for
                 damages, penalties, response costs, clean-up costs, injunctive
                 or other relief, (ii) costs of removal and restoration,
                 including fees of attorneys and experts, and costs of
                 reporting the existence of Hazardous Materials to any
                 Governmental Body, and (iii) any expenses or obligations,
                 including attorney's fees and expert witness fees, incurred
                 at, before and after any trial or other proceeding before any
                 Governmental Body or appeal therefrom whether or not taxable
                 as costs, including, without limitation, witness fees,
                 deposition costs, copying and telephone charges and other
                 expenses, all of which shall be paid by Borrower to Lender
                 when incurred by Lender.

                                      11.

                                  MISCELLANEOUS

Notices.

         All notices and communications under this Loan Agreement shall be in
writing and shall be (i) delivered in person, (ii) sent by telecopy, or (iii)
mailed, postage prepaid, either by registered or certified mail, return receipt
requested, or by overnight express carrier, addressed in each case as follows:
<TABLE>

<S>               <C>                      <C>
To Lender:
                  .........                 Firstar Bank N.A.
                  .........                 30 N. Michigan Avenue
                  .........                 Chicago, IL  60602
                  .........                 Attn:  Craig B. Collinson
                  .........                 Senior Vice President
                  .........                 Telecopy:  (312) 697-1397

Copy to:
                  .........                 Gould & Ratner
                  .........                 222 N. LaSalle Street, 8th Floor
                  .........                 Chicago, IL 60601-1086
                  .........                 Attn: Christopher J. Horvay, Esq.
                  .........                 Telecopy: (312) 236-3241

To Borrowers and Guarantor:
                  .........                 US 1 Industries, Inc.
                  .........                 1000 Colfax Street
                  .........                 Gary, IN  46406
                  .........                 Attn:  Michael E. Kibler and
                                                   Harold Antonson
                  .........                 Telecopy: (219) 977-5227

Copy to:
                  .........                 Troutman Sanders L L P
                  .........                 600 Peachtree Street, N.E.
                  .........                 Atlanta, GA  30342
                  .........                 Attn: W. Brinkley Dickerson, Jr.,
                                                     Esq.
                  .........                 Telephone No.: (404) 885-3822
</TABLE>

or to any other address or telecopy number, as to any of the parties hereto, as
such party shall designate in a written notice to the other parties hereto. All
notices sent pursuant to the terms of this Section 11. 1 shall be deemed
received (i) if personally delivered, then on the Business Day of delivery,
(ii) if sent by telecopy before 2:00 p.m. Chicago time, on the day sent if a

<PAGE>
Business Day or if such day is not a Business Day or if sent after 2:00 p.m.
Chicago time, then on the next Business Day, (iii) if sent by overnight,
express carrier, on the next Business Day immediately following the day sent,
or (iv) if sent by registered or certified mail, on the earlier of the fifth
Business Day following the day sent or when actually received. Any notice by
telecopy shall be followed by delivery on the next Business Day by overnight,
express carrier or by hand.

Survival of Loan Agreement; Indemnities.

All covenants, agreements, representations and warranties made in this
Loan Agreement and in the certificates delivered pursuant hereto shall survive
the making by Lender of the Revolving Loan and the execution and delivery to
Lender of the Revolving Note and of all other Loan Instruments, and shall
continue in full force and effect so long as any of Borrowers' Obligations
remain outstanding, unperformed or unpaid. Notwithstanding the repayment of all
amounts due under the Loan Instruments, the cancellation of the Revolving Note
and the release and/or cancellation of any and all of the Loan Instruments or
the foreclosure of any Liens on the Collateral, the obligations of Borrower and
Guarantor to indemnify Lender with respect to the expenses, damages, losses,
costs and liabilities described in Section 10.2 shall survive until all
applicable statute of limitations periods with respect to actions which may be
brought against Lender has run.

Further Assurance.

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 the Loan Instruments and to protect Lender's rights thereunder,
and not take any action inconsistent with the purposes of the Loan Instruments.

Taxes and Fees.

Should any tax (other than taxes based upon the net income of Lender),
recording or filing fees become payable in respect of any of the Loan
Instruments, or any amendment, modification or supplement thereof, Borrowers
jointly and severally, agree to pay the same on demand, together with any
interest or penalties thereon attributable to any delay by any Borrower in
meeting Lender's demand, and agrees to hold Lender harmless with respect
thereto.

Severability.

In the event that any provision of this Loan Agreement is 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 other Governmental Body, as
applicable, the validity, legality and enforceability of the remaining terms
and provisions of this Loan Agreement shall not in any way be affected or
impaired thereby, all of which shall remain in fall force and effect, and the
affected term or provision shall be modified to the minimum extent permitted by
law so as to achieve most fully the intention of this Loan Agreement.

<PAGE>
Waiver.

No delay on the part of Lender in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, and no single or partial
exercise of any right, power or privilege hereunder shall preclude other or
further exercise thereof, or be deemed to establish a custom or course of
dealing or performance between the parties hereto, or preclude the exercise of
any other right, power or privilege.

Modification of Loan Instruments.

No modification or waiver of any provision of any of the Loan
Instruments shall be effective unless the same shall be in writing and signed
by Lender. Any such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on any
Borrower or Guarantor in any case shall entitle any Borrower or Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.

Captions.

The headings in this Loan Agreement are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof.

Successors and Assigns.

This Loan Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto; provided that no Borrower may assign any of its rights or delegate any
of its duties hereunder to any other Person.

Remedies Cumulative.

All rights and remedies of Lender pursuant to this Loan Agreement, any
other Loan Instruments or otherwise, shall be cumulative and non-exclusive, and
may be exercised singularly or concurrently. Lender shall not be required to
prosecute collection, enforcement or other remedies against any Person before
proceeding against any Borrower or Guarantor to enforce or resort to any
security, liens, collateral or other rights of Lender. One or more successive
actions may be brought against any Borrower and/or any other Person, either in
the same action or in separate actions, as often as Lender deems advisable,
until all of Borrowers' Obligations are paid and performed in full.

Entire Agreement; Conflict.

This Loan Agreement and the other Loan Instruments executed prior or
pursuant hereto constitute the entire agreement among the parties hereto with
respect to the transactions contemplated hereby or thereby and supersede any
prior agreements, whether written or oral, relating to the subject matter
hereof In the event of a conflict between the terms and conditions set forth
herein and the terms and conditions set forth in any other Loan Instrument, the
terms and conditions set forth herein shall govern.


<PAGE>
Applicable Law.

The Loan Instruments 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. For purposes of this Section 11. 12, the Loan Instruments
shall be deemed to be performed and made in the State of Illinois.

JURISDICTION AND VENUE.

BORROWERS AND GUARANTOR HEREBY AGREE THAT ALL ACTIONS OR PROCEEDINGS
INITIATED BY ANY BORROWER AND GUARANTOR AND ARISING DIRECTLY OR INDIRECTLY OUT
OF THE LOAN INSTRUMENTS 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. BORROWERS
AND GUARANTOR HEREBY EXPRESSLY SUBMIT AND CONSENT 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 AGREE THAT PERSONAL SERVICE OF THE
SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN MAY BE SERVED
IN THE MANNER PROVIDED FOR NOTICES HEREIN, AND AGREE THAT SERVICE OF SUCH
SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL ADDRESSED TO BORROWERS OR GUARANTOR, AS THE CASE MAY BE. AT THE
ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO SECTION 11.1. BORROWERS AND
GUARANTOR WAIVE 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 BORROWER OR GUARANTOR 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, ANY SUCH BORROWER OR GUARANTOR SHALL BE DEEMED IN DEFAULT AND AN ORDER
AND/OR JUDGMENT MAY BE ENTERED BY THE COURT AGAINST SUCH BORROWER AND/OR
GUARANTOR AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR
PAPERS. THE EXCLUSIVE CHOICE OF FORUM FOR BORROWERS AND GUARANTOR SET FORTH IN
THIS SECTION 11.13 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 BORROWERS AND
GUARANTOR HEREBY WAIVE THE RIGHT TO COLLATERALLY ATTACK ANY SUCH JUDGMENT OR
ACTION.


<PAGE>
WAIVER OF RIGHT TO JURY TRIAL.

LENDER, BORROWERS AND GUARANTOR ACKNOWLEDGE AND AGREE THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER ANY OF THE LOAN INSTRUMENTS OR WITH RESPECT
TO THE TRANSACTIONS CONTEMPLATED THEREBY WOULD BE BASED UPON DIFFICULT AND
COMPLEX ISSUES AND, THEREFORE, THE PARTIES AGREE 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.

Time of Essence.

         Time is of the essence for the performance by Borrowers and Guarantor
of the obligations set forth in this Loan Agreement and the other Loan
Instruments.

Estoppel Certificate.

         Within 15 days after Lender requests Borrowers and Guarantor to do so,
Borrowers  and  Guarantor  will  execute  and  deliver  to  Lender a statement
certifying (i) that this Loan Agreement is in full force and effect and has not
been  modified except as described in such  statement,  (ii) the date to which
interest and principal on the Note has been paid, (iii) the Principal  Balance,
(iv) whether or not to its knowledge  an Incipient Default or Event of Default
has occurred and is continuing, and, if so, specifying in reasonable detail
each such  Incipient  Default  or Event of  Default  of which it has knowledge,
v) whether to its  knowledge it has any  defense, set off or counterclaim to
the payment of the Note in accordance with its terms, and, if so, specifying
each defense, set off or counterclaim of which it has knowledge in reasonable
detail (including where applicable the amount thereof), and (vi)as to any other
matter reasonably requested by Lender.

Consequential Damages.

         No party to this Agreement or attorney for such party shall be liable
to any other party to this Agreement for consequential damages arising from any
breach  of  contract,  tort  or  other  wrong  relating to the establishment,
administration or collection of the Borrowers' Obligations.

Counterparts.

         This Loan  Agreement may be executed by the parties hereto in several
counterparts  and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute one and the same agreement.

No Fiduciary Relationship.

         No  provision in this Loan  Agreement or in any other Loan Instrument,
and no course of dealing among the parties hereto, shall be deemed to create
any fiduciary duty by Lender to Borrower or Guarantor.

                [remainder of this page intentionally left blank]


<PAGE>


         IN WITNESS WHEREOF, this Loan Agreement has been executed and
delivered by each of the parties hereto by a duly authorized officer of each
such party 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: ____________________________

<PAGE>
                             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


<PAGE>
                      LIST OF EXHIBITS TO LOAN AGREEMENT

Exhibit 1.1(A)    ......... -       Form of Compliance Certificate
Exhibit 2.1.4     ......... -       Form of Notice of Borrowing
Schedule 5.4.3    ......... -       Facility Sites, Locations of Property,
                                    Books and Records
Schedule 5.4.4    ......... -       Leases
Schedule 5.4.7    ......... -       Existing Indebtedness
Schedule 5.6      ......... -       Financial Statements
Schedule 5.7      ......... -       Litigation
Schedule 5.11     ......... -       Patents, Trademarks, Franchises and
                                    Agreements
Schedule 5.16     ......... -       Permitted Subordinated Indebtedness
Schedule 5.18.1   ......... -       Employee Benefit Plans
Schedule 5.19.1   ......... -       Collective Bargaining Agreements;
                                    Grievances



<PAGE>
                                 EXHIBIT 1.1(A)

                             COMPLIANCE CERTIFICATE

          Reference is made to that certain Loan Agreement dated as of April _,
2000 (as the same may be amended, modified, supplemented or restated from time
to time, the "Loan Agreement"), between Carolina National Transportation, Inc.,
Keystone Lines, Gulf Line Transport, Inc. and Five Star Transport, Inc. and the
undersigned, and Firstar Bank NA, a national banking association. All
capitalized terms used but not elsewhere defined herein shall have the meanings
ascribed to such terms in the Loan Agreement.

         Pursuant to the Loan  Agreement, the undersigned hereby certifies to
Lender that:


         (1)      as of _______________, 2000, ________________ is the
             [Chief Financial Officer] of each Borrower;

         (2) except as set forth below, each Borrower is in full compliance
             with all terms and conditions of the Loan Agreement; and

         (3) attached hereto as Schedule I is the calculation of the following:

                           (i)   Total Unsubordinated Indebtedness / (
                                 Tangible Net Worth plus Subordinated
                                 Indebtedness);

                           (ii)  Tangible Net Worth plus the amount of
                                 Permitted Subordinated Indebtedness
                                 outstanding;

                           (iii) Minimum Debt Service Ratio calculated as
                                 provided in Section 7.19 of the Loan
                                 Agreement; and

                           (iv) Ratio of Total Indebtedness to EBITDA.

