-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, YOOAUlnv0F+6+IaLL4spMke/5j/1ffpye9nymPuVWAPDpkm8u9NbsCC1PDYPnqiM 9aIV+O7qu3IKQ7YjsGPCcA== 0000950134-95-001905.txt : 19950814 0000950134-95-001905.hdr.sgml : 19950814 ACCESSION NUMBER: 0000950134-95-001905 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950811 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREYHOUND LINES INC CENTRAL INDEX KEY: 0000813040 STANDARD INDUSTRIAL CLASSIFICATION: LOCAL & SUBURBAN TRANSIT & INTERURBAN HWY PASSENGER TRAINS [4100] IRS NUMBER: 860572343 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-10841 FILM NUMBER: 95561834 BUSINESS ADDRESS: STREET 1: 15110 N DALLAS PKWY STE 600 CITY: DALLAS STATE: TX ZIP: 75248 BUSINESS PHONE: 2147157000 MAIL ADDRESS: STREET 1: P O BOX 660362 CITY: DALLAS STATE: TX ZIP: 75266-0362 10-K/A 1 AMENDMENT TO FORM 10-K 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM 10-K/A [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM __________ TO ____________ COMMISSION FILE NUMBER 1-10841 GREYHOUND LINES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 86-0572343 (State or other jurisdiction (I.R.S. employer of incorporation or organization) identification no.) 15110 N. DALLAS PARKWAY, SUITE 600, DALLAS, TEXAS 75248 (Address of principal executive offices) (Zip code) (214) 789-7000 (Registrant's telephone number, including area code) SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED ------------------- ----------------------------------------- Common Stock, $.01 par value per share American Stock Exchange 10% Senior Notes, due July 31, 2001 American Stock Exchange 8.5% Convertible Subordinated Debentures, due March 31, 2007 American Stock Exchange
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 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 the Form 10-K or any amendment to this Form 10-K. / / Aggregate market value of Common Stock held by non-affiliates of the registrant based on the last reported sale price of the Common Stock on the American Stock Exchange composite tape on March 1, 1995, was $100,292,000, which value, solely for the purposes of this calculation, excludes shares held by registrant's executive officers and directors. Such exclusion should not be deemed a determination by the registrant that all such individuals are, in fact, affiliates of the registrant. APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES /X/ NO / / APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. CLASS OF COMMON STOCK OUTSTANDING AT MARCH 1, 1995 --------------------- ---------------------------- $.01 par value 53,743,682 shares DOCUMENTS INCORPORATED BY REFERENCE: Portions of the definitive proxy statement for the Registrant, to be filed not later than 120 days after the end of the fiscal year covered by this report, are incorporated into Part III by reference. ================================================================================ 2 GREYHOUND LINES, INC. ANNUAL REPORT ON FORM 10-K/A FOR THE YEAR ENDED DECEMBER 31, 1994 TABLE OF CONTENTS PART IV
PAGE ---- Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K . . . . . . . . . . . . . . . . 3
2 3 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (A) CERTAIN DOCUMENTS FILED AS PART OF THE FORM 10-K 1. AND 2. FINANCIAL STATEMENTS AND FINANCIAL STATEMENTS SCHEDULES The following financial statements and financial statements schedules are set forth in Item 8 of the Form 10-K Annual Report. Financial Statement Schedules not included in this Form 10-K Annual Report have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. Fifty percent or less owned companies accounted for by the equity method have been omitted because, considered in the aggregate, they have not been considered to constitute a significant subsidiary.
Page No. -------- Management Report on Responsibility for Financial Reporting . . . . . . . . . . . . . . . . . . . . 27 Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Consolidated Statements of Financial Position at December 31, 1994 and 1993 . . . . . . . . . . . . 29 Consolidated Statements of Operations for the Years Ended December 31, 1994, 1993 and 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1994, 1993 and 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Consolidated Statements of Cash Flows for the Years Ended December 31, 1994 1993 and 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Schedule II -- Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . 61
3. EXHIBITS 3.1 -- Restated Certificate of Incorporation of Greyhound Lines, Inc.(3) 3.2 -- Restated Bylaws of Greyhound Lines, Inc.(3) 3.3 -- Article Fourth of the Restated Certificate of Incorporation of the Registrant relating to its capital stock.(6) 3.4 -- Certificate of Amendment in the Restated Certificate of Incorporation of the Registrant amending Article Fourth thereof.(7) 3.5 -- Certificate of Amendment in the Restated Certificate of Incorporation of the Registrant amending Article Eighth thereof.(12) 3.6 -- Certificate of Designations of Series A Junior Preferred Stock of the Registrant.(12) 3.7 -- Form of Certificate of Amendment to Certificate of Incorporation.(14) 4.1 -- Indenture governing the 8 1/2% Convertible Subordinated Debentures due March 31, 2007, including the form of 8 1/2% Convertible Subordinated Debentures due March 31, 2007.(4) 4.2 -- Indenture, dated October 31, 1991, between the Registrant and LaSalle National Bank, as Trustee, with respect to $165,000,000 principal amount of 10% Senior Notes due 2001, including form of 10% Senior Notes Due 2001.(1) 3 4 4.3 -- First Supplemental Indenture to the Indenture between the Registrant and LaSalle National Bank, as Trustee.(4) 4.4 -- Form of First Supplemental Indenture to the Indenture between the Registrant and Shawmut Bank Connecticut, N.A., as Trustee.(15) 4.5 -- Rights Agreement, dated as of March 22, 1994, between the Registrant and Mellon Securities Trust Company, as Rights Agent.(10) 4.6 -- Form of Promissory Note issued to holders of priority tax claims against the Registrant, including a schedule of holders of such notes and principal amounts thereof.(3) 4.7 -- Amended and Restated Loan and Security Agreement dated as of October 13, 1994 by and between Greyhound Lines, Inc. and Foothill Capital Corporation.(14) 4.8 -- Amendment Number One to Amended and Restated Loan and Security Agreement dated March 27, 1995 by and between Greyhound Lines, Inc. and Foothill Capital Corporation.(16) 10.1 -- Acquisition Agreement dated December 22, 1986, among The Greyhound Corporation, Greyhound Lines, Inc., the Registrant, GLI Holding Company, GLI Bus Operations Holding Company and GLI Merger Company.(18) 10.2 -- First Amendment to Acquisition Agreement dated January 31, 1987.(18) 10.3 -- Second Amendment to Acquisition Agreement dated March 18, 1987.(18) 10.4 -- Third Amendment to Acquisition Agreement dated March 18, 1987.(18) 10.5 -- Fourth Amendment to Acquisition Agreement dated September 18, 1987.(18) 10.6 -- Trademark License Agreement dated March 18, 1987, between The Greyhound Corporation, GLI Holding Company and the Registrant.(18) 10.7 -- Assignment of Exhibit B Trademarks dated March 18, 1987, executed by The Greyhound Corporation.(18) 10.8 -- Bus Purchase Requirements Agreement dated March 18, 1987, among the Registrant, Greyhound Lines, Inc., Transportation Manufacturing Corporation and Motor Coach Industries, Inc.(18) 10.9 -- Equipment Sublease dated March 18, 1987, between Greyhound Lines, Inc. and the Registrant.(18) 10.10 -- Master Lease dated March 18, 1987, between Greyhound Lines, Inc. and GLI Realty Company.(18) 10.11 -- Employee Stock Ownership Plan of the Registrant, effective as of October 31, 1991.(3) 10.12 -- Trust Agreement dated as of October 31, 1991, between the Registrant and Bank One, Texas, N.A., as trustee for Registrant's Employee Stock Ownership Plan.(3) 10.13 -- Contested Claim Pool Trust Agreement to be entered into as of October 31, 1991, by and between the Registrant and Smith Barney Trust Company, as trustee.(3) 10.14 -- Claims Treatment Agreement dated August 23, 1991, by and among Eagle Bus Manufacturing, Inc., the Registrant, Trailways Commuter Transit, Inc., GLI Bus Operations Holding Company, GLI Food Services, Inc., Southern Greyhound Lines Co., GLI Holding Company, Central Greyhound 4 5 Lines Co., Greyhound Travel Services, Inc., Eastern Greyhound Lines, Co., and Western Greyhound Lines Co., on the one hand, and The Dial Corp., on the other.(3) 10.15 -- Coach Purchase Agreement, dated February 14, 1992, between the Registrant, Texas, New Mexico & Oklahoma Coaches, Inc., Vermont Transit Co., Inc., Motor Coaches Industries, Inc., Hausman Bus Sales, Inc. and MCI Acceptance Corp.(3) 10.16 -- Coach Purchase Agreement, dated December 23, 1992, between the Registrant and Motor Coach Industries, Inc.(5) 10.17 -- Amendment No. 1 to the 1993 Coach Purchase Agreement, dated as of February 4, 1993, by and among Greyhound Lines, Inc. and Motor Coach Industries, Inc.(8) 10.18 -- Amendment No. 2 to the 1993 Coach Purchase Agreement, dated as of June 25, 1993, by and among Greyhound Lines, Inc. and Motor Coach Industries, Inc.(8) 10.19 -- Memorandum of Agreement, dated as of June 4, 1993, between Greyhound Lines, Inc. and the International Association of Machinists and Aerospace Workers.(8) 10.20 -- Agreement dated as of June 30, 1993, between the Registrant and New York City Transit Authority.(8) 10.21 -- Interest Rate Swap Transaction Confirmations dated as of July 12, 1993, between the Registrant and Bankers Trust Company.(8) 10.22 -- Memorandum of Agreement, dated as of May 25, 1993, between the Registrant and the Amalgamated Council of Greyhound Local Unions.(9) 10.23 -- Lease Agreement No. 1, dated as of December 29, 1993, between Wilmington Trust Company and the Registrant.(9) 10.24 -- Lease Agreement No. 2, dated as of December 29, 1993, between Wilmington Trust Company and the Registrant.(9) 10.25 -- Lease Agreement No. 3, dated as of December 29, 1993, between Wilmington Trust Company and the Registrant.(9) 10.26 -- Lease Supplement No. 1-1, dated as of December 30, 1993, between Wilmington Trust Company and the Registrant.(9) 10.27 -- Lease Supplement No. 2-1, dated as of December 30, 1993, between Wilmington Trust Company and the Registrant.(9) 10.28 -- Lease Supplement No. 3-1, dated as of December 30, 1993, between Wilmington Trust Company and the Registrant.(9) 10.29 -- Tax Indemnification Agreement, dated as of December 29, 1993, between Nationsbanc Lease Investments, Inc. and the Registrant.(9) 10.30 -- Pledge Agreement, dated as of December 29, 1993, among the Registrant, Wilmington Trust Company and Nationsbanc Lease Investments, Inc.(9) 10.31 -- Participation Agreement, dated as of December 29, 1993, between Nationsbanc Lease Investments, Inc. and the Registrant.(9) 5 6 10.32 -- Greyhound Lines, Inc. 1991 Management Incentive Stock Option Plan.(3) 10.33 -- Greyhound Lines, Inc. 1993 Management Incentive Stock Option Plan.(7) 10.34 -- Greyhound Lines, Inc. 1993 Non-Employee Director Stock Option Plan.(9) 10.35 -- Greyhound Lines, Inc. Supplemental Executive Retirement Plan.(9) 10.36 -- Coach Purchase Agreement, dated as of December 31, 1993, between the Registrant and Motor Coach Industries, Inc.(11) 10.37 -- Conditional Sale Contract and Security Agreement, dated as of May 10, 1994, between the Registrant and Motor Coach Industries, Inc.(12) 10.38 -- Lease Agreement, dated as of March 28, 1994, between Wilmington Trust Company and the Registrant.(11) 10.39 -- Lease Supplement No. 1, dated as of March 28, 1994, between Wilmington Trust Company and the Registrant.(11) 10.40 -- Pledge Agreement, dated as of March 28, 1994, among the Registrant, Wilmington Trust Company and Cargill Leasing Corporation.(11) 10.41 -- Participation Agreement, dated as of March 28, 1994, between Cargill Leasing Corporation and the Registrant.(11) 10.42 -- Bill of Sale, dated as of March 28, 1994, between the Registrant and Wilmington Trust Company.(11) 10.43 -- Tax Indemnification Agreement, dated as of March 28, 1994, between Cargill Leasing Corporation and the Registrant.(11) 10.44 -- Lease Agreement, dated as of March 29, 1994, between Wilmington Trust Company and the Registrant.(11) 10.45 -- Lease Supplement No. 1, dated as of March 29, 1994, between Wilmington Trust Company and the Registrant.(11) 10.46 -- Pledge Agreement, dated as of March 29, 1994, among the Registrant, Wilmington Trust Company and Cargill Leasing Corporation.(11) 10.47 -- Participation Agreement, dated as of March 29, 1994, between Cargill Leasing Corporation and the Registrant.(11) 10.48 -- Bill of Sale, dated as of March 29, 1994, between the Registrant and Wilmington Trust Company.(11) 10.49 -- Tax Indemnification Agreement, dated as of March 29, 1994, between Cargill Leasing Corporation and the Registrant.(11) 10.50 -- Conditional Sale Contract and Security Agreement, dated as of June 28, 1994, between the Registrant and Motor Coach Industries, Inc.(13) 10.51 -- First Amendment to the Registrant 1993 Non-Employee Director Stock Option Plan.(13) 6 7 10.52 -- Amendments to Interest Rate Swap Agreement, dated as of October 6, 1994 between the Registrant and Bankers Trust Company.(13) 10.53 -- Form of Letter Agreements with various holders of Convertible Debentures relating to, among other things, the Conversion.(15) 10.54 -- Employment Agreement, dated November 15, 1994, between Registrant and Craig R. Lentzsch.(16) 10.55 -- Amendment Number Two to Bus Purchase Requirements Agreement dated December 21, 1994 by and between Greyhound Lines, Inc. and Motor Coach Industries.(16) 11 -- Computation of Registrant's earnings per share for the two months ended December 31, 1991.(14) 11.1 -- Computation of Registrant's earnings per share for the year ended December 31, 1992.(14) 11.2 -- Computation of Registrant's earnings per share for the year ended December 31, 1993.(14) 11.3 -- Computation of Registrant's earnings per share for the year ended December 31, 1994.(16) 22 -- Subsidiaries of the Registrant.(16) 23.1 -- Consent of Arthur Andersen LLP.(16) 27 -- Financial Data Schedule as of and for the year ended December 31, 1994.(17) - -------------------- (1) Incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1991. (2) Incorporated by reference to the Company's Registration Statement on Form 10 (File No. 1-10841) relating to the Common Stock and Senior Notes. (3) Incorporated by reference from the Registration Statement on Form S-1 (File Nos 33-45060-01 and 33-45060-02) regarding the Registrant's 8 1/2% Convertible Subordinated Debentures Due 2007. (4) Incorporated by reference from the Company's Registration Statement on Form S-1 (File No. 33-47908) regarding the Registrant's Common Stock and 10% Senior Notes Due 2001 held by the Contested Claims Pool Trust. (5) Incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. (6) Incorporated by reference from the Company's Registrant Statement on Form S-3 (File No. 33-61044). (7) Incorporated by reference from the Company's Registrant Statement on Form S-8 (File No. 33-63506) regarding the Registrant's 1991 and 1993 Management Stock Option Plans. (8) Incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1993. (9) Incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 1993. (10) Incorporated by reference from the Registrant's Quarterly Report on Form 8-K regarding the Rights Agreement dated March 22, 1994. 7 8 (11) Incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994. (12) Incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994. (13) Incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994. (14) Incorporated by reference from the Registration Statement on Form S-1 (File No. 33-56131) regarding the Registrant's Common Stock. (15) Incorporated herein by reference from the Registrant's Issuer Tender Offer Statement on Schedule 13E-4 (File No. 5-41800). (16) Previously filed. (17) Filed only in EDGAR format with the Registrant's Annual Report on Form 10-K for the year ended December 31, 1994. (18) Filed herewith. (B) REPORTS ON FORM 8-K The Company filed no current reports on Form 8-K with the Securities and Exchange Commission during the quarter ended December 31, 1994, nor was it required to do so. 8 9 SIGNATURES Pursuant to the requirements of Section 13 or Section 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, thereunto duly authorized, on August 11, 1995. GREYHOUND LINES, INC. (Registrant) By: /s/ Steven L. Korby ------------------------------------------ Steven L. Korby Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer) 9 10 INDEX TO EXHIBITS
SEQUENTIALLY EXHIBIT NUMBERED NUMBER DESCRIPTION PAGE ------ ----------- -------------- 10.1 Acquisition Agreement dated December 22, 1986, among The Greyhound Corporation, Greyhound Lines, Inc., the Registrant, GLI Holding Company, GLI Bus Operations Holding Company and GLI Merger Company. 10.2 First Amendment to Acquisition Agreement dated January 31, 1987. 10.3 Second Amendment to Acquisition Agreement dated March 18, 1987. 10.4 Third Amendment to Acquisition Agreement dated March 18, 1987. 10.5 Fourth Amendment to Acquisition Agreement dated September 18, 1987. 10.6 Trademark License Agreement dated March 18, 1987, between The Greyhound Corporation, GLI Holding Company and the Registrant. 10.7 Assignment of Exhibit B Trademarks dated March 18, 1987, executed by The Greyhound Corporation. 10.8 Bus Purchase Requirements Agreement dated March 18, 1987, among the Registrant, Greyhound Lines, Inc., Transportation Manufacturing Corporation and Motor Coach Industries, Inc. 10.9 Equipment Sublease dated March 18, 1987, between Greyhound Lines, Inc. and the Registrant. 10.10 Master Lease dated March 18, 1987, between Greyhound Lines, Inc. and GLI Realty Company.
