U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period ended to
Commission File Number: 33-30123-A
GENERAL PARCEL SERVICE, INC.
(Exact name of small business issuer in its charter)
State of Florida 59-2576629
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8923 Western Way, Suite 22,
Jacksonville, FL 32256
(Address of principal executive offices)
(904) 363-0089
(Issuer's telephone number)
Check whether issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities and 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
There were 3,758,671 shares of the Company's common stock
outstanding as of May 14, 1996.
<PAGE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
FORM 10-QSB
INDEX
PART I. FINANCIAL INFORMATION Page Number
Item 1
------
Consolidated Balance Sheets
as of March 31, 1996 and
December 31, 1995. . . . . . . . . . . . . 2
Consolidated Statements of
Earnings for the three months
ended March 31, 1996 and 1995. . . . . . . 3
Consolidated Statements of Cash
Flows for the three months
ended March 31, 1996 and 1995. . . . . . . 4
Notes to Consolidated Financial
Statements . . . . . . . . . . . . . . . . 5
Item 2
------
Management's Discussion and Analysis
of Financial Condition and Results
of Operations. . . . . . . . . . . . . . . 6
PART II. OTHER INFORMATION . . . . . . . . . .11
Item 6
------
Exhibits and Reports on Form 8-K
(A) Reports on Form 8-K
(B) Exhibits:
Exhibit 10, Material Contracts
Exhibit 27, Financial Date Schedule
<PAGE>
<TABLE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
current assets:
Cash $ 6,739 $ 6,739
Accounts receivable (net of allowance for doubtful
accounts of $7,551 and $7,846 at March 31, 1996
and December 31, 1995 respectively) 2,290,047 2,068,975
Other current assets 425,606 380,090
------------ ------------
Total current assets 2,722,392 2,455,804
------------ ------------
Long term assets:
Equipment, at net book value 7,396,798 7,593,626
Goodwill 998,114 1,015,784
Other assets 187,251 187,251
------------ ------------
Total long term assets 8,582,163 8,796,661
------------ ------------
Total assets $ 11,304,555 $ 11,252,465
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Short term borrowings $ 2,902,906 $ 1,599,000
Current obligations under capital leases 855,836 860,309
Current maturities of long-term debt 427,894 518,842
Accounts payable 1,768,549 1,953,468
Accrued expenses and other current liabilities 605,605 738,404
------------ ------------
Total current liabilities 6,560,790 5,670,023
------------ ------------
Long term liabilities:
Long-term obligations under capital leases 1,481,648 1,605,802
Long-term debt 845,601 3,910,808
Convertible debentures 300,000 300,000
------------ ------------
Total long term liabilities 2,627,249 5,816,610
------------ ------------
Total liabilities 9,188,039 11,486,633
------------ ------------
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, $.01 par value, 500,000 shares
authorized, 220,000 issued and outstanding at March 31,
1996, 100,000 issued and outstanding at December 31,
1995, liquidation preference $5,500,000. 2,200 1,000
Common stock, $.01 par value, 10,000,000 shares authorized,
3,758,671 shares issued and outstanding at March 31, 1996
and December 31, 1995. 37,586 37,586
Additional paid-in capital 16,388,455 13,389,655
Deficit (14,311,725) (13,662,409)
------------ ------------
Total stockholders' equity (deficit) 2,116,516 (234,168)
------------ ------------
Total liabilities and stockholders' equity (deficit) $ 11,304,555 $ 11,252,465
============ ============
<FN>
<F1>
Read accompanying notes.
2
</FN>
<PAGE>
</TABLE>
<TABLE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<CAPTION>
Three months ended March 31,
1996 1995
------------ ------------
<S> <C> <C>
Revenue $ 5,783,671 $ 5,063,330
------------ ------------
Operating expenses:
Operations salaries & benefits 3,079,190 2,536,693
Fuel 355,500 287,558
Equipment Rental 29,091 8,699
Insurance 364,165 449,000
Tires & maintenance 200,014 174,185
Depreciation & amortization 431,949 410,632
Facilities expense 352,815 331,587
Terminal expense 112,969 56,054
Purchased transportation 98,159 53,726
Other operating costs 59,834 39,250
Selling and administrative expense 967,521 711,849
------------ ------------
Total operating expenses 6,051,207 5,059,233
------------ ------------
Operating loss (267,536) 4,097
Interest expense (206,780) (152,074)
------------ ------------
Net loss (474,316) (147,977)
Preferred stock dividend requirement (58,992) (43,750)
------------ ------------
Earnings available to common shares $ (533,308) $ (191,727)
============ ============
Net loss per common
share (primary and fully diluted) $ (0.14) $ (0.05)
============ ============
Weighted average number of common
shares outstanding 3,758,671 3,758,671
============ ============
<FN>
<F1>
Read accompanying notes.
3
</FN>
</TABLE>
<PAGE>
<TABLE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash
(Unaudited)
<CAPTION>
Three months ended March 31,
1996 1995
------------ ------------
<S> <C> <C>
Cash flows (used in) provided by operating activities:
Net loss $ (474,316) $ (147,977)
Adjustments to reconcile net loss to cash
(used in) provided by operating activities:
Loss on disposal of fixed assets -- 2,718
Depreciation and amortization 454,678 423,263
Changes in assets and liabilities:
Increase in accounts receivable (221,072) (216,150)
Decrease (increase) in other current assets (45,516) 105,837
Increase in other assets -- (2,670)
Increase in accounts payable 572,151 468,986
Decrease in accrued expenses (132,797) (150,012)
------------ ------------
Total adjustments 627,444 631,972
------------ ------------
Net cash (used in) provided by
operating activities 153,128 483,995
------------ ------------
Cash flows for investing activities:
Business combination -- (151,674)
Proceeds from disposal of equipment -- --
Purchase of equipment (172,149) (354,913)
------------ ------------
Net cash used in investing activities (172,149) (506,587)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of preferred stock 3,000,000 --
Dividends paid on preferred stock (175,000) (175,000)
Repayment of long-term debt (3,156,155) (150,893)
Principal payments under capital lease obligations (196,660) (264,617)
Increase in short-term borrowings 1,303,906 725,000
Decrease in bank overdraft (757,070) (83,516)
----------- ------------
Net cash provided by financing activities 19,021 50,974
----------- ------------
Increase (decrease) in cash -- 28,382
Cash, beginning of period 6,739 575
----------- ------------
Cash, end of period $ 6,739 $ 28,957
=========== ============
Supplemental cash flow data
Cash paid during the period for interest $ 165,916 $ 145,693
=========== ============
Supplemental schedule of noncash investing and
financing activities
Capital lease and notes payable obligations
incurred for new vehicles and equipment $ 68,033 $ 1,195,394
=========== ============
Business combination
Fair value of assets acquired $ -- $ 1,408,670
Fair value of liabilities assumed -- (1,256,996)
----------- ------------
Net cash payments $ -- $ 151,674
=========== ============
<FN>
<F1>
Read accompanying notes
4
</FN>
</TABLE>
<PAGE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
The information presented herein as of March 31, 1996, and for
the three months ended March 31, 1996 and 1995, is unaudited.