         Compliance Exceptions (if any):

         With respect to any item identified as not being in compliance, the
undersigned has attached and certifies as to the accuracy of statements
specifying the violation, condition, or events which result in such
non-compliance, the nature and status thereof, and the actions which Borrowers
propose to take with respect thereto to bring Borrowers into full compliance
with the Loan Agreement.

         The foregoing certifications are made by, in his/her capacity as the
acting Chief Financial Officer of each Borrower, from his/her personal
knowledge, after due inquiry and with full knowledge that Lender will rely
thereon. This Certificate is given pursuant to and in compliance with
subsection 6.3.4 of the Loan Agreement.

<PAGE>
         IN WITNESS  WHEREOF, the undersigned has executed this Compliance
Certificate on this _________ day of ___________ 2000.



                                            US 1 INDUSTRIES, INC.


                                            By: _____________________________

                                            Name: ___________________________

                                            Title: ____________________________


<PAGE>


                                   SCHEDULE I

                              Covenant Calculations

For the quarter beginning on - and ending on
1.       Total of Unsubordinated Indebtedness / (Tangible Net Worth plus
         Subordinated Indebtedness);

2.       Tangible Net Worth plus the amount of Permitted Subordinated
         Indebtedness Outstanding;

3.       Minimum Debt Service Ratio.

4. Ratio of Indebtedness to EBITDA.




<PAGE>


                                  EXHIBIT 2.1.4


                FORM OF NOTICE OF BORROWING/DISBURSEMENT REQUEST


                                April _____, 2000





Firstar Bank N.A.
30 N. Michigan Avenue
Chicago, IL  60602

Dear Sir:

         Reference  is made to that certain Loan Agreement dated as of April
____, 2000 (the "Loan  Agreement")  between CAROLINA NATIONAL TRANSPORTATION,
INC.,  KEYSTONE LINES, GULF LINE TRANSPORT, INC., and FIVE TRANSPORT, INC., as
Borrowers, US 1 INDUSTRIES, INC. as Guarantor and FIRSTAR BANK N.A., a national
banking association. Capitalized terms used but not elsewhere  defined herein
hall have the respective meanings ascribed to such terms in the Loan Agreement.

         Borrowers hereby  notify  Lender that on the date hereof, Borrowers
desires  to borrow $___________ of the Revolving  Loan and Borrowers hereby
directs Lender to disburse such principal amount in accordance with the payment
instructions attached hereto as Exhibit A.

         Borrowers  acknowledge that this Notice of  Borrowing/Disbursement
Request and acceptance  by any Borrower or Borrowers of the  proceeds of the
disbursements contemplated hereby constitute a representation and warranty that
the conditions contained in subsection  2.1.4 of the Loan  Agreement have been
satisfied in all material respects.

                  ......... Very truly yours,

                            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:   _________________________________



<PAGE>
                            FIVE STAR TRANSPORT, INC., an Indiana corporation

                            By:      _________________________________
                            Name:    _________________________________
                            Title:   _________________________________



<PAGE>


                                    EXHIBIT A

Entity, Payment Instructions                              Amount

Carolina National Transportation, Inc.,
Keystone Lines, Gulf Line Transport, Inc.,
and Five Star Transport, Inc.

By Wire Transfer to:


Bank Name:        .........         __________________________
Bank Address:     .........         __________________________
                  .........         --------------------------

Acct. No.:        .........         __________________________
ABA No.:          .........         __________________________
Attention:        .........         __________________________
Telephone No.:    .........         __________________________

<PAGE>
Exhibit 10.2

                          August Investment Partnership
                              8400 Louisiana Street
                           Merrillville, Indiana 46410



PROMISSORY NOTE



$50,000.00        .........                       Date: December 31, 2000


For value received, the undersigned TC Services, Inc. (the "Promisor") promises
to pay to the order of August Investment Partnership (the "Payee"), at 8400
Louisiana, Merrillville, Indiana 46410, (or at such other place as the Payee
may designate in writing) the sum of $50,000.00 with interest from December 31,
2000, on the unpaid principal at the rate of .75 percent over the national
Price as published in the Wall Street Journal.

The unpaid principal shall be payable on October 1, 2002 with accrued interest
payable monthly. All payments on this Note shall be applied first in payment of
accrued interest and any remainder in payment of principal.

If any payment obligation under this Note is not paid when due, the Promisor
promises to pay all costs of collection, including reasonable attorney fees,
whether or not a lawsuit is commenced as part of the collection process.

No renewal or extension of this Note, delay in enforcing any right of the Payee
under this Note, or assignment by Payee of this Note shall affect the liability
of the Promisor. All rights of the Payee under this Note are cumulative and may
be exercised concurrently or consecutively at the Payee's option.

This Note shall be construed in accordance with the laws of the State of
Indiana.

If any one or more of the provisions of this Note are determined to be
unenforceable, in whole or in part, for any reason, the remaining provisions
shall remain fully operative.

All payments of principal and interest on this Note shall be paid in the legal
currency of the United States.

Promisor waives presentment of payment, protest, and notice of protest and
nonpayment of this Note.

This note replaces the original dated December 31, 1998 Signed this 22nd day of
February, 2001, at Gary, Indiana



TC Services, Inc.





By:__________________________________________
     Harold Antonson
     Chief Financial Officer

<PAGE>

                          August Investment Partnership
                              8400 Louisiana Street
                           Merrillville, Indiana 46410



PROMISSORY NOTE



$200,000.00       .........                     Date: December 31, 2000



For value received, the undersigned TC Services, Inc. (the "Promisor") promises
to pay to the order of August Investment Partnership (the "Payee"), at 8400
Louisiana, Merrillville, Indiana 46410, (or at such other place as the Payee
may designate in writing) the sum of $200,000.00 with interest from December
31, 2000, on the unpaid principal at the rate of .75 percent over the national
Price as published in the Wall Street Journal.

The unpaid principal shall be payable on October 1, 2002 with accrued interest
payable monthly. All payments on this Note shall be applied first in payment of
accrued interest and any remainder in payment of principal.

If any payment obligation under this Note is not paid when due, the Promisor
promises to pay all costs of collection, including reasonable attorney fees,
whether or not a lawsuit is commenced as part of the collection process.

No renewal or extension of this Note, delay in enforcing any right of the Payee
under this Note, or assignment by Payee of this Note shall affect the liability
of the Promisor. All rights of the Payee under this Note are cumulative and may
be exercised concurrently or consecutively at the Payee's option.

This Note shall be construed in accordance with the laws of the State of
Indiana.

If any one or more of the provisions of this Note are determined to be
unenforceable, in whole or in part, for any reason, the remaining provisions
shall remain fully operative.

All payments of principal and interest on this Note shall be paid in the legal
currency of the United States.

Promisor waives presentment of payment, protest, and notice of protest and
nonpayment of this Note.

This note replaces the original dated December 31, 1998 Signed this 22nd day of
February, 2001, at Gary, Indiana



TC Services, Inc.





By:__________________________________________
     Harold Antonson
     Chief Financial Officer


<PAGE>

Exhibit 10.3
                                Antonson & Kibler
                               1000 Colfax Street
                               Gary, Indiana 46406





PROMISSORY NOTE


$3,042,074.00     .........                            Date: December 31, 2000



For value received, the undersigned US1 Industries, Inc. (the "Promisor")
promises to pay to the order of Harold Antonson and Michael Kibler (the
"Payee"), at 1000 Colfax Street, Gary, Indiana 46406, (or at such other place
as the Payee may designate in writing) the sum of $3,042,074.00 with interest
from December 31, 2000, on the unpaid principal at the rate of .75 percent over
the national Price as published in the Wall Street Journal.

The unpaid principal shall be payable on October 1, 2002 with accrued interest
payable monthly. All payments on this Note shall be applied first in payment of
accrued interest and any remainder in payment of principal.

If any payment obligation under this Note is not paid when due, the Promisor
promises to pay all costs of collection, including reasonable attorney fees,
whether or not a lawsuit is commenced as part of the collection process.

No renewal or extension of this Note, delay in enforcing any right of the Payee
under this Note, or assignment by Payee of this Note shall affect the liability
of the Promisor. All rights of the Payee under this Note are cumulative and may
be exercised concurrently or consecutively at the Payee's option.

This Note shall be construed in accordance with the laws of the State of
Indiana.

If any one or more of the provisions of this Note are determined to be
unenforceable, in whole or in part, for any reason, the remaining provisions
shall remain fully operative.

All payments of principal and interest on this Note shall be paid in the legal
currency of the United States.

Promisor waives presentment of payment, protest, and notice of protest and
nonpayment of this Note.

This note replaces the original dated December 31, 1999 Signed this 22nd day of
February, 2001, at Gary, Indiana

US1 Industries, Inc.





By:__________________________________________
     Harold Antonson
     Chief Financial Officer


<PAGE>

                    SECOND AMENDMENT TO LOAN AGREEMENT
         This Amendment, dated as of December 7, 2000, 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:

         All Borrowers, other than Cam, 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 ("Loan Agreement").  Lender has agreed to
further amend such Loan Agreement to do the following: (i) establish a separate
line of equipment financing in the amount of $500,000, (ii) increase the amount
of the Revolving Loan Commitment therein from $3,500,000 to $5,500,000, and
(iii) add Cam as a Borrower, all on the terms and conditions hereinafter set
forth.  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.       Each of Borrowers and Guarantor represent and warrant that no Event of
         Default or Incipient Default exists or will occur as a result of any
         Advance and that each of their representations and warranties set
         forth in the Loan Instruments is true and correct as of the date
         hereof, except to the extent that any such representations or
         warranties relate to an earlier date.  Cam hereby agrees to all of the
         terms and conditions as set forth in the Loan Agreement as amended
         hereby and assumes the obligations of Borrowers thereunder jointly and
         severally with the other Borrowers and agrees to be bound by all of
         the terms or covenants, agreements and conditions, thereof as the same
         apply to Borrowers.

2.       The parties hereby agree to amend and restate the following
         definitions of the following terms in Section 1.1 and to add as
         defined terms in the Loan Agreement those terms set forth below not
         defined in Section 1.1 of the Loan Agreement prior to the date hereof
         to read in their entirety as follows:

                  Advance:  means any advance of the Revolving Loan or
                  Equipment Loan as the case may be.

                  Borrowers:  means Carolina National Transportation, Inc., an
                  Indiana Corporation, Keystone Lines, a California
                  corporation, Gulf Line Transport, Inc., an Indiana
                  corporation, Five Star Transport, Inc., an Indiana
                  Corporation, Cam Transport, Inc., an Indiana corporation and
                  such other entities owned or controlled by any of the
                  foregoing or US 1 Industries, Inc., which elects in writing
                  to be designated as a Borrower hereunder in a writing on
                  terms satisfactory to Lender and as to which Lender elects to
                  extend credit hereunder.

                  Certificated Collateral:  any equipment purchased with
                  proceeds of the Equipment Loan which is covered by title
                  issued under a statute of a state under the law of which
                  indication of a security interest on the certificate of title
                  is required as a condition of perfection.

                  Equipment Loan:  means the Loan made by Lender to Borrowers
                  pursuant to Section 2.1A hereof.

                  Equipment Loan Commitment: $500,000

                  Equipment Loan Maturity Date:  means the earlier of (i)
                  May 15, 2002, or (ii) the date on which Borrowers'
                  obligations are accelerated pursuant to this Loan Agreement;

                  Equipment Loan Note: the promissory note executed by
                  Borrowers payable to the order of Lender in the amount of the
                  Equipment Loan Commitment, dated as of the December 7, 2000,
                  in form and substance satisfactory to Lender.

                  Loan Instruments:

(i)      Loan Agreement;

(ii)     Revolving Loan Note;

(iii)    Equipment Loan Note

(iv)     Corporate Guaranty;

(v)      Security Instruments;

(vi)     Closing Certificate;

(vii)    Subordination Agreements

(viii)   Uniform Commercial Code financing statements required by Lender;

(ix)     Personal Guaranties; and

(x)      such other instruments and documents as Lender reasonably may require
         in connection with the transactions contemplated by this Loan
         Agreement;

         as the same may be amended and/or restated from time to time,
         including but without limitation as amended by or pursuant to that
         certain Amendment to Loan Agreement dated June 9, 2000, and that
         certain Second Amendment to Loan Agreement dated December 7, 2000.

                  "Interest Rate:  with respect to the Revolving Loan , the
                  interest which the Revolving Loan bears, other than during
                  a Default Rate Period, as provided in subsection 2.3.1(a)
                  hereunder; with respect to the Equipment Loan, the interest
                  which the Equipment Loan bears, other than during a Default
                  Rate Period, as provided in subsection 2.3.1(b) hereunder

                  Personal Guarantees:  the individual guarantees of Michael
                  Kibler and Harold Antonson limited to $1,500,000 per
                  guaranty.