10 EX-10.1 2 ACQUISTION AGREEMENT DATED DECEMBER 22, 1986 1 EXHIBIT 10.1 ACQUISITION AGREEMENT among The Greyhound Corporation, Greyhound Lines, Inc. GLI Operating Company, GLI Holding Company, GLI Bus Operations Holding Company and GLI Merger Company December 22, 1986 2 ACQUISITION AGREEMENT THIS ACQUISITION AGREEMENT (this "Agreement") is made and entered into the 22nd day of December, 1986, by and among The Greyhound Corporation, an Arizona corporation ("Greyhound"), Greyhound Lines, Inc., a California corporation ("Seller"), GLI Operating Company, a Delaware corporation ("GLI Operating"), GLI Holding Company, a Delaware corporation ("GLI Holding"), GLI Bus Operations Holding Company, a Delaware corporation ("GLI Bus"), and GLI Merger Company, a Delaware corporation ("GLI Merger"). W I T N E S S E T H: WHEREAS, Greyhound owns all of the issued and outstanding capital stock of Seller, and Seller owns 1,000 shares (the "Shares") of the common stock, $.01 par value, of GLI Operating, which constitutes all of the issued and outstanding capital stock of GLI Operating; WHEREAS, GLI Holding owns all of the issued and outstanding capital stock of GLI Bus, and GLI Bus owns all of the issued and outstanding capital stock of GLI Merger; WHEREAS, GLI Operating and GLI Merger propose to enter into an Agreement and Plan of Merger in the form of Exhibit A hereto (the "Merger Agreement") providing, among other things, for (a) the merger of GLI Merger into GLI Operating (the "Merger"), (b) the cancellation of the Shares and the conversion thereof into the right to receive: (i) $175,000,000 (the "Cash Payment"), (ii) 400,000 shares of Series A Preferred Stock of GLI Operating or, at the option of GLI Holding, of GLI Holding or GLI Bus, with an aggregate liquidation preference of $40,000,000 ("Preferred 1 3 Stock") and (iii) $40,000,000 principal amount of 11% Junior Subordinated Notes due 1999 of GLI Operating or, at the option of GLI Holding, of GLI Holding or GLI Bus (the "Junior Notes"), and (c) the cancellation of the outstanding shares of common stock of GLI Merger and the conversion thereof into an equal number of shares of common stock of GLI Operating (the "New Shares") to be issued to GLI Bus, as the holder of the outstanding common stock of GLI Merger, on a one for one basis, which new Shares, effective as of the consummation of the Merger, shall thereafter represent all of the issued and outstanding common stock of GLI Operating; WHEREAS, Greyhound proposes to (a) convey and assign to GLI Holding those trademarks and other rights listed on Exhibit B, which the parties hereto believe and acknowledge have a value of at least $6,000,000, in exchange for a number of shares of common stock, $.01 par value, of GLI Holding, which will represent, as of the Closing (hereinafter defined), 25% of the outstanding GLI Holding Stock on a fully-diluted basis after the consummation of such exchange and after the completion of all the transactions contemplated by this Agreement (the "GLI Holding Stock") and (b) license those trademarks and other rights listed on Exhibit C hereto, in exchange for the execution and delivery by GLI Holding of that certain trademark license and contingent royalty agreement hereinafter described (the "Trademark License Agreement"); all of such trademarks and other rights assigned and licensed by Greyhound to GLI Holding are hereinafter collectively referred to as the "Trademarks"; and WHEREAS, the parties hereto desire to enter into this Agreement for the purpose of setting forth certain representations, warranties, covenants, agreements, and conditions relating to the Merger and the other transactions contemplated hereby; 2 4 NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants, and agreements, and upon the terms, and subject to the conditions, hereinafter set forth, the parties hereto do hereby agree as follows: 1. DELIVERY OF OUTSTANDING SHARES AND ISSUANCE OF NEW SHARES. 1.1 Delivery of and Distribution in Respect of Shares. At the Closing, pursuant to the terms of the Merger Agreement, Seller shall deliver or cause to be delivered to GLI Operating for cancellation the stock certificate or certificates evidencing the Shares and GLI Bus shall cause GLI Operating to delivery to Seller (a) the Cash Payment by wire transfer of funds to the bank account designated in writing by Seller to GLI Holding at least three business days prior to the Closing, (b) 400,000 shares of Preferred Stock, which shares shall have substantially the powers, designations, preferences, and other rights described in Exhibit D hereto, and (c) the Junior Notes, which shall be in substantially the form of Exhibit E hereto. The Cash Payment, Preferred Stock, and Junior Notes (collectively, the "Consideration") shall constitute the consideration for the Shares and the Noncompetition Agreement (hereinafter defined). 1.2 Issuance of New Shares to GLI Bus. At the Closing, pursuant to the terms of the Merger Agreement, GLI Operating shall issue the New Shares to GLI Bus, as the holder of the common stock of GLI Merger, on a one for one basis. 1.3 Assets of GLI Operating. Effective prior to and as of the Closing, Seller shall cause GLI Operating to own all the outstanding capital stock of Eastern Greyhound Lines Co., Central Greyhound Lines Co., Southern Greyhound Lines Co., Western Greyhound Lines Co., and Greyhound Travel Services, Inc., Arizona corporations (collectively, the "Companies"), and to own directly, 3 5 or through the Companies, all of the business and assets related to the business of operating motor vehicles for the intercity and local transportation of passengers, baggage and package express throughout the United States and the business of providing charter bus services owned directly or indirectly by Greyhound and operated directly or indirectly by Seller, including, without limitation, cash on hand at Closing and all of the assets listed on a schedule previously delivered to GLI Holding (collectively, the "Sale Assets"), other than those assets which shall remain the assets of Greyhound or Seller specifically listed and identified on Schedule 1.3 attached hereto (the "Retained Assets") and the Trademarks (which shall be assigned to GLI Holding pursuant to Section 1.4 below). 1.4 Deliveries in Respect of Trademarks. At the Closing: Greyhound shall, pursuant to instruments of conveyance and assignment reasonably satisfactory to GLI Holding, assign the Trademarks (other than the Trademarks described on Exhibit C) to GLI Holding, and GLI Holding shall issue and deliver the GLI Holding Stock to Greyhound. 1.5 Liabilities. (a) Effective as of the Closing, GLI Operating and the Companies shall be obligated to pay only the liabilities set forth on the Closing Statement or on Schedule 1.5 hereto, which shall not include (i) any liabilities related to any litigation existing as of the Closing, (ii) any liability for any breach of any contract, agreement, lease or instrument that occurred prior to, or as a result of the Closing, and (iii) any liability, obligation, claim, action or proceeding with respect to which GLI Holding, GLI Bus, GLI Operating or the Companies is entitled to indemnification pursuant to Section 10.2 hereof (the "Continuing Liabilities"). If GLI Operating is the issuer of the Preferred Stock or the maker of 4 6 the Junior Note, GLI Operating shall also be obligated to fulfill the obligations set forth in the Preferred Stock and Junior Note, respectively. (b) Effective as of the Closing, Seller shall (i) assume and agree to pay (in accordance with Section 1.5(c)) all debts, obligations, and liabilities (the "Non-Assumed Liabilities") of GLI Operating and the Companies (whether known or unknown, direct or indirect, absolute or contingent, matured or unmatured, or otherwise) which currently exist, or come to exist in the future, which arose, or arise, as the case may be, out of events or transactions which occurred, or conditions existing, prior to the Closing and which are not Continuing Liabilities and (ii) cause all liens, pledges, mortgages, security interests, or other encumbrances on the Sale Assets securing the Non-Assumed Liabilities to be released prior to or contemporaneously with the Closing. (c) Seller covenants and agrees to pay all Non-Assumed Liabilities promptly when due, provided the Seller agrees to pay and discharge in full at Closing, whether or not then due, all liabilities for borrowed money (including principal, interest, and any fee or penalties) of GLI Operating or the Companies, both short term and long-term. Should Seller fail to pay any Non-Assumed Liabilities when due, GLI Operating or any Company may, at its option and in its sole discretion, pay such overdue Non-Assumed Liabilities for the account of Greyhound and Seller. In such event, GLI Operating shall send a notice (the "Liabilities Notice") setting forth in reasonable detail such Non-Assumed Liabilities paid by GLI Operating or any Company for the account of Greyhound and Seller. Within seven days of the receipt by Seller of the Liabilities Notice, Seller shall reimburse GLI Operating or any Company in full for all Non-Assumed Liabilities paid by it. 5 7 1.6 Closing Statement and Related Payment. (a) As soon as practicable following the Closing Date, but in no event later than 90 days following the Closing Date, Seller shall prepare and deliver to GLI Holding a consolidated balance sheet, together with related footnotes (the "Closing Statement"), of GLI Operating at and as of the Closing Date, but immediately prior to the Closing and the consummation of the transactions thereat, which shall be audited by Touche Ross & Co., independent public accountants ("TRC"). Such Closing Statement shall be prepared in accordance with generally accepted accounting principles on a basis consistent with those employed in the preparation of the pro forma consolidated balance sheet of GLI Operating as of August 31, 1986 (the "Pro Forma Balance Sheet"), a copy of which is attached hereto as Exhibit F, and will present fairly the consolidated financial position of GLI Operating, as of immediately prior to the Closing, subject to the following instructions. In no event shall (i) any prepaid expenses, refund claims, or other assets be shown as assets on such Closing Statement unless and to the extent such prepaid expenses, refund claims, or other assets relate to items that are usable in the ordinary course of business by GLI Operating or the Companies following the Closing Date, (ii) any increase, except ordinary course of business additions, be made in the value of any non-current asset from the amounts set forth on the Pro Forma Balance Sheet, or (iii) any asset other than a Sale Asset be shown on the Closing Statement. Generally accepted accounting principles shall be used in preparing the Closing Statement, notwithstanding any conflict between generally accepted accounting principles and the principles used in preparing the Pro Forma Balance Sheet, except as specifically disclosed in the pro Forma Balance Sheet and the notes thereto and except as otherwise necessary to comply with the provisions of this Agreement. The Closing Statement shall also include a report of TRC to the effect that TRC is not aware of any material modifications that should be made to the Closing Statement in order for it to be in conformity with generally accepted 6 8 accounting principles (other than as permitted by the provisions of the immediately preceding sentence) and to the effect that the Closing Statement Net Worth (hereinafter defined) was calculated in accordance with the provisions of this Agreement. Each party to this Agreement agrees to cooperate fully with the other parties hereto in performing or causing to be performed such actions and in providing or causing to be provided such information as shall be necessary and appropriate to permit prompt preparation and delivery of the Closing Statement. (b) Seller shall cause TRC to permit GLI Holding and its representatives to review and inspect its workpapers used in connection with the audit of the Closing Statement and any other financial statements of GLI Operating or the Seller. As soon as practicable after receiving the Closing Statement, but in no event more than 30 days following receipt thereof, GLI Holding shall notify Seller as to whether GLI Holding disagrees with the amount of net worth (total assets minus total liabilities) reflected on the Closing Statement and, in the case of disagreement, the reason or reasons therefor. If any disagreement set forth therein cannot be resolved between GLI Holding and Seller within 30 days after delivery of such notification to Seller, such disagreement with respect to the net worth of GLI Operating as of the Closing Date but immediately prior to the Closing and the consummation of the transactions thereat shall be determined by a "Big Eight" accounting firm (other than Touche Ross & Co. and Arthur Andersen & Co.), jointly selected by the independent public accountants of Greyhound and of GLI Holding. The determination of such "Big Eight" accounting firm shall be binding on the parties hereto. The fees and disbursements of such accounting firm shall be shared equally by GLI Operating and Greyhound. (c) In the event that the net worth of GLI Operating as reflected in the Closing Statement as finally determined in accor- 7 9 dance with Section 1.6(b) (the "Closing Statement Net Worth") is less than $122,000,000, Seller shall pay GLI Operating in cash an amount equal to the difference between $122,000,000 and the Closing Statement Net Worth, within five days of the determination of the Closing Statement Net Worth. (d) In the event that the Closing Statement Net Worth (before deducting the obligation provided for in this Section 1.6(d)) is more than $122,000,000, GLI Operating shall execute a non-interest bearing promissory note in the amount equal to the difference between the Closing Statement Net Worth and $122,000,000, within five days after the determination of the Closing Statement Net Worth. Such promissory note shall be due and payable in four equal quarterly installments, the last of which shall be due one year from the date such note is issued. 2. DELIVERY OF ADDITIONAL AGREEMENTS. 2.1 Master Lease. At the Closing, Seller and GLI Operating (or any of its affiliates) shall enter into a lease agreement with respect to the 27 operating bus terminals included in the Retained Assets (the "Master Lease"). The Master Lease shall provide for a term of five years and, as to each leased terminal, a rental equal to 7% of Seller's net book value of such leased terminal as of the Closing Date or, if sold prior to the Closing Date, the net book value as of the date of such sale. Seller shall have the right to terminate the Master Lease as to a maximum of any eight leased terminals per year following the Closing on at least six months' prior notice (provided, however, that the Master Lease may not be terminated as to the San Diego Terminal prior to December 14, 1989). The Master Lease shall be on a "triple net" basis and shall contain such additional terms and provisions, and shall be in such form, as shall be mutually acceptable to the parties. 8 10 2.2 Standstill Agreement. At the Closing, Greyhound and GLI Holding shall enter into an agreement (the "Standstill Agreement") pursuant to which Greyhound will agree (a) to vote its GLI Holding Stock for directors and, with reasonable exceptions, to vote such stock with respect to all other matters as directed by a group consisting of Fred G. Currey, Craig Lentzsch, and P. Anthony Lannie (the "Management Group"), (b) not to increase its ownership of GLI Holding beyond 25%, (c) to give GLI Holding a right of first refusal on any sale of Greyhound's GLI Holding Stock, other than in a bona fide, widely distributed registered public offering or pursuant to the provisions of Rule 144 (other than Rule 144(k)) promulgated under the Securities Act of 1933, and (d) not to take any action which would cause GLI Holding to become a public company. The Standstill Agreement will provide Greyhound with reasonable "piggy-back" registration rights and one demand registration right after GLI Holding goes public. Greyhound's piggy-back registration rights will be subject to cutback, pro rata with all parties other than GLI Holding (shares sold by GLI Holding will be the last cutback), if the managing underwriter requires. After Closing, Greyhound will have the right to designate a number of directors as is equal to Greyhound's ownership percentage of GLI Holding Stock on a fully-diluted basis (so long as it owns at least 5% of GLI Holding's fully-diluted common stock) times the total number of GLI Holding directors and the preemptive right to purchase its pro rata share (based on its fully-diluted common stock ownership) of any new shares of common stock offered by GLI Holding. Such preemptive rights shall terminate if GLI Holding goes public. The Standstill Agreement shall contain such additional terms and provisions, including the provision of monthly, quarterly, and audited annual financial information to Greyhound, and shall be in such form, as the parties may mutually agree. 2.3 Operations Agreement. At the Closing, Greyhound and Seller will cause Greyhound Lines of Canada Ltd. to enter into a 9 11 10-year through service operations agreement ("Operations Agreement") with GLI Operating on terms customary in the industry and consistent with past practices of the Seller. The Operations Agreement shall contain such additional terms and provisions, including operating standards, and shall be in such form, as the parties may mutually agree. 2.4. Garage and Terminal Leases. At the Closing, Seller shall sublease to GLI Operating (or any of its subsidiaries) the bus maintenance facilities at the New York City location and bus maintenance facilities and terminal facilities at the Philadelphia location on a triple net basis, subject to all the terms and conditions of the prime lease and such other terms and conditions as Seller and GLI Holding may agree, at a rent equal to that payable under the primary lease plus an annual rental of 7% of Seller's net book value of leasehold improvements on the Closing Date (the "Garage Leases"). Seller shall have the right to relocate at its expense the maintenance and terminal facilities covered by the Garage Leases, subject to GLI Holding's reasonable satisfaction that the efficiency of operations will not be materially impaired and the GLI Holding's cost of bus operations related to such facilities will not increase by more than 10%. Seller's Philadelphia relocation plan, as described to GLI Holding, meets such criteria. Seller shall retain any amounts paid to Seller by the lessors of the Garage Leases for cancellation of such Garage Leases. GLI Holding (or any of its subsidiaries) shall retain the benefits of subleasing any or all of such facilities to third parties, including without limitation all existing subleases. 2.5 Services Agreements. If requested by Seller within one year from the date hereof, GLI Holding (or any of its subsidiaries) shall (a) (i) enter into an agreement with Greyhound Lines of Canada, Ltd. Texas, New Mexico & Oklahoma Coaches, Inc., Vermont Transit Co., Inc., Southeastern Stages, Inc. and Kerrville Bus 10 12 Company, Inc. (collectively, the "Retained Carriers") to perform computer services for such Retained Carriers at a service fee intended to reimburse GLI Holding (or any of its subsidiaries) for all its costs but at no profit thereon and otherwise on terms mutually agreed on by GLI Holding and such Retained Carriers, and/or (ii) grant to Greyhound Lines of Canada Ltd. a non-exclusive, non-transferable, license to use the computer software currently used by Seller, GLI Operating and the Companies, and to receive normal periodic updates thereto, at no charge to Greyhound Lines of Canada Ltd. solely for the exclusive use of Greyhound Lines of Canada Ltd. and (b) enter into an agreement with Transportation Manufacturing Corporation, Motor Coach Industries, Inc. and Motor Coach Industries, Ltd. (the "Manufacturers") to act as the warranty and maintenance representative of the Manufacturers on terms consistent with past practice and as otherwise mutually agreed by GLI Holding and the Manufacturers. 2.6 West Des Moines Lease. At the Closing, GLI Holding (or any of its subsidiaries) shall lease Seller's West Des Moines, Iowa, accounting center for three years on a triple net basis at an annual rental of 7% of Seller's net book value of such center at Closing, which lease will be subject to the terms and conditions of the industrial revenue bonds related to the center and will include an option to the lessee to purchase such property at Seller's net book value at the end of the lease term. Such lease shall contain such additional terms and provisions, and shall be in such form, as the parties may mutually agree. Greyhound and Seller agree that, so long as such purchase option is in existence and so long as the interest income on such bonds remains exempt from federal income tax, neither Greyhound nor Seller will prepay, call or amend the terms of the industrial revenue bonds related to the center and that, upon exercise of such option, Greyhound and Seller will use their commercially reasonable efforts to transfer such bonds and 11 13 related obligations to GLI Holding (or its designated subsidiaries) at the same interest rate and other principal terms as are in effect on the date of this Agreement. 2.7 Retained Carrier Purchase Options. At the Closing, Greyhound shall grant GLI Holding (or any of its subsidiaries) a one year option to purchase all of Greyhound's (and its affiliates) interest in the Retained Carriers (other than Greyhound Lines of Canada Ltd. and Southeastern Stages, Inc.) at a purchase price for each such carrier equal to Greyhound's ownership percentage of the equity of such carrier times the greater of (a) Adjusted Net Book Value (hereinafter defined) of such carrier or (b) six times earnings before interest income and expense and income taxes for such carrier (with Seller retaining all intercompany balances) for fiscal 1985, if such option is exercised before the end of fiscal 1987, or fiscal 1987, if such option is exercised after the end of fiscal 1987. The agreement granting such options shall contain such other terms and conditions, and shall be in such form, as may be mutually agreed on by Greyhound and GLI Holding. As used in this Section 2.7, the term "Adjusted Net Book Value" shall mean the total assets of such carrier minus the total liabilities of such carrier, as reflected on a balance sheet of such carrier prepared in accordance with generally accepted accounting principles applied on a consistent basis (as of the most recent fiscal quarter prior to the exercise of such option), plus an amount equal to the excess of the fair market value (as of such balance sheet date) over book value of all buses and real estate owned by such carrier. Greyhound shall pay the costs of any appraisals necessary to determine Adjusted Net Book Value. 2.8 Bus Purchase Agreements. At the Closing, GLI Operating and the Manufacturers shall enter into a 60 month bus purchase agreement under which GLI Operating will agree to buy 75% of its requirements for motor coaches (not including mini-vans and the 12 14 like made by major manufacturers) from the Manufacturers. GLI Operating will cooperate with the Manufacturers to provide stable configurations, substantial order lead times, and orderly delivery dates. The prices to GLI Operating will be those already in effect for 1987 orders, and thereafter will be standard list price less cost justified volume discounts based on annual volume of motor coaches purchased for use by GLI Operating or the Companies. Such discount will be at least as follows: 2.5% if annual volume is 51 to 100, 4.5% if annual volume is 101 to 150, and 6.5% if annual volume exceeds 150. The appropriate discount to be applicable to all buses purchased during any year shall be based on GLI Operating's order for estimated bus requirements of the number of buses to be purchased during each calendar year and shall be retroactively adjusted at the end of each calendar year based on the actual number of buses purchased during such calendar year. In addition, GLI Holding and Seller will enter into an agreement at Closing providing that GLI Holding will assume Seller's existing bus purchase agreement with the Manufacturers (which agreement shall not be modified in any respect) or pay Seller a cancellation fee equal to 5% of the purchase price of each bus which Seller is obligated to purchase under such agreement which GLI Holding does not purchase, it being understood that GLI Holding has no other right of cancellation and must cancel an order it desires to cancel at least six months prior to the scheduled delivery date of the buses subject to cancellation. Seller will assign to GLI Holding, as to each bus GLI Holding elects to purchase, Seller's rights under its purchase agreements with the Manufacturers. As to all buses purchased after 1987 by assumption of Seller's obligation to the Manufacturers, Seller shall cause GLI Holding to receive the amount of volume discount to which GLI Operating would have been entitled if such buses had been purchased by GLI Operating directly from the Manufacturers. The agreements described herein shall contain such additional terms, and shall be in such form, as may be agreed on by Greyhound and GLI Holding. 13 15 2.9 Trademark Agreements. At the Closing, Greyhound and GLI Holding shall enter into the Trademark License Agreement pursuant to which Greyhound grants to GLI Holding and its subsidiaries immediately after the Closing a perpetual exclusive license to use, and will license, at GLI Holding's request, others to use, the name and trademark "Greyhound" and the "image of the running dog" trademark (as described on Exhibit C) in the United States and Mexico for, and only for, travel and transportation uses (except water). Except as currently used by Seller in the transportation business, in no event shall the licensee be permitted to use the trademark "Greyhound" standing alone. The Trademark License Agreement shall be royalty-free except as hereinafter expressly stated, and shall provide that if Greyhound and all its active affiliated companies cease use of the Term "Greyhound" in their corporate names, and the "image of the running dog" as a corporate logo, Greyhound shall transfer all rights to such trademarks to GLI Holding without additional payment. The Trademark License Agreement shall provide for a contingent royalty payable for calendar years 1989 through 1993 based on the consolidated bus and travel revenues of GLI Holding (appropriately adjusted for inflation) as follows: Royalty Schedule