The December 31, 1995, balance sheet data was derived from
audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
1. Summary of Significant Accounting Policies
Management's Representation
In the opinion of management, all adjustments necessary for a
fair presentation of such consolidated financial statements are
reflected in the interim periods presented. Such adjustments
consisted of normal recurring items. Interim results are not
necessarily indicative of results for a full year.
The consolidated financial statements and notes are presented as
permitted by Form 10-QSB and do not contain certain information
included in the annual consolidated financial statements and
notes of General Parcel Service, Inc. (the "Company").
Net Loss per Common Share
Net loss applicable to common share is based on the weighted
average number of shares outstanding during the periods
reported. Any assumption of conversion of common stock
equivalents, such as options and warrants, is anti-dilutive and
has not been considered in determining net loss per share or the
weighted average number of shares outstanding.
Preferred Stock
On February 28, 1996, the Board of Directors amended the
Articles of Incorporation to provide for 300,000 shares of Class
A, Series 2 Cumulative Preferred Stock. On March 4, 1996,
120,000 shares were sold for a total price of $3,000,000 to an
Affiliate of the Company's Chairman. Proceeds from the sale
were used to retire $3,000,000 of bank debt. The preferred
shares are non-voting and generally provide for a conversion
into common stock at a rate of $2.50 per share, and provide for
a cumulative dividend of $1.75 per annum, paid quarterly. At
March 31, 1996, the Company had preferred stock dividends in
arrears of $58,992.
5
<PAGE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion should be read in conjunction with the
Consolidated Financial Statements including the footnotes and is
qualified in its entirety by the foregoing and other more
detailed financial information appearing elsewhere herein.
Historical results of operations and the percentage
relationships among any amounts included in the Consolidated
Statements of Earnings, and any trends which may appear to be
inferable therefrom, should not be taken as being necessarily
indicative of trends in operations or results of operations for
any future periods.
Liquidity and Capital Resources
Except for the year ending December 31, 1993, the Company has
experienced negative annual operating cash flows since its
inception. Expansion of operations and operating losses since
inception have been funded from six major sources: 1) private
placements of restricted shares of common and preferred stock to
its principal shareholders, 2) proceeds from its initial public
offering of common stock in November, 1989, 3) installment loans
and leases from third party lenders collateralized by equipment
acquired to support business growth, 4) a bank line of credit
collateralized by accounts receivable and stock owned by a major
shareholder and his affiliates, 5) short term borrowings from
banks and shareholders, 6) debt issued and liabilities assumed
in connection with the acquisition of the assets of Transit
Express of Charlotte, Inc. ("TE").
As of March 31, 1996, the Company had raised net equity capital
of $8,145,052 from private placements of restricted common
shares, $5,417,489 from private placements of preferred stock,
$2,715,700 from its initial public offering of November 2, 1989
and $150,000 from the sale of unrestricted common shares. When
combined with cumulative operating losses since inception of
$13,961,725 and $350,000 of dividends paid on preferred stock,
the Company's net stockholders' equity as of March 31, 1996 was
$2,116,516. The Company issued $3,000,000 of preferred stock on
March 5, 1996, but has issued no restricted common stock in 1996.
As of March 31, 1996 the Company was contractually obligated to
repay $6,513,885 of indebtedness to equipment lessors, banks and
other secured lenders and $300,000 to holders of its convertible
debentures. In addition, the Company owed $1,768,549 to
suppliers of goods and services necessary for the conduct of
ongoing business including amounts represented by issued and
outstanding checks, and had accrued salaries and other expenses
of $605,605, which were unpaid at March 31, 1996.
Cash provided by operations during the three months ended March
31, 1996 was $153,128 as compared to cash provided by operations
for the first three months of 1995 of $483,995. The net cash
provided by operations resulted primarily from the non-cash
expense of depreciation and amortization and an increase in
accounts payable. These were partially offset by the net loss,
an increase in accounts receivable and a decrease in accrued
expenses. The Company's cash balance remained unchanged during
the first three months of 1996.
6
The Company decreased its borrowings under its bank lines of credit
by $1,696,094 during the first three months of 1996. The Company
repaid its $3,000,000 bank term loan and borrowed $1,303,906 under
its revolving credit agreement.
The aggregate principal amount due under the Company's bank
lines increased during 1995 and the form of the debt was
modified to include a $3,000,000, five year term loan and a
$2,700,000 revolving credit loan at December 31, 1995. The term
loan provided and the revolving credit agreement provides for
interest payable monthly for advances of $1,000,000 or greater
at the lower interest of the thirty day LIBOR rate plus .75% or
the Bank's prime interest rate less .75% and for all other
advances at the Bank's prime interest rate less .75%. The
revolving credit agreement is collateralized by the Company's
accounts receivable and certain stock certificates pledged by
the Company's Chairman. As of December 31, 1995, the Company
had borrowed $3,000,000 under the term loan and $1,599,000
against the line of credit and had $1,101,000 of credit
available. As noted above, the Company has repaid the term loan
and increased its line of credit to $3,250,000 in the first
quarter of 1996. As of March 31, 1996, the Company has borrowed
$2,902,906 against the line of credit.
Management's estimates of cash requirements to fund operating
losses and debt service are substantial. All of these factors
raise the question as to whether the Company will continue to
operate as a going concern. While revenues continue to increase
and expense containment measures have been instituted,
management is nonetheless pursuing several strategies for
raising additional resources through debt or equity transactions.
Management believes, but can offer no assurances, that it can
improve operating performance and cash flows through the
following measures:
*A large portion of the Company's expenses since
inception have been related to efforts to develop its
marketing, distribution and service network. The Company
has developed extensive distribution networks in Florida
and in Atlanta, Georgia and is endeavoring to expand its
North Carolina service area. Management believes that it
has acquired sufficient delivery vehicles to service its
market area, although the Company continues to replace or
upgrade equipment as deemed necessary. Management believes
that additional market penetration will improve the
productivity of its delivery fleet and result in
profitable operations.
*During 1996, the Company plans to concentrate on continuing
to build volume in its Florida and Atlanta markets where
excess capacity exists and selectively expand its
operations in North Carolina or other Southeastern areas
where profitable volume can be obtained with minimum capital
outlays. Because of the Company's limited resources, any
expansion will be into areas where the Company will be able to
produce positive cash flows in a short period of time by
shipping a large volume of parcels from existing customers
into areas covered by new terminals and avoid substantial
start-up losses.