                  Purchase Date:   the date or dates of purchase of any
                  equipment purchased with Advances from the Equipment Loan
                  under Section 2.1A.

                  Revolving Loan Commitment:  $5,500,000.

                  Revolving Loan Note:  the promissory note executed by
                  Borrowers payable to the order of Lender in the amount of the
                  Revolving Loan Commitment, dated as of the Closing Date, as
                  amended and restated as of June 9, 2000, and as further
                  amended and restated as of December 7, 2000."

3.       Article II of the Loan Agreement is hereby amended by the insertion of
         the following as Section 2.1A between Sections 2.1 and 2.2:

         "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
                  March 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.2            Equipment Loan Note.

                           The Equipment Loan shall be evidenced by the
                  Equipment Loan Note.

                  2.1A.3            Reborrowing.

                           Subject to the conditions set forth in this Section
                  2.1A, Borrowers may from time to time prior to the
                  March 15, 2001, reborrow all or any portion of any Advance of
                  the Equipment Loan which is repaid.

                  2.1A.4            Conditions of Advances of the Equipment
                  Loan.

                           The obligation of Lender to disburse any Advance of
                  the Equipment Loan is subject to the satisfaction of the
                  following conditions precedent:

                                    (a)     no Event of Default or Incipient
                                            Default shall exist or would be
                                            created by the making of and such
                                            Advance;

                                    (b)     each such Advance shall be in a
                                            minimum amount of $1,000;

                                    (c)     not less than ten (10) days prior
                                            to the estimated Purchase Date,
                                            Lender shall have:

                                            (i)  received a written request in
                                                 a form satisfactory to Lender
                                                 requesting an Advance on the
                                                 Equipment Loan

                                            (ii) received and approved of a
                                                 copy of the purchase agreement
                                                 and all other agreements or
                                                 instruments relating to the
                                                 purchase of any equipment to
                                                 be purchased with such Advance
                                                 and shall have received any
                                                 other information which Lender
                                                 may request as to any such
                                                 equipment, including without
                                                 limitation UCC, judgment and
                                                 tax lien searches, invoices,
                                                 bills of sale, certificates of
                                                 title and other document
                                                 reports as Lender may request
                                                 establishing good title in the
                                                 Seller of the equipment to be
                                                 purchased free and clear of
                                                 all encumbrances and that
                                                 Lende's security interest
                                                 therein when perfected will be
                                                 a first Lien.

                                            (iii)approved the purchase of such
                                                 equipment, which approval
                                                 shall not be unreasonably
                                                 withheld

                                    (d)     on the applicable Purchase Date,
                                            each of Borrowers' and Guarantor's
                                            representations and warranties set
                                            forth in the Loan Instruments shall
                                            be true and correct in all material
                                            respects when made and at and as of
                                            the time of the Purchase Date,
                                            except to the extent that any such
                                            representations and warranties
                                            expressly relate to an earlier date;

                                    (e)     delivery to Lender of the original
                                            certificate(s) of title as to any
                                            Certificated Collateral with the
                                            appropriate endorsements and
                                            indications thereof of the security
                                            interest in favor of Lender;

                                    (f)     Borrower shall have paid or made
                                            available in a manner satisfactory
                                            to Lender the balance due for the
                                            purchase of the equipment to be
                                            purchased;

                                    (g)     the amount of any Advance of the
                                            Equipment Loan shall be limited to
                                            eighty percent (80%) of the
                                            purchase price for the equipment to
                                            be purchased with the proceeds of
                                            such Advance."

4.       Sections 2.2, 2.3 and 2.4 of the Loan Agreement are hereby amended and
         restated in their entirety to read as follows:

         "2.2     Use of Proceeds of the Revolving Loan and Equipment Loan.

                  The proceeds of the Revolving Loan shall be used (i) to
                  refinance Borrower's and Guarantor's secured loan obligations
                  to Lender; (ii) for Borrowers' working capital; and (iii) to
                  pay related transactions costs. The proceeds of the
                  Equipment Loan shall be used to purchase equipment for use in
                  Borrowers' trucking businesses.

         2.3               Interest.

                           2.3.1    Interest Rate.

                                    (a)     The Principal Balance of the
                                            Revolving Loan shall bear interest
                                            from the date hereof through
                                            December 31, 2000, in an amount
                                            equal to (i) the Prime Rate in
                                            effect from time to time plus (ii)
                                            0.5% per annum.  Thereafter, such
                                            Principal Balance shall bear
                                            interest at a rate determined as
                                            follows:


If the ratio of Unsubordinated           The interest rate charged effective the
Indebtness to the sum of Tangible        first day of the next quarter shall be
Net Worth plus Subordinated              equal to:
Indebtedness is:
Greater than or equal to 4.0 to 1.0      The Prime Rate in effect from time to
                                         time plus 0.5% per annum

Between 3.01 and 3.99 to 1.0             The Prime Rate in effect from time to
                                         time plus 0.25% per annum

Less than or equal to 3.0 to 1.0         The Prime Rate in effect from time to
                                         time provided, however, that during a
                                         Default Rate Period, Borrowers'
                                         Obligations shall bear interest at the
                                         applicable Default Rate.

                                    (b)     The principal balance of the
                                        Equipment Loan shall bear interest in
                                        an amount equal to:

                                        (i) the Prime Rate in effect from time
                                        to time; plus (ii) 1% per annum,
                                        provided, however, that during a
                                        Default Rate Period, Borrowers'
                                        Obligations shall bear interest at the
                                        applicable Default Rate.

                           2.3.2    Interest Computation.

                                    Interest shall be computed on the basis of
                          a year consisting of 360 days and charged for the
                          actual number of days during the period for which
                          interest is being charged.  In computing interest,
                          the Funding Date shall be included and the date of
                          payment shall be excluded.

                           2.3.3    Maximum Interest.

                                    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 Borrowers to  Lender in excess of the
                           maximum contract rate of interest permitted by
                           applicable law ("Excess Interes").  f any Excess
                           Interest is provided for or determined by a court of
                           competent jurisdiction to have been provided for in
                           this Loan Agreement or any other Loan Instrument,
                           then in such event (i) Borrowers shall not be
                           obligated to pay such Excess Interest, (ii) any
                           Excess Interest collected by Lender shall be, at
                           Lender's option, (A) applied to the Principal
                           Balance or the repayment of the Principal Balance of
                           the Equipment Loan, as approved, or to accrued and
                           unpaid interest not in excess of the maximum rate
                           permitted by applicable law or (B) 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 Loan Agreement and the other Loan
                           Instruments, as applicable, shall be deemed to have
                           been, and shall be, modified to reflect such
                           reduction, and (iv) Borrowers 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,
                           Borrowers 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 subsection 2.3.3
                           again shall apply.

                           2.3.4    Increased Costs.

                                    If, after the Closing Date, either (i) any
                           change in or in the interpretation of any law or
                           regulation is introduced (other than changes in
                           taxation of the net income of Lender), including,
                           without limitation, with respect to reserve
                           requirements applicable to Lender, (ii) Lender
                           complies with any future guideline or request from
                           any central bank or other Governmental Body proposed
                           or promulgated after the Closing Date or (iii)
                           Lender determines that the adoption of any
                           applicable law, rule or regulation (other than
                           changes in taxation of the net income of Lender)
                           regarding capital adequacy or any change therein, or
                           any change in the interpretation or administration
                           thereof by any Governmental Body, central bank or
                           comparable agency charged with the interpretation or
                           administration thereof announced after the Closing
                           Date has or would have the effect described below,
                           or Lender complies with any request or directive
                           regarding capital adequacy (whether or not having
                           the force of law) of any such Governmental Body,
                           central bank or comparable agency announced after
                           the Closing Date and in case of any event set forth
                           in this clause (iii), such adoption, change or
                           compliance has or would have the direct or indirect
                           effect of reducing the rate of return on any of
                           Lender's capital as a consequence of its obligations
                           hereunder to a level below that which Lender could
                           have achieved but for such adoption, change or
                           compliance (taking into consideration Lender's
                           policies with respect to capital adequacy) by an
                           amount deemed by Lender to be material, and any of
                           the foregoing events described in clauses (i), (ii)
                           or (iii) increases the cost to Lender of (A) funding
                           or maintaining the Revolving Loan or the Revolving
                           Loan Commitment or the Equipment Loan or the
                           Equipment Loan Commitment or (B) issuing, causing
                           the issuance of making or maintaining any Letter of
                           Credit, or reduces the amount receivable in respect
                           thereof by Lender, then Borrowers shall upon demand
                           by Lender at any time within 180 days after the date
                           on which an officer of Lender responsible for
                           overseeing this Loan Agreement knows or has reason
                           to know of its right to additional compensation
                           under this Section 2.3.4, pay to Lender additional
                           amounts sufficient to reimburse Lender against such
                           increase in cost or reduction in amount receivable;
                           provided, however, such entity shall only be
                           entitled to additional compensation for any such
                           costs incurred from and after the date that is 30
                           days prior to the date Borrowers receive such demand.
                           A certificate as to the amount of such increased
                           cost, and setting forth in reasonable detail the
                           calculation thereof, shall be submitted to Borrowers
                           by Lender, and shall be conclusive absent manifest
                           error. Lender will promptly notify Borrowers of any
                           event of which it has knowledge that would entitle
                           Lender to additional compensation under this
                           subsection 2.3.4. Lender shall not request any
                           additional compensation under this subsection 2.3.4
                           unless it is generally making similar requests of
                           other borrowers similarly situated, and Lender
                           agrees to use a reasonable basis for calculating
                           amounts allocable to the Revolving Loan Commitment
                           and Equipment Loan Commitment.

         2.4      Principal and Interest Payments.

                           2.4.1    Interest.

                                    (a)     Interest on  the Revolving Loan
                                            shall be payable monthly in arrears
                                            on the first Business Day of each
                                            month beginning with May 1, 2000.

                                    (b)     Interest on the Equipment Loan
                                            shall be payable monthly in arrears
                                            commencing January 1, 2001, with a
                                            final payment due on the Equipment
                                            Loan Maturity Date.

                           2.4.2    Principal.

                                    (a)     The Principal Balance of the
                                            Revolving Loan, together with all
                                            other sums due to Lender pursuant
                                            to the terms of the Loan
                                            Instruments, shall be due and
                                            payable in full on the Revolving
                                            Loan Maturity Date.

                                    (b)     The unpaid principal balance of the
                                            Equipment Loan shall be due and
                                            payable as follows:  the amount of
                                            such unpaid principal balance
                                            divided by sixty (60) shall be
                                            payable each month on the 15th day
                                            of the month commencing March 15,
                                            2001, and on the 15th day of each
                                            month thereafter with any unpaid
                                            balance of such principal balance
                                            of the Equipment Loan becoming due
                                            and payable, if not sooner paid, on
                                            the Equipment Loan Maturity Date.

         2.5      Mandatory Prepayments of the Revolving Loan.

                  If at any time or for any reason, Borrowers' Obligations
                  (less the unpaid principal balance of the Equipment Loan
                  and any interest accrued and unpaid on the Equipment Loan)
                  exceeds the Revolving Loan Commitment or, if for any reason,
                  Borrowers' Obligations (less the unpaid principal balance of
                  the Equipment Loan and any interest accrued and unpaid on the
                  Equipment Loan)exceeds the availability requirements set
                  forth in Section 2.1.4(e) hereof (any such excess being
                  referred to herein as an "Overadvance"), Borrowers shall
                  immediately pay to Lender, in Good Funds, the amount of such
                  Overadvance.

5.       The third sentence of Section 5.5 of the Loan Agreement is hereby
         amended and restated in its entirety to read as follows:

                  "Upon the proper filing with the appropriate Governmental
         Bodies of appropriate Uniform Commercial Code financing statement in
         the case of Collateral other than Certificated Collateral, and upon
         filing of the properly executed and notarized certificate of title
         with the appropriate Governmental Bodies in the case of Certificated
         Collateral, the applicable Loan Instruments will create valid and
         perfected first Liens in the Collateral, subject only to Permitted
         Prior Liens."

6.       Section 7.16 of the Loan Agreement is hereby amended and restated in
         its entirety to read as follows:

         "7.16    Unsubordinated Indebtedness to Tangible Net Worth Ratio.

         Permit the ratio of Unsubordinated Indebtedness to the sum of Tangible
         Net Worth plus Subordinated Indebtedness to exceed 4.5 to 1 from the
         date hereof through June 30, 2001, or permit such ratio to exceed 4 to
         1 after June 30, 2001."