CONSOLIDATED REVENUE ROYALTY RATE ------------------------ ------------ (In Millions of Dollars) Less than 600 0 From 600 to 650 .5% From 650 to 700 1.0% From 700 to 750 1.5% From 750 to 800 2.0% From 800 to 850 2.5% From 850 to 900 2.0% From 900 to 950 1.5% From 950 to 1,000 1.0% Above 1000 .5%
14 16 Each royalty percentage shall apply only to the appropriate consolidated revenue bracket (and shall not apply to any other bracket). The royalty payable for each bracket shall be added to the royalty payable for each other bracket to determine the total royalty payable for each year. The Trademark License Agreement shall contain such additional terms, and shall be in such form, as Greyhound and GLI Holding shall agree. 2.10 Sublease and Service Agreement. At the Closing GLI Operating and Greyhound shall enter into a sublease and services agreement pursuant to which (i) Greyhound shall sublease to GLI Operating the office facilities and, if also leased, furnishings currently utilized by Seller, GLI Operating and the Companies at Greyhound Tower, Phoenix, Arizona, and (ii) Greyhound shall provide to GLI Operating and the Companies the office services currently provided by Greyhound to Seller, GLI Operating and the Companies. Such sublease and services agreement shall provide (a) for a firm term of one (1) year with two (2) six month renewal options; (b) for rent and other charges or fees to be paid by GLI Operating on a basis consistent with past practice (but in no event shall such rents and other charges or fees be less favorable than the rents, charges or fees paid by Greyhound's subsidiaries), and (c) such additional terms, and shall be in such form, as Greyhound and GLI Holding shall agree. 2.11 Sublease of Buses. At the Closing, Seller and GLI Operating shall enter into a sublease agreement, pursuant to which Seller will sublease to GLI Operating and the Companies an aggregate of 2,109 buses on the same terms and conditions as Seller's current bus leases, except that supplemental rental on the buses leased from Security Pacific shall be calculated at 7% fixed interest plus actual commitment fees on the underlying leveraged debt. During the first three years of such sublease, the sublease agreement will provide that GLI Operating and the Companies will be 15 17 entitled to work stoppage relief for their sublease payments for 1979 and 1980 buses under capital leases and for their sublease payments for 1981 and 1982 buses leased from Security Pacific by permitting GLI Operating and the Companies to make such payments by the execution of a one year promissory note bearing interest at the same rate as the Junior Notes. Such notes will be permitted for up to a maximum of six months of sublease payments. 3. CLOSING. 3.1 Closing. The parties hereto shall consummate the transactions contemplated hereby and by the Merger Agreement ("Closing") on a date and at a time specified by GLI Holding by at least ten days prior written notice to Seller or, if no notice is sent by GLI Holding, then at 1:00 p.m., Phoenix, Arizona time, on March 18, 1987 or such later date to which the Termination Date (as hereinafter defined) may be extended ("Closing Date") at the offices of Seller at Greyhound Tower, 111 West Clarendon, Phoenix, Arizona. As a part of the Closing, the parties shall cause a certificate of merger (including the Merger Agreement) to be executed and delivered and filed in the office of the Secretary of State of Delaware in accordance with the Delaware General Corporation Law. The Closing shall not be deemed consummated unless and until such certificate of merger has been duly filed. 3.2 Closing Deliveries. At Closing: (a) Seller shall cause to be delivered or made available to GLI Holding: (i) The officer's certificate required by Section 8.3 hereof; (ii) The legal opinion required by Section 8.4 hereof; 16 18 (iii) The approvals and consents required by Section 8.7 hereof; (iv) All documents required to transfer control of all bank accounts and bank deposit boxes of Seller, GLI Operating, and the Companies (except those specified as Retained Assets); (v) Fully executed originals of the Noncompetition Agreement substantially in the form of Exhibit G hereto; (vii) A certified copy of the resolutions of the Board of Directors of Greyhound, Seller and GLI Operating authorizing the transactions contemplated by this Agreement and the Merger Agreement; (viii) Incumbency certificates certifying the authority and signatures of all persons executing the Agreement and all documents contemplated thereby on behalf of Seller; (ix) such other agreements and documents as may be required by this Agreement or reasonably requested by GLI Holding to evidence compliance by Greyhound, Seller, or GLI Operating with the terms of this Agreement; and (x) the Merger Agreement executed by GLI Operating and the consent of Seller, as the sole shareholder of GLI Operating, to the terms and conditions contained in the Merger Agreement and to the consummation of the transactions contemplated by the Merger Agreement. (b) GLI Bus shall cause to be delivered to Seller: 17 19 (i) The Consideration required to be paid pursuant to the Merger Agreement; (ii) The officer's certificate required by Section 9.3 hereof; (iii) The legal opinion required by Section 9.4 hereof; (iv) The approvals required by Section 9.6 hereof; (v) A certified copy of the resolutions of the Boards of Directors of GLI Holding, GLI Bus and GLI Merger authorizing the transactions contemplated by this Agreement; (vi) Incumbency certificates certifying the authority and signatures of all persons executing the Agreement and all documents contemplated thereby on behalf of GLI Holding, GLI Bus and GLI Merger; (vii) Such other agreements and documents as may be required by this Agreement or reasonably requested by Seller to evidence compliance by GLI Holding, GLI Bus and GLI Merger with the terms of this Agreement; and (viii) The Merger Agreement executed by GLI Merger and the consent of GLI Bus, as the sole shareholder of GLI Merger, to the terms and conditions contained in the Merger Agreement and to the consummation of the transactions contemplated by the Merger Agreement. 3.3 Further Instruments and Assistance. Without further consideration, Greyhound or Seller at any time shall execute and deliver such further instruments of transfer and assignment and 18 20 take such other action as GLI Holding may reasonably request to comply with the terms of this Agreement and take such other actions as GLI Holding may reasonably request to vest in the Companies or GLI Operating title to and ownership of all of the Sale Assets. 4. REPRESENTATIONS AND WARRANTIES OF SELLER AND GREYHOUND. Seller and Greyhound represent and warrant to GLI Holding, GLI Bus and GLI Merger, subject to the exceptions listed on Exhibit H, that: 4.1 Merger Agreement. Except as described in Schedule 4.1, Greyhound, Seller, and GLI Operating have the full power, authority, and right to enter into this Agreement and to perform their respective obligations hereunder; and this Agreement constitutes a valid and binding obligation upon Greyhound, Seller, and GLI Operating, enforceable in accordance with its terms. The execution, delivery, and performance of this Agreement and of all the documents and instruments required hereby from Greyhound, Seller, or GLI Operating have been duly authorized by all necessary corporate action of Greyhound, Seller, or GLI Operating, as appropriate. The documents and instruments required hereby when executed and delivered by Greyhound, Seller, or GLI Operating will be the valid and binding obligations of Greyhound, Seller, or GLI Operating enforceable against Greyhound, Seller, or GLI Operating, as appropriate, in accordance with their respective terms. 4.2 Capitalization. The total authorized capital stock of GLI Operating consists of 5,000,000 shares of common stock, $.01 par value, of which only the Shares have been duly and validly issued to Seller and are presently outstanding, and 10,000,000 shares of Preferred Stock, $.01 par value, none of which are outstanding. The total authorized capital stock of each of the Companies consists of 1,000 shares of common stock, $1.00 par 19 21 value, all of which have been duly and validly issued to GLI Operating and are currently outstanding (collectively, the "Company Shares"). All the Shares and Company Shares are fully paid for and non-assessable. On the Closing Date, Seller will own good, valid and marketable title to the Shares, and GLI Operating will own good, valid and marketable title to the Company Shares, free and clear of any and all mortgages, liens, encumbrances, charges, claims, restrictions, pledges, security interests or impositions. Upon consummation of the Closing, GLI Bus will own all the outstanding capital stock of GLI Operating, and GLI Operating will own all the outstanding capital stock of the Companies, free and clear of all mortgages, liens, encumbrances, charges, claims, restrictions, pledges, security interests or impositions. Except as contemplated by this Agreement, no rights or agreements for the purchase or acquisition from, or sale or issuance by, GLI Operating or any of the Companies of any shares of their capital stock are outstanding and no authorization therefor is in effect. 4.3 No Breach. Except as described on Schedule 4.3, Greyhound's, Seller's, and GLI Operating's execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not (a) result in the breach of any of the terms or conditions of, or constitute a default under, the charter documents or the Bylaws of Greyhound, Seller, GLI Operating, or the Companies or any indenture or mortgage to which any of them is a party or any material contract, commitment, pledge, note, bond or other instrument or obligation to which any of them is now a party or by which any of them or any of their properties or assets may be bound or affected, or (b) violate any material law or any material rule or regulation of any administrative agency or governmental body or any order, writ, injunction or decree of any court, administrative agency or governmental body to which Greyhound, Seller, GLI Operating or the Companies are subject. 20 22 4.4 Corporate Status. GLI Operating is duly authorized, validly existing and in good standing under the laws of Delaware. Each of the Companies and Seller is duly organized, validly existing and in good standing under the corporation laws of the States of Arizona and California, respectively. Each of the Companies and Seller is, and at the Closing Date GLI Operating will be, duly licensed, qualified or domesticated as a foreign corporation and in good standing under the corporation laws of each jurisdiction specified in Schedule 4.4 with respect to each such company. Neither the character nor location of the properties owned by any of GLI Operating or the Companies nor the nature of the business of any of the Companies requires any of them to be licensed or qualified under the laws of any other jurisdiction where the failure to be so licensed or qualified would have a material adverse effect upon the business of GLI Operating and the Companies taken as a whole. Except as described on Schedule 4.4, GLI Operating and the Companies have full power and authority to carry on their business and to own and operate their assets, properties, and business. 4.5 Financial Statements; Changes. The Pro forma consolidated and consolidating balance sheet and balance sheet detail of Seller and the Companies contained in Schedule 4.5 are true and correct in all material respects and were prepared in accordance with generally accepted accounting principles consistently applied with the principles used in preparing the consolidated and consolidating balance sheet and balance sheet detail of Seller as of December 31, 1985, except for normal year-end adjustments, and present fairly the consolidated financial position of Seller and the Companies as of August 31, 1986. Except as set forth on Part II of Schedule 4.5 hereto, since August 31, 1986 there has not been: (a) any material adverse change in the Sale Assets or the business, operations, financial condition or prospects of the Companies and GLI Operating taken as a whole; (b) any borrowings by GLI Operating or the Companies other than advances from Seller made in the normal 21 23 course of business; (c) any mortgage, pledge, lien or encumbrance of or with respect to any of the Sales Assets or assets of GLI Operating or the Companies, except those incurred in the normal course of business; (d) any sale, transfer or other disposition of the Sale Assets, except those incurred in the ordinary course of business (e) any waiver, releases or termination of any material right or claim of the Companies; (f) any capital expenditure not in the ordinary course of business; or (g) any payment by GLI Operating or the Companies to any of their affiliates (other than pursuant to a contract described in Schedule 4.8). 4.6 Owned and Leased Real Property. Schedule 4.6 contains a list of all real estate included in the Sale Assets that is owned or leased or to be owned or leased (including in each case of leased property, the name of the lessor, termination date, annual rental, and whether or not there is a renewal option). GLI Operating, the Companies and Seller, as the case may be, have good and marketable title to all such owned real property free and clear of all third party security interests, liens, encumbrances, restrictions and other burdens, except (i) as described in Schedule 4.6, and (ii) except for the following: (a) Any and all rights of the public and of the federal and any state, county, and municipal governments and any other political subdivisions acquired, assigned, condemned, dedicated, granted, leased, retained, taken and/or used for any and all governmental, public or other purposes of any nature, whatsoever; (b) General taxes and special assessments for the year 1986 if not yet delinquent, and all years subsequent thereto; (c) Any and all recorded or unrecorded assignments, easements, grants, leases, licenses, reservations, rights-of- 22 24 way, and the rights and/or privileges, by prescription or otherwise, for the construction, installation, maintenance, use, operations, repair, extension, renewal and removal of public and private alleys, crossings, highways, overhead runways, roadways, sidewalks, streets, tunnels, railways, and viaducts and water, sewage, storm sewers, drains, gas, electricity, steam and any and all other service and utility lines, conduits, drains, pipes, wires, fixtures, poles and any and all other services or utility facilities, and for the emission or passage of any dust, odor, fumes, smoke or other solid, liquid or gaseous matter; (d) Any and all laws, ordinances or governmental regulations now or hereafter in force (including building and zoning ordinances) limiting or regulating the use or enjoyment of the above-described premises or the character, size, use or location of any improvement now or hereafter erected thereon; (e) Any and all encroachments, overlaps, boundary line disputes and any matters which a correct survey and/or inspection of the above described premises would disclose; (f) Any and all rights of parties in possession, be it actual or constructive; (g) Any and all party wall agreements and rights accruing thereunder; and (h) Judgments, mechanics' liens and liens of a similar nature, which Seller agrees to dispose of or indemnify each of GLI Operating and the Companies against in a manner satisfactory to GLI Holding prior to the Closing; 23 25 provided items (a) through (h) do not materially impair the use of any one or all of such real property or result in title no longer being good and marketable. Seller will make available to GLI Holding prior to Closing copies of all title insurance policies, lawyers' abstract opinions and surveys held in Seller's possession with respect to all such real property, together with copies of all documents relating to any third party security interests, liens, encumbrances, restrictions or other burdens disclosed on Schedule 4.6. (GLI Holding acknowledges that (a) the policies, abstract opinions and surveys referred to are not current, and (b) that GLI Holding and Seller shall agree to descriptions of the real properties of Seller being transferred hereunder to the extent necessary prior to Closing). Seller will make available to GLI Holding prior to Closing true and correct copies of all leases listed on Schedule 4.6 hereto. Except as described on Schedule 4.6 hereto, neither Seller, GLI Operating, nor any of the Companies has received written notice of default under any such leases; none of such leases are in default in any material respect or have been assigned, mortgaged, or encumbered by seller, GLI Operating, or any of the Companies; and all such leases constitute legal, valid, and binding obligations of the respective parties thereto. All buildings, structures and other improvements located on any owned parcel of real estate listed on Schedule 4.6 hereto are, in all material respects, being used and occupied in substantial compliance with, and conform in all material respects to, all building, zoning, use and occupancy laws, codes, ordinances, rules, regulations, and restrictions, whether federal, state, or local (including all such laws that relate to environmental or safety matters). 4.7 Owned and Leased Tangible Personal Property. Schedule 4.7 contains (a) a list of fixed assets included in the Sale Assets; (b) a description of tangible personal property 24 26 included in the Sale Assets not owned by GLI Operating or the Companies but in their possession or used in their business and having rental payments therefor in excess of $50,000 per year; and (c) as to all such tangible personal property not owned by GLI Operating or the Companies but listed on Schedule 4.7, the name of the lessor or owner, termination date, monthly rental, and whether or not there is a renewal option. Except as indicated in Schedule 4.7 or in Schedule 4.6, GLI Operating or one of the Companies has good and marketable title to the personal property included in the Sale Assets free and clear of all material third party security interests, liens, encumbrances, restrictions, and other burdens, except: (a) As may be imposed by governmental regulations relating to use; (b) Liens in connection with workmen's compensation or in connection with unemployment insurance and other social security taxes, and liens which secure the performance of trade contracts, leases, statutory obligations, and mechanics', carriers', workmen's, repairmen's and other obligations of like nature made in the normal course of business; (c) Liens for unpaid taxes which are not delinquent or which are being contested in good faith; and (d) Liens of vendors for any unpaid portion of the purchase price of any equipment, other than buses, acquired by the Companies in the ordinary course of business; provided items (a) through (d) do not materially impair the use of any one or more items of such personal property or result in title no longer being good and marketable. 25 27 Except as indicated in Schedule 4.7, the Companies, GLI Operating and Seller hold and use all tangible personal property, if any, included in the Sale Assets not owned by them but listed on such Schedule: (a) Free and clear of all material third party security interests, liens, encumbrances, restrictions and other burdens except lessor's interests; claims under bailment and storage agreements; and liens, if any, for personal property taxes which are not delinquent or which are being contested in good faith; (b) In substantial compliance with all material zoning and use laws, codes, ordinances, rules, regulations, and restrictions, whether federal, state, or local (including all such laws that relate to food and drug, health, environmental or safety matters); and (c) In accordance with a lease or other agreement which is in full force and effect and constitutes a legal, valid, and binding obligation of its respective parties, and neither GLI Operating, Seller nor any of the Companies has received any notice of default under any such lease or agreement and none of such leases or agreements are in default by any party thereto. Schedule 4.7 lists all buses included in the Sale Assets owned or leased by Seller, GLI Operating or the Companies, and the make, model, year of construction, and seating capacity of each such motor vehicle. Such buses have been maintained in accordance with Seller's standard preventive maintenance standards which are in conformance in all material respects with the regulations of each governmental authority having jurisdiction with respect thereto. 26 28 The Sale Assets, taken as a whole, are in such operating condition and repair, subject to ordinary wear and tear, and consistent with industry practices, as to be substantially fit for the purposes for which they are currently being utilized. EXCEPT AS EXPRESSLY SET FORTH HEREIN, SELLER DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES TO GLI HOLDING, GLI BUS OR GLI MERGER, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND GLI HOLDING, GLI BUS AND GLI MERGER ACKNOWLEDGE THAT THE SALE ASSETS SHALL BE IN AN AS IS WHERE IS CONDITION, SUBJECT ONLY TO THE TERMS AND CONDITIONS OF THIS AGREEMENT. 4.8 Certain Contracts. Schedule 4.8 is a list of (a) those contracts of Seller, GLI Operating, and the Companies included in the Sale Assets or which are Continuing Liabilities which are material to the business of GLI Operating and the Companies and which have been entered into other than in the ordinary course of business, (b) all contracts included in the Sale Assets or which are Continuing Liabilities which are between Seller, GLI Operating and the Companies, on the one hand, and Greyhound or any affiliate of Greyhound, on the other hand, and (c) any guarantees or similar obligations of Greyhound, Seller, GLI Operating, or any of the Companies which are Continuing Liabilities. All of such contracts and other material contracts included in the Sale Assets or which constitute Continuing Liabilities are legally binding and in effect and none of the parties to such contracts has given written notice to terminate any of such contracts. Except as described on Schedule 4.8, GLI Operating and the Companies have substantially performed each material term, covenant, and condition of each of such contracts and other material contracts included in the Sale Assets or which constitute Continuing Liabilities to be performed by GLI Operating and the Companies required to be performed as of the date hereof and will have substantially performed as of the Closing Date such terms, covenants and conditions required to be 27 29 performed as of the Closing Date. No event has occurred under any of such contracts and other material contracts included in the Sale Assets or which constitute Continuing Liabilities which constitutes a default or would constitute a default thereunder but for the requirement that notice be given or time elapse or both and which would have a material adverse effect on GLI Operating and the Companies taken as a whole. No contract, lease, or other agreement included in the Sales Assets or Continuing Liabilities (collectively, "Contracts") provides for any guaranteed or assured tax-benefit or after-tax yield to any third party, except such as may arise from acts or omissions of Seller or its affiliates (none of which acts or omissions has occurred). All Contracts which are commission agent agreements with respect to bus terminals may be cancelled by GLI Operating after the Closing on notice of six months or less without penalty. No Contract, including interline and industry agreements, is unduly burdensome or contains terms which are adversely unusual or otherwise not customary in the industry in any material respect. None of the Contracts between Seller, GLI Operating, and any of the Companies, on the one hand, and Greyhound or any affiliate of Greyhound (other than among the Companies), on the other hand, is less favorable to Seller, GLI Operating, or any of the Companies in any material respect than could have been obtained in an arm's length transaction with a non-affiliated party. GLI Holding acknowledges that the bus purchase agreements referred to in Section 2.8 hereof meet such criteria. 