*Management has reassessed the operating practices at each of
its terminals and has instituted a number of changes directed
towards cost containment including elimination of unprofitable
delivery routes. Strict accountability over all costs are being
implemented at all locations through budgetary controls and improved
reporting of actual operating results to operations managers.
7
*The Board of Directors has engaged KPMG Baymark Capital LLC
("BayMark") to render certain financial advisory and investment
banking services to the Company. Under the terms of the engagement,
BayMark will familiarize itself to the extent it deems appropriate
and feasible with the business, operations, properties, financial
condition and prospects of the Company and will advise and assist
the Company in identifying and/or evaluating various strategic or
financial alternatives that may be available to the Company to
enhance shareholder value. Among the alternatives which may be
available to the Company are an acquisition of all or a significant
portion of the assets or equity securities of another corporation
or business entity; a sale of the Company or significant portion of
it equity securities, assets or businesses to one or more third
parties; a recapitalization or restructuring of the Company;
repurchases by the Company of its common stock or other securities;
a public or private sale of additional equity or debt securities of
the Company; or such other form of transaction that BayMark
believes may be of possible interest to the Company.
*Should the Company not obtain additional funding through the
efforts of BayMark and not be able to provide cash for its
operations to fund operations losses or debt service, it will
rely on the commitment of one of its major shareholders to fund
losses of the Company through December 31, 1996.
Financial Condition
As of March 31, 1996, the Company's working capital deficit
(current liabilities less current assets) was $3,838,398, which
was an increase of $624,179 from the $3,214,219 working capital
deficit at December 31, 1995. Total current assets of
$2,722,392 included cash of $6,739, accounts receivable of
$2,290,047, prepaid insurance premiums and deposits of $245,432,
inventories of tires, parts, uniforms and supplies of $98,001
and other prepaid expenses of $82,173.
Current liabilities of $6,560,790 included current obligations
under leases and other lending agreements of $4,186,636, amounts
owed to trade creditors of $1,768,549, including amounts
represented by issued and outstanding checks, and other accrued
expenses of $605,605.
Total assets as of March 31, 1996, increased by $52,090 (or
4.6%) during the three months ended March 31, 1996 to
$11,304,555.
Accounts receivable increased by $221,072 (or 10.7%) during the
three months ended March 31, 1996 to $2,290,047 primarily
because of a 9.0% increase in revenue for the month of March 31,
1996, compared to the month of December 1995. The number of
weeks sales in outstanding receivables was 5.1 at March 31,
1996, compared to 5.2 at December 31, 1995. Other current
assets of $425,606 increased by $45,516 (or 12.0%) primarily
because of an increase in prepaid insurance premiums.
The net book value of equipment decreased by $196,828 (or 2.6%)
to $7,396,798 during the three months ended March 31, 1996 as a
result of depreciation of $437,008 exceeding additions of
$240,180. There were no disposals during this period. The
8
additions included $68,033 for 4 new delivery vans, $59,743 for
life-extending equipment repairs, $107,899 for terminal
equipment and $4,503 for computers and other office equipment.
Total liabilities of $9,188,039 decreased by $2,298,594 (or
20.0%) during the three months ended March 31, 1996. This
resulted primarily from an decrease in total bank and other debt
by $1,852,249 (or 29.3 %) to $4,476,401, an decrease in
accounts payable by $184,919 (or 9.5%) to $1,768,549, a
decrease in accrued expenses by $132,799 (or 18.0%) to $605,605
and a decrease in obligations under capital leases of 128,627
(or 5.2%).
Capital lease obligations of $2,377,484 decreased during the
three months ended March 31, 1996 as a result of $196,660 of
scheduled principal payments in excess of $68,033 of new
additions. The additions to capitalized leases were for 4 new
delivery vans. Long term debt of $845,601 decreased $3,156,155
(or 78.4%) as a result of repayment of the $3,000,000 term loan
and $156,155 of scheduled principal payments. Short-term
borrowings increased by $1,303,906 to $2,902,906 (or 81.5%) as a
result of an increase in the Company's utilization of its line
of credit to fund operations, service debt and pay lease
payments.
The Company's stockholders' equity increased during three months
ended March 31, 1996 by $2,350,684 to $2,116,516 at March 31,
1996, as a result of the sale of $3,000,000 of preferred stock
and was reduced by the net loss for the period and the payment
of a dividend on the Company's preferred stock.
Results of Operations - Three months ended March 31, 1996 Versus
three months ended March 31, 1995
Revenue for three months ended March 31, 1996 was $5,783,671 and
represented an increase of $720,341 (or 14.2%) over the revenue
for the same period last year.
Total operating expenses (excluding interest expense) of
$6,051,207 for three months ended March 31, 1996 increased by
$991,974 (or 19.6%) compared to the same 1995 period total. The
operating ratio (total operating expenses excluding interest as
a percentage of revenue), was 104.7% in the three months ended
March 31, 1996 compared to 99.9% in the same period of 1995.
Operating salaries and benefits of $3,079,190 increased by
$542,497 (or 21.4%) in three months ended March 31, 1996, and
were 53.0% of revenue compared to 50.0% in 1995. The increase
in operating salaries and benefits occurred primarily in the
Charlotte terminal because of the TE acquisition and in Atlanta
where significant new business was generated.
Fuel costs of $355,500 in three months ended March 31, 1996,
increased $67,942 (or 23.6%) from the three months ended March
31, 1995 level and were 6.1% of revenue in the three months
ended March 31, 1996 compared to 5.7% in the year earlier
period. Tires and maintenance expense of $200,014 increased by
$25,829 (or 14.8%) from the 1995 level and represented 3.5% of
revenue compared to 3.4% in same period of 1995. Insurance costs
decreased by $84,835 (or 18.9%) to $364,165 (or 6.2%) of revenue
9
in three months ended March 31, 1996 as compared to 8.9% of
revenue during the three months ended March 31, 1995. The
decrease in insurance costs resulted from continued success of
the safety control program.
The fixed components of operating cost (depreciation and
amortization, facilities and terminal expense) increased in
three months ended March 31, 1996 because of an increase in the
number of vehicles in service for the full year, the utilization
of electronic clipboards and amortization of intangible assets
acquired in the TE acquisition. Depreciation and amortization
attributable to operations of $431,949 increased by $21,317 (or
5.2%) and was 7.5% of revenue for three months ended March 31,
1996 compared to 8.1% in same 1995 three month period.