7.       Section 7.18 of the Loan Agreement is hereby amended and restated in
         its entirety to read as follows:

        "7.18    Minimum Net Worth.  Fail to maintain Tangible Net Worth plus
         Permitted Subordinated Indebtedness of at least $1,000,000, from the
         date hereof until December 31, 2000, or to maintain Tangible Net Worth
         plus Permitted Subordinated Indebtedness of at least $1,750,000 from
         and after December 31, 2000."

8.       Section 8.2 of the Loan Agreement is hereby amended by the insertion
         of words "and Equipment Loan Commitment" after the words"Revolving
         Loan Commitment" in the second line of subparagraph (a) and the third
         line of subparagraph (b) thereof.

9.       Subsection 10.1.1 of the Loan Agreement is hereby amended by insertion
         of the words "and Equipment Loan" after the words "Revolving Loan" in
         the seventh line of such subsection 10.1.1.

10.      Section 11.2 of the Loan Agreement is hereby amended by the insertion
         of the words "Equipment Loan" after the words "Revolving Loan" in the
         third line thereof and the words"Revolving Loan Note and Equipment
         Loan Not" for the words "a Revolving Note" in the third and ninth
         lines of Section 11.2.

11.      Lender hereby consents to the following:

                  (a)      The pledge of accounts receivable of Borrowers and
                           Guarantor to secure Permitted Subordination
                           Indebtedness to August Investments and Michael
                           Kibler and Harold Antonson, as provided in the
                           attached Amendments to Subordination Agreement as
                           Exhibit "H-1" and "H-2", provided the lien created
                           thereby shall, in each case, be junior to the
                           respective liens in favor of Lender securing
                           Borrower' Obligations and the obligations of the
                           guarantors under the Personal Guarantees and the
                           Corporate Guaranty.

                  (b)      The increase in Permitted Subordinated Indebtedness
                           under the Loan Agreement to $4,635,043.

12.      Simultaneously with the execution hereof, Borrowers and Guarantor
         shall deliver to Lender the following, duly executed  by the parties
         thereto other than Lender:

                  (i)      Second Amended and Restated Revolving Loan Note in
                           the form attached hereto as Exhibit "A"
                           ("Amended Not");

                  (ii)     Equipment Loan Note attached hereto as Exhibit"B";

                  (ii)     Security Agreement executed by Cam and attached
                           hereto as Exhibit "C");

                  (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";

                  (iv)     Uniform Commercial Code Financing Statements
                           executed by Cam in the forms attached hereto as
                           Exhibit "E-1" and "E-2";

                  (v)      Amended and Restated Personal Guaranties of Michael
                           Kibler and Harold Antonson in the forms and attached
                           hereto as Exhibit "F-1" and "F-2";

                  (vi)     Amended and Restated Corporate Guaranty of US 1
                           Industries, Inc. in the form attached hereto as
                           Exhibit "G";

                  (vii)    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;

                  (viii)   Amendments to Subordination Agreement in the forms
                           attached hereto as Exhibits "H-1" and "H-2"; and

                  (ix)     Acknowledgements  (Subordinated Debt) in the form
                           attached hereto as Exhibit "I-1" or "I-2"; and

                  (ix)     An opinion letter from the law firm of Borrowers'
                           counsel in a form reasonably satisfactory to
                           Lender's counsel regarding authorization, execution
                           and delivery of this Amendment and the documents
                           referenced herein.

                  (x)      Articles of Incorporation of each of Borrowers and
                           Guarantor certified as of date not earlier than
                           December 1, 2000.

13.      Borrowers shall pay to Lender a fee of $10,000 upon the execution
         hereby with respect to the transactions contemplated herein.  In
         addition, Borrowers shall reimburse Lender for all of Lende'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.

14.      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.

15.      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

<PAGE>
                               -4-
                            EXHIBIT "A"

                        REVOLVING LOAN NOTE $5,500,000.00
Dated as of April 18, 2000
Chicago, Illinois
Amended and Restated as of June 12, 2000
Further Amended and Restated as of December 7, 2000


         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 FIVE MILLION FIVE
HUNDRED THOUSAND AND NO/100ths DOLLARS ($5,500,000.00), or, if less, the
aggregate unpaid amount of the Revolving 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 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 Revolving 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 Revolving Loan Note shall bear interest
at the per annum rate of interest set forth in subsection 2.3.1 of the Loan
Agreement.

         Accrued and unpaid interest on, and the Principal Balance of, this
Revolving 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 of this Revolving
Loan Note 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 of this Revolving Loan
Note, 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 Revolving 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 Interes"). If
any Excess Interest is provided for or determined by a court of competent
jurisdiction to have been provided for in this Revolving 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 Revolving 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 Revolving 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 Revolving Loan Note,
and expressly agrees that this Revolving 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 Revolving 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 Revolving 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 Revolving 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 Revolving 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 Revolving 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 Revolving
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 Revolving 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 Revolving
Loan Note is of the essence.

         This Revolving Loan Note is entitled to the benefit of certain
collateral security, all as more fully set forth in the Loan Agreement.

         The Revolving Loan Note amends and restates, in its entirety, a
Revolving Loan Note dated June 12, 2000, in the principal face amount of
$3,500,000 made by Borrowers and payable to the order of Lender, which amended
and restated a Revolving Loan Note dated April 18, 2000.

         IN WITNESS WHEREOF, this Revolving 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: ____________________________


<PAGE>
                                 -4-
                             EXHIBIT"B"

                        EQUIPMENT LOAN NOTE

$500,000.00
Dated as of December 7, 2000
Chicago, Illinois


         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 "Make")), hereby
promise, jointly and severally, to pay to the order of FIRSTAR BANK N.A., a
national banking association ("Lender"), the principal sum of FIVE HUNDRED
THOUSAND AND NO/100ths DOLLARS ($500,000.00), 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 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 2.1A.6 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 2.1A.7 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 ofthis 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.

         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: ____________________________


<PAGE>
                             -12-
                           EXHIBIT "C"

                      SECURITY AGREEMENT

         This SECURITY AGREEMENT, dated as of December 7, 2000, is between CAM
TRANSPORT, INC., a Indiana corporation, ("Borrower"), and FIRSTAR BANK N.A., a
national banking association ("Lender").

                         Preliminary Statement:

A.       Borrower, CAROLINA NATIONAL TRANSPORTATION, INC., GULF LINE TRANSPORT,
         INC. and FIVE STAR TRANSPORT, INC. ("Other Borrowers") and US 1
         INDUSTRIES, INC. ("Guarantor") and Lender have entered into a Second
         Amendment to Loan Agreement of even date herewith (as the same may be
         amended, modified, supplemented or restated from time to time, the
         "Loan Agreement"), pursuant and subject to the terms and conditions of
         which Lender has agreed to make loans and other financial
         accommodations to Borrower and Other Borrowers.

B.       One of the conditions precedent to Lender's obligations under the Loan
         Agreement is that Borrower shall have executed and delivered this
         Security Agreement to secure the payment and performance of Borrowers'
         Obligations.

         NOW, THEREFORE, in order to induce Lender to make Advances, and for
other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties hereto hereby agree as follows:

1.       Definitions. All terms used herein which are defined in the Illinois
         Uniform Commercial Code (the "Code") shall have the same meaning
         herein as in the Code unless the context in which such terms are used
         herein indicates otherwise. All capitalized terms used but not
         elsewhere defined in this Security Agreement shall have the
         respective meanings ascribed to such terms in the Loan Agreement.
         As used herein, the following terms shall have the following meanings:

         Intellectual Property Collateral: collectively, the Patent Collateral
         and the Trademark Collateral.

         Patent Collateral: shall mean all (i) letters patent and applications
         for letters patent of Borrower throughout the world, including all
         patent applications of Borrower in preparation for filing anywhere in
         the world, (ii) patent licenses of Borrower, (iii) reissues,
         divisions, continuations, continuations-in-part, extensions, renewals
         and reexaminations of any Patent Collateral and (iv) all proceeds of,
         and rights associated with, the foregoing (including licenses,
         royalties and proceeds of infringement suits), the right of Borrower
         to sue third parties for past, present and future infringements of any
         patent or patent application, and for breach or enforcement of any
         patent license of Borrower, and all rights corresponding thereto
         throughout the world.

         Trademark Collateral: shall mean all (i) trademarks, trade names,
         corporate names, company names, business names, fictitious business
         names, trade dress, service marks, certification marks, collective
         marks, logos, other sources of business identifiers, prints and labels
         on which any of the foregoing have appeared or appear, designs and
         general intangibles of a like nature of Borrower (each of the
         foregoing items referred to as a "Trademark"), now existing anywhere
         in the world or hereafter adopted or acquired, whether currently in
         use or not, all registrations and recordings thereof and all
         applications in connection therewith, whether pending or in
         preparation for filing, including registrations, recordings and
         applications in the United States Patent and Trademark Office and any
         foreign country, (ii) all Trademark licenses of Borrower, (iii) all
         reissues, extensions or renewals of any of the items described in
         clauses (i) and (ii) above, (iv) all of the goodwill of the business
         connected with the use of, and symbolized by the items described in
         clauses (i) and (ii) above, and (v) all proceeds of, and rights
         associated with, the foregoing, including any claim by Borrower
         against third parties for past, present or future infringement or
         dilution of any Trademark, Trademark registration or Trademark
         license, or for any injury to the goodwill associated with the use of
         any such Trademark or for breach or enforcement of any Trademark
         license.

2.       Security Interests. In order to secure Borrowers' Obligations,
         Borrower hereby grants to Lender a security interest in all Property of
          Borrower, whether now owned or hereafter acquired, and all addi
         ions and accessions thereto, including, without limitation, the
         Property described below:

2.1      Goods, Machinery, Equipment and Inventory. All of Borrower's goods,
         machinery, equipment and inventory, wherever located, and all
         additions and accessions thereto or replacements thereof, including,
         but not limited to, all machinery, inventory and equipment of any and
         every kind and description comprising, belonging to or used in
         connection with the operation of the business of Borrower
         (collectively, the "Tangible Collateral");

2.2      Accounts, General Intangibles. All of Borrower's accounts, contract
         rights, chattel paper, instruments, investment property, deposit
         accounts, documents, and general intangibles, and all additions and
         accessions thereto and replacements thereof, including, but not
         limited to, all licenses, franchises, permits and authorizations
         heretofore or hereafter granted or issued to Borrower under federal,
         state or local laws (excluding, however, any licenses, franchises,
         permits and authorizations issued by any Governmental Body to the
         extent, and only to the extent, it is unlawful to grant a security
         interest in such licenses, franchises, permits and authorizations, but
         including, without limitation, the right to receive all proceeds
         derived or arising from or in connection with the sale or assignment
         of such licenses, franchises, permits and authorizations) which permit
         or pertain to the operation of the business of Borrower, and all of
         Borrowe's Intellectual Property Collateral, Operating Agreements,
         income tax refunds, copyrights, patents, trademarks, trade names,
         trade styles, goodwill, going concern value, franchise, supply and
         distributorship agreements, non-competition agreements and employment
         contracts (collectively, the "Intangible Collateral").

2.3      Proceeds. All proceeds (including proceeds of insurance, eminent
         domain and other governmental taking and tort claims) and products of
         the Property described in Sections 2.1 and 2.2 above; and

2.4      Books and Records. All of the books and records pertaining to the
         Property described in Sections 2.1, 2.2 and 2.3 above.

All of the Property described above hereinafter is referred to collectively as
the "Collateral." The security interest of Lender in the Collateral shall be
superior and prior to all other Liens except Permitted Prior Liens.

3.       Representations and Warranties. Borrower hereby represents and
         warrants to Lender as follows:

3.1      Ownership of Collateral. It is the owner of all of the Collateral free
         from any Lien except for Permitted Liens, except the portion thereof
         consisting of after-acquired Property, and Borrower will be the owner
         of such after-acquired Property, free from any Lien except for
         Permitted Liens.

3.2      Places of Business. There is listed on Exhibit A hereto the location
         of the chief executive office of Borrower, all of the other places of
         business of Borrower and all locations where the Tangible Collateral
         and the books and records of Borrower are kept. Except as described in
         Exhibit A, none of the Collateral is in the possession of any
         consignee, bailee, warehouseman, agent or possessor.

3.3      Trade or Assumed Names. Borrower has not used any trade or assumed
         names during the six years preceding the date hereof.

3.4      Financing Statements. Except for the financing statements of Lender
         and the financing statements pertaining to the Permitted Senior
         Indebtedness Liens, if any, no financing statement covering any
         Collateral or any portion or proceeds thereof is on file in any public
         office.