4.9 Proprietary Marks. (a) Schedule 4.9 sets forth a list of all material registered trademarks, trade names, service marks, or logo types thereof of Greyhound ("Proprietary Marks") that GLI Operating and the Companies utilize in the conduct of the business of GLI Operating and the Companies and an indication of the nature of such right, license, or interest in each instance; 28 30 (b) Schedule 4.9 lists all current agreements which restrict or limit GLI Operating or the Companies, Seller or Greyhound in any material way from domestic use of any of the Proprietary Marks; (c) Schedule 4.9 lists all controversies, with the specific exclusion of official trademark office objections, pending or, to the knowledge of Seller threatened, or which reasonably could rise out of facts and circumstances now known to Seller, which involve the infringement, validity, or ownership of the Proprietary Marks or in which the Proprietary Marks are involved in questions of infringement, validity, or ownership of third party-owned properties, and with respect to which an adverse result would have a material adverse effect on GLI Operating and the Companies taken as a whole; and Except as set forth in Schedule 4.9: (a) Certificates or instruments evidencing title of record in Greyhound to the Proprietary Marks are in the possession of Greyhound; (b) All registrations of the Proprietary Marks are subsisting on the trademark registers set forth in Schedule 4.9 and are in full force and effect and all applications listed in Schedule 4.9 are pending in the trademark offices of such jurisdictions; (c) Greyhound is the direct and unrestricted owner of all right, title, and interest in and to the Proprietary Marks and in and to the registrations thereof and applications therefor listed in Schedule 4.9, and no such right, title and interest has been mortgaged, pledged, transferred, assigned or, except as set forth in Schedule 4.9, licensed to any third 29 31 party or is held subject to any trust or similar right in favor of any third party; and (d) The Proprietary Marks comprise all the material trademarks and trade names (including all applications, registrations, extensions, and renewals thereof) which are necessary to permit the continuation of GLI Operating's and the Companies' operations in the same manner as now conducted. 4.10 Taxes. Except as set forth in Schedule 4.10 hereto: (a) Seller has or will have, or has or will have caused GLI Operating and the Companies to have, for all periods ending on or before the Closing Date, duly and timely filed all tax returns required to be filed by them or for which they may be held responsible and have paid or provided for all taxes shown to be due and payable; (b) All federal, state, and local income and franchise tax returns (including without limitation any information returns) of the Companies and GLI Operating have been audited by the taxing authorities and all taxes, deficiencies, penalties, additions to tax, interest, and assessments affecting each such entity for any year covered by any such return have been finally determined and paid; (c) There are no agreements, waivers, or other arrangements providing for an extension of time with respect to the filing of any tax returns by GLI Operating and the Companies or the payment by, or assessment against, GLI Operating and the Companies of any tax, governmental charge, duty, penalty, additions to tax, interest, or deficiency; (d) There are no suits, actions, claims, investigations, inquiries, or proceedings pending or threatened against 30 32 GLI Operating and the Companies in respect of taxes, governmental charges, duties, penalties, interest, deficiencies or assessments, or any material matters under discussion between GLI Operating or the Companies and any governmental authority relating to taxes, governmental charges, duties, penalties, interest or assessments, or any claims for additions to tax, governmental charges, duties, or assessments asserted by any such authority; and (e) No election under section 341(f) of the Internal Revenue Code of 1986 has been or will be filed by or on behalf of GLI Operating or any of the Companies. 4.11 Benefit Plans. None of GLI Operating or the Companies is a party to any "employee welfare benefit plan" or "employee pension benefit plan" (as defined in Sections 3(1) and 3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA"), or any other plan, practice, or policy providing for fringe benefits to officers, directors, or employees ("Benefit Plans") as of the date hereof. Seller shall be responsible for and will indemnify GLI Operating and the Companies for all liabilities arising with respect to any Benefit Plans of the Seller prior to the Closing Date. 4.12 Suits, Claims. Except as disclosed in Schedule 4.10 or Schedule 4.12, there is (a) no suit, action, or claim, (b) no investigation or inquiry by any administrative agency or governmental body, (c) no state of facts known to Greyhound, and (d) no legal, administrative or arbitration proceeding pending or, to the knowledge of Greyhound, threatened against GLI Operating or any of the Companies or any of the properties, assets, or business of GLI Operating or any of the Companies, the outcome of which could reasonably be expected to have a material adverse effect on the assets 31 33 or business of GLI Operating and the Companies taken as a whole. Except as disclosed in Schedule 4.12, there is no outstanding order, writ, injunction, or decree of any court, administrative agency or governmental body or arbitration tribunal against or affecting Seller, GLI Operating, and the Companies or any of the properties, assets, or business of GLI Operating or the Companies which could reasonably be expected to have a material adverse effect on the assets or business of GLI Operating and the Companies taken as a whole. 4.13 Government Permits. Except as disclosed in Schedule 4.4 or Schedule 4.13, GLI Operating and the Companies have in the aggregate all material governmental licenses, titles, certificates, franchises, and permits necessary to conduct the business of GLI Operating and the Companies. Such licenses, titles, certificates, franchises, and permits are in full force and effect, and no material violations exist or have been recorded in respect of any of them. 4.14 Compliance with Law. Except as disclosed in any Schedule, GLI Operating and the Companies are in substantial compliance with all applicable laws, rules, regulations, ordinances, codes, orders, licenses, and permits applicable to the conduct of their business or assets, the noncompliance with which would affect materially and adversely business of GLI Operating and the Companies as a whole. 4.15 No Broker. Except for the retention of Morgan Stanley & Co. Incorporated, neither Greyhound, Seller nor GLI Operating has retained any broker or other intermediary to act on its behalf in connection with the transactions contemplated by this Agreement. Greyhound and Seller shall be solely liable for any payment due to Morgan Stanley & Co. Incorporated by reason of the consummation of the transactions contemplated hereby. 32 34 4.16 Availability of Documents. Seller has prior to the actual date of execution of this Agreement made available for inspection by GLI Holding and its representatives true, correct, and complete copies of the charter documents and By-laws of GLI Operating and the Companies and all written agreements, arrangements, commitments, and documents referred to herein or in any Schedule hereto, in each case, together with all amendments and supplements thereto. Seller has heretofore made available for inspection by GLI Holding and its representatives the corporate minute books of GLI Operating and the Companies. Such corporate minute books contain, or at Closing will contain, the minutes of all the meetings of stockholders, board of directors, and any committees which have been held on or before the actual date of execution hereof and all written consents to action executed in lieu thereof. 4.17 Investment Intent. Greyhound and Seller are acquiring all the securities to be acquired pursuant to this Agreement and the Merger Agreement or in connection with the purchase of certain of the trademarks for investment only and with no present intention of distributing such securities. 4.18 Completeness and Accuracy of Information. Neither the representations and warranties of Greyhound and Seller in this Agreement (including the information contained in the schedules hereto) nor the Pro Forma Balance Sheet contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained therein not misleading under the circumstances. In the case of the Pro Forma Balance Sheet, GLI Holding recognizes that such statements were prepared from internal financial statements which were unaudited and had been prepared on a different basis and for different purposes. Accordingly, such financial statements reflect a number of allocations, assumptions and estimates, all of which have been made in good faith and on rea- 33 35 sonable bases, consistent with generally accepted accounting principles. 5. REPRESENTATION AND WARRANTIES OF GLI HOLDING. GLI Holding represents and warrants to Greyhound and Seller as follows: 5.1 Corporate Status. Each of GLI Holding, GLI Bus and GLI Merger is a corporation duly authorized, validly existing and in good standing under the laws of the State of Delaware. Each of GLI Holding, GLI Bus and GLI Merger has full power and lawful authority to carry on its business as presently conducted and to own and operate its assets, properties, and business. 5.2 Authorization. The execution, delivery and performance of this Agreement and the Merger Agreement by GLI Holing, GLI Bus and GLI Merger, as the case may be, and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action of GLI Holding, GLI Bus and GLI Merger, and this Agreement and the Merger Agreement constitutes a valid and binding obligation upon GLI Holding, GLI Bus and GLI Merger enforceable in accordance with their respective terms. 5.3 No Litigation. As of the date hereof, there is (a) no suit, action, or claim, (b) no investigation or inquiry by any administrative agency or governmental body, and (c) no legal, administrative, or arbitration proceeding pending or, to the knowledge of GLI Holding, threatened against GLI Holding, GLI Bus or GLI Merger or any of their respective properties, assets, or business, in each case which seeks to terminate, modify, or affect this Agreement or the consummation of the transactions contemplated herein or therein. 34 36 5.4 No Breach. GLI Holding's, GLI Bus' and GLI Merger's signing, delivery, and execution of this Agreement, the Merger Agreement and the consummation of the transactions contemplated hereby and thereby will not (a) result in the breach of any of the terms or conditions of, or constitute a default under, the charter documents or the Bylaws of GLI Holding, GLI Bus of GLI Merger, or any material indenture or mortgage, to which GLI Holding, GLI Bus and GLI Merger is a party or any material contract, commitment, pledge, note, lease, license or other instrument or obligation to which GLI Holding, GLI Bus or GLI Merger now is a party or by which GLI Holding, GLI Bus or GLI Merger or any of the properties or assets of GLI Holding, GLI Bus or GLI Merger may be bound or materially affected, or (b) violate any material law or any material regulation of any administrative agency or governmental body, or any order, writ, injunction, or decree of any court, administrative agency or governmental body which is expressly applicable to GLI Holding, GLI Bus or GLI Merger. 5.5 Labor Contract. GLI Holding acknowledges that Seller's labor contract with the Amalgamated Transit Union expired on October 31, 1986 (but has been extended subject to the right to terminate such contract on 72 hours prior written notice and further extended subject to ratification to March 19, 1987) and that Seller has made no representations or warranties and has given no opinion as to the effect of such expiration with respect thereto. 5.6 Investment Intent. GLI Bus is acquiring the shares of GLI Operating for investment only and with no present intention of distributing such shares. 5.7 No Broker. Neither BusLease, Inc., GLI Holding, GLI Bus nor GLI Merger has retained any broker or other intermediary to act on their behalf in connection with the transactions contemplated by this Agreement. 35 37 6. PRECLOSING EMPLOYEE MATTERS. 6.1 Employees. The Companies and GLI Operating presently have no employees and, except for employees hired by or with the consent of GLI Holding, the Companies and GLI Operating will not have any employees at Closing. 6.2 Employees and Benefits Generally. (a) Following the Closing, Seller shall retain the obligation to administer all pension benefits accrued through the Closing Date under The Greyhound Employees' Retirement Income Plan ("GRIP") for each employee who participates in GRIP. Each of GLI Holding and the Companies may establish its own benefit plans. (b) Following the Closing, Seller shall continue to administer all benefits accrued under the Greyhound Employees' Capital Accumulation Plan ("TRIM") for each employee who participates in TRIM. Each of GLI Holding and the Companies may establish its own employee capital accumulation plan. (c) On and after the Closing Date, employees of GLI Operating and the Companies, if any, shall cease to participate and accrue benefits in all Benefit Plans. Any benefit entitlement under the Benefit Plans for service prior to the Closing Date shall be provided by Seller pursuant to the terms of the Benefit Plans. 6.3 Transferee Liability. GLI Operating, the Companies, GLI Holding, GLI Bus and GLI Merger will have no transferee withdrawal liability with respect to any multiemployer plan as defined in Section 4001(a)(3) of ERISA and no transferee plan termination obligation under Title IV of ERISA as a result of the inclusion of GLI 36 38 Operating and the Companies in the consolidated group of which Seller is the common parent. In the event that any such transferee liability becomes payable by GLI Operating, the Companies, GLI Holding, GLI Bus and GLI Merger, such liability shall be indemnified by Seller. 7. PRECLOSING AND OTHER COVENANTS AND CONDITIONS. Except as contemplated and described in the schedules to this Agreement or in this Agreement or otherwise consented to in writing by GLI Holding or Seller, as appropriate, or as provided in this Agreement, from the date of this Agreement until the Closing, the parties agree that: 7.1 Business in Ordinary Course. Seller and GLI Operating shall operate the business of each of the Companies and GLI Operating in the ordinary course. 7.2 Change in Constituent Documents. No change will be made in the Articles of Incorporation or the Bylaws or other constituent documents of the Companies and GLI Operating. 7.3 Accounting Methods. Except as required by law, regulation, or generally accepted accounting principles, no significant change will be made in the accounting policies and practices followed by the Companies or GLI Operating or in the depreciation or amortization or property valuation policies, rates, or methods heretofore used or adopted. 7.4 Capital Changes. Neither Seller, GLI Operating nor the Companies shall issue or sell rights to subscribe to, or enter into any arrangement or contract with respect to, any shares of the Companies' or GLI Operating's capital stock or other equity securities, or make any other changes in the Companies' or GLI Operating's equity structure. 37 39 7.5 Contracts. No Contracts, agreements, or commitments shall be entered into by or on behalf of any of the Companies or GLI Operating except contracts, agreements, or commitments made by any of the Companies or GLI Operating or by Seller on behalf of any of the Companies or GLI Operating with unaffiliated third-parties in the ordinary course of business. 7.6 Consultation with GLI Holding. To the fullest extent practicable, Seller, GLI Operating, and the Companies will cause their senior executive officers to consult with and consider the views of GLI Holding prior to entering into, terminating, or substantially modifying any material commitments, pension plans or contracts (other than with respect to collective bargaining agreements) respecting any of the Companies' or GLI Operating's businesses or any of the Sale Assets. 7.7 Default. Seller, GLI Operating, and each of the Companies will use all reasonable effort so as not to default under or become in material breach of any term or provision of, or suffer or permit to exist any condition or event which, after notice or lapse of time or both, would constitute a breach of any material contract respecting any of the Companies' or GLI Operating's business. 7.8 Employees and Compensation. Except as consented to by GLI Holding, none of the Companies nor GLI Operating will hire any personnel for employment and none of the Companies nor GLI Operating will adopt any benefit Plans. 7.9 Preserve Business and Assets. GLI Operating and Seller will or will cause each of the Companies and GLI Operating to use reasonable efforts to preserve the Sale Assets and business of each of the respective Companies and GLI Operating, and to preserve the goodwill of agents, lessees, lenders, joint venturers, licensees, 38 40 and customers having business relations with each of the Companies and GLI Operating. 7.10 Insurance. The Companies, Seller, or GLI Operating will cause to be maintained in effect insurance consistent with industry practices with respect to the business of the Companies and GLI Operating and the Sale Assets and cause to be obtained renewals thereof or substitutions therefor for periods prior to Closing, and will not default with respect to any provision of, and will give all notices and present all claims under, all such insurance policies in due and timely fashion. GLI Holding shall obtain and maintain insurance with respect to the business of the Companies and GLI Operating and the Sale Assets after Closing consistent with sound business practices. 7.11 Government Reports. The Companies and GLI Operating duly and timely will file all reports required to be filed with governmental authorities and others and duly and timely will observe and conform to all laws, rules, regulations, ordinances, codes, orders, licenses, permits, approvals, and certifications relating to any of their properties or applicable to the business of the Companies and GLI Operating, the failure of which to so observe and conform to would in the aggregate materially and adversely affect the business of the Companies and GLI Operating taken as a whole. 7.12 Tax Returns. Each of the Companies and GLI Operating will duly and timely file all tax returns required to be filed by it or for which it may be held responsible and shall pay all taxes shown to be due and payable on such returns, provided that the Companies may contest in appropriate proceedings any tax, governmental charge, duty, or assessment; and each of the Companies, GLI Operating and Seller will withhold from each payment made to each of its employees, if any, the amount of all taxes (including, but not limited to, Federal income taxes and Federal Insurance 39 41 Contribution Act taxes and state and local income, wage, disability, unemployment, and similar taxes) required to be withheld therefrom and will pay the same, before becoming delinquent, to the proper tax receiving officers. 7.13 Access. The Companies, Seller, and GLI Operating will permit GLI Holding's representatives full access during normal business hours throughout the period prior to the Closing to all of the Companies', Seller's and GLI Operating's offices, records, and documents relating to the Sale Assets and the business of the Companies and GLI Operating; and the Companies, Seller, and GLI Operating promptly will furnish to GLI Holding copies of all documents and information concerning them as GLI Holding reasonably may request. 7.14 Consents. GLI Holding and Seller, acting together, will use their best efforts to obtain all consents, waivers, approvals, and agreements of other parties or governmental authorities which are necessary to the consummation of the transactions contemplated by this Agreement. 7.15 Releases. GLI Holding and Seller, acting together, will use their best efforts to obtain or make arrangements to obtain releases of comfort letters, letters of credit, guarantees, or similar facilities referred to in Section 11.2 hereof. 7.16 Update Schedules. Prior to Closing, Seller shall disclose to GLI Holding any information contained in Seller's representations and warranties or the Schedules (other than Schedule 4.5) which, because of an inadvertent omission or event occurring after the date hereof, is incomplete or is no longer correct in some material respect as of the time of delivery of such information. Except for purposes of Section 8.1, subsequent to the Closing the representations and warranties of Greyhound and Seller herein shall 40 42 be deemed modified by the information disclosed pursuant to this section. 7.17 Financing. Seller shall and shall cause GLI Operating and the Companies to cooperate with GLI Holding in effecting the funding of GLI Holding financing of this transaction, including without limitation approval and execution of such documents, at the Closing, as GLI Holding may reasonably request, but in no event shall Greyhound or Seller be required to incur any obligation with respect to such financing. GLI Holding shall obtain Financing for this transaction. 7.18 Exclusivity. GLI Holding shall have the exclusive right through the close of business on the date this Agreement terminates to consummate the transaction contemplated herein, and during such exclusive period, neither Greyhound, Seller, the Companies, GLI Operating, nor any of their authorized representatives will solicit, accept, or encourage any other offer to purchase any capital stock of GLI Operating or any Company, any of the Sale Assets, or all or any significant part of the business of the Companies or GLI Operating or any similar transaction, except for sales in the ordinary course of business, nor hold discussions or negotiations with, or provide any information to any other individual or corporation, partnership, or other entity concerning any such sales or transactions. 7.19 Acquisition of Buses. The Companies, in the aggregate, will have received during the period from January 1, 1986 to the Closing Date, 275 new TMC 1986 Model MCI 102A3 buses (all of which buses will have available to the Companies the full remaining warranties customarily provided by the bus manufacturer to purchasers of new buses), and will have received prior to the Closing Date from Seller all of the training buses owned by Seller, all historic buses, and 16 capital lease buses subleased or previously subleased 41 43 to Vermont Transit Co., Inc. all of which buses (except for the capital lease buses) will be owned by the Companies at Closing free and clear of any debt, liens, claims, encumbrances, or security interests, unless sold to and leased back from BusLease, Inc. or any of its subsidiaries. 7.20 Change of Name of Seller. Promptly after the Closing, Seller will change its name from Greyhound Lines, Inc. to "Transportation Leasing Co." or a similar name and will give all consents and take all other action, at the expense of GLI Holding, necessary to permit GLI Operating to change its name to "Greyhound Lines, Inc." and to qualify GLI Operating to do business under such name in the United States. From and after the Closing neither Seller nor Greyhound nor any of their affiliates will use in the United States the name "Greyhound Lines" or any deceptively similar name without the permission of GLI Holding, except as provided in the Operations Agreement. 7.21 GLI Holding Financial Information. As long as Greyhound holds more than 15% of the outstanding shares of GLI Holding Stock, the Junior Notes or the Preferred Stock, GLI Holding will send within 60 days after the end of each fiscal quarter consolidated financial information of GLI Holding relating to such fiscal quarter and will send within 90 days after the end of each fiscal year audited consolidated financial information of GLI Holding relating to such fiscal year. 8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF GLI HOLDING. Subject to waiver pursuant to Section 12.6 hereof, all obligations of GLI Holding, GLI Bus and GLI Merger under this Agreement and the Merger Agreement are subject to the fulfillment on the Closing Date of each of the following conditions: 42 44 8.1 Representations and Warranties. Each representation and warranty of Greyhound and Seller hereunder shall be true and accurate in all material respects on the Closing Date in the same manner as if it were made again at and as of the Closing Date. 8.2 Performance by Seller. Greyhound, Seller and GLI Operating shall have performed and complied in all material respects with each and every covenant, agreement, and condition required by this Agreement to be performed and complied with by it on or before the Closing Date. 8.3 Officer's Certificate. Seller shall have delivered to GLI Holding, GLI Bus, and GLI Merger a certificate of an executive officer of Greyhound and Seller, dated as of the Closing Date, certifying on behalf of Greyhound and Seller that the conditions set forth in Sections 8.1 and 8.2 hereof have been fulfilled. 