Facilities expense (rent plus utilities) of $352,815 increased
by $21,228 (or 6.4%) and was 6.1% of three months ended March
31, 1996 revenue versus 6.5% in 1995. Terminal expense
increased by $56,915 (or 101.5%) to $112,969 which was 2.0% of
revenue in three months ended March 31, 1996 versus 1.1% of
revenue in same 1995 period, due to significant increases in
security costs and terminal maintenance.
Purchased transportation, which includes amounts paid to
trucking companies to bring packages from customers'
distribution points outside the Company's geographical operating
area to the Company's terminals for delivery, increased to
$98,159 in three months ended March 31, 1996, from $53,726 for
the three months ended March 31, 1995. The $44,433 (or 82.7%)
increase was a result of additional packages brought into the
Company's distribution area from outside its operating area.
Selling and administrative expense of $967,521 was 35.9% higher
than the 1995 same period level and increased as a percentage of
revenue from 14.0% in the three months ended March 31, 1995 to
16.7% in three months ended March 31, 1996. The increase relates
primarily to additional legal and professional fees which increased
by $188,237 over those of the same period last year and additional
personnel costs of $23,181 which increased 7.9% from those for
three months ended March 31, 1995.
Interest expense of $206,780 increased by $54,706 (or
36.0%) compared to the same 1995 period as the Company incurred
new debt to fund operating losses and acquire assets.
10
<PAGE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) The Company filed a Form 8-K dated January 10, 1996,
reporting that the Company's Audit Committee had approved the
selection of Grenadier, Appleby, Collins & Company to audit
the Company's financial statements for the year ended
December 31, 1995.
(b) The Company filed a Form 8-K dated March 4, 1996 reporting
that on February 28, an affiliate of the Chairman of the
Board of the Company entered into a subscription agreement
with the Company to purchase $3,000,000 of the Class A,
Series 2 Cumulative Convertible Preferred Stock of the
corporation. Such subscription was fully funded on March 4,
1996. After the sale of the stock, the Company was in
compliance with the capital requirements of NASD bylaws.
(c) The Company filed a Form 8-K dated March 5, 1996 reporting
that on February 28, 1996, the Company's Board of Directors
approved an amendment to the Company's Articles of
Incorporation, creating a new Class A, Series 2 Preferred
Stock ("Series 2 Preferred"). The Series 2 Preferred is
identical to the Company's Class A, Series 1 Preferred except
that the conversion price per share is at a rate of $2.50 per
share rather than $3.00 per share. The Company issued 120,000
shares of the newly authorized Series 2 Preferred to an
affiliate of the Chairman of the Board of the Registrant for
a total purchase price of $3 million or $25.00 per share on
March 5, 1996.
Exhibit 10 - Promissory note and loan agreement dated March 8, 1996,
governing an addition to the line of credit agreement
between the Company and First Union National Bank of Florida
Exhibit 27 - Financial Data Schedule
Signature
---------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
General Parcel Service, Inc.
Date: May 14, 1996 By: (Signed)
------------------------
Wayne N. Nellums
Vice President,
Chief Financial Officer
LOAN AGREEMENT
First Union National Bank of Florida
214 North Hogan Street - FLOO70
Jacksonville, Florida 32202
(Hereinafter referred to as the "Bank")
General Parcel Service, Inc.
8923 Western Way
Jacksonville, Florida 32256
(individually and collectively "Borrower")
This Loan Agreement ("Agreement") is entered into this March 8,
1996, by and between Bank and Borrower, a Corporation organized
under the laws of Florida.
Borrower has applied to Bank for a loan or loans individually
and collectively, the "Loan") evidenced by one or more
promissory notes (whether one or more, the "Note") as follows:
Line of Credit - in the principal amount of $550,000.00 which is
evidenced by the Promissory Note dated March 8, 1996 ("Line of
Credit Note"), under which Borrower may borrow, repay, and
reborrow, from time to time, so long as the total indebtedness
outstanding at any one time does not exceed the principal
amount. The loan proceeds are to be used by Borrower solely for
short term working needs, Bank's obligation to advance or
readvance under the Line of Credit Note shall terminate if
Borrower is in Default under the Line of Credit Note or in any
event, on April 30, 1996 hereof unless renewed or extended by
Bank in writing upon such terms then satisfactory to Bank.
This Agreement applies to the loan and all Loan Documents. The
terms "Loan Documents" and "Obligations," as used in this
Agreement, are defined in the Note. The term "Borrower" shall
include its Subsidiaries and Affiliates. As used in this
Agreement as to Borrower, 'Subsidiary" shall mean any
corporation of which more than 50% of the issued and outstanding
voting stock is owned directly or indirectly by Borrower. As to
Borrower, "Affiliate" shall have the meaning as defined in 11
U.S.C. _ 101, except that the term "debtor" therein shall be
substituted by the term "Borrower" herein.
Relying upon the covenants, agreements, representations and
warranties contained in this Agreement, Bank is willing to
extend credit to Borrower upon the terms and subject to the
conditions set forth herein, and Bank and Borrower agree as
follows:
REPRESENTATIONS. Borrower represents that from the date of this
Agreement and until final payment in full of the Obligations:
Accurate Information. All information now and hereafter
furnished to Bank is and will be true, correct and complete.
Any such information relating to Borrower's financial condition
will accurately reflect Borrower's financial condition as of the
date(s) thereof, (including all contingent liabilities of every
type), and Borrower further represents that its financial
condition has not changed materially or adversely since the
date(s) of such documents. Authorization; Non-Contravention.
The execution, delivery and performance by Borrower and any
guarantor, as applicable, of this Agreement and other Loan
Documents to which it is a party are within its power, have been
duly authorized by all necessary action taken by the duly
authorized officers of Borrower and any guarantors and, it
necessary, by making appropriate filings with any governmental
agency or unit and are the legal, binding, valid and enforceable
obligations of Borrower and any guarantors; and do not (i)
contravene, or constitute (with or without the giving of notice
or lapse of time or both) a violation of any provision of
applicable law, a violation of the
Page I of 4
organizational documents of Borrower or any guarantor, or a
default under any agreement, judgment, injunction, order, decree
or other instrument binding upon or affecting Borrower or any
guarantor, (ii) result in the creation or imposition of any lien
(other than the lien(s) created by the Loan Documents) on any of
Borrower's or guarantor's assets, or (iii) give cause for the
acceleration of any obligations of Borrower or any guarantor to
any other creditor. Asset Ownership. Borrower has good and
marketable title to all of the properties and assets reflected
on the balance sheets and financial statements supplied Bank by
Borrower, and all such properties and assets are free and clear
of mortgages, security deeds, pledges, liens, charges, and all
other encumbrances, except as otherwise disclosed to Bank by
Borrower in writing ("Permitted Liens"). To Borrower's
knowledge, no default has occurred under any Permitted Liens and
no claims or interests adverse to Borrower's present rights in
its properties and assets have arisen. Discharge of Liens and
Taxes. Borrower has duly filed, paid and/or discharged all
taxes or other claims which may become a lien on any of its
property or assets, except to the extent that such items are
being appropriately contested in good faith and an adequate
reserve for the payment thereof is being maintained.