3.5      Intangible Collateral. The Intangible Collateral hereunder represents
         bona fide and existing indebtedness, obligations, liabilities, rights
         and privileges owed or belonging to Borrower to which, to the best of
         Borrower's knowledge, as of the date of this Security Agreement, there
         is no valid defense, set-off or counterclaim against Borrower and in
         connection with which there is no default with respect to any material
         payment or material performance on the part of Borrower, or, to the
         best of Borrower's knowledge, any other party. With respect to any
         Intellectual Property Collateral of Borrower the loss, impairment or
         infringement of which singly or in the aggregate could reasonably be
         expected to have a Material Adverse Effect: (i) such Intellectual
         Property Collateral is subsisting and has not been adjudged invalid or
         unenforceable, in whole or in part, (ii) such Intellectual Property
         Collateral is valid and enforceable, (iii) Borrower has made all
         filings and recordations necessary in the exercise of reasonable and
         prudent business judgment to protect its interest in such Intellectual
         Property Collateral in the United States Patent and Trademark Office,
         the United States Copyright Office and in corresponding offices
         throughout the world, as appropriate, (iv) Borrower is the owner of
         the entire and unencumbered right, title and interest in and to such
         Intellectual Property Collateral and no claim has been made that the
         use of such Intellectual Property Collateral does or may violate the
         asserted rights of any third party, and (v) Borrower has performed
         and will continue to perform all acts and has paid and will continue
         to pay all required fees and taxes to maintain each and every item of
         such Intellectual Property Collateral in full force and effect
         throughout the world, as applicable. Borrower owns directly, or is
         to use by license or otherwise, all Intellectual Property Collateral
         of any Person used in, necessary for or material to the conduct of
         Borrower's businesses. Except as set forth in the Loan Agreement, no
         litigation is pending or, to the best knowledge of Borrower,
         threatened which contains allegations respecting the validity,
         enforceability, infringement or ownership of any of the Intellectual
         Property Collateral of Borrower.

3.6      Tangible Collateral-Personal Property. All Tangible Collateral at all
         times shall be considered personal property.

3.7      Accounts. Each existing Account constitutes, and each hereafter
         arising Account will constitute, to the best of Borrower's knowledge,
         the legally valid and binding obligation of the account debtor
         obligated to pay the same. The amount represented by Borrower to
         Lender as owing by each account debtor is, or will be, the correct
         amount actually and unconditionally owing, except for normal cash
         discounts and allowances where applicable. To the best of Borrower's
         knowledge, no account debtor has any defense, set-off, claim or
         counterclaim against Borrower that can be asserted against Lender,
         whether in any proceeding to enforce Lender's rights in the Collateral
         or otherwise. None of the Accounts is, nor will any hereafter arising
         Account be, evidenced by a promissory note or other instrument other
         than a check, unless delivered to Lender with appropriate endorsements.

3.8      Inventory. No Inventory is subject to any licensing, patent,
         trademark, trade name or copyright agreement with any Person that
         restricts Borrower's ability to manufacture and/or sell the Inventory
         other than territorial restrictions not materially adverse to the
         Borrower or its business.

4.       Affirmative Covenants. Until all of Borrowers' Obligations are paid
         and performed in full and the Loan Agreement shall have been
         terminated, Borrower agrees that it will:

4.1      Taxes. Pay promptly when due all taxes, levies, assessments and
         governmental charges upon and relating to any of the Property, income
         or receipts of Borrower or otherwise for which Borrower is or may be
         liable, except to the extent that the failure to pay any of such
         taxes, levies, assessments or charges is permitted by the Loan
         Agreement.

4.2      Insurance. At its sole expense, keep the Collateral insured against
         loss or damage by insurance policies which shall be in such form, with
         such companies and in such amounts as may be reasonably satisfactory
         to Lender and otherwise comply with the provisions of Section 6.6 of
         the Loan Agreement.

4.3      Tangible Collateral.

4.3.1    Good Repair. Keep the Tangible Collateral in good working order and
         repair and make all necessary replacements thereof and renewals
         thereto so that the value and operating efficiency thereof at all
         times shall be maintained and preserved.

4.3.2    Insurance Requirements. Maintain the Tangible Collateral at all times
         in accordance with the requirements of all insurance carriers which
         provide insurance with respect to such Tangible Collateral so that
         such insurance shall remain in full force and effect.

4.3.3    Certificates of Title. Upon the request of Lender (i) promptly deliver
         to Lender all certificates of title pertaining to the Tangible
         Collateral and (ii) take all actions reasonably requested by Lender to
         cause the Lien granted to Lender hereunder to be noted on such
         certificates of title.

4.3.4    Use of Collateral. Use the Tangible Collateral in material compliance
         with all statutes, regulations, ordinances, requirements and
         regulations and all judgments, orders, injunctions and decrees
         applicable thereto, and all other federal, state and local laws.

4.4      Intangible Collateral.

4.4.1    Payments. Make all payments and perform all acts reasonably necessary
         to maintain and preserve the Intangible Collateral, including, without
         limitation, filing of documents, renewals or other information with
         any Governmental Body or any other Person.

4.4.2    Delivery of Instruments and Letters of Credit. Upon the request of
         Lender, promptly deliver to Lender the original executed copies of all
         instruments and letters of credit which constitute part of the
         Intangible Collateral, together with such endorsements, assignments
         and other agreements as Lender may request in order to perfect the
         Security Interests.

4.4.3    Accurate Records. At all times keep accurate and complete records of
         payment and performance by Borrower and other Persons of their
         respective obligations with respect to the Intangible Collateral and
         permit Lender or any of its agents tocall at Borrower's place of
         business without hindrance or delay to inspect, audit, check or make
         extracts from the books, records, correspondence or other data
         relating to the Intangible Collateral in accordance with the
         provisions of the Loan Agreement.

4.4.4    Verification of Indebtedness. Upon request of Lender after the
         occurrence and during the continuation of an Event of Default, permit
         Lender itself, at any time, in the name of Lender or Borrower, to
         verify directly with the obligors the indebtedness due Borrower on any
         account or other item of Intangible Collateral.

4.4.5    Defaults, Other Claims. Immediately inform Lender of any default in
         payment or performance by Borrower or any other Person of any
         obligation with respect to the Intangible Collateral or of claims made
         by others in regard to the Intangible Collateral, if either of which
         could have a Material Adverse Effect.

4.4.6    Ownership of Intellectual Property Collateral. Notify Lender
         immediately if it knows, or has reason to know, that any application
         or registration relating to any material item of its Intellectual
         Property Collateral may become abandoned or dedicated to the public or
         placed in the public domain or invalid or unenforceable, or of any
         adverse determination or development (including the institution of, or
         any such determination or development in, any proceeding in the United
         States Patent and Trademark Office, the United States Copyright Office
         or any foreign counterpart thereof or any court) regarding Borrowe's
         ownership of any of its Intellectual Property Collateral, its right to
         register the same or to keep and maintain and enforce the same.

4.4.7    Maintenance of Intellectual Property Collateral. Take all necessary
         steps, including in any proceeding before the United  States Patent
         and Trademark Office, the United States Copyright Office or any
         similar office or agency in any country or any political subdivision
         thereof, to maintain and pursue any application (and to obtain the
         relevant registration) filed with respect to, and to maintain any
         registration of, its Intellectual Property Collateral, including the
         filing of applications for renewal, affidavits of use, affidavits of
         incontestability and opposition, interference and cancellation
         proceedings and the payment of fees and taxes.

4.5      Collection of Proceeds. Use commercially reasonable efforts to collect
         the proceeds of indebtedness owing to Borrower by any Person under any
         instrument or by any Account Debtor with respect to any account,
         contract right, chattel paper or general intangible.

4.6      Financing Statements, Further Assurances. Concurrently with the
         execution of this Security Agreement, and from time to time
         hereafter as requested by Lender, execute and deliver to Lender such
         financing statements, continuation statements, termination statements,
         amendments to any of the foregoing and other documents, in form
         satisfactory to Lender, as Lender may require to perfect and continue
         in effect the Security Interests, to carry out the purposes of this
         Security Agreement and to protect Lende's rights hereunder. Borrower,
         upon demand, shall pay the cost of filing all such financing
         statements, continuation statements, termination statements,
         amendments to any of the foregoing and other documents.

5.       Negative Covenants. Until all of Borrowe's Obligations are paid and
         performed in full and the Loan Agreement shall have been terminated,
         Borrower agrees that it will not:

5.1      Sales and Transfer of Collateral. Sell, lease, assign, license or
         otherwise dispose of any of the Collateral, except as maybe permitted
         by and in accordance with the applicable provisions the Loan Agreement.

5.2      Places of Business. Borrower shall not change the location of (i)
         Borrower's (A) chief executive office or (B) books and records or (ii)
         any Tangible Collateral, in each case without first giving Lender at
         least 30 days' advance written notice thereof and having taken any and
         all action reasonably requested by Lender to maintain and preserve the
         first perfected Lien in favor of Lender on all Property thereof free
         and clear of any Lien whatsoever except for Permitted Liens.

5.3      Installation of Tangible Collateral. Permit any of the Tangible
         Collateral to be installed, affixed or attached to the real estate of
         Borrower or any other Person so as to become a part thereof or become
         in any sense a fixture not otherwise pledged to Lender.

5.4      Bailees. Permit any Collateral to be in the possession or control of
         any warehouseman, bailee or processor without Lender's prior written
         consent and unless Lender has received warehouse receipts or bailee
         letters satisfactory to Lender prior to such possession or control.

5.5      Licenses of Intellectual Property. Sell, transfer, assign or grant any
         exclusive license with respect to the Intellectual Property Collateral
         to an Affiliate of Borrower or otherwise take any action with respect
         to its Intellectual Property Collateral in violation of any term or
         provision of the Loan Agreement.

5.6      Trademark Collateral. Permit, and permit any of its licensees to,
         unless Borrower shall either (i) reasonably and in good faith
         determine that any of its Trademark Collateral is of negligible
         economic value to Borrower or (ii) have a valid business purpose to do
         otherwise: (A) fail to continue to use any of its Trademark Collateral
         in order to maintain all of its Trademark Collateral in full force
         free from any claim of abandonment for non-use, (B) fail to maintain
         as in the past the quality of products and services offered under all
         of its Trademark Collateral, (C) fail to employ all of its Trademark
         Collateral registered with any federal, state or foreign authority
         with an appropriate notice of such registration, (D) adopt or use any
         trademark which is confusingly similar or a colorable imitation of any
         of its Trademark Collateral except in compliance with applicable law,
         (E) use any of its Trademark Collateral registered with any federal,
         state or foreign authority except for the uses for which registration
         or application for registration of such Trademark Collateral has been
         made except in compliance with applicable law or (F) do or permit any
         act or knowingly omit to do any act whereby any of its Trademark
         Collateral may lapse or become invalid or unenforceable.

5.7      Patent Collateral. Unless Borrower shall either (i) reasonably and in
         good faith determine that any of its Patent Collateral is of
         negligible economic value to Borrower or (ii) have a valid business
         purpose to do otherwise, do any act, or omit to do any act, whereby
         any of Borrower's Patent Collateral may lapse or become abandoned or
         dedicated to the public or unenforceable.

6.       Protection of Collateral. In the event of any failure of Borrower to
         (i) maintain in force and pay for any insurance or bond which Borrower
         is required to provide pursuant to this Security Agreement or the
         other Loan Instruments, (ii) keep the Tangible Collateral in good
         repair and operating condition, (iii) keep the Collateral free from
         all Liens except for Permitted Liens, (iv) pay when due all taxes,
         levies and assessments on or in respect of the Collateral, except as
         permitted pursuant to the terms of Section 4.1 above, (v) make all
         payments and perform all acts on the part of Borrower to be paid or
         performed with respect to any of the Collateral, including, without
         limitation, all expenses of protecting, storing, warehousing,
         insuring, handling and maintaining the Collateral or (vi) keep fully
         and perform promptly any other of the obligations of Borrower under
         this Security Agreement or the other Loan Instruments, Lender, at its
         option, may (but shall not be required to) procure and pay for such
         insurance, place such Collateral in good repair and operating
         condition, pay or contest or settle such Liens or taxes or any
         judgments based thereon or otherwise make good any other aforesaid
         failure of Borrower. Borrower shall reimburse Lender immediately upon
         demand for all sums paid or advanced on behalf of Borrower for any
         such purpose, together with all costs, expenses and attorneys' fees
         paid or incurred by Lender in connection therewith and interest at the
         Default Rate on all sums so paid or advanced from the date of such
         payment or advancement until repaid to Lender. All such sums paid or
         advanced by Lender, with interest thereon, immediately upon payment or
         advancement thereof, shall be deemed to be part of Borrower's
         Obligations secured hereby.

7.       Event of Default. Borrower shall be in default under this Security
         Agreement upon the occurrence of an Event of Default
         under the Loan Agreement.