8.4 Legal Opinion. Greyhound and Seller shall have delivered to GLI Holding, GLI Bus, and GLI Merger an opinion of L. G. Lemon, Vice President and General Counsel of Greyhound, dated as of the Closing Date, in form and substance reasonably satisfactory to GLI Holding's counsel, to the effect that: (a) The corporate existence and good standing in its jurisdiction of incorporation and the corporate power and authority of GLI Operating and each of the Companies is as represented and warranted in Section 4.4 hereof; (b) To such counsel's knowledge, GLI Operating and the Companies have complied with all material laws, rules, regulations, ordinances, codes, orders, licenses, and permits applicable to the operation of the business of GLI Operating and the Companies as represented and warranted in Section 4.14 hereof; and 43 45 (c) This Agreement, the Merger Agreement, and the transactions contemplated hereby and thereby have been duly and validly approved by Seller, Greyhound, and GLI Operating, as appropriate, and this Agreement has been executed, acknowledged and delivered by Seller, Greyhound, and GLI Operating; the Merger Agreement has been executed, acknowledged and delivered by GLI Operating; all legal and corporate proceedings necessary to be taken by Seller, Greyhound, and GLI Operating in connection with the approval of this Agreement and the Merger Agreement have been duly and validly taken, and this Agreement and the Merger Agreement are valid and binding upon Seller, Greyhound, and GLI Operating, as appropriate, and enforceable against Seller in accordance with their respective terms, except as the enforcement thereof may be modified or limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforceability of creditors' rights generally and except as to rules governing specific performance, injunctive relief and equitable remedies. (d) The execution and delivery and the performance on the date hereof (to the extent required by this Agreement) of this Agreement and all of the documents and instruments required hereby by Seller, Greyhound, and GLI Operating did not and will not conflict with or violate any judgment, order or decree binding upon Seller, Greyhound, GLI Operating or the Companies, the Certificate of Incorporation or By-laws of Seller, Greyhound, and GLI Operating or the Companies, or, to such counsel's knowledge, any contract or agreement to which Seller, Greyhound, GLI Operating, or the Companies are a party or by which they are bound, except as disclosed in Schedule 4.3. 44 46 (e) To such counsel's knowledge, GLI Operating is the owner of all the outstanding capital stock of each of the Companies free and clear of all mortgages, liens, encumbrances, charges, claims, restrictions, pledges, security interests, or impositions attributable to Seller, Greyhound, or GLI Operating. 8.6 Satisfaction of Legal Requirements. All statutory and other legal requirements for the valid consummation of the transactions contemplated by this Agreement shall have been fulfilled, including compliance with Hart-Scott-Rodino Antitrust Improvement Act of 1976 (the "HSR Act"), but excluding the granting of authority or temporary authority by any state regulatory agency having jurisdiction over intrastate fares, routes, service or operations or the Interstate Commerce Commission, which the parties hereto acknowledge is not legally required to consummate such transactions. 8.7 Approvals; Consents. All material consents, waivers, approvals, and agreements of and notices to other parties (other than with respect to leasehold consents, and any financing to be obtained by GLI Holding) or governmental authorities which are necessary to the effective consummation of the transactions contemplated by this Agreement and the Merger Agreement shall have been obtained or given. 8.8 No Restraint; No Litigation. Neither Greyhound, GLI Operating nor Seller shall be restrained or prohibited by any law, rule or regulation or order from consummating the transactions contemplated by this Agreement or the Merger Agreement, and no material suit, action or other proceeding shall be threatened by or pending before, any governmental agency that seeks restraint, prohibition, material damages, or other material relief in connection with this Agreement or the Merger Agreement or the consummation of the transactions contemplated hereby and thereby. 45 47 8.9 Deliveries. Seller shall have executed and delivered to GLI Holding those documents required by Section 3.2(a) hereof. 9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER. Subject to waiver pursuant to Section 13.6 hereof, all obligations of Seller, Greyhound and GLI Operating under this Agreement and the Merger Agreement are subject to the fulfillment on the Closing Date of each of the following conditions: 9.1 Representations and Warranties. Each representation and warranty of GLI Holding hereunder shall be true and accurate in all material respects on the Closing Date in the same manner as if it were made again at and as of the Closing Date. 9.2 Performance by GLI Holding, GLI Bus, and GLI Merger. GLI Holding, GLI Bus, and GLI Merger shall have performed and complied in all material respects with each and every covenant, agreement, and condition required by this Agreement to be performed and complied with by it on or before the Closing Date. 9.3 Officer's Certificate. GLI Holding shall have delivered to Seller a certificate of an executive officer of GLI Holding, GLI Bus, and GLI Merger, dated as of the Closing Date, certifying on behalf of GLI Holding, GLI Bus, and GLI Merger that the conditions set forth in Sections 9.1 and 9.2 hereof have been fulfilled. 9.4 Legal Opinion. GLI Holding shall have delivered to Seller the opinion of Johnson & Swanson, counsel to GLI Holding, dated as of the Closing Date, in form and substance reasonably satisfactory to Seller's counsel, to the effect that: (a) The corporate existence, good standing, power and authority of GLI Holding, GLI Merger and GLI Bus are as represented and warranted in Section 5.1 hereof. 46 48 (b) This Agreement, the Merger Agreement and the transactions contemplated hereby and thereby have been duly and validly approved by the Boards of Directors of GLI Holding, GLI Bus and GLI Merger and this Agreement and the Merger Agreement have been executed, acknowledged, and delivered by GLI Holding, GLI Bus and GLI Merger, as the case may be; all legal and corporate proceedings necessary to be taken by GLI Holding, GLI Bus and GLI Merger in connection with the approval of this Agreement and the Merger Agreement have been duly and validly taken, and this Agreement and the Merger Agreement each is valid and binding upon GLI Holding, GLI Bus and GLI Merger, as appropriate, and enforceable in accordance with their respective terms, except as the enforcement thereof may be modified or limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforceability of creditors' rights generally and except as to rules governing specific performance, injunctive relief and other equitable remedies. (c) The execution and delivery and the performance on the date hereof (to the extent required by this Agreement) of this Agreement and all of the documents and instruments required hereby by GLI Holding, GLI Bus or GLI Merger, did not and will not conflict with or violate any judgment, order or decree binding upon GLI Holding, GLI Bus or GLI Merger, the Certificate of Incorporation or Bylaws of GLI Holding, GLI Bus or GLI Merger, or to such counsel's knowledge, any contract or agreement to which GLI Holding, GLI Bus or GLI Merger are a party or by which they are bound. 9.5 Satisfaction of Legal Requirements. All statutory and other legal requirements for the valid consummation of the transactions contemplated by this Agreement shall have been fulfilled, including compliance with Hart-Scott-Rodino Antitrust Improvement 47 49 Act of 1976 (the "HSR Act"), but excluding the granting of authority or temporary authority by any state regulatory agency having jurisdiction over intrastate fares, routes, service or operations or the Interstate Commerce Commission, which the parties hereto acknowledge is not legally required to consummate such transactions. 9.6 Approvals; Consents. All material consents, waivers, approvals, and agreements of and notices to the other parties or governmental authorities which are necessary to the effective consummation of the transactions contemplated by this Agreement and the Merger Agreement shall have been obtained or given, including approval of this Agreement by the Board of Directors of GLI Holding, GLI Bus and GLI Merger. 9.7 No Restraint; No Litigation. Neither GLI Holding, GLI Bus nor GLI Merger shall be restrained or prohibited by any law, rule or regulation or order from consummating the transactions contemplated by this Agreement or the Merger Agreement, and no material suit, action or other proceeding shall be threatened by or pending before, any governmental agency that seeks restraint, prohibition, material damages, or other material relief in connection with this Agreement or the Merger Agreement or the consummation of the transactions contemplated hereby and thereby. 9.8 Deliveries. GLI Holding shall have executed and delivered to Seller those documents and caused the delivery of the Consideration required by Section 3.2(b) hereof. 10. SURVIVAL; INDEMNIFICATION. 10.1 Survival of Representations and Warranties. All representations and warranties of GLI Holding or Seller under this Agreement shall survive the Closing and shall remain effective for 48 50 a period of two years after the Closing (except for representations and warranties with respect to the capitalization of GLI Operating and the Companies, which shall survive the Closing and remain effective indefinitely) regardless of any investigation or inquiry by any party hereto at any time. 10.2 Indemnity. Subject to the limitations contained in Section 10.1 hereof and to the limitations set forth below, Greyhound and Seller hereby indemnify and agree to save GLI Holding, GLI Bus, GLI Operating and the Companies (each an "Indemnitee") harmless against and from any claim, action, proceeding, damage, liability, loss, cost, expenses, judgment, fine, penalty or deficiency, including without limitation reasonable attorneys' fees and other costs and expenses incident to proceedings or investigations or defenses of any claim, in each case calculated on an after-tax basis ("Damages"), arising out of, resulting from or related to, and to pay each Indemnitee on demand the full amount of any Damages which such Indemnitee suffers or incurs as a result of: (a) any breach of any representation or warranty or failure to perform any obligation of Greyhound or Seller under this Agreement or any certificate or agreement executed and delivered pursuant to this Agreement. Greyhound's or Seller's obligation to indemnify the Indemnitees under this subsection 10.2(a) with respect to the breach of representations or warranties shall not extend to a claim for Damages until the aggregate amount of Damages exceeds $9,500,000; and thereafter Greyhound and Seller shall each be liable in full for Damages, but only to the extent the aggregate of all Damages exceeds $9,500,000; provided, however, that for purposes of this Section 10.2(a), any use of the word "material" (or any variation thereof) in Seller's representations and warranties shall be disregarded. 49 51 (b) Any liability or obligation of the Seller, GLI Operating or the Companies, except for Continuing Liabilities fully accrued in the Closing Statement or set forth on Schedule 1.5. (c) Any third party claim, action or proceeding arising out of any product sold, manufactured, rebuilt, repaired or remanufactured prior to Closing (except to the extent such claim, action or proceeding arises out of any action with respect to the installation, maintenance or storage taken by GLI Operating or the Companies after the Closing). (d) Any third party claim, action or proceeding for property damage or personal injury arising out of any event that occurred prior to the Closing. (e) Any third party claim, action or proceeding arising out of any employee collective bargaining agreement of Greyhound, the Seller, GLI Operating or the Companies, any unfair labor practice of Greyhound, Seller or the companies, or any obligation of any character to employees or for employee compensation relating to employees of Greyhound, Seller, GLI Operating or employees of the Companies prior to the Closing, except to the extent that any of the foregoing arises out of any action or omission of GLI Holding, GLI Bus or GLI Merger. (f) Any federal, state or local income tax arising out of transactions prior to Closing or the consummation of the transactions contemplated by this Agreement (including any tax resulting from the Section 338 Election referred to in Section 11.3 hereof). 50 52 (g) Any liability or obligation of the Companies or GLI Operating to the Seller or any affiliate of the Seller arising prior to the Closing, except for Continuing Liabilities fully accrued in the Closing Statement or set forth on Schedule 1.5. (h) Any loss, claim, liability or obligation resulting from any tax indemnities, rental adjustments or similar tax benefit reimbursement or yield preservation provisions in any lease, sublease or related contract to which Seller, GLI Operating or the Companies is a party, except to the extent arising as a result of acts or omissions of GLI Operating or the Companies occurring subsequent to the Closing. (i) Any loss, claim, liability or obligation resulting from the failure of Greyhound or Seller to obtain any consent, waiver, approval or agreement of any lessor regarding any of the transactions contemplated by this Agreement or the Merger Agreement. 10.3 Notice. GLI Holding agrees to give Seller prompt and specific notice of the facts and basis of any claim for Damages for which any Indemnitee seeks indemnification under Section 10.2, unless the failure to provide prompt and specific notice is not prejudicial to Seller. If any amount in respect of a claim for Damages pursuant to Section 10.2(a) hereof has not been determined as of the expiration of the period, if any, set forth in Section 10.1 hereof, each Indemnitee's right to claim such amount shall continue after such period until such amount has been determined. 10.4 Legal Counsel. In any litigation, administrative proceeding, negotiation or arbitration pertaining to any claim made by a third party for which an Indemnitee seeks indemnification under Section 10.2, Seller shall have the right to select legal counsel to represent the Indemnitee and to otherwise control such litiga- 51 53 tion, proceeding, negotiation or arbitration. If Seller elects to control such litigation, proceeding, negotiation or arbitration, the Indemnitee at all times shall have the right to participate fully in the defense at its own expense. If Seller, within a reasonable time after notice, shall fail to defend, each Indemnitee shall have the right, but not the obligation, to undertake the defense of and to compromise or settle (exercising reasonable business judgment) the claim or other matter on behalf, for the account and at the risk of Seller. 11. TRANSACTIONS FOLLOWING CLOSING. 11.1. Assignment Rights. Should Seller be required to pay any amount as Damages under the indemnity in Section 10 hereof, the Indemnitee shall assign to Seller, as directed by Seller, any rights of such Indemnitee under contracts or accounts or otherwise in any matter in respect of which Damages were paid. 11.2. Guarantees of Obligations. GLI Holding shall indemnify Seller and Greyhound in respect of any claims arising from Continuing Liabilities that have been supported or guaranteed by Seller or Greyhound under comfort letters, letters of credit, guarantees or other facilities furnished by Seller or Greyhound and disclosed on Schedule 11.2 hereto. GLI Holding shall cooperate with Seller and Greyhound in obtaining releases of Seller and Greyhound from such comfort letters, letters of credit, guarantees or other facilities to the extent they have not been obtained pursuant to Section 7.15. 11.3. Taxes (a) Mutual Assistance. The parties hereto will provide each other such records and assistance as may reasonably be requested by any of them in connection with the preparation of 52 54 any return for taxes, any audit or other examination by any taxing authority, and any judicial or administrative proceedings relating to liability for taxes (including refunds) and will each provide each other with any records or information relevant to such return, audit or examination, proceedings or determination as are in its possession or subject to its control. Such assistance shall include making employees available on a mutually convenient basis to provide additional information and explanation of any material provided pursuant hereto and shall include providing copies of any relevant tax returns. All information provided pursuant to this Section 11.3(a) shall be held in confidence, and not be disclosed to others for any reason whatsoever, except to the extent that such disclosure is required in order to effect the intent of this Section 11.3(a) or such disclosure is required by law. (b) Income Taxes. GLI Operating and the Companies and their subsidiaries are included in Greyhound's consolidated federal and certain consolidated or combined state tax returns filed by Greyhound, Seller or their subsidiaries and will be so included for 1986 and 1987 up to the Closing Date. GLI Holding agrees that it will cause GLI Operating and the Companies and their subsidiaries to prepare and submit to Seller appropriate tax return information consistent with prior years for 1986 and the period from January 1, 1987 to Closing Date, including all necessary supporting data and work papers reasonably requested by Seller. (c) Carrybacks. Seller intends that benefits of tax losses and credits of GLI Operating and the Companies and their subsidiaries generated in taxable periods subsequent to the Closing Date will be utilized in GLI Holding's and GLI Operating's combined or consolidated income tax returns. GLI Holding, GLI Operating and the Companies and their subsid- 53 55 iaries will elect, where permitted, to carry forward, rather than carry back any such unutilized losses or credit. If GLI Operating or the Companies and their subsidiaries incur any such unutilized losses or credits which must be carried back to combined or consolidated tax return periods of Greyhound, including Seller or its subsidiaries, or if such losses or credits are otherwise carried back with Seller's consent, Seller at the request of GLI Holding and at GLI Holding's expense, shall file an appropriate carryback (including any tentative carryback adjustment) claim for refund of any taxes recoverable and shall promptly pay, upon receipt by Seller, to GLI Holding or GLI Operating or the Companies the amount of such refund (including interest) less any tax detriment (including interest) to Greyhound or its subsidiaries resulting from such carryback claim, including in all cases the carryback or carryover effects on tax year(s) other than those to which directly carried back due to rearrangement of carrybacks or carryovers caused by applicable tax rules governing the ordering of tax items. (d) Tax Audit Adjustments. With respect to the tax years of GLI Operating and the Companies and their subsidiaries not yet audited by or under protest or appeal with, the Internal Revenue Service or the years involved in the current Internal Revenue Service examination, or with respect to any open tax year under protest or appeal or not yet audited or under current examination by any other taxing authority: (i) Seller will be responsible for the representation of GLI Operating and the Companies and their subsidiaries in regard to all federal, state and local tax audits for all years open for the assessment of deficiencies through and including the filing of final 1986 or 1987 returns for any period up to and including the 54 56 Closing Date. Seller shall inform GLI Holding of (a) the commencement of any audit or examination, (b) proposals of deficiencies or refunds, and (c) the assessment of deficiencies or the agreement to refund an overpayment of taxes, with respect to GLI Operating and the Companies and their subsidiaries. (ii) Subject to the provisions of this subsection, the parties hereto acknowledge that any tax liability of any of GLI Operating, the Companies, and subsidiaries, including any interest, penalties and additions to tax for any period prior to the Closing Date resulting from a Final Determination (as herein defined) is the liability of Seller. With respect to any deductions allowable in future years as a result of timing differences arising in connection with a Final Determination, GLI Holding shall promptly pay Seller for the benefit of such deductions as actually realized by GLI Holding, GLI Operating, or the Companies and their subsidiaries after Closing. As used herein, "Final Determination" shall mean a final determination of tax, interest and penalties by the Internal Revenue Service or any state or local taxing authority or a court of competent jurisdiction after timely appeals thereof, if any. (iii) If an assessment is proposed and sustained with respect to GLI Operating, the Companies and their subsidiaries by any taxing authority and results in tax benefits realized by GLI Operating, the Companies and their subsidiaries for a period prior to the Closing Date and such benefits will not otherwise be allowable to GLI Operating, the Companies, and their subsidiaries for any period after Closing, Seller shall promptly pay such benefits (including interest) to GLI Operating, the 55 57 Companies and their subsidiaries. (e) Section 338 Election. (i) GLI Holding or GLI Operating shall have the right to make an election under section 338(g) of the Internal Revenue Code of 1986, as amended (the "Code"), and under any relevant state or local income, excise, or franchise tax law (a "Section 338 Election"), with respect to the purchase by GLI Bus of the outstanding common stock of GLI Operating pursuant to the Merger Agreement. Neither Seller nor Greyhound will cause GLI Operating or any of the Companies to elect out of the Greyhound consolidated federal income tax return filed for the taxable year in which the Closing occurs. Promptly after the Closing, Greyhound shall, at GLI Holding's request, join in making an election under section 338(h)(10) of the Code and under all such other laws where a similar election is permissible (an "(h)(10) Election") with respect to the sale of the GLI Operating common stock to GLI Bus pursuant to the Merger Agreement. (ii) Greyhound and GLI Holding each covenant that the purchase and sale of the GLI Operating common stock to GLI Bus pursuant to the Merger Agreement hereunder will be treated by each of them for federal, state and local income, excise, and franchise tax purposes in each jurisdiction in which an (h)(10) Election has been made as a sale by GLI Operating and the Companies of all of their assets in a single transaction in which gain or loss is recognized to the same extent as would have been recognized from an actual sale of such assets in exchange 56 58 for cash equal to the fair market value thereof, and that GLI Operating and the Companies will be members, for federal income tax purposes, of the consolidated return group of Greyhound and will file with Greyhound a consolidated federal income tax return and a combined consolidated income, excise or franchise tax return for the taxable year in which the Closing occurs in each jurisdiction where such filing is required. (f) Purchase Price; Allocation. Greyhound and GLI Holding shall agree prior to the due date for the Section 338 Election on an allocation of the Consideration among the assets of GLI Holding using the method prescribed by Temporary Treasury Regulation Section 1.338(b)-2T, and all tax returns and reports filed by Greyhound and GLI Holding with respect to the transactions contemplated by this Agreement shall be consistent with that allocation. Greyhound and GLI Holding shall jointly select an independent appraisal firm to determine the allocation of Consideration among the assets of GLI Holding. If Greyhound and GLI Holding are unable to agree on the selection of such appraisal firm, an appraiser shall be jointly selected by the independent public accountants of Greyhound and of GLI Holding. The determination of such independent appraisal firm shall be binding on the parties hereto. The fees and disbursements of such independent appraisal firm shall be shared equally by GLI Operating and Greyhound. (g) Cooperation and Access to Information. GLI Holding shall not destroy any records of GLI Operating and the Companies and their subsidiaries necessary for tax return preparation or support in audits or other tax proceedings without the prior written consent of Seller. 57 59 11.4 Operation of Businesses. Greyhound and Seller presently intend to continue to operate any assets or business of Seller not sold hereunder, and have no present plans to liquidate or terminate such business. 11.5 GLI Holding Indemnification. Subject to the provisions of Section 10, from and after the Closing Date, GLI Bus, GLI Holding, GLI Operating and the Companies will defend, hold harmless and indemnify Seller and its subsidiaries from and against any and all Continuing Liabilities and any and all loss, cost or expense resulting from any claim, contract or obligation arising from the business or activities of GLI Holding, GLI Operating or the Companies or in connection with the other Sale Assets after the Closing, (a) except as the result of any breach of this Agreement by Seller, (b) except for claims, contracts, liabilities, or obligations against which the Seller has agreed to indemnify the Companies or GLI Holding pursuant to the terms of this Agreement, and (c) except for any claim asserted against Greyhound or its affiliates as a result of confusion of the identities of the parties due to similarity of corporate names or otherwise. In the event any person is entitled to indemnification hereunder based upon a claim asserted by a third party, the indemnitor shall have the right to select counsel subject to the reasonable approval of the indemnitee, to control and to approve any settlement thereof. The indemnitee shall cooperate in furnishing evidence and testimony and in any other manner which the indemnitor may reasonably request and shall have the right, if it so elects, to retain counsel at its own expense to participate in the defense of any claim. 