Sufficiency of Capital. Borrower is not, and after
consummation of this Agreement and after giving effect to all
indebtedness incurred and liens created by Borrower in
connection with the loan, will not be, insolvent within the
meaning of 11 U.S.C. _ 101 (32). Compliance with Laws.
Borrower is in compliance in all respects with all federal,
state and local laws, rules and regulations applicable to its
properties, operations, business, and finances, including,
without limitation, any federal or state laws relating to liquor
(including 18 U.S.C. _ 3617, et sea.) or narcotics (including 21
U.S.C. _ 801, et sec.) and/or any commercial crimes; all
applicable federal, state and local laws and regulations
intended to protect the environment; and the Employee Retirement
Income Security Act of 1 974, as amended (" ERISA"), if
applicable. Organization and Authority. Each corporate or
limited liability company Borrower and any guarantor, as
applicable, is duly created, validly existing and in good
standing under the laws of the state of its organization, and
has all powers, governmental licenses, authorizations, consents
and approvals required to operate its business as now conducted.
Each Corporate or limited liability company Borrower and any
guarantor is duly qualified, licensed and in good standing in
each jurisdiction where qualification or licensing is required
by the nature of its business or the character and location of
its property, business or customers, and in which the failure to
so qualify or be licensed, as the case may be, in the aggregate,
could have a material adverse effect on the business, financial
position, results of operations, properties or prospects of
Borrower or any such guarantor. No Litigation. There are no
pending or threatened suits, claims or demands against Borrower
or any guarantor that have not been disclosed to Bank by
Borrower in writing. AFFIRMATIVE COVENANTS. Borrower agrees
that from the date of this Agreement and until final payment in
full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will: Business Continuity. Conduct its
business in substantially the same manner and locations as such
business is now and has previously been conducted. Maintain
Properties. Maintain, preserve and keep its property in good
repair, working order and condition, making all needed
replacements, additions and improvements thereto, to the extent
allowed by this Agreement. Access to Books & Records. Allow
Bank, or its agents, during normal business hours, access to the
books, records and such other documents of Borrower as Bank
shall reasonably require, and allow Bank to make copies thereof
at Bank's expense. Insurance. Maintain adequate insurance
coverage with respect to its properties and business against
loss or damage of the kinds and in the amounts customarily
insured against by companies of established reputation engaged
in the same or similar businesses including, without limitation,
commercial general liability insurance, workers compensation
insurance, and business interruption insurance; all acquired in
such amounts and from such companies as Bank may reasonably
require. Notice of Default and Other Notices. (a) Notice of
Default. Furnish to Bank immediately upon becoming aware of the
existence of any condition or event which constitutes a Default
(as defined in the Loan Documents) or any event which, upon the
giving of notice or lapse of time or both, may become a Default,
written notice specifying the nature and period of existence
thereof and the action which Borrower is taking or proposes to
take with
Page 2 of 4
respect thereto. (b) Other Notices. Promptly notify Bank in
writing of (i) any material adverse change in its financial
condition or its business; (ii) any default under any material
agreement, contract or other instrument to which it is a party
or by which any of its properties are bound, or any acceleration
of the maturity of any indebtedness owing by Borrower: (iii) any
material adverse claim against or affecting Borrower or any part
of its properties; (iv) the commencement of, and any material
determination in, any litigation with any third party or any
proceeding before any governmental agency or unit affecting
Borrower; and (v) at least thirty (30) days prior thereto, any
change in Borrower's name or address as shown above, and/or any
change in Borrower's structure, Compliance with Other
Agreements. Comply with all terms and conditions contained in
this Agreement, and any other Loan Documents, and swap
agreements, if applicable, as defined in the Note. Payment of
Debts. Pay and discharge when due, and before subject to
penalty or further charge, and otherwise satisfy before maturity
or delinquency, all obligations, debts, taxes, and liabilities
of whatever nature or amount, except those which Borrower in
good faith disputes. Reports and Proxies. Deliver to Bank,
promptly, a copy of all financial statements, reports, notices,
and proxy statements, sent by Borrower to stockholders, and all
regular or periodic reports required to be filed by Borrower
with any governmental agency or authority. Other Financial
Information. Deliver promptly such other information regarding
the operation, business affairs, and financial condition of
Borrower which Bank may reasonably request. Non-Default
Certificate From Borrower. Deliver to Bank, with the Financial
Statements required herein, a certificate signed by Borrower, if
Borrower is an individual, or by a principal financial officer
of Borrower warranting that no "Default" as specified in the
Loan Documents nor any event which, upon the giving of notice or
lapse of time or both, would constitute such a Default, has
occurred. Estoppel Certificate. Furnish, within fifteen days
after request by Bank, a written statement duly acknowledged of
the amount due under the loan and whether offsets or defenses
exist against the Obligations. Deposit Relationship. Maintain
its primary depository account with Bank.
NEGATIVE COVENANTS. Borrower agrees that from the date of this
Agreement and until final payment in full of the Obligations,
unless Bank shall otherwise consent in writing, Borrower will
not: Default on Other Contracts or Obligations. Default on any
material contract with or obligation when due to a third party
or default in the performance of any obligation to a third party
incurred for money borrowed. Judgment Entered. Permit the entry
of any monetary judgment or the assessment against, the filing
of any tax lien against, or the issuance of any writ of
garnishment or attachment against any property of or debts due
Borrower. Government Intervention. Permit the assertion or
making of any seizure, vesting or intervention by or under
authority of any government by which the management of Borrower
or any guarantor is displaced of its authority in the conduct of
its respective business or such business is curtailed or
materially impaired. Prepayment of Other Debt. Retire any
long-term debt entered into prior to the date of this Agreement
at a date in advance of its legal obligation to do so. Retire
or Repurchase Capital Stock. Retire or otherwise acquire any of
its capital stock. Collateral Advance Rate. Outstandings
against the Line of Credit Note shall never exceed seventy (70%)
percent of the market value of the common stock of Winn Dixie
pledged as collateral. In the event that outstandings against
the Line of Credit Note, exceed seventy (70%) percent of the
market value of the common stock of Winn Dixie pledged as
collateral, and this even continues for a longer than ten (10)
consecutive business days, the Bank may, at its sole option,
declare the Line of Credit Note in default, demand payment in
full and pursue it's legal remedies.
FINANCIAL COVENANTS. Borrower, on a consolidated basis, agrees
to the following Provisions from the date of this Agreement and
until final payment in full of the Obligations, unless Bank
shall otherwise consent in writing: Annual Financial Statements.