8.       Right of Lender to Contact Account Debtors.  Lender shall have the
         right, from time to time, at Lender's discretion, to contact account
         debtors of Borrower and Guarantor to verify that Accounts are valid
         and not subject to setoff or counterclaim and to verify the
         creditworthiness of the account debtor.

9.       Remedies Upon Default. Upon the occurrence and during the continuation
         of an Event of Default:

9.1      Rights of Lender. Lender shall have all of the rights and remedies of
         a secured party under the Code and all other rights and remedies
         accorded to Lender at equity or law, including, without limitation,
         the right to apply for and have a receiver appointed by a court of
         competent jurisdiction to manage, protect and preserve the Collateral,
         to continue operating the business of Borrower and to collect all
         revenues and profits thereof. Any notice of sale or other disposition
         of Collateral given not less than ten (10) days prior to such proposed
         action shall constitute reasonable and fair notice of such action.
         Lender may postpone or adjourn any such sale from time to time by
         announcement at the time and place of sale stated in the notice of
         sale or by announcement of any adjourned sale, without being required
         to give a further notice of sale. Any such sale may be for cash or,
         unless prohibited by applicable law, upon such credit or installment
         terms as Lender shall determine. Borrower shall be credited with the
         net proceeds of such sale only when such proceeds actually are
         received by Lender in Good Funds. Despite the consummation of any such
         sale, Borrower shall remain liable for any deficiency on Borrower's
         Obligations which remains outstanding following any such sale. All net
         proceeds received pursuant to a sale shall be applied in the manner
         set forth in Section 8.4 of the Loan Agreement.

9.2      Assembly of Collateral. Upon the request of Lender, Borrower shall
         assemble and make the Collateral available to Lender at a place
         designated by Lender.

9.3      Proceeds. Borrower shall hold all proceeds of the Collateral collected
         by Borrower in trust for Lender, and, after Borrower receives notice
         from Lender, promptly after the receipt of the proceeds of Collateral,
         turn over such proceeds to Lender in the exact form in which they were
         received.

9.4      Other Rights. Lender, at its election, and without notice to Borrower,
         may:

9.4.1    Terminate Right of Collection. Terminate the rights of Borrower to
         collect the proceeds described in Section 8.3.

9.4.2    Notification. Notify the obligors under any instruments and the
         Account Debtors of any account, contract right, chattel paper or
         general intangible to make all payments directly to Lender.

9.4.3    Collection of Payments. Demand, sue for, collect or receive, in the
         name of Borrower or Lender, any money or Property payable or
         receivable on any item of Collateral.

9.4.4    Settlement. Settle, release, compromise, adjust, sue upon or otherwise
         enforce any item of Collateral as Lender may determine.

9.4.5    Mail of Borrower; Endorsement of Checks. For the purpose of enforcing
         Lender's rights under this Security Agreement, receive and open mail
         addressed to Borrower, and endorse notes, checks, drafts, money
         orders, documents of title or other forms of payment on behalf and in
         the name of Borrower.

All monies received by Lender pursuant to this Section 9 shall be applied by
Lender in accordance with the applicable provisions of Section 8.4 of the Loan
Agreement.

10.      Power of Attorney. To effectuate the rights and remedies of Lender
         under this Security Agreement, Borrower hereby irrevocably appoints
         Lender as its attorney-in-fact, in the name of Borrower or in the name
         of Lender, (i) to execute and file from time to time financing
         statements, continuation statements, termination statements and
         amendments thereto, covering the Collateral, in form satisfactory to
         Lender and (ii) take all action and execute all documents referred to
         in Section 9.4 above. The power of attorney granted pursuant to this
         Section 10 is coupled with an interest and shall be irrevocable until
         all of Borrower's Obligations have been paid and performed in full and
         the Loan Agreement shall have been terminated.

11.      Certain Agreements of Borrower.

11.1     Waiver of Notice. Borrower hereby waives notice of the acceptance of
         this Security Agreement and, except as otherwise specifically provided
         in Section 9.1 and 9.3 above or in the Loan Agreement, all other
         notices, demands or protests to which Borrower otherwise might be
         entitled by law (and which lawfully may be waived) with respect to
         this Security Agreement, Borrower's Obligations and the Collateral.

11.2     Rights of Lender. Borrower agrees that Lender (i) shall have no duty
         as to the collection or protection of the Collateral or any income
         thereon, (ii) may exercise the rights and remedies of Lender with
         respect to the Collateral without resort or regard to other security
         or sources for payment and (iii) shall not be deemed to have waived
         any of the rights or remedies granted to Lender hereunder unless such
         waiver shall be in writing and shall be signed by Lender. Borrower and
         Lender acknowledge their intent that, upon the occurrence of an Event
         of Default, Lender shall receive, to the fullest extent permitted by
         law and governmental policy, all rights necessary or desirable to
         obtain, use or sell the Collateral, and to exercise all remedies
         available to Lender under the Loan Instruments, the Code or other
         applicable law. Borrower and Lender further acknowledge and agree
         that, in the event of changes in law or governmental policy occurring
         subsequent to the date hereof that affect in any manner Lender's
         rights of access to, or use or sale of, the Collateral, or the
         procedures necessary to enable Lender to obtain such rights of access,
         use or sale, Lender and Borrower shall amend the Loan Instruments, in
         such manner as Lender shall request, in order to provide Lender such
         rights to the greatest extent possible consistent with then applicable
         law and governmental policy.

11.3     No Delay, Single or Partial Exercise Permitted. No delay or omission
         on the part of Lender in exercising any rights or remedies contained
         herein shall operate as a waiver of such right or remedy or of any
         other right or remedy, and no single or partial exercise of any right
         or remedy shall preclude any other or further exercise thereof, or the
         exercise of any other right or remedy. A waiver of any right or remedy
         on any one occasion shall not be construed as a bar or waiver of any
         right or remedy on future occasions, and no delay, omission, waiver or
         single or partial exercise of any right or remedy shall be deemed to
         establish a custom or course of dealing or performance between the
         parties hereto.

11.4     Borrower to Remain Liable. Borrower hereby expressly agrees that,
         anything herein to the contrary notwithstanding, Borrower shall remain
         liable under each contract, agreement, interest or obligation assigned
         by Borrower to Lender hereunder to observe and perform all of the
         conditions and obligations to be observed and performed by Borrower
         thereunder, all in accordance with and pursuant to the terms and
         provisions thereof. The exercise by Lender of any of the rights
         assigned hereunder shall not release Borrower from any of its duties
         or obligations under any such contract, agreement, interest or
         obligation. Lender shall have no duty, responsibility, obligation or
         liability under any such contract, agreement, interest or obligation
         by reason of or arising out of the assignment thereof to Lender or the
         granting to Lender of a Security Interest therein or the receipt by
         Lender of any payment relating to any such contract, agreement,
         interest or obligation pursuant hereto, nor shall Lender be required
         or obligated in any manner to perform or fulfill any of the
         obligations of Borrower thereunder or pursuant thereto, or to make any
         payment, or to make any inquiry as to the nature or sufficiency of
         any payment received by Lender or the sufficiency of any performance
         of any party under any such contract, agreement, interest or
         obligation, or to present or file any claim, or to take any action to
         collect or enforce any performance of the payment of any amounts which
         may have been assigned to Lender, in which Lender may have been
         granted a Security Interest or to which Lender may be entitled at any
         time or times.

11.5     Grant of License to Use Intellectual Property Collateral. Borrower
         hereby grants to Lender, after the occurrence and during the
         continuance of an Event of Default, an irrevocable, nonexclusive
         license (exercisable without payment of royalty or other compensation
         to Borrower) to use, assign, license or sublicense any Intellectual
         Property Collateral, now owned or hereafter acquired by Borrower, and
         wherever the same may be located, including in such license reasonable
         access as to all media in which any of the licensed items may be
         recorded or stored and to all computer programs and used for the
         compilation or printout thereof.

12.      Rights Cumulative. All rights and remedies of Lender pursuant to this
         Security Agreement, the Loan Agreement or otherwise, shall be
         cumulative and non-exclusive, and may be exercised singularly or
         concurrently.

13.      Severability. In the event that any provision of this Security
         Agreement is 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 other Governmental Body, this Security Agreement 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.

14.      Notices. All notices and communications under this Security Agreement
         shall be in writing and delivered in the manner set forth in the Loan
         Agreement.

15.      Successors and Assigns. This Security Agreement shall be binding upon
         and inure to the benefit of and be enforceable by the respective
         successors and assigns of Lender and Borrower.

16.      Captions. The headings in this Security Agreement are for purposes of
         reference only and shall not limit or otherwise affect the meaning
         hereof.

17.      Counterparts. This Security Agreement may be executed in one or more
         counterparts, each of which shall be deemed to be an original, but all
         of which, when taken together, shall be one and the same instrument.

18.      Survival of Security Agreement; Termination. All covenants,
         agreements, representations and warranties made herein shall survive
         the execution and delivery of the Loan Agreement and shall continue in
         fall force and effect until Borrower's Obligations are paid and
         performed in full and the Loan Agreement shall have been terminated.

19.      Governing Law. This Security Agreement shall be construed in
         accordance with and governed by the laws and decisions of the State
         Illinois, without regard to conflict of laws principles.

20.      Jurisdiction and Venue. Borrower hereby agrees that all actions or
         proceedings initiated by Borrower and arising directly or indirectly
         out of this Security Agreement 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 other
         court in which Lender shall initiate or to which Lender shall remove
         such action, to the extent such court has jurisdiction. Borrower
         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 served in the manner provided for notices herein, and
         agrees that service of such summons and complaint or other process or
         papers may be made by registered or certified mail addressed to
         Borrower at the address to which notices are to be sent pursuant to
         Section 11.1 of the Loan Agreement. Borrower 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 Borrower, 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, Borrower shall be deemed in default and an order and/or
         judgment may be entered by the court against Borrower as demanded or
         prayed for in such summons, complaint, process or papers. The
         exclusive choice of forum for Borrower set forth in this Section 19
         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
         Borrower hereby waives the right to collaterally attack any such
         judgment or action.

21.      Waiver of Right to Jury Trial. Borrower acknowledges and agrees that
         any controversy which may arise under any of the Loan Instruments or
         with respect to the transactions contemplated thereby would be based
         upon difficult and complex issues and, therefore, the parties agree
         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.

22.      Time of the Essence. Time for the performance of Borrower's
         Obligations under this Security Agreement is of the essence.

23.      Termination. This Security Agreement and the Liens and security
         interests granted hereunder shall not terminate until the full and
         complete performance and payment and satisfaction of Borrower's
         Obligations and the Loan Agreement shall have terminated, whereupon
         Lender shall release all such Liens and security interests in favor of
         Lender affecting the Collateral.

                   [remainder of this page intentionally left blank]

<PAGE>

        IN WITNESS WHEREOF, this Security Agreement has been executed and
delivered by the parties hereto by a duly authorized officer of each such party
on the date first set forth above.

Address:                     CAM TRANSPORT, INC.,
1000 Colfax Street           an Indiana corporation
Gary, IN 46406
                             By: _____________________________
                             Name: ___________________________
                             Title: ____________________________



Address:                     FIRSTAR BANK N.A., a national banking association
30 N. Michigan Avenue
Chicago, IL 60602
                             By: _____________________________
                             Name: Craig B. Collinson
                             Title: Senior Vice President


<PAGE>

                                EXHIBIT A

                     Location of Chief Executive Office,
                    Location of other Places of Business,
                      Location of Books and Records and
                     Locations of All Tangible Collateral


                       Location of Chief Executive Office
                                 1000 Colfax
                                  Gary, IN


                       Location of Other Places of Business
                                    NONE


                           Location of Books and Records
                                  1000 Colfax
                                   Gary, IN


                       Locations of All Tangible Collateral

                                [To be provided]



<PAGE>

                               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 and defined in that certain Loan Agreement dated as of April 18, 2000,
between the undersigned others and Lender providing for a loan facility in the
principal amount of $2,000,000 in favor of the Borrower and related companies,
which amount was increased to $3,500,000 by Amendment to Loan Agreement dated
June 12, 2000 ("Loan Agreement")).  Borrower hereby acknowledges that as of the
date hereof the Loan Agreement is being amended to increase the Revolving Loan
Commitment provided for therein to $5,500,000, and to make certain other
changes to the terms thereof.  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 and the Second 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 the date hereof and an Equipment Loan
Note of even date herewith, 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 December 7, 2000.

FIVE STAR TRANSPORT, INC.