12. TERMINATION. 12.1 Termination. This Agreement may be terminated and the transaction contemplated hereby may be abandoned as follows: (a) at any time prior to the Closing by mutual written agreement of the 58 60 parties hereto; (b) by GLI Holding on the Closing Date if any of the conditions set forth in Article 8 of this Agreement shall not have been fulfilled by the Closing Date; (c) by Seller on the Closing date if any of the conditions set forth in Article 9 of this Agreement shall not have been fulfilled by the Closing Date; or (d) by GLI Holding or Seller after the Termination Date if the Closing shall not have occurred. The "Termination Date" shall be March 18, 1987; provided such date shall be extended by the number of days (whether before or after March 18, 1987) during which GLI Holding is enjoined or restrained from hiring and training temporary bus drivers, but in no event shall the Termination Date by later than December 31, 1987. 12.2 Rights on Termination; Waiver. If this Agreement is terminated pursuant to Section 12.1, all further obligations of the parties under or pursuant to this Agreement (other than those for any breach which occurs prior to such termination) shall terminate without further liability of either party to the other, except as provided in Section 12.3. 12.3 Termination Payment. If this Agreement is terminated as a result of the breach of this Agreement by GLI Holding, GLI Bus or GLI Merger, then Seller and Greyhound shall have the rights set forth in the Pledge Agreement referred to in Section 13.15 of this Agreement. From time to time after the termination of this Agreement for any reason (other than the breach of this Agreement by GLI Holding, GLI Bus or GLI Merger), the Seller and Greyhound will reimburse to GLI Holding all documented out-of-pocket costs and expenses incurred by GLI Holding, GLI Bus and GLI Merger in connection with this Agreement and the transactions contemplated by this Agreement or the efforts to obtain financing therefor (other than expenses incurred in connection with negotiation of a contract with the Amalgamated Transit Union or the hiring and training of temporary drivers), including without limitation, the fees and expenses of its agents, representatives, consultants, legal coun- 59 61 sel, accountants, and investment bankers, and financing commitment fees; provided, however, that the aggregate amount of such reimbursement shall be limited to $3,500,000 if neither Greyhound nor Seller has breached this Agreement. 13. MISCELLANEOUS. 13.1 Remedies Cumulative. Except as herein expressly provided, the remedies provided herein shall be cumulative and shall not preclude the assertion by any party of any other rights or the seeking of any other remedies against any other party, as the case may be. 13.2 Commissions. Each of the parties hereto will indemnify and hold harmless the other party hereto from and against any and all claims or liabilities for brokerage commissions, finder's fees or other similar compensation incurred by reason of any action taken by the indemnifying party. 13.3 Notices. All notices, requests, demands, and other communications required or permitted to be given hereunder shall be deemed to have been duly given when received and shall be addressed as follows: If to Greyhound, c/o The Greyhound Corporation Seller or GLI Greyhound Tower Operating: Phoenix, Arizona 85077 Attn: Chairman and Chief Executive Officer with a copy to: The Greyhound Corporation 1742 Greyhound Tower Phoenix, Arizona 85077 Attn: General Counsel If to GLI Holding, c/o BusLease, Inc. GLI Bus or GLI Merger: 2400 InterFirst Plaza 901 Main Street Dallas, Texas 75202 Attn: President
60 62 with a copy to: Johnson & Swanson Founders Square 900 Jackson Street Dallas, Texas 75202-4499 Attn: Lawrence D. Stuart, Jr. Phillip J. Kushner
Each party may change the address to which such communications are to be directed to it by giving written notice to the other party in the manner provided in this Section 13.3 hereof. 13.4 Access to Information and Record Retention. In addition to Seller's rights under Section 11.3 of this Agreement, GLI Operating shall permit Seller and its representatives access at all reasonable times after Closing to the offices, documents, books, records, and accounts of GLI Operating and the Companies or related to the Sale Assets for review and copying any of them which relate to the business of Seller or GLI Operating or the Companies prior to Closing. Subject to Section 11.3(f) of this Agreement, for a period ending five years after the Closing Date, neither GLI Operating nor the Companies may destroy any documents, books, records, or account which related to the business of Seller or the Companies prior to Closing without first receiving Seller's written approval. 13.5 Expenses. Subject to Section 12.3, each party shall pay and discharge all liabilities and expenses that it incurred or that were incurred on its behalf in connection with Agreement and all related documents, including, but not limited to, all fees and expenses of agents, representatives, counsel, accountants, consultants and investment bankers, and all amounts payable with respect to any claim for brokerage or finder's fees (if any) or any other commissions with respect to the transactions contemplated by this Agreement. 61 63 13.6 Modifications. The parties hereto by mutual consent may amend, modify, supplement and waive any right under this Agreement in any manner agreed to by them in writing at any time. 13.7 Entire Agreement. This Agreement and the schedules and exhibits referred to herein and all certificates and other instruments executed and delivered pursuant hereto set forth the entire and the only agreement and understandings of the parties with respect to the transactions contemplated hereby and supersede all prior agreements, representations, arrangements and understandings relating to the subject matter hereof which may have been imparted to GLI Holding or its representatives prior to negotiations, in negotiations or as a result of GLI Holding's investigation of Seller, GLI Operating or the Companies prior to the signing hereof. reference to "Agreement" herein includes all schedules and exhibits hereto and all certificates and other instruments executed and delivered pursuant hereto. 13.8 Headings. The article and section headings contained in this Agreement are for convenient reference only, and shall not in any way affect the meaning or interpretation hereof. 13.9 Public Announcement. Prior to the Closing, no public announcement or press releases concerning the transactions contemplated hereby shall be made or released unless mutually consented to by each party hereto or as may be required by law or a court of competent jurisdiction, in which case the parties agree to consult with each other as to the content of such disclosure. 13.10 Attorney's Fees. The prevailing party in any litigation hereunder shall be entitled to the recovery of its attorney's fees and court costs from the other party, as such amounts are fixed by the court. 62 64 13.11 Binding Effect. This Agreement shall bind and inure to the benefit of the parties and their respective successors and assigns. 13.12 Applicable Law. Interpretation and enforcement of this Agreement shall be in accordance with the law of and in the courts of Arizona. 13.13 No Reliance. No third party (other than, after the Closing Date, the Companies) is entitled to rely on any of the representations, warranties, and agreements contained in this Agreement. No party hereto shall assume any liability to any third party (other than, after the Closing Date, the Companies) because of any reliance on the representations, warranties, and agreements of any party contained in this Agreement. 13.14 Subsequent Changes. Various assets, rights and obligations associated with the Sale Assets and the business related thereto have not been transferred to GLI Holding or the Companies or out of Seller as of the date hereof. Such transfers will be completed in all material respects prior to Closing and will not have any adverse impact on the transactions contemplated by this Agreement. 13.15 Pledge Agreement. Concurrently with the execution of this Agreement, Greyhound and the individuals named therein shall execute that certain Pledge Agreement relating to the pledge to Greyhound of shares of common stock of BusLease, Inc. and options related to such common stock owned by such individuals. 63 65 IN WITNESS WHEREOF, the parties have executed this instrument on the date first above written. THE GREYHOUND CORPORATION By: /s/ JOHN W. TEETS John W. Teets, Chairman of the Board and Chief Executive Officer GREYHOUND LINES, INC. By: /s/ FRANK L. NAGEOTTE Frank L. Nageotte, Chairman of the Board GLI OPERATING COMPANY By: /s/ JOHN W. TEETS John W. Teets, Chairman of the Board and Chief Executive Officer GLI HOLDING COMPANY By: /s/ FRED G. CURREY Fred G. Currey, Chairman of the Board and Chief Executive Officer GLI BUS OPERATIONS HOLDING COMPANY By: /s/ FRED G. CURREY Fred G. Currey, Chairman of the Board and Chief Executive Officer GLI MERGER COMPANY By: /s/ FRED G. CURREY Fred G. Currey, Chairman of the Board and Chief Executive Officer 64 EX-10.2 3 FIRST AMENDMENT TO ACQUISITION AGREEMENT 1 EXHIBIT 10.2 FIRST AMENDMENT TO ACQUISITION AGREEMENT This First Amendment to the "Acquisition Agreement" (hereinafter defined) is made and entered into, subject to the provisions of Section 6 hereof, effective as of January 31, 1987, between The Greyhound Corporation, an Arizona corporation, Greyhound lines, Inc., a California corporation (hereinafter collectively referred to as "Seller"), and GLI Holding Company, a Delaware corporation (hereinafter referred to as "GLI Holding"). W I T N E S S E T H: WHEREAS, Seller and GLI Holding entered into an agreement dated December 22, 1986 (hereinafter referred to as the "Acquisition Agreement") under which GLI Holding shall acquire certain assets of Seller as of a date determined under Section 3.1 of the Acquisition Agreement (hereinafter referred to as "Closing"); WHEREAS, Seller and GLI Holding have agreed, subject to the terms and conditions hereof, that Seller shall cause its trustees of the Greyhound Retirement and Disability Fund and the Western Greyhound Pension Trust (hereinafter collectively referred to as the "Trusts") to authorize the transfer of all of the assets and liabilities of the Trusts and the Greyhound Retirement and Disability Plan and the Western Greyhound Retirement Plan (hereinafter collectively referred to as the "Plans") to a new retirement plan and trust (hereinafter referred to as the "New Plan" and "New Trust," respectively) to be established pursuant to a collective bargaining agreement (hereinafter referred to as the "Collective Bargaining Agreement") between GLI Merger Company, a Delaware corporation (hereinafter referred to as "GLI Merger") or its parent and the Amalgamated Council of Greyhound Local Unions (hereinafter referred to as "Amalgamated Council"); and WHEREAS, Seller and GLI Holding have agreed that, subject to the terms and conditions hereof, Seller shall cause its trustees of the Greyhound Lines Career Average Pension Trust (hereinafter referred to as the "Career Trust") to authorize the transfer of all the assets and liabilities of the Career Trust and the Greyhound Lines Career Average Pension Plan (hereinafter referred to as the "Career Plan") to a new career average retirement plan and trust (hereinafter referred to as the "New Career Plan" and "New Career Trust," respectively) to be established pursuant to the Collective Bargaining Agreement; 2 NOW, THEREFORE, the parties agree as follows: 1. Establishment of the New Plans and Trusts. As soon as practicable following the execution and ratification of the Collective Bargaining Agreement, GLI Merger agrees that it or its parent will establish in conjunction with the Amalgamated Council the New Plan, the New Trust, the New Career Plan and the New Career Trust. GLI Merger agrees that said plans and trusts will be intended to constitute qualified plans and trusts under the Internal Revenue Code of 1986, as amended (the "Code"), and that such trusts will be intended to constitute tax-exempt trusts under the Code. In addition, GLI Merger agrees, in conjunction with the Amalgamated Council to seek favorable determinations from the Internal Revenue Service with regard to the qualified status of such plans and trusts and the tax-exempt status of such trusts under the Code. 2. Transfer of Assets and Liabilities. As soon as is practicable after the later of Closing or the establishment of the New Plan and the New Trust, Seller agrees to cause its trustees of the Trusts to take any and all action necessary to transfer all of the assets and liabilities thereof to the New Trust. Likewise, as soon as practicable after the later of Closing or the establishment of the New Career Plan and the New Career Trust, Seller agrees to cause its trustees of the Career Trust to take any and all action necessary to transfer all of the assets and liabilities thereof to the New Career Trust. Seller and GLI Merger agree that it shall not be necessary for the Internal Revenue Service to have issued favorable determination letters with respect to the qualified status of the new plans and trusts and the exempt status of the new trusts prior to implementing the transfers of assets and liabilities contemplated hereunder; provided, however, that Johnson & Swanson shall have furnished Seller an opinion that the New Plan, New Trust, New Career Plan and New Career Trust satisfy the requirements applicable to qualified plans and trusts under the Code. 3. Investment of Trust Assets. As soon as practicable following the execution and ratification of the Collective Bargaining Agreement, Seller agrees to cause its trustees of the Trusts and the Career Trust to authorize actions to liquidate in an orderly and reasonable manner all of the equity investments held in such Trusts and to reinvest the proceeds therefrom in cash 2 3 equivalents pending the transfer of assets and liabilities contemplated hereunder. Seller and GLI Merger agree that said liquidation and reinvestment shall be undertaken in a manner that complies with the applicable requirements of Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). 4. Cooperation of Actuarial Consultant Firms. Seller and GLI Merger agree that their respective actuarial consultant firms assisting in the implementation of the actions contemplated by this agreement will be available for consulting with each other and will assist each other in accomplishing the transfers of assets and liabilities contemplated herein. 5. Representations and Warranties of Seller Concerning Plans. With respect to the Plans and the Career Plan, the Seller hereby represents and warrants the following: a. Determination letters have been received to the effect that the Plans and the Career Plan are qualified under section 401 of the Code and the trusts maintained pursuant thereto are exempt from federal income taxation under section 501 of the Code, and nothing has occurred to cause the loss of such qualification or exemption. b. No prohibited transactions (as defined in section 406 of ERISA or in section 4975 of the Code) with respect to the Plans or the Career Plan has occurred or will have occurred prior to Closing. c. The aggregate value, as of the Closing Date, of the assets of the Plans and the Career Plan, including any contributions receivable but net of any current payables or accrued expenses (Net Assets Available for Plan Benefits) shall not be less than the total of the actuarial present value of accumulated plan benefits of the Plans and the Career Plan. For purposes hereof, the determination of such actuarial present value of accumulated plan benefits shall (i) be made as of the Closing Date; (ii) be calculated by the actuarial firm of Tower, Perrin, Forster & Crosby (TPF&C) in the same manner as reflected in the 1985 Actuarial Report prepared as of January 1, 1985; (iii) include both vested and non-vested benefits; and (iv) be subject to verification by GLI Merger's actuaries. In no event shall 3 4 the assets in the dedicated bond portfolios of the Plans be valued in this determination at an amount greater than the actuarial present value of the liabilities of the related covered retiree benefits (which are calculated using an investment return assumption equal to the effective yield on the respective dedicated bond portfolios at the date dedicated). Assets of the Plans and the Career Plan other than the dedicated bond portfolios shall be valued at fair market value as of closing for purposes of this determination. Indemnification under Section 10.2 of the Acquisition Agreement for breach of this Section 5c shall not be subject to the limitation that $9,500,000 of Damages have been incurred, and any indemnification payments as a result of breach of the representation in this Section 5c shall not be included in determining whether the $9,500,000 has been reached under Section 10.2(a) of the Acquisition Agreement. 6. Condition Precedent to this First Amendment to the Acquisition Agreement Becoming Effective. This First Amendment to the Acquisition Agreement shall not become effective unless on or prior to Closing, both (i) GLI Holding, or a subsidiary thereof, executes the Collective Bargaining Agreement effective at Closing, and (ii) GLI Holding represents that the Amalgamated Council has agreed to cause the transfers of all assets and liabilities of the Trusts and Career Trust to the New Trust and the New Career Trust, respectively, and to take the other actions envisioned for the Plans and the Trusts by the First Amendment. 7. Effect on Agreement. Except as expressly provided herein, no provision of the Acquisition Agreement is affected by this First Amendment. 4 5 IN WITNESS WHEREOF, this first amendment has been executed by the parties on this 31st day of January, 1987. THE GREYHOUND CORPORATION GLI HOLDING COMPANY By: /s/ RICHARD C. STEPHAN By: /s/ FRED G. CURRY Title: Vice President Title: President & Chairman GREYHOUND LINES INC. By: /s/ RICHARD C. STEPHAN Title: Vice President
5 EX-10.3 4 SECOND AMENDMENT TO ACQUISITION AGREEMENT 1 EXHIBIT 10.3 SECOND AMENDMENT TO ACQUISITION AGREEMENT This Second Amendment to the Acquisition Agreement (the "Second Amendment") is made and entered into by and among The Greyhound Corporation, an Arizona corporation ("Greyhound"), Greyhound Lines, Inc., a California corporation ("Seller"), GLI Operating Company, a Delaware corporation ("GLI Operating"), GLI Holding Company, a Delaware corporation ("GLI Holding"), GLI Bus Operations Holding Company, a Delaware corporation ("GLI Bus"), and GLI Merger Company, a Delaware corporation ("GLI Merger"). Greyhound, Seller, GLI Operating, GLI Holding, GLI Bus and GLI Merger shall hereinafter collectively be referred to as the "Parties". Each term used in this Second Amendment with its initial letter capitalized shall have the meaning ascribed to such term in the Acquisition Agreement (hereinafter defined), unless another meaning is prescribed herein. WITNESSETH: WHEREAS, the Parties entered into that certain Acquisition Agreement dated December 22, 1986, which was amended on January 31, 1987 (the "Acquisition Agreement"). WHEREAS, the Acquisition Agreement provides that at the Closing certain of the Parties will enter into agreements pursuant to which (a) GLI Operating Company will purchase buses from the Manufacturers (Section 2.8); and (b) GLI Holding will assume Seller's existing bus purchase agreement with the Manufacturers (Section 2.8); WHEREAS, the United States Department of Justice has advised the Parties of their position that the foregoing agreements to be entered into may conflict with certain prohibitions contained in the Final Judgment entered in the matter of United States of America v. The Greyhound Corporation (Civil Action No. 57C1107 (D.C. N.D. Illinois, 1957) (the "Judgment"); and 2 WHEREAS, GLI Operating requires additional new buses to perform its business and desires to make arrangements to lease buses from Seller or an affiliate of Seller as long as the Judgment is effective. NOW, THEREFORE, the Parties agree as follows: 1. Section 2.8 of the Acquisition Agreement shall be amended to read in its entirety as follows: "2.8. Bus Purchase and Lease Agreements. The parties thereto shall enter into the agreements attached hereto as Exhibit I and Exhibit J." 2. Except as expressly provided herein, no provision of the Acquisition Agreement is affected by this Second Amendment. IN WITNESS WHEREOF, this Second Amendment has been executed by the Parties on this 18th day of March, 1987. THE GREYHOUND CORPORATION GLI HOLDING COMPANY By /s/ RICHARD C. STEPHAN By /s/ CRAIG R. LENTZSCH R. C. Stephan Craig R. Lentzsch Vice President Vice President GREYHOUND LINES INC. GLI BUS OPERATIONS HOLDING COMPANY By /s/ RICHARD C. STEPHAN By /s/ CRAIG R. LENTZSCH R. C. Stephan Craig R. Lentzsch Vice President Vice President GLI OPERATING COMPANY GLI MERGER COMPANY By /s/ RICHARD C. STEPHAN By /s/ CRAIG R. LENTZSCH R. C. Stephan Craig R. Lentzsch Vice President Vice President
EX-10.4 5 THIRD AMENDMENT TO ACQUISITION AGREEMENT 1 EXHIBIT 10.4 THIRD AMENDMENT TO ACQUISITION AGREEMENT This Third Amendment to the Acquisition Agreement (the "Third Amendment") is made and entered into as of March 18, 1987, between The Greyhound Corporation, an Arizona corporation, ("Greyhound"), Greyhound Lines, Inc., a California corporation ("Seller"), GLI Operating Company, a Delaware corporation ("GLI Operating"), GLI Holding Company, a Delaware corporation ("GLI Holding"), GLI Bus Operations Holding Company, a Delaware corporation ("GLI Bus"), and GLI Merger Company, a Delaware corporation ("GLI Merger"). Greyhound, Seller, GLI Operating, GLI Holding, GLI Bus and GLI Merger shall hereinafter collectively be referred to as the "Parties." Each term used in this Third Amendment with its initial letter capitalized shall have the meaning ascribed to such term in the Acquisition Agreement (hereinafter defined), unless another meaning is prescribed herein. W I T N E S S E T H: WHEREAS, the Parties entered into that certain Acquisition Agreement dated December 22, 1986, which was amended on January 31, 1987 and March 18, 1987 (the "Acquisition Agreement"). WHEREAS, the Parties have agreed, subject to the terms and conditions hereof, that Seller shall cause the trustee of the Greyhound Employees' Retirement Income Trust (the "GRIP Trust") to duly transfer certain of the assets and liabilities of the GRIP Trust and the Greyhound Employees Retirement Income Plan ("GRIP") to a new retirement plan and trust (the 'New GRIP Plan" and the "New Grip Trust," respectively) to be established pursuant to this Amendment; WHEREAS, the parties have agreed subject to the terms and conditions hereof, that Seller shall cause the trustee of the Greyhound Employees' Capital Accumulation Plan Trust (the "401(k) Trust") to duly transfer certain of the assets and liabilities of the 401(k) Trust and the Greyhound Employees' Capital Accumulation Plan (the "401(k) Plan") to a new 401(k) plan and trust (the 'New 401(k) Plan and the "New 401(k) Trust," respectively) to be established pursuant to this Third Amendment; WHEREAS, the Parties have agreed, subject to the terms and conditions hereof, that Seller shall cause its trustees of the Greyhound Retirement and Disability Fund and the Western Greyhound Pension Trust (the "Trusts") to authorize the transfer 2 of all of the assets and liabilities of the Trusts and the Greyhound Retirement and Disability Plan and the Western Greyhound Retirement Plan (the "Plans") to a new retirement plan and trust (the "New Plan" and the "New Trust," respectively) to be established pursuant to a collective bargaining agreement (the "Collective Bargaining Agreement") between GLI Merger or its parent and the Amalgamated Council of Greyhound Local Unions (the "Amalgamated Council"); and WHEREAS, the Parties have agreed, subject to the terms and conditions hereof, to make certain other arrangements in connection with the Acquisition Agreement. NOW, THEREFORE, the Parties agree as follows: ARTICLE I RETIREMENT PLANS 1.1 GRIP. Following the Closing, Seller shall temporarily retain all obligations and liabilities with respect to administration of all pension benefits accrued through the Closing Dated under GRIP for each participant in the GRIP who, as of such date, becomes a permanent, full-time employee of GLI Holding or its affiliate (a "Transferred Employee"). Such accrued benefits shall in accordance with Sections 1.2 and 1.3, hereof, be transferred to the New GRIP Trust to be established, at GLI Holding's expense, by GLI Holding or its affiliate with the assistance of Seller, which meets the requirements for qualification pursuant to Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and which is similar in all material respects to GRIP, except that GLI Holding or its affiliate shall be the plan sponsor of such New GRIP Plan and shall then assume and be responsible for all obligations and all liabilities with respect to the pension benefits provided under the New GRIP Plan for transferred Employees; 1.2 New GRIP Plan. As soon as practicable after the date hereof and effective as of the Closing Date, GLI Holding or its affiliate shall, at GLI Holding's expense, take all action necessary and appropriate to establish and maintain a New GRIP Plan and New Grip Trust comparable to GRIP and the GRIP Trust and reasonably acceptable to Seller. GLI Holding agrees that such new plan and trust shall constitute a qualified plan and trust under the Code. GLI Holding agrees that each Transferred Employee (i) immediately shall become eligible to participate in the New GRIP Plan, (ii) shall be credited with the years of service with Seller and any company affiliated with Seller as if 2 3 such years of service had been rendered to GLI Holding or its affiliate under the New GRIP Plan, and (iii) shall be fully vested in his or her accrued benefit to the Closing Date in the New GRIP Plan as funded in accordance with Section 1.3, hereof. As soon as practicable after the date hereof, Seller shall deliver to GLI Holding a list of the transferred Employees who deliver to GLI Holding a list of the Transferred Employees who are participants in GRIP, together with a listing of each such employee's years of service as defined in (ii) above, and his or her accrued benefit to be transferred from GRIP to the New GRIP Plan as of the Closing Date. 1.3 Transfer of GRIP Assets and Liabilities. Seller shall cause the GRIP Trust to transfer to the New GRIP Trust an amount in cash or annuity contracts equal to the actuarial accrued liability for all Transferred Employees, but in no event an amount which is less than the amount required to be transferred for such Transferred Employees pursuant to the requirements of Section 414(1) of the Code. For purposes hereof, the determination of such actuarial accrued liability shall (i) be made as of the Closing Date; (ii) be calculated by the actuarial firm of Towers, Perrin, Forster & Crosby in the same manner as reflected in the 1986 Actuarial Report prepared as of January 1, 1986 except that the assumption with respect to annual salary increases shall be seven percent (7%) per year; (iii) include both vested and non-vested benefits; and (iv) be subject to verification by GLI Holding's actuaries. This amount shall be increased by interest at the rate earned by the trustee of GRIP for short-term interest funds for the period from the Closing Date to the date the assets are actually transferred. In connection with such transfer Seller shall make all appropriate filings required under the Code or ERISA, and the regulations thereunder, and such transfer shall take place as soon as practicable after Internal Revenue Service approval. In the event of an adverse determination by the Internal Revenue Service, GLI Holding and Seller agree to cooperate in the selection of an appropriate method of treating Transferred Employees' benefits. Seller and GLI Holding shall file a timely "Notice of the Occurrence of a Reportable Event" with the Pension Benefit Guaranty Corporation, and file an actuarial statement (together with supportive documents and/or schedules) as required pursuant to Section 4043 of ERISA, and any regulations issued thereunder. 