Borrower will annually provide audited financial statements
reflecting its operations and that of its subsidiaries, if any,
including, without limitation, a balance sheet, profit and loss
statement and statement of cash flows, with supporting
schedules. Periodic Financial Statements. Borrower will
provide unaudited, management-prepared
Page 3 of 4
quarterly financial statements, including, without limitation, a
balance sheet, profit and loss statement, and statement of cash
flows, with supporting schedules.
CONDITIONS PRECEDENT. The obligations of Bank to make the loan
and any advances pursuant to this Agreement are subject to the
following conditions precedent: Additional Documents. Receipt
by Bank of such additional supporting documents as Bank or its
counsel may reasonably request.
IN WITNESS WHEREOF, Borrower, on the day and year first written
above, has caused this Agreement to be executed under seal.
General Parcel Service, Inc.
Taxpayer Identification Number: 59-2576629
CORPORATE By: (Signed)
SEAL Wayne N. Nellums, Vice President of Finance
First Union National Bank of Florida
(Signed)
Steve Trescott, Senior Vice President
Page 4 of 4
<PAGE>
PROMISSORY NOTE
$550,000.00
March 8, 1996
General Parcel Service, Inc.
8923 Western Way
Jacksonville, Florida 32256
(Individually and collectively "Borrower")
First Union National Bank of Florida
214 North Hogan Street - FLOO70
Jacksonville, Florida 32202
(Hereinafter referred to as the "Bank")
Borrower promises to pay to the order of Bank, in lawful money
of the United States of America, at its office indicated above
or wherever else Bank may specify, the sum of Five Hundred Fifty
Thousand and 00/100 dollars ($550,000.00) or such sum as may be
advanced from time to time with interest on the unpaid principal
balance at the rate and on the terms provided in this Promissory
Note (including all renewals, extensions and/or modifications
hereof, this "Note"),
SECURITY. grants Bank a security interest in the personal
property collateral described in the Security Agreement dated
March 8, 1996.
INTEREST RATE SELECTIONS. Prime Rate. The rate of Bank's Prime
Rate as that rate may change' from time to time with changes to
occur on the date Bank's Prime Rate changes ("Prime-Based
Rate"). Bank's Prime Rate shall be that rate announced by Bank
from time to time as its prime rate and is one of several
interest rate bases used by Bank. Bank lends at rates both above
and below Bank's Prime Rate, and Borrower acknowledges that
Bank's Prime Rate is not represented or intended to be the
lowest or most favorable rate of interest offered by Bank.
LIBOR Rate. 1-month LIBOR Rate plus 0.75% (75 basis points)
("LIBOR-Based Rate"). The LIBOR-Based Rate shall be determined
in accordance with Bank's adjusted LIBOR Rate formula.
INTEREST RATE TO BE APPLIED. Interest Rate. Subject to the
provisions hereof, the unpaid principal balance of this Note
shall bear interest from the date hereof at the LIBOR-Based
Rate, as determined by Bank prior to the commencement of each
consecutive interest period of 1-month, (each an "Interest
Period") during the term of the Note ("Interest Rate"), Upon
determination by Bank of the Interest Rate for any Interest
Period, such Interest Rate shall remain in effect, subject to
the provisions hereof, for the entire Interest Period until
redetermined as provided above for the next successive Interest
Period.
Default Rate. In addition to all other rights contained in this
Note, if a Default (defined herein) occurs and as long as a
Default continues, all outstanding Obligations shall bear
interest at the Prime-Based Rate plus three percent (3%)
("Default Rate") except if the Note is governed by North
Carolina law and is under or equal to Three Hundred Thousand and
No/1OO Dollars @$300,000.00), the Default Rate shall be the
Prime-Based Rate. The Default Rate shall apply from the
occurrence of a Default (defined herein) until the Obligations
or any judgment thereon is paid in full.
INDEMNIFICATION AND ADDITIONAL COSTS. Indemnification, Borrower
indemnities Bank against Bank's loss or expense in employing
deposits as a consequence (a) of Borrower's failure to make any
payment when due under this Note or (b) any payment, prepayment
or conversion of any loan on a date other than the last day of
the Interest Period ("Indemnified Loss or Expense").
Additional Costs. If, at any time, a new, or a revision in any
existing law or interpretation or administration (including
reversals) thereof by any government authority, central bank or
comparable agency imposes, increases or modifies any reserve or
similar requirement against assets, deposits or credit extended
by Bank, or subjects Bank to any tax, duty or other charge
(except tax on Bank's net income), and any of the foregoing
increase the cost to Bank of maintaining its commitment or
reduce the amount of any sum received or receivables by Bank
under this Note, within 15 days after demand by Bank, Borrower
agrees to pay Bank such additional amounts as will compensate
Bank for such increased costs or reductions ("Additional Costs").
Match Funding. The amount of such (a) Indemnified Loss or
Expense or (b) Additional Costs outlined above shall be
determined, in Bank's sole discretion, based upon the assumption
that Bank funded 100% of the loan in the applicable London
interbank or domestic certificate of deposit market.
Unavailability of Interest Rate. If, at any time, (a) Bank shall
determine that, by reasons of circumstances affecting foreign
exchange and interbank markets generally, LIBOR or CD deposits
in the applicable amounts are not being offered to Bank; or (b)
a new, or a revision in any existing law or interpretation or
administration (including reversals) thereof by any government
authority, central bank or comparable agency shall make it
unlawful or impossible for Bank to honor its obligations under
this Note, (i) Bank's obligation to make, maintain or convert
into a LIBOR-Based Rate shall be suspended; and (ii) the
applicable LIBOR-Based Rate shall immediately be converted to
the Prime-Based Rate for the remainder of the Interest Period.
INTEREST COMPUTATION. Actual/360 Computation. Interest shall
be computed on the basis of a 360-day year for the actual number
of days in the interest period ("Actual/360 Computation"). The
Actual/360 Computation determines the annual effective interest
yield by taking the stated (nominal) interest rate for a year's
period and then dividing said rate by 360 to determine the daily
periodic rate to be applied for each day in the interest period.
Application of the Actual/360 Computation produces an
annualized effective interest rate exceeding that of the nominal
rate.
PAYMENT. This Note shall be due and payable in consecutive
periodic payments of accrued interest only commencing April 8,
1996, and on the eighth day of each month thereafter until fully
paid. In any event, this Note shall be due and payable in full,
including all principal and accrued interest, on demand.
APPLICATION OF PAYMENTS. Monies received by Bank from any
source for application toward payment of the Obligations
(defined herein) shall be applied to accrued interest and then
to principal. If a Default (defined herein) occurs, monies may
be applied to the Obligations in any manner or order deemed
appropriate by Bank.
If any payment received by Bank under this Note or other Loan
Documents (defined herein) is rescinded, avoided or for any
reason returned by Bank because of any adverse claim or
threatened action, the returned payment shall remain payable as
an obligation of all persons liable under this Note or other
Loan Documents as though such payment had not been made.
LOAN DOCUMENTS AND OBLIGATIONS. The term "Loan Documents" used
in this Note and other Loan Documents refers to all documents
executed in connection with the loan evidenced by this Note and
may include, without limitation, a commitment letter that
survives closing, a loan agreement, this Note, guaranty
agreements, security agreements, security instruments, financing
Page 2
statements, mortgage instruments, letters of credit and any
modifications, but however, does not include swap agreements as
defined in 11 U.S.C. _ 101 whenever executed.
The term "Obligations" used in this Note refers to any and all
indebtedness and other obligations under this Note, all other
obligations as defined in the respective Loan Documents, and all
obligations under any swap agreements as defined in 11 U.S.C. _
101 between Borrower and Bank whenever executed.
LATE CHARGE. If any payments are not timely made, Borrower
shall also pay to Bank a late charge equal to five percent (5%)
of each payment past due for ten (10) or more days.
Acceptance by Bank of any late payment without an accompanying
late charge shall not be deemed a waiver of Bank's right to
receive such late charge or to receive a late charge for any
subsequent late payment received.
If this Note is secured by owner-occupied residential real
property located outside the state in which the office of Bank
first shown above is located, the late charge laws of the state
where the real property is located shall apply to this Note.
ATTORNEYS' FEES AND OTHER COLLECTION COSTS. Borrower shall pay
all of Bank's reasonable expenses incurred to enforce or collect
any of the Obligations, including, without limitation,
reasonable arbitration, paralegals', attorneys' and experts'
fees and expenses, whether incurred without the commencement of
a suit, in any trial, arbitration, or administrative proceeding,
or in any appellate or bankruptcy proceeding.
USURY, Regardless of any other provision of this Note or other
Loan Documents, if for any reason the effective interest should
exceed the maximum lawful interest, the effective interest shall
be deemed reduced to and shall be such maximum lawful interest,
and la) the amount which would be excessive interest shall be
deemed applied to the reduction of the principal balance of this
Note and not to the payment of interest, and (b) it the loan
evidenced by this Note has been or is thereby paid in full, the
excess shall be returned to the party paying same, such
application to the principal balance of this Note or the
refunding of excess to be a complete settlement and acquittance
thereof.
DEFAULT. It any of the following occurs, a default ("Default")
under this Note shall exist: (a) Nonpayment; Nonperformance.
The failure of timely payment or performance of the Obligations
under this Note or any other Loan Documents; (b) False Warranty.
A warranty or representation made in the Loan Documents or
furnished Bank in connection with the loan evidenced by this
Note proves materially false, or if of a continuing nature,
becomes materially false; (c) Cross Default. At Bank's option,
any default in payment or performance of any obligation under
any other loans, contracts or agreements of Borrower, any
Subsidiary or Affiliate of Borrower ("Affiliate" shall have the
meaning as defined in 11 U.S.C. _ 101, except that the term
"debtor" therein shall be substituted by the term "Borrower"
herein; "Subsidiary" shall mean any corporation of which more
than 50% of the issued and outstanding voting stock is owned
directly or indirectly by Borrower), any general partner of or
the holder(s) of the majority ownership interests of Borrower
with Bank or its affiliates; (d) Cessation; Bankruptcy. The
death of, appointment of guardian for, dissolution of,
termination of existence of, loss of good standing status by,
appointment of a receiver for, assignment for the benefit of
creditors of, or commencement of any bankruptcy or insolvency
proceeding by or against the Borrower, its Subsidiaries or
Affiliates, if any, or any general partner of or the holder(s)
of the majority ownership interests of Borrower, or any party to
the Loan Documents; or (a) Material Capital Structure or
Business Alteration. A material alteration in the type or kind
of Borrower's business or that of its Subsidiaries or
Affiliates, if any; or the acquisition of substantially all of
Borrower's, any Subsidiary's, any Affiliate's, or guarantor's
business or
Page 3
assets, or a material portion (10% or more) of such business or
assets if such a sale is outside Borrower's, any Subsidiary's,
any Affiliate's or any guarantor's, ordinary course of business,
or more than 50% of its outstanding stock or voting power in a
single transaction or a series of transactions, or the
acquisition of substantially all of the business or assets or
more than 50% of the outstanding stock or voting power of any
other entity, or should any Borrower, Subsidiary, Affiliate, or
guarantor enter into any merger or consolidation without prior
written consent of Bank.
REMEDIES UPON DEFAULT. (a) Bank Lien and Set-off. Except as
prohibited by law, Borrower grants Bank a security interest in
all of Borrower's accounts with Bank and any of its affiliates.
If a Default (defined herein) occurs, Bank is authorized to
exercise its right of set-off or to foreclose its lien against
any agreement or account of any nature or maturity of Borrower
without notice. (b) Acceleration Upon Default. If a Default
occurs, Bank may, at Bank's discretion, accelerate the maturity
of this Note and all other Obligations, and all of the
Obligations shall be immediately due and payable. (c)
Cumulative. All remedies available to Bank with respect to this
Note and other Loan Documents and remedies available at law or
in equity shall be cumulative and may be pursued concurrently or
successively.
LINE OF CREDIT ADVANCES. Borrower may borrow, repay and
reborrow, and Bank may advance and readvance under this Note
respectively from time to time, so long as the total
indebtedness outstanding at any one time does not exceed the
principal amount stated on the face of this Note. Bank's
obligation to advance or readvance under this Note shall
terminate if Borrower is in Default under this Note or in any
event, on the first anniversary hereof unless renewed or
extended by Bank in writing upon such terms then satisfactory to
Bank.
WAIVERS AND AMENDMENTS. No waivers, amendments or modifications
of this Note and other Loan Documents shall be valid unless in
writing and signed by an officer of Bank. No waiver by Bank of
any Default shall operate as a waiver of any other Default or
the same Default on a future occasion. Neither the failure nor
any delay on the part of Bank in exercising any right, power, or
privilege granted pursuant to this Note and other Loan Documents
shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise or the
exercise of any other right, power or privilege.
Each Borrower or any other person who may be liable under the
Loan Documents waives presentment, protest, notice of dishonor,
demand for payment, notice of intention to accelerate maturity,
notice of acceleration of maturity, notice of sale and all other
notices of any kind. Further, each agrees that Bank may extend,
modify or renew this Note or make a novation of the loan
evidenced by this Note for any period, whether or not longer
than the original period of the Note, and grant any releases,
compromises or indulgences with respect to any collateral
securing this Note, or with respect to any Borrower or any
person who may be liable under this Note or other Loan
Documents, all without notice to or consent of any Borrower or
any person who may be liable under this Note or other Loan
Documents and without affecting the liability of Borrower or any
person who may be liable under this Note or other Loan Documents.
MISCELLANEOUS PROVISIONS. (a) Assignment. This Note and other
Loan Documents shall inure to the benefit of and be binding upon
the parties and their respective heirs, legal representatives,
successors and assigns. Bank's interests in and rights under
this Note and other Loan Documents are freely assignable, in
whole or in part, by Bank. Borrower shall not assign its rights
and interest hereunder without the prior written consent of
Bank, and any attempt by Borrower to assign without Bank's prior
written consent is null and void. Any assignment shall not
release Borrower from the Obligations. (b) Applicable Law;
Conflict Between Documents. This Note and other Loan Documents
shall be governed by and construed under the laws of the state
where Bank first shown above is located without regard to that
state's conflict of laws principles. If the terms of this Note
should conflict with the terms of the loan agreement or any
commitment letter that survives
Page 4
closing, the terms of this Note shall control. (c) Jurisdiction.
Borrower irrevocably agrees to non-exclusive personal
jurisdiction in the state in which the office of Bank first
shown above is located. (d) Severability. If any provision of
this Note or of the other Loan Documents shall be prohibited or
invalid under applicable law, such provision shall be
ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Note or other such document.
(a) Notices. Any notices to Borrower shall be sufficiently
given, if in writing and mailed or delivered to the Borrower's
address shown above or such other address as provided hereunder,
and to Bank, if in writing and mailed or delivered to Bank's
office address shown above or such other address as Bank may
specify in writing from time to time, In the event that Borrower
changes Borrower's address at any time prior to the date the
Obligations are paid in full, Borrower agrees to promptly give
written notice of said change of address by registered or
certified mail, return receipt requested, all charges prepaid.
(f) Plural; Captions. All references in the Loan Documents to
Borrower, guarantor, person, document or other nouns of
reference mean both the singular and plural form, as the case
may be, and the term "person" shall mean any individual, person
or entity. The captions contained in the Loan Documents are
inserted for convenience only and shall not affect the meaning
or interpretation of the Loan Documents. (g) Binding Contract.
Borrower by execution of and Bank by acceptance of this Note
agree that each party is bound to all terms and provisions of
this Note. (h) Advances. Bank in its sole discretion may make
other advances and readvances under this Note pursuant hereto.
(i) Posting of Payments. All payments received during normal
banking hours after 2:00 p.m. local time at the office of Bank
first shown above shall be deemed received at the opening of the
next banking day. (j) Joint and Several Obligations. Each
person who signs this Note is a Borrower and is jointly and
severally obligated. (k) Fees and Taxes. Borrower shall
promptly pay all documentary, intangible recordation and/or
similar taxes on this transaction whether assessed at closing or
arising from time to time.
Arbitration. Upon demand of any party hereto, whether made
before or after institution of any judicial proceeding, any
dispute, claim or controversy arising out of, connected with or
relating to this Note and other Loan Documents ("Disputes")
between or among parties to this Note shall be resolved by
binding arbitration as provided herein. Institution of a
judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include,
without limitation, tort claims, counterclaims, disputes as to
whether a matter is subject to arbitration, claims brought as
class actions, claims arising from Loan Documents executed in
the future, or claims arising out of or connected with the
transaction reflected by this Note.
Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association
(the "AAA") and Title 9 of the U.S. Code. All arbitration
hearings shall be conducted in the city in which the office of
Bank first stated above is located. The expedited procedures
set forth in Rule 51 et sec. of the Arbitration Rules shall be
applicable to claims of less than $1,000,000. All applicable
statutes of limitation shall apply to any Dispute, A judgment
upon the award may be entered in any court having jurisdiction.
The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected
for expedited procedure shall be a retired judge from the
highest court of general jurisdiction, state or federal, of the
state where the hearing will be conducted or if such person is
not available to serve, the single arbitrator may be a licensed
attorney. Notwithstanding the foregoing, this arbitration
provision does not apply to disputes under or related to swap
agreements.
Preservation and Limitation of Remedies. Notwithstanding the
preceding binding arbitration provisions, Bank and Borrower
agree to preserve, without diminution, certain remedies that any
party hereto may employ or exercise freely, independently or in
connection with an arbitration proceeding or after an
arbitration action is brought. Bank and Borrower shall have the
right to proceed in any court of proper jurisdiction or by
self-help to exercise or prosecute the following
Page 5
remedies, as applicable: (I) all rights to foreclose against any
real or personal property or other security by exercising a
power of sale granted under Loan Documents or under applicable
law or by judicial foreclosure and sale, including a proceeding
to confirm the sale; (ii) all rights of self-help including
peaceful occupation of real property and collection of rents,
set-off, and peaceful possession of personal property; (iii)
obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of
receiver and filing an involuntary bankruptcy proceeding; and
((iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an
arbitrator to grant similar remedies that may be requested by a
party in a Dispute.
Borrower and Bank agree that they shall not have a remedy of
punitive or exemplary damages against the other in any Dispute
and hereby waive any right or claim to punitive or exemplary
damages they have now or which may arise in the future in
connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.
IN WITNESS WHEREOF, Borrower, on the day and year first above
written, has caused this Note to be executed under seal.
General Parcel Services, Inc.
Taxpayer Identification Number: 59-2576629
CORPORATE By: (Signed)
SEAL Wayne N. Nellums,
Vice President of Finance
F536261
1 3998
Page 6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information
extracted from the consolidated Statements of Operations
and Balance Sheet and is qualified in its entirety by
reference to such financial statements.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<PERIOD-START> JAN-1-1996
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 6,739
<SECURITIES> 0
<RECEIVABLES> 2,297,598
<ALLOWANCES> 7,551
<INVENTORY> 0
<CURRENT-ASSETS> 2,722,392
<PP&E> 14,143,940
<DEPRECIATION> 6,747,142
<TOTAL-ASSETS> 11,304,555
<CURRENT-LIABILITIES> 6,560,790
<BONDS> 0
<COMMON> 37,586
0
2,200
<OTHER-SE> 2,076,730
<TOTAL-LIABILITY-AND-EQUITY> 11,304,555
<SALES> 0
<TOTAL-REVENUES> 5,783,671
<CGS> 0
<TOTAL-COSTS> 6,051,207
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 206,780
<INCOME-PRETAX> (474,316)
<INCOME-TAX> 0
<INCOME-CONTINUING> (474,316)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (474,316)
<EPS-PRIMARY> (0.14)
<EPS-DILUTED> (0.14)
</TABLE>