By ______________________________


<PAGE>

                               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 Lender providing for a loan facility in the
principal amount of $2,000,000 in favor of the Borrower and related companies,
which amount was increased to $3,500,000 by Amendment to Loan Agreement dated
June 12, 2000 ("Loan Agreement")).  Borrower hereby acknowledges that as of the
date hereof the Loan Agreement is being amended to increase the Revolving Loan
Commitment provided for therein to $5,500,000, and to make certain other
changes to the terms thereof.  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 and the Second 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 the date hereof and an Equipment Loan
Note of even date herewith, 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 December 7, 2000.

CAROLINA NATIONAL TRANSPORTATION, INC.


By ________________________________________


<PAGE>

                            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 Lender providing for a loan facility in the
principal amount of $2,000,000 in favor of the Borrower and related companies,
which amount was increased to $3,500,000 by Amendment to Loan Agreement dated
June 12, 2000 ("Loan Agreement")).  Borrower hereby acknowledges that as of the
date hereof the Loan Agreement is being amended to increase the Revolving Loan
Commitment provided for therein to $5,500,000, and to make certain other
changes to the terms thereof.  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 and the Second 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 the date hereof and an Equipment Loan Note of even
date herewith, 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 December 7, 2000.

KEYSTONE LINES


By ______________________________


<PAGE>

                               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 Lender providing for a loan facility in the
principal amount of $2,000,000 in favor of the Borrower and related companies,
which amount was increased to $3,500,000 by Amendment to Loan Agreement dated
June 12, 2000 ("Loan Agreement")).  Borrower hereby acknowledges that as of the
date hereof the Loan Agreement is being amended to increase the Revolving Loan
Commitment provided for therein to $5,500,000, and to make certain other
changes to the terms thereof.  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 and the Second 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 the date hereof and an Equipment Loan Note of even
date herewith, 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 December 7, 2000.

GULF LINE TRANSPORT INC.


By ______________________________


<PAGE>

                              EXHIBIT "D-5"

                              ACKNOWLEDGEMENT
                           (Security Agreement)


         The undersigned ("Guarantor") 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 Guarantor 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 certain of its subsidiaries ("Borrowers") and Lender providing
for a loan facility in the principal amount of $2,000,000 in favor of the
Borrowers, which amount was increased to $3,500,000 by Amendment to Loan
Agreement dated June 12, 2000 ("Loan Agreement")), and Guarantor's obligations
under that certain Corporate Guaranty in favor of Lender dated April 18, 2000,
which is being amended and restated in its entirety as of the date hereof.
Guarantor hereby acknowledges that as of the date hereof the Loan Agreement is
being amended to increase the Revolving Loan Commitment provided for therein to
$5,500,000, and to make certain other changes to the terms thereof.  Guarantor
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 as of the Second
Amendment to Loan Agreement of even date herewith, and that "Obligations" as
that term is used in said Corporate Guaranty as amended and restated as of the
date hereof includes without limitation to obligation to pay all amounts due
under the Revolving Loan Note in the face amount of $5,500,000, as amended and
restated in its entirety as of the date hereof, and an Equipment Loan Note
of even date herewith, 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 December 7, 2000.

US 1 INDUSTRIES, INC.


By ______________________________

<PAGE>


                         EXHIBIT "F-1"

                     Date: April 18, 2000
             Amended and Restated as of June 9, 2000
       Further Amended and Restated as of December 7, 2000


                        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 (a) certain Revolving Loan Note, dated April 18, 2000,
as amended and restated in its entirety as of June 9, 2000, and as further
amended and restated as of December 7, 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"), Five Star Transport, Inc., an Indiana corporation
("Five Star") and Cam Transport, Inc., an Indiana corporation ("Cam")
(Carolina, Keystone, Gulf Line, Five Star and Cam hereinafter collectively
referred to as "Borrowers") in the principal amount of $5,500,000 (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 "Revolving Note"), and (b)
that certain Equipment Loan Note dated December 7, 2000, executed by Borrowers
in favor of Lender in the principal amount of $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 "Equipment Note", the Equipment Note
and Revolving Note hereinafter referred to as the "Notes") 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, and
as further amended as of the date hereof 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 Notes 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 Notes or the Loan Agreement,
Guarantor agrees to pay on demand by Lender all sums then or thereafter due
under the Notes 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, except any liability with respect to a
breach of Section 7.5 of the Loan Agreement, shall be limited to the sum of (i)
the principal sum of One Million Five Hundred Thousand Dollars ($1,500,000) 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 any
Borrower 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 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 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 in favor of Lender dated April 18, 2000, and amended and
restated as of June 9, 2000.

Chicago, Illinois
                                               _________________________
                                               Michael Kibler


STATE OF _______________                   )
                                           )        SS.
COUNTY OF _____________                    )

         The undersigned, a Notary Public in and for the above County and
State, certifies that Michael Kibler, personally known to me to be the same
person whose name is subscribed as guarantor to the foregoing Limited Guaranty,
appeared before me in person and acknowledged signing the said instrument as
the free and voluntary act of the guarantor.

         Subscribed and sworn to before me this _____ day of ____________, 20__.

                                             __________________________________
                                             Notary Public


My commission expires:
_______________________


<PAGE>

                                 EXHIBIT "F-2"

                                   Date: April 18, 2000
                          Amended and Restated as of June 9, 2000
                   Further Amended and Restated as of December 7, 2000


                               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 (a) certain Revolving Loan Note, dated April 18,
2000, as amended and restated in its entirety as of June 9, 2000, and as
further amended and restated as of December 7, 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"), Five Star Transport, Inc., an Indiana
corporation ("Five Star") and Cam Transport, Inc., an Indiana corporation
("Cam") (Carolina, Keystone, Gulf Line, Five Star and Cam hereinafter
collectively referred to as "Borrowers") in the principal amount of $5,500,000
(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 "Revolving Note"),
and (b) that certain Equipment Loan Note dated December 7, 2000, executed by
Borrowers in favor of Lender in the principal amount of $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 "Equipment Note", the
Equipment Note and Revolving Note hereinafter referred to as the "Notes") 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, and as further amended as of the date hereof 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 Notes
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 Notes 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, except any liability with respect to a
breach of Section 7.5 of the Loan Agreement, shall be limited to the sum of (i)
the principal sum of One Million Five Hundred Thousand Dollars ($1,500,000) 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 any
Borrower 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 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 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.
                                    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 in favor of Lender dated April 18, 2000, and amended and
restated as of June 9, 2000.

Chicago, Illinois
                                                     _________________________
                                                     Harold Antonson

<PAGE>


                              EXHIBIT "G"

                        Date: April 18, 2000
              Amended and Restated as of June 9, 2000
           Further Amended and Restated as of December 7, 2000


                             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, Inc., an Indiana corporation ("Cam") (Carolina, Keystone,
Gulf Line, Five Star and Cam hereinafter  collectively referred to as
"Borrowers") and to enter into a Second Amendment to Loan Agreement of even
date herewith between Borrowers and Lender (which Second  Amendment to Loan
Agreement together with the original Loan Agreement dated April 18, 2000, and
Amendment to Loan Agreement dated June 9, 2000  between Borrowers (other  than
Cam) 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 the date hereof (the "Revolving Loan Note")
and the Equipment Loan Note from Borrowers to Lender of even date herewith (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.

US 1 INDUSTRIES, INC., an Indiana corporation


By:_________________________________
Name:_______________________________
Title:________________________________


Address:          1000 Colfax Street
                  Gary, IN 46406
Fax No.:          (219) 977-5227

<PAGE>


                                   "EXHIBIT H-1"

                     AMENDMENT TO SUBORDINATION AGREEMENT


         This Amendment dated as of December 7, 2000, is entered into by and
between August Investment Partnership ("Junior Creditor") with offices at 1000
Colfax Street, Gary, IN 46406 and Firstar Bank N.A. ("Lender") with offices at
30 N. Michigan Avenue, Chicago, IL 60602.

                                   WITNESSETH:
         WHEREAS, Lender has previously extended credit to Carolina National
Transportation Inc. ("Carolina"), Keystone Lines ("Keystone"), Gulf Line
Transport Inc. ("Gulf Line") and First Star Transport, Inc. ("First Star") and
is about to extend credit to Cam Transport, Inc. ("Cam") (Carolina, Keystone,
Gulf Line, First Star and Cam are hereinafter referred to collectively as
"Borrowers") pursuant to that certain Loan Agreement dated April 18, 2000, as
amended by Amendment to Loan Agreement dated June 9, 2000 and as further
amended by Second Amendment to Loan Agreement of even date herewith (the "Loan
Agreement");

         WHEREAS, US 1 Industries, Inc. ("Guarantor"), the parent of each of
Borrowers, has guaranteed the obligations of Borrowers under the Loan Agreement
and the Revolving Loan Note and Equipment Loan Note issued pursuant thereto
under a Corporate Guaranty dated April 18, 2000, and amended and restated as of
June 9, 2000, and as further amended and extended as of the date hereof (the
"Corporate Guaranty").

         WHEREAS, Guarantor may hereafter be liable to Lender under the
Corporate Guaranty as a result of the advance of monies and other extensions of
credit under the Loan Agreement;

         WHEREAS, the owners of Junior Creditor are financially interested in
Guarantor and TC Services, Inc. and Borrowers, and Guarantor and TC Services,
Inc. are indebted to Junior Creditor for monies previously advanced by Junior
Creditor to Guarantor or TC Services, Inc. ("Subordinated Debt");

         WHEREAS, Junior Creditor has previously entered into a Subordination
Agreement with Lender subordinating its rights to be paid by Guarantor or TC
Services, Inc. or any of Borrowers on account of the Subordinated Debt (as
defined in the Subordination Agreement) to the rights of Lender as holder of
the Senior Debt (as defined in the Subordination Agreement); and

         WHEREAS, the Subordination Agreement imposes various restrictions on
Junior Creditor's ability to take security in the assets of Guarantor or
Borrowers, and the parties wish to amend those restrictions all as hereinafter
provided to allow for a junior pledge of assets to secure the repayment of the
Subordinated Debt; and

         WHEREAS, Borrowers desire to increase the amount of credit available
to them from Lender.

         NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged by Junior Creditor, and in order to induce Lender to
make loans or extend credit or any other financial accommodation to or for the
benefit of the Borrowers pursuant to the Loan Agreement, or to grant such
renewals or extensions thereof as Lender may deem advisable, to better secure
Lender in respect of the foregoing, and to induce Lender to consent to the
junior pledge described above, and a partial payment of principal of the
Subordinated Debt, the Junior Creditor and Lender hereby agrees as follows:

1.       Consent to Junior Pledge.  Lender hereby consents to Junior Creditor
         accepting a pledge of collateral from Guarantor and Borrowers
         consisting of amounts received and other assets of Guarantor and/or
         Borrower as security for the repayment of the Subordinated Debt,
         provided Junior Creditor hereby agrees that any liens created thereby
         ("Permitted Junior Liens") shall be junior in every respect to any
         lien in favor of the Lender securing the Senior Debt, and Junior
         Creditor hereby agree not to accept such collateral or any other
         assets of Guarantor or Borrowers, or any of them, as security for any
         debt payable to Junior Creditor other than the Subordinated Debt
         without the prior written consent of the Lender, which may be withheld
         by Lender's in its absolute discretion.  The form of any security
         agreement or other document creating or perfecting the Permitted
         Junior Lien, including without limitation any financing statement
         shall be subject to the approval of Lender, which shall not be
         unreasonably withheld.  Not in limitation of the foregoing, any such
         security agreement or financing statement securing the Permitted
         Junior Lien shall indicate on its face by language and in a manner
         approved by Lender that the lien credited thereby is junior to the
         lien in favor of Lender securing the Senior Debt, and that any further
         borrowing by Borrowers and/or Guarantor without the prior written
         consent of Lender is, subject to certain limited exceptions stated in
         the Loan Agreement, prohibited by the terms of the Loan Agreement.
         Junior Creditor, warrants and represents that, as of the date hereof,
         it has no lien on or security interest in any of the assets of
         Guarantor or Borrowers as security for the repayment of the
         Subordinated Debt, and agrees that, except as expressly provided in
         this Section or to the Subordinated Debt, Junior Creditor shall not
         take, accept the assignment of or hold any security interest in any of
         the assets of Guarantor or Borrowers as security for any obligation,
         until the Senior Debt shall have been fully discharged and all
         financing agreements between the Guarantor and Borrowers and the
         Lender have been terminated.

2.       Delivery of Original Subordinated Debt Instruments.  Junior Creditor
         hereby agrees to deliver the Lender all original instruments
         evidencing the Subordinated Debt together with a separate endorsement
         or assignment thereof to Lender as additional security to be held by
         Lender as additional security until the Senior Debt has been paid in
         full.

3.       Subordinated Debt Owed Only to the Junior Creditor.  Junior Creditor
         warrants and represents that as of the date hereof, Junior Creditor
         has not previously assigned any interest in the Subordinated Debt or
         any security interest in connection therewith, that no other party
         owns an interest in the Subordinated Debt or security therefor (other
         than as an unsecured trade creditor) other than Junior Creditor
         (whether as joint holders of the Subordinated Debt, participants or
         otherwise) and that the entire Subordinated Debt is owing only to
         Junior Creditor and Junior Creditor covenants that the entire
         Subordinated Debt shall continue to be owing only to the Junior
         Creditor and all security therefor shall continue to be held solely
         for the benefit of the Junior Creditor (except to the extent held for
         the benefit of unsecured trade creditors).  Junior Creditor further
         warrants and covenants to Lender that Junior Creditor shall not make
         further loans, advances or extensions of credit to Guarantor or any
         Borrowers or TC Services, Inc. without the prior written consent of
         Lender.

4.       Waiver.  Junior Creditor hereby waives, to the extent permitted under
         law, any requirement that, if and when Lender finds it necessary to
         enforce its security interest with respect to the Senior Debt, Lender
         shall marshal assets of Guarantor or Borrowers as required by law.

5.       Amendment.  Except as expressly provided herein, the terms of the
         Subordination Agreement shall remain in full force and effect as
         originally stated therein.  This Amendment to Subordination Agreement
         may not be amended except by the express written agreement of the
         parties hereto.

         IN WITNESS WHEREOF, this instrument has been executed and delivered as
of this 7th day of December, 2000.

                  _________            AUGUST INVESTMENT PARTNERSHIP

                  _________            By:    _________________________________
                  _________                   Harold Antonson


                  _________             By:   _________________________________
                  _________                   Michael Kibler

Acknowledged and Accepted
in Chicago, Illinois as of this
7th day of December, 2000

                  _________             FIRSTAR BANK N.A.


                  _________             By:   ________________________________
                  _________                   Craig B. Collinson
                  _________                   Title:  Senior Vice President


         The undersigned hereby accept and acknowledge receipt of a copy of,
the foregoing Subordination Agreement dated as of this 7th day of December,
2000, and agree that neither will pay any of the Subordinated Debt (as defined
in the Subordination Agreement) or grant any security therefor, except as the
foregoing agreement provides. In the event of a breach by Junior Creditor any
of the provisions herein or of the foregoing Agreement, all of the Senior Debt
(as defined in the Subordination Agreement) shall, without presentment, demand,
protest or notice of any kind, become immediately due and payable, unless
Lender shall otherwise elect in writing. The undersigned further agrees that
the terms of this Agreement shall not give the undersigned any substantive
rights vis-a-vis Lender or the subordinating creditor named above.

TC SERVICES, INC. _________         US 1 INDUSTRIES, INC.

By: ________________________        By: _____________________________
Name: _____________________         Name: ___________________________
Title: ______________________       Title: ____________________________

<PAGE>

                              EXHIBIT "H-2"

                 AMENDMENT TO SUBORDINATION AGREEMENT


         This Amendment dated as of December 7, 2000, is entered into by and
between Harold Antonson ("Antonson") and Mike Kibler ("Kibler") with offices at
1000 Colfax Street, Gary, IN 46406 (Antonson and Kibler are hereinafter
referred to as "Junior Creditors") and Firstar Bank N.A. ("Lender") with
offices at 30 N. Michigan Avenue, Chicago, IL 60602.

                                                              WITNESSETH:

         WHEREAS, Lender has previously extended credit to Carolina National
Transportation Inc. ("Carolina"), Keystone Lines ("Keystone"), Gulf Line
Transport Inc. ("Gulf Line") and First Star Transport, Inc. ("First Star") and
is about to extend credit to Cam Transport, Inc. ("Cam") (Carolina, Keystone,
Gulf Line, First Star and Cam are hereinafter referred to collectively as
"Borrowers") pursuant to that certain Loan Agreement dated April 18, 2000, as
amended by Amendment to Loan Agreement dated June 9, 2000, and as further
amended by Second Amendment to Loan Agreement of even date herewith
(the "Loan Agreement");

         WHEREAS, US 1 Industries, Inc. ("Guarantor"), the parent of each of
Borrowers, has guaranteed the obligations of Borrowers under the Loan Agreement
and the Revolving Loan Note and Equipment Loan Note issued pursuant thereto
under a Corporate Guaranty dated April 18, 2000, and amended and restated as of
June 9, 2000, and as further amended and restated as of the date hereof (the
"Corporate Guaranty").

         WHEREAS, Guarantor may hereafter be liable to Lender under the
Corporate Guaranty as a result of the advance of monies and other extensions of
credit under the Loan Agreement;

         WHEREAS, Junior Creditors are financially interested in Guarantor and
Borrowers, and Guarantor is indebted to Junior Creditors for monies previously
advanced by Junior Creditors to Guarantor ("Subordinated Debt");

         WHEREAS, Junior Creditors have previously entered into a Subordination
Agreement with Lender subordinating their rights to be paid by Guarantor or any
of Borrowers on account of the Subordinated Debt (as defined in the
Subordination Agreement) to the rights of Lender as holder of the Senior Debt
(as defined in the Subordination Agreement); and

         WHEREAS, the Subordination Agreement imposes various restrictions on
Junior Creditors' ability to advance further funds to Guarantor and to take a
security interest in the assets of Guarantor or Borrowers prior to the payment
in full of the Senior Debt, and the parties wish to amend those restrictions
all as hereinafter provided to allow for (i) the amount of Subordinated Debt to
be increased, and (ii) a junior pledge of assets to secure the repayment of the
Subordinated Debt.

         NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged by Junior Creditors, and in order to induce Lender to
make loans or extend credit or any other financial accommodation to or for the
benefit of the Borrowers pursuant to the Loan Agreement, or to grant such
renewals or extensions thereof as Lender may deem advisable, to better secure
Lender in respect of the foregoing, and to induce Lender to consent to an
increase in the amount of the Subordinated Debt, the junior pledge described
above, and a partial payment of principal of the Subordinated Debt, Junior
Creditors and Lender hereby agree as follows:

1.       Increase in Amount of Subordinated Debt.  Lender hereby consents to
         the increase in the amount of the Subordinated Debt as of the date
         hereof to $4,285,043, $613,567 of which constitutes interest accrued
         as of April 18, 2000 ("Pre-Closing Interest Amount").  Junior
         Creditors, jointly and severally, represent and warrant that there is
         no debt outstanding to them from Guarantor or Borrowers or any related
         company or any of them for borrowed money other than the Subordinated
         Debt in the aforesaid amount, and agree that they shall neither
         individually nor jointly loan any additional monies to Guarantor or
         Borrowers or any related company without the prior written consent of
         Lender.

2.       Consent to Junior Pledge.  Lender hereby consents to Junior Creditors
         accepting a pledge of collateral from Guarantor and Borrowers
         consisting of amounts received and other assets of Guarantor and/or
         Borrower as security for the repayment of the Subordinated Debt,
         provided Junior Creditors hereby agree that any liens created thereby
         ("Permitted Junior Liens") shall be junior in every respect to any
         lien in favor of the Lender securing the Senior Debt, and Junior
         Creditors hereby agree not to accept such collateral or any other
         assets of Guarantor or Borrower, or any of them, as security for any
         debt payable to Junior Creditors other than the Subordinated Debt
         without the prior written consent of the Lender, which may be withheld
         by Lender's in its absolute discretion.  The form of any security
         agreement or other document creating or perfecting the Permitted
         Junior Lien, including without limitation any financing statement
         shall be subject to the approval of Lender, which shall not be
         unreasonably withheld.  Not in limitation of the foregoing, any such
         security agreement or financing statement securing the Permitted
         Junior Lien shall indicate on its face by language and in a manner
         approved by Lender that the lien credited thereby is junior to the
         lien in favor of Lender securing the Senior Debt, and that any further
         borrowing by Borrowers and/or Guarantor without the prior written
         consent of Lender is, subject to certain limited exceptions stated in
         the Loan Agreement, prohibited by the terms of the Loan Agreement.
         Junior Creditors, jointly and severally, warrant and represent that,
         as of the date hereof, they have no lien on or security interest in
         any of the assets of Guarantor or Borrowers as security for the
         repayment of the Subordinated Debt, and agree that, except as
         expressly provided in this Section or to the Subordinated Debt,
         Junior Creditors shall neither jointly or individually take, accept
         the assignment of or hold any security interest in any of the assets
         of Guarantor or Borrowers as security for any obligation, until the
         Senior Debt shall have been fully discharged and all financing
         agreements between the Guarantor and Borrowers and the Lender have
         been terminated.

3.       Delivery of Original Subordinated Debt Instruments.  Junior Creditor
         hereby agrees to deliver the Lender all original instruments
         evidencing the Subordinated Debt together with a separate endorsement
         or assignment thereof to Lender as additional security to be held by
         Lender as additional security until the Senior Debt has been paid in
         full.

4.       Subordinated Debt Owed Only to the Junior Creditor.  Junior Creditors
         warrant and represent, jointly and severally, that as  of the date
         hereof, Junior Creditors have not previously assigned any interest in
         the Subordinated Debt or any security interest in connection
         therewith, that no other party owns an interest in the Subordinated
         Debt or security therefor (other than as an unsecured  trade creditor)
         other than Junior Creditors (whether as joint holders of the
         Subordinated Debt, participants or otherwise) and that the entire
         Subordinated Debt is owing only to Junior Creditors and Junior
         Creditors covenant that the entire Subordinated Debt shall continue to
         be owing only to Junior Creditors and all security therefor shall
         continue to be held solely for the benefit of Junior Creditors (except
         to the extent held for the benefit of unsecured trade creditors).
         Junior Creditors further warrant and covenant to Lender that Junior
         Creditors shall not make further loans, advances or extensions of
         credit to Guarantor or any Borrowers or TC Services, Inc. without the
         prior written consent of Lender.

5.       Waiver.  Junior Creditors hereby waive, to the extent permitted under
         law, any requirement that, if and when Lender finds it necessary to
         enforce its security interest with respect to the Senior Debt, Lender
         shall marshal assets of Guarantor or Borrowers as required by law.

6.       Amendment.  Except as expressly provided herein, the terms of the
         Subordination Agreement shall remain in full force and  effect as
         originally stated therein.  This Amendment to Subordination Agreement
         may not be amended except by the express written agreement of the
         parties hereto.

         IN WITNESS WHEREOF, this instrument has been executed and delivered as
of this 7th day of December, 2000.


                  _________                 By:_________________________________
                  _________                    HAROLD ANTONSON


                  _________                 By:_________________________________
                  _________                    MICHAEL KIBLER

Acknowledged and Accepted
in Chicago, Illinois as of this
7th day of December, 2000

                  _________                 FIRSTAR BANK N.A.


                  _________                 By:________________________________
                  _________                    Craig B. Collinson
                  _________                    Title:  Senior Vice President


         The undersigned hereby accepts and acknowledges receipt of a copy of,
the foregoing Subordination Agreement dated as of this 7th day of December,
2000, and agrees that it will not pay any of the Subordinated Debt (as defined
in the Subordination Agreement) or grant any security therefor, except as the
foregoing agreement provides. In the event of a breach by Junior Creditors or
either of them of any of the provisions herein or of the foregoing Agreement,
all of the Senior Debt (as defined in the Subordination Agreement) shall,
without presentment, demand, protest or notice of any kind, become immediately
due and payable, unless Lender shall otherwise elect in writing. The
undersigned further agrees that the terms of this Agreement shall not give the
undersigned any substantive rights vis-a-vis Lender or the subordinating
creditor named above.

                                            US 1 INDUSTRIES, INC.

                                            By: _____________________________
                                            Name: ___________________________
                  _________                 Title: ____________________________


<PAGE>
                          EXHIBIT "I-1"

                          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 Second 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 the date hereof, 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
Second 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, 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 and Second 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 ___________, 2000.

<TABLE>
<S>               <C>                      <C>

                  _________                 ______________________________
                  _________                 Harold Antonson

                  _________                 ______________________________
                  _________                 Michael Kibler
</TABLE>


<PAGE>

                                 EXHIBIT "I-2"

                                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 an 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 acknowledges and agrees that the
Subordinated Debt (as defined in that certain Subordination Agreement dated
April 18, 2000, as amended as of the date hereof, 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
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 and Lender
and Borrowers' Parent dated April 18, 2000, or the Amendment to Loan Agreement
dated June 8, 2000, among Borrower, 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 and
Second 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 ___________, 2000.

<TABLE>
<S>              <C>                     <C>


                  _________               AUGUST INVESTMENT PARTNERSHIP

                  _________               By: ______________________________
                  _________                    General Partner
                  _________               By: ______________________________
                  _________                    General Partner
</TABLE>