1.4 401(k) Plan. Following the Closing, Seller shall temporarily retain all obligations and liabilities for administration of any benefits accrued under the 401(k) Plan for each Transferred Employee. Such accrued benefits shall be transferred to the New 401(k) Trust to be promptly established by GLI Holding 3 4 or its affiliate at GLI Holding's expense with the assistance of Seller which meets the requirements for qualification pursuant to Section 401(a) of the Code and contains a cash or deferred feature within the meaning of Section 401(k) of the Code. The New 401(k) Plan shall be similar in all material respects to the 401(k) Plan except for certain investment options and that GLI Holding or its affiliate shall be the sponsor of such Plan. The amount of the accrued benefits to be transferred shall be an amount equal to the sum of all account balances (vested and nonvested) of all Transferred Employees as of the Closing Date as determined by the 401(k) Plan administrator in its sole discretion, but in the exercise of good faith. The cash amounts so transferred will be increased by interest at the rate earned by the trustee of the 401(k) Trust for short-term interest funds for the period from the Closing Date to the date the assets are actually transferred. Upon such transfer GLI Holding or its affiliate shall assume and be responsible for all obligations and liabilities with respect to such transferred benefits. In connection with such transfer Seller shall make all appropriate filings required under the Code or ERISA, and the regulations thereunder, and such transfer shall take place as soon as practicable. 1.5 Best Efforts. GLI Holding shall use its best efforts expeditiously to file all requests for determination letters and take all other acts necessary or desirable to implement as soon as reasonably possible the provisions herein with respect to pension and other benefit programs for the Transferred Employees and other affected plan participants. 1.6 Cooperation of Actuarial Consultant Firms. Seller and GLI Holding agree that their respective actuarial consultant firms assisting in the implementation of the actions contemplated by this agreement will be available for consulting with each other and will assist each other in accomplishing the transfers of assets and liabilities contemplated herein. 1.7 Qualified Status of New Plans. Notwithstanding any provision to the contrary in the Acquisition Agreement, as amended, with respect to all of the new plans and trusts mentioned in this third Amendment, and all of the partial and full transfers of assets between plan trusts contemplated hereby: (i) GLI Holding shall obtain determinations for each such new plan and trust from the Internal Revenue Service, that each such plan and trust is qualified under the Code; and (ii) it shall not be necessary for the Internal Revenue Service to have issued favorable determination letters with respect to the qualified status of such plans and trusts prior to implementing the 4 5 transfers of assets and liabilities contemplated thereunder and hereunder provided, however, that the law firm of Johnson & Swanson shall have first furnished Seller an opinion, at GLI Holding's expense, that such new plans and trusts satisfy the requirements applicable to qualified plans and trusts under the Code. In addition, GLI Holding agrees to indemnify and hold Seller harmless from any liability or expense (including reasonable attorneys' fees) relating to or arising out of the transfer of any plan assets contemplated under the Acquisition Agreement, as amended. 1.8 Welfare Benefits. Unless otherwise specifically agreed to in writing by GLI Holding, GLI Holding shall not assume any liability for benefits under any health and welfare plans or trusts currently maintained by Greyhound, Seller or any affiliate thereof, or to which any such company makes or has made contributions under or to. 1.9 Certain Health Benefits. To the extent that the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") may require continuation of certain health benefits to employees after termination of employment, GLI Holding shall be responsible for such continued coverage and compliance with the provisions of COBRA with respect to qualifying events, as defined in section 162(k) of the Code, accruing in connection with individuals, including Transferred Employees or other employees of Seller hired after the Closing Date, after they become employees of GLI Holding or its affiliate. ARTICLE II UNION RETIREMENT PLAN 2.1 Establishment of New Plan and Trust. As soon as practicable following the execution and ratification of the Collective Bargaining Agreement, GLI Merger agrees that it or its parent will establish in conjunction with the Amalgamated Council the New Plan and the New Trust. GLI Merger agrees that said plan and trust will be intended to constitute a qualified plan and trust under the Code, and that such trust will be intended to constitute tax-exempt trust under the Code. In addition, GLI Merger agrees, in conjunction with the Amalgamated Council to seek favorable determination from the Internal Revenue Service with regard to the qualified status of such plan and trust and the tax-exempt status of such trust under the Code. 2.2 Transfer of Assets and Liabilities. As soon as is practicable after the later of Closing or the establishment of 5 6 the New Plan and the New Trust, Seller agrees to cause its trustees of the Trusts to take any and all action necessary to transfer all of the assets and liabilities thereof to the New Trust. Seller and GLI Merger agree that it shall not be necessary for the Internal Revenue Service to have issued a favorable determination letter with respect to the qualified status of the new Plan and Trust and the exempt status of the New Trust prior to implementing the transfers of assets and liabilities contemplated hereunder; provided, however, that Johnson & Swanson shall have furnished Seller an opinion, at GLI Operating's expense, that the New Plan and New Trust satisfy the requirements applicable to qualified plans and trusts under the Code. 2.3 Investment of Trust Assets. As soon as practicable following the execution and ratification of the Collective Bargaining Agreement, Seller agrees to cause its trustees of the Trusts to authorize actions to liquidate in an orderly and reasonable manner all of the equity investments held in such Trusts and to reinvest the proceeds therefrom in cash equivalents pending the transfer of assets and liabilities contemplated hereunder. Seller and GLI Merger agree that said liquidation and reinvestment shall be undertaken in a manner that complies with the applicable requirements of Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). 2.4 Cooperation of Actuarial Consultant Firms. Seller and GLI Merger agree that their respective actuarial consultant firms assisting in the implementation of the actions contemplated by this agreement will be available for consulting with each other and will assist each other in accomplishing the transfers of assets and liabilities contemplated herein. 2.5 Representations and Warranties of Seller Concerning Plans. With respect to the Plans, Seller hereby represents and warrants the following: a. Determination letters have been received to the effect that the Plans are qualified under section 401 of the Code and the trusts maintained pursuant thereto are exempt from federal income taxation under section 501 of the Code, and nothing has occurred to cause the loss of such qualification or exemption. b. No prohibited transactions (as defined in section 406 of ERISA or in section 4975 of the Code) with respect to the Plans has occurred or will have occurred prior to Closing. 6 7 c. The aggregate value, as of the Closing Date, of the assets of the Plans, including any contributions receivable but net of any current payables or accrued expenses (Net Assets Available for Plan Benefits) shall not be less than the total of the actuarial present value of accumulated plan benefits of the Plans. For purposes hereof, the determination of such actuarial present value of accumulated plan benefits shall (i) be made as of the Closing Date; (ii) be calculated by the actuarial firm of Tower, Perrin, Forster & Crosby (TPF&C) in the same manner as reflected in the 1985 Actuarial Report prepared as of January 1, 1985; (iii) include both vested and non-vested benefits; and (iv) be subject to verification by GLI Merger's actuaries. In no event shall the assets in the dedicated bond portfolios of the Plans be valued in this determination at an amount greater than the actuarial present value of the liabilities of the related covered retiree benefits (which are calculated using an investment return assumption equal to the effective yield on the respective dedicated bond portfolios at the date dedicated). Assets of the Plans other than the dedicated bond portfolios shall be valued at fair market value as of Closing for purposes of this determination. Indemnification under Section 10.2 of the Acquisition Agreement for breach of this Section 2.5(c) shall not be subject to the limitation that $9,500,000 of Damages have been incurred, and any indemnification payments as a result of breach of the representation in this Section 2.5(c) shall not be included in determining whether the $9,500,000 has been reached under Section 10.2(a) of the Acquisition Agreement. 2.6 Condition Precedent to this Article of the Third Amendment Becoming Effective. This Article of the Third Amendment shall not become effective unless on or prior to Closing, GLI Holding represents that the Amalgamated Council has agreed to cause the transfers of all assets and liabilities of the Trusts to the New Trust and to take the other actions envisioned for the Plan and the Trust by this Article of the Third Amendment. ARTICLE III ENVIRONMENTAL MATTERS 3.1 Underground Storage Tank Status. The Parties desire to make certain arrangements with respect to certain underground storage tanks on properties owned by GLI Operating or the Companies as of March 18, 1987 or leased from Seller by GLI 7 8 Operating or the Companies (other than those properties leased under the Master Lease), at the Closing (the "Tanks"). 3.2 Testing and Repair or Replacement. GLI Operating shall be obligated to bear the costs of testing, repairing or replacing any of the Tanks from and after the Closing. 3.3 Environmental Remediation. Notwithstanding any provision of the Acquisition Agreement to the contrary, the Seller shall be obligated to bear a proportionate share of any costs, fees, expenses, fines, penalties and governmental levies associated with remediation done in respect of leaks from the Tanks, and the actual costs or expenses of remediation of the properties where the Tanks are located (other than costs and expenses that were the direct result of the operation or use of the Tanks after the Closing in a manner materially inconsistent with the operation or use of the Tanks prior to the Closing) (collectively, the "Remediation Expenses"). The Seller's proportionate share shall be 100% of the Remediation Expenses for a period of one year after the Closing Date, and shall decrease linearly 20% every year thereafter, such that the Seller is not responsible for any Remediation Expenses from and after five years after the Closing Date. GLI Operating shall be obligated to bear the remaining share of the Remediation Expenses. Notwithstanding when any Remediation Expenses are actually incurred or paid, the proportionate share of Remediation Expenses to be paid by Seller and GLI Operating with respect to any Tank location shall be determined upon the earlier of (a) such time as GLI Operating undertakes, or requests Seller to undertake, such remediation in accordance with the provisions of this Section or (b) upon notification of GLI Operating by any governmental entity of the probable imposition of any fines, penalties or governmental levies or the demand to remediate the property or repair or replace the Tanks. GLI Operating shall give the Seller written notice: (x) not less than ten days prior to entering into an agreement to undertake such remediation, and (y) within five days after being notified of the probable imposition of any fines, penalties or governmental levies or the demand to remediate the property or repair or replace the Tanks. Seller shall have the right at its election to control the remediation process, including selection and hiring of any contractors (which shall be reasonably acceptable to GLI Operating) and supervision of remediation, during the time that its proportionate share of the Remediation Expenses equals or exceeds 50%. 3.4 Master Lease Tanks. With respect to underground storage tanks located on properties leased under the Master Lease, GLI Operating shall not be obligated to bear any costs, 8 9 fees, expenses, fines, penalties or any governmental levies associated with remediation done in respect of leaks from such tanks, or for the actual costs or expenses of remediation of the properties where such tanks are located, unless such costs and expenses are the direct result of the operation or use of such tanks by GLI Operating or the Companies after the Closing in a manner materially inconsistent with the operation or use of such tanks prior to the Closing. 3.5 Application. This Article supersedes in its entirety any other representations, covenants or agreements (including without limitation indemnification agreements) contained in the Acquisition Agreement only with respect to the matters specifically described in this Article and does affect any other representations, covenants or agreements (including without limitation indemnification agreements) contained in the Acquisition Agreement with respect to any other matter (including without limitation other environmental matters). ARTICLE IV TELEPHONE CHARGES 4.1 Seller Obligation. The Seller shall be obligated to reimburse GLI Operating in full for any unbilled telephone access charges which may arise after the Closing Date attributable to telephone calls made by or to the Seller, GLI Operating or the Companies prior to the Closing Date to the extent not included in the Closing Statement. The Parties hereby agree not to accrue any of these charges on the Closing Statement. 4.2 Method of Reimbursement. GLI Operating shall provide Seller with written notice of any such access charges, including a copy of the invoices related thereto. Within 30 days after receipt of such notice, Seller shall be obligated to make payment to GLI Operating for such access charges. ARTICLE V 59 CENT TICKETS In February 1987, Seller sold to its customers bus tickets for 59 cents per ticket, certain of which may be used on or after the Closing Date. Notwithstanding any provision in the Acquisition Agreement or instructions related to the preparation of the Closing Statement to the contrary, for every 59 cent ticket used on or after the Closing Date, there shall be included in the Closing Statement as a liability an amount equal to the 9 10 payments to commission agents pertaining to such tickets plus 2.5 cents per mile for each passenger mile traveled on such ticket less $300,000. ARTICLE VI EMPLOYEE INSURANCE PLANS Greyhound and the Seller shall keep in full force and effect through March 31, 1987, all medical, dental, health and life insurance plans covering each salaried employee of Seller who becomes an employee of GLI Operating. GLI Operating shall reimburse Seller and hold Seller harmless from all cost, expense and liability which may be incurred by Seller or to which Seller may become subject as a result of providing such insurance from and after the Closing Date. ARTICLE VII ADMINISTRATION OF INSURANCE CLAIMS From and after the Closing Date, GLI Operating shall administer insurance claims on behalf of Seller with respect to certain occurrences prior to the Closing Date. GLI Operating and Seller agree to each bear their proportionate share of GLI Operating's insurance claims department administration expenses as reflected on the accounting records of GLI Operating, except that one half of the total compensation of the Vice President of Risk Management shall be excluded from the insurance claims department expenses. Seller's proportionate share of such expenses for any month shall be determined based on the number of active insurance claims administered during such month on behalf of Seller compared to the total number of active insurance claims administered during such month by GLI Operating's insurance claims department. GLI Operating shall forward all out-of-pocket expense invoices and claims settlement agreements to Seller for payment or reimbursement. Settlement of claims by GLI Operating on behalf of Seller will only be undertaken in accordance with procedures and authorization provided by Seller. Seller shall pay GLI Operating monthly for its proportionate share of GLI Operating's insurance claims department expenses. The foregoing arrangement may be terminated after one year from the date hereof by either party upon 90 days' prior written notice. 10 11 ARTICLE VIII CERTAIN REAL ESTATE MATTERS 8.1 Restructure of Transaction. To assist GLI Holding in connection with the Closing and financing of the transaction, Seller has agreed to modify somewhat the procedures utilized with respect to certain real estate assets from that originally contemplated under the Acquisition Agreement. In particular, all owned real property which was previously vested in the Companies (as indicated in Schedule 4.6 to the Acquisition Agreement) has been conveyed by the Companies to GLI Operating by Warranty Deed (the "Upstream Deeds") and certain (but not all) leased real property which was previously vested in the Companies (as indicated in Schedule 4.6 to the Acquisition Agreement) has been assigned by the Companies to GLI Operating by Assignment and Assumption Agreement (the "Upstream Assignments"). Further, all owned real property previously vested in Seller (as indicated in Schedule 4.6 to the Acquisition Agreement) has been conveyed by Seller to GLI Operating by Warranty Deed (the "Lines Deeds") and all leased real property previously vested in Seller (as indicated in Schedule 4.6 to the Acquisition Agreement) has been assigned to GLI Operating by Assignment and Assumption Agreement (the "Lines Assignments"). The parties acknowledge that under the original structure contemplated by the Acquisition Agreement the Upstream Deeds and Upstream Assignments would not have been executed and the Lines Deeds would, in lieu of being general warranty deeds, have been deeds in the same form previously utilized by Seller in transferring owned properties to the Companies. The Lines Assignments would have been required in any event, but would have been made earlier but for GLI Holding's request. The modification of the transaction in the manner contemplated above is herein referred to as the "Restructure." 8.2 Effect of Restructure on Seller's Obligations. Seller and GLI Holding acknowledge that GLI Holding's request for the Restructure did not occur far enough in advance of the Closing to permit Seller and GLI Holding to examine fully the descriptions of and title to the owned real properties as necessary for Seller to make accurate the Upstream Deeds or the Lines Deeds, or to permit Seller and GLI Holding to obtain the consents of landlords to the assignments of real property leases to GLI Operating and/or any subsequent assignments or subleases to GLI Realty and its affiliates which are contemplated to be made by GLI Operating for operational and business reasons after the Closing. It is the intention of the parties that Seller's and Greyhound's representations, warranties and liabilities with respect to transfer of the owned and leased real properties in connection 11 12 with the transaction as actually closed shall not exceed, or be less than, the representations and warranties made and the liabilities which would have been assumed by Seller and Greyhound with respect to real property matters pursuant to the Acquisition Agreement had the Restructure not occurred. 8.3 Indemnification of Seller. In consideration of Seller's consent to the Restructure GLI Holding agrees to pay, and to indemnify Seller and Greyhound and hold Seller and Greyhound harmless against and from any claim, action, proceeding, damage, liability, loss, cost, expense, judgment, fine, penalty or deficiency, including without limitation reasonable attorneys' fees and other costs and expenses incident to proceedings or investigations or defenses of any claim ("Damages"), arising out of, resulting from or related to, and to pay Seller and Greyhound on demand the full amount of any Damages which either Seller or Greyhound suffers or incurs as a result of: (i) Liability pursuant to either the Upstream Deeds or the Lines Deeds, asserted by or on behalf of any transferee of the property, which exceeds the liability which Seller or Greyhound would have had with respect to such property under the Acquisition Agreement had the Restructure not occurred; (ii) Transfer taxes, recording fees, service charges and other expenses incurred due to (i) the Upstream Deeds and (ii) the Lines Deeds to the extent such taxes and expenses with respect to the Lines Deeds exceed amounts which Seller or Greyhound would have incurred in transferring the assets covered by the Lines Deeds had the Restructure not occurred. Without limitation, GLI Holding shall have the liability for all values declared in conjunction with the Upstream Deeds and the Lines Deeds, any transfer taxes or similar charges with respect to the Upstream Deeds, and any loss of exemptions or increases in taxes or expenses incurred by Seller with respect to the Lines Deeds other than those which would have been incurred by Seller in the absence of the Restructure; (iii) Liability for breach or default of the leases or subleases covering any leased property covered by the Upstream Assignments, including loss of use of such facility by eviction or otherwise, due to the failure to obtain the landlord's consent to the assignment of any such lease or sublease to GLI Operating or any 12 13 subsequent assignment or sublease of those properties by GLI Operating; and (iv) Any liability with respect to the transfer of or representations or warranties of Seller or Greyhound with respect to owned or leased real properties which exceeds the liability Seller or Greyhound would have had in that regard under the Acquisition Agreement had the Restructure not occurred. 8.4 Title Corrective Matters. After the Closing, GLI Holding shall provide to Seller copies of all title reports or commitments which GLI Holding obtains for the owned real properties, and Seller and GLI Holding shall cooperate in preparing correction deeds and correcting the legal descriptions and title exceptions to reflect the actual condition of Seller's (or its affiliates) title to the owned real property on the closing date; provided no such correction shall deprive GLI Holding of title to any real property described in Schedule 4.6, in the condition warranted in Section 4.6 of the Acquisition Agreement. GLI Holding shall bear all expenses incurred in obtaining title reports or commitments, and in recording any correction deeds, provided, however, that to the extent that any such correction deed or other corrective title work is required because of the title to any property being vested other than as represented in Schedule 4.6 of the Acquisition Agreement, the costs of such corrective work shall be borne by Seller. 8.5 Overlandlord's Consents -- Master Leased Properties. Anything to the contrary, or apparently to the contrary, notwithstanding, in the Master Lease (herein so-called) between the Seller and GLI Realty Company ("GLI Realty"), covering certain fee and leasehold interests which has been executed pursuant to Section 2.1 of the Acquisition Agreement, it is acknowledged that Section 10.2(i) of the Acquisition Agreement continues to apply to the facilities covered by such Master Lease and Greyhound and Seller shall indemnify GLI Realty, GLI Holding, GLI Bus, GLI Operating, and the Companies against any failure by Greyhound and/or Seller to obtain any and all necessary consents, waivers, approvals, or agreements of any underlying lessors in respect of such agreements and Seller shall make available to GLI Operating or its subsidiaries the use of the facilities covered thereby in accordance with the contemplation of the Acquisition Agreement. 8.6 Lessor's Consents -- Previously Assigned Leased Properties. Further, Section 10.2(i) is also acknowledged to be fully applicable in the case of any leased properties which have 13 14 been assigned to the Companies by Seller or its affiliates prior to March 17, 1987, where the consent of any lessor was required to such assignment but such consent has not been received or obtained. Section 10.2(i) shall not apply to the transfers of leased properties made pursuant to the Upstream Assignments or to any subsequent transfers, assignments, or subleases of any of such leases carried out by GLI Holding or its affiliates after the Closing. 8.7 Lessor's Consents -- Seller's Leased Properties. It is further agreed that if (i) either Sublease between Seller, as sublessor, and GLI Operating, as sublessee, covering the New York and/or Philadelphia facilities, respectively, as contemplated in Section 2.4 of the Acquisition Agreement is terminated by reason of the failure of the underlying lessor to give a required consent thereto, or (ii) any of the leased facilities covered by Section 4.6 of the Acquisition Agreement which are being assigned to GLI Operating pursuant to the Lines Assignment require the consent of the lessor for assignment and are put into default by reason of Seller's failure to obtain the required consent, Seller will nevertheless make the facilities in question available to GLI Operating or its subsidiaries in a manner equivalent in all material respects to that contemplated by the Acquisition Agreement. ARTICLE IX JUNIOR NOTES The Parties hereby agree that the Junior Notes to be delivered pursuant to Section 1.1 of the Acquisition Agreement shall be substantially in the form attached hereto as Exhibit A. ARTICLE X EFFECT OF THIRD AMENDMENT The Parties hereby agree that this Third Amendment shall terminate the First Amendment to Acquisition Agreement dated January 31, 1987, among Greyhound, Seller and GLI Holding. Except as expressly provided herein, no provision of the Acquisition Agreement is affected by this Third Amendment. IN WITNESS WHEREOF, this Third Amendment has been executed by the parties on this 18th day of March, 1987. 14 15 THE GREYHOUND CORPORATION GLI HOLDING COMPANY By: /s/ RICHARD STEPHAN By: /s/ CRAIG LENTZSCH R. C. Stephan Craig R. Lentzsch Vice President Vice President GREYHOUND LINES, INC. GLI BUS OPERATIONS HOLDING COMPANY By: /s/ RICHARD STEPHAN By: /s/ CRAIG LENTZSCH R. C. Stephan Craig R. Lentzsch Vice President Vice President GLI OPERATING COMPANY GLI MERGER COMPANY By: /s/ RICHARD STEPHAN By: /s/ CRAIG LENTZSCH R. C. Stephan Craig R. Lentzsch Vice President Vice President
15 16 EXHIBIT A THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE, TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES INFORMATION SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION OF THE ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER) THAT SUCH PLEDGE, SALE, OFFER, TRANSFER, OR OTHER DISPOSITION WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS. 11% JUNIOR SUBORDINATED NOTE DUE 1999 $40,000,000.00 March 18, 1987 FOR VALUE RECEIVED, the undersigned, GLI Operating Company, a Delaware corporation ("Maker"), promises to pay to Greyhound Lines, Inc., a California corporation, or its registered assigns ("Payee"), the sum of FORTY MILLION DOLLARS ($40,000,000.00), together with interest on the unpaid principal balance from time to time remaining at the rate of eleven percent (11%) per annum. The principal of and accrued interest on this note shall be due and payable in lawful money of the United States of America, at the office of The Greyhound Corporation, Greyhound Tower, Phoenix, Arizona 85077. 1. Payments. The interest on this note shall be compounded (but not paid) on each January 15 and July 15 to and including July 15, 1989 (the "Conversion Date"), at which time all such accrued and unpaid interest shall be added to and become principal of this note. From and after the Conversion Date, accrued and unpaid interest on the principal of this note (including principal created pursuant to the immediately preceding sentence) shall be payable on January 15 and July 15 in each year and at the final maturity of this note. The principal of this note (including principal created pursuant to the preceding paragraph) shall be payable in four annual installments, each equal to 20% (rounded to the nearest $100) of the principal of this note that is outstanding at the close of business in Phoenix, Arizona, on July 15, 1995, the first such payment to be due on July 15, 1995, and one additional such payment to be due on July 15, 1996, 1997, and 1998. The balance of the principal of this note shall be due and payable on July 15, 1999. 1 17 Overdue principal and, to the extent permitted by law, interest shall bear interest at the rate of 13% per annum from the due date until paid. 2. Prepayments. Maker shall be entitled to prepay the unpaid principal balance hereof, from time to time and at any time, in whole or in part, without premium or penalty, but only in increments of $500,000 and only if all interest accrued hereon is paid through the date of such payment. Any prepayment of principal shall be applied to such installment or installments of principal as Maker may select at the time of prepayment. 3. Events of Default and Remedies. The entire unpaid principal balance of, and all unpaid accrued interest on, this note shall, subject to the provisions of paragraph 12 below, immediately become due and payable at the option of the holders of notes evidencing at least a majority of the aggregate outstanding principal amount notes of this series upon the occurrence of one or more of the following events of default (individually and collectively, hereinafter called a "Default"): (i) The failure or refusal of Maker to pay all or any part of the principal or accrued interest on this note as and when the same becomes due and payable in accordance with the terms hereof, and the continuation of such failure or refusal for a period of one hundred eighty (180) days after the due date prior to July 15, 1990, or for a period of thirty (30) days thereafter; (ii) The maturity of Senior Debt (as hereinafter defined) having an aggregate principal amount of $5,000,000 or more shall be accelerated by action of the holder or holders thereof, and such acceleration shall not have been rescinded or such Senior Debt paid in full within one hundred and eighty days (180) after the date of such acceleration (provided, however, that if the Senior Debt that has been accelerated includes Senior Debt under (x) the Credit Agreement among Maker, certain of Maker's affiliates listed therein, the Banks listed therein and Irving Trust Company, as Agent, dated as of March 18, 1987, or (y) the 12 1/2% Senior Subordinated Notes due 1997, issued under the Indenture dated as of March 18, 1987 between GLI Merger Company and Connecticut National Bank, as Trustee, then such acceleration shall constitute a Default immediately upon the occurrence thereof); (iii) Maker shall (a) voluntarily seek, consent to, or acquiesce in the benefit or benefits of any Debtor Relief Law (hereinafter defined), or (d) be made the subject of any proceeding provided for by any Debtor Relief Law that could suspend or otherwise affect any of the rights of the 2 18 holder hereof, provided however, if such proceeding is withdrawn or dismissed within one hundred and eighty (180) days from the date of the institution of such proceeding, then such event shall no longer be deemed a Default hereunder (as used herein, "Debtor Relief Laws" means the Bankruptcy Code of the United States of America, and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement receivership, insolvency, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally). Subject to the provisions of paragraph 12 below, in the event a Default shall have occurred and shall be continuing, the holder of this note may proceed to protect and enforce its rights either by suit in equity and/or by action at law, or by other appropriate proceedings, whether for the specific performance of any covenant or agreement contained in this note, or in aid of the exercise of any power or right granted by this note or to enforce any other legal or equitable right of the holder of this note. 4. Cumulative Rights. No delay on the part of the holder of this note in the exercise of any power or right under this note shall operate as a waiver thereof, nor shall a single or partial exercise of any such power or right. 5. Waiver. Except as expressly provided herein or in any document or instrument executed in connection herewith, Maker, and each surety, endorser, guarantor, and other party ever liable for the payment of any sum of money payable on this note, jointly and severally waive demand, presentment, protest, notice of nonpayment, notice of intention to accelerate, notice of protest, notice of acceleration, all other notices of any kind, and any and all lack of diligence or any delay in collection or the filing of suit hereon which may occur, and agree that their liability on this note shall not be affected by any renewal or extension in the time of payment hereof, by any indulgences, or by any release or change in any security for the payment of this note, and hereby consent to any and all renewals, extensions, indulgences, releases, or changes, regardless of the number of such renewals, extensions, indulgences, releases, or changes. 6. Attorneys' Fees and Costs. In the event a Default shall occur and be continuing, and in the event that thereafter this note is placed in the hands of an attorney for collection, or in the event this note is collected in whole or in part through legal proceedings of any nature, then and in any such case, Maker promises to pay all costs of collection, including but not limited to reasonable attorneys' fees incurred by the holder hereof on account of such collection, whether or not suit is filed. 3 19 7. Notices. Any notice, demand, or other communication given pursuant to or in connection with this note must be in writing to be effective and shall be deemed to have been given and received (a) when actually delivered to the address of the party to be notified if delivered in person, or (b) if mailed, on the earlier of the date actually delivered to the address of the party to be notified or (whether ever so delivered or not) on the third Business Day (hereinafter defined) after it is enclosed in an envelope, addressed to the party to be notified at such party's address as set forth in this note, properly stamped, sealed, and deposited in the United States mail, certified mail, return receipt requested. Until changed by notice pursuant hereto, for purposes hereof, the address of Payee is Greyhound Tower, Phoenix, Arizona 85077, Attention: General Counsel, and the address of Maker is 2400 InterFirst Plaza, 901 Main Street, Dallas, Texas 75202. 8. Governing Law. This note is intended to be performed in the State of New York, and the laws of such state shall govern the construction, validity, enforcement, and interpretation hereof. 9. Heading Construction. The headings of the paragraphs of this note are inserted for convenience only and shall not be deemed to constitute a part hereof; words used herein of any gender shall be construed to included any other gender where appropriate, and words used herein which are either singular or plural shall be construed to included the other where appropriate. 10. Successors and Assigns. All of the covenants, stipulations, promises, and agreements in this note contained by or on behalf of Maker shall bind its successors and assigns, whether so expressed or not. 11. Business Day. In any case where a payment of principal or interest hereon is due on a day which is not a Business Day, Maker shall be entitled to delay such payment until the next succeeding Business Day, but interest shall continue to accrue until the payment is, in fact, made. As used herein, "Business Day" means every day other than a Saturday, Sunday or legal holiday in the State of Texas. 12. Subordination. Each holder of this note hereby acknowledges and agrees that the indebtedness evidenced by, and other obligations payable in respect of, this note (including but not limited to principal, interest and amounts payable under Section 6 hereof), and any renewals, rearrangements, or modifications hereof (collectively, "Obligations"), are at all times and in all respects subordinate and junior in right of 4 20 payment to the payment of Senior Debt on the following terms and conditions: (a) Such holder shall not demand, sue for, take, or receive any payment or distribution (whether in cash, property or securities) (other than regularly scheduled installments of interest and principal which are not made in advance of the scheduled payment dates) upon or in respect of all or any part of the Obligations or commence any action or proceeding against Maker under any Debtor Relief Laws unless and until the Senor Debt shall have been paid in full and in the event such holder receives any such payment or distribution, the holder of this note shall hold such payment or distribution in trust for the holders of Senor Debt and pay it over to such holders, ratably, on demand; (b) If a default in payment of any Senior Debt, or an event which (with or without notice, lapse of time, or otherwise) would by its terms permit any holder of Senior Debt to accelerate the maturity thereof, occurs and is continuing, the holder of this note shall not accelerate, demand, sue for, take or receive any payment or distribution (whether in cash, property or securities) upon or in respect of all or any part of the Obligations or commence any action or proceeding against Maker under any Debtor Relief Laws unless and until the Senior Debt shall have been paid in full and in the event such holder receives any such payment or distribution, the holder of this note shall hold such payment or distribution in trust for the holders of Senior Debt and pay it over to such holders, ratably, on demand; and (c) In the event of any proceedings relative to Maker or its property under any Debtor Relief Laws, or in the event of any voluntary or involuntary liquidation, winding up or dissolution of Maker, or assignee for the benefit of creditors, the holders of Senior Debt shall be entitled to receive payment in full of the Senior Debt (including, without limitation, postpetition interest, regardless of whether such interest is allowable under Section 506 of the United States Bankruptcy Code) before the holder of this note is entitled to receive any payment or distribution (whether in cash, property or securities) on account of the Obligations and, in the event any such payment or distribution is made upon or in respect of the Obligations, it shall be paid to the holders of Senior Debt, ratably, until the Senior Debt shall have been paid and satisfied in full. As used herein, "Senior Debt" means all obligations (whether now outstanding or hereafter incurred) for the payment of which Maker is responsible or liable as obligor, guarantor, or 5 21 otherwise in respect of (i) for principal of (and premium, if any) and interest on all indebtedness for money borrowed or evidenced by bonds, notes, debentures, or similar instruments, and all fees, expenses, reimbursements, indemnities, premiums and other amounts payable under any agreements or instruments relating thereto, (ii) indebtedness under leases which are or may be capitalized under generally accepted accounting principles, (iii) any indebtedness for money borrowed in connection with an acquisition by Maker or a subsidiary of the stock or substantially all of the assets of another person or in connection with a merger or consolidation to which Maker or a subsidiary is a party, (iv) any indebtedness representing the deferred and unpaid purchase price of any property or business, and (v) all deferrals, renewals, amendments, modifications, supplements, extensions and refundings of any such indebtedness or obligations under clauses (i), (ii) or (iii); provided, that the following shall not constitute Senior Debt: (a) indebtedness which is expressly made equal in right of payment with this note or subordinate and subject in right of payment to this note or (b) indebtedness for goods or materials purchased or services obtained in the ordinary course of business or indebtedness consisting of trade payables. Senior Debt shall continue to constitute Senior Debt for all purposes hereof, and the provisions of Section 12 shall continue to apply to such Senior Debt, notwithstanding the fact that such Senior Debt or any claim in respect thereof shall be disallowed, avoided or subordinated pursuant to the provisions of any Debtor Relief Law or other applicable law. Each holder of this note by his acceptance hereof: (x) if and so long as payment with respect to this note is prohibited under this Section 12, irrevocably authorizes and empowers (but without imposing any obligation on or any duty to such holder from) any representative of the holders of Senior Debt designated by the holders of at least 66 2/3% of the outstanding Senior Debt, to demand, sue for, collect, receive and receipt for such holder's ratable share of payments and distributions in respect hereof (including without limitation all payments and distributions which may be payable or deliverable pursuant to the terms of any indebtedness subordinated to this note) which are required to be paid or delivered to the holders of Senior Debt as provided in this Section 12 and to file and prove all claims therefor, and take all such other action (including the right to vote such holder's ratable share of this note and the right to vote, file and prove claims respecting any indebtedness subordinated to this note) in the name of such holder, or otherwise, as the holders of at least 66 2/3% of the outstanding Senior Debt may determine to be necessary or appropriate for the enforcement of the provisions of this Section 12; and (y) agrees (I) to execute and deliver to such designated representative of Senior Debt all such further instruments confirming the authorization hereinabove set forth, and all such powers of 6 22 attorney, proofs of claim, assignments of claim and other instruments, and to take all such other actions as may be requested by such representative upon direction by the holders of at least 66 2/3% of the outstanding Senior Debt in order to enable such representative to enforce all claims upon or in respect of such holder's ratable share of payment and distributions in respect of this note and (II) not to compromise, release, forgive or otherwise discharge the obligations of the Maker with respect to this note without prior written consent of the holders of at least 66 2/3% of the outstanding Senior Debt. Each holder of Senior Debt may extent, renew, modify, supplement or amend the terms of the Senior Debt or any security therefor or guaranty thereof and release, sell, exchange or enforce such security or guaranty or elect any right or remedy, or delay in enforcing or release any right or remedy and otherwise deal freely with the Maker all without notice to the holder of this note and all without affecting the liabilities and obligations of the Maker or the holder of this note, even if any right of subrogation or similar rights of the holder of this note is extinguished, affected or impaired thereby. This Section 12 shall constitute a continuing offer and inducement to all persons who become holders of, or continue to hold, Senior Debt. Notwithstanding anything to the contrary contained herein, the provisions of this Section 12 are made for the benefit of the holders of Senior Debt, each of whom is an obligee hereunder and is entitled to enforce such holder's rights hereunder, without any act or notice of acceptance hereof or reliance hereon. No amendment, modification or discharge of any provision of this Section 12 shall be effective against any holder of Senior Debt unless expressly consented to in writing by such holder. 13. Offset of Payments. Any amount (including principal and interest) payable on this note to any affiliate of The Greyhound Corporation shall, at the option of Maker, be subject to offset for any liability of The Greyhound Corporation or any of its affiliates to Maker or any Affiliate of Maker arising under that certain Acquisition Agreement dated December 22, 1986, among Maker, The Greyhound Corporation, and others. Failure to make any payment on this note as a result of any such permitted offset shall not constitute a Default on this note. 14. Series. This note is one of a series of notes of Maker knows as its Junior Subordinated Notes due 1999, initially limited to $40,000,000. Additional notes of this series may be issued in exchange for Maker's Series A Preferred Stock from time to time. All notes of such series shall rank equal and pari passu in all respects, and all payments and prepayments on such notes shall be made ratably to all holders thereof. 7 EX-10.5 6 FOURTH AMENDMENT TO ACQUISITION AGREEMENT 1 EXHIBIT A THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE, TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES INFORMATION SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION OF THE ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER) THAT SUCH PLEDGE, SALE, OFFER, TRANSFER, OR OTHER DISPOSITION WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS. 11% JUNIOR SUBORDINATED NOTE DUE 1999 $40,000,000.00 March 18, 1987 FOR VALUE RECEIVED, the undersigned, GLI Operating Company, a Delaware corporation ("Maker"), promises to pay to Greyhound Lines, Inc., a California corporation, or its registered assigns ("Payee"), the sum of FORTY MILLION DOLLARS ($40,000,000.00), together with interest on the unpaid principal balance from time to time remaining at the rate of eleven percent (11%) per annum. The principal of and accrued interest on this note shall be due and payable in lawful money of the United States of America, at the office of The Greyhound Corporation, Greyhound Tower, Phoenix, Arizona 85077. 1. Payments. The interest on this note shall be compounded (but not paid) on each January 15 and July 15 to and including July 15, 1989 (the "Conversion Date"), at which time all such accrued and unpaid interest shall be added to and become principal of this note. From and after the Conversion Date, accrued and unpaid interest on the principal of this note (including principal created pursuant to the immediately preceding sentence) shall be payable on January 15 and July 15 in each year and at the final maturity of this note. The principal of this note (including principal created pursuant to the preceding paragraph) shall be payable in four annual installments, each equal to 20% (rounded to the nearest $100) of the principal of this note that is outstanding at the close of business in Phoenix, Arizona, on July 15, 1995, the first such payment to be due on July 15, 1995, and one additional such payment to be due on July 15, 1996, 1997, and 1998. The balance of the principal of this note shall be due and payable on July 15, 1999. 1 2 Overdue principal and, to the extent permitted by law, interest shall bear interest at the rate of 13% per annum from the due date until paid. 2. Prepayments. Maker shall be entitled to prepay the unpaid principal balance hereof, from time to time and at any time, in whole or in part, without premium or penalty, but only in increments of $500,000 and only if all interest accrued hereon is paid through the date of such payment. Any prepayment of principal shall be applied to such installment or installments of principal as Maker may select at the time of prepayment. 3. Events of Default and Remedies. The entire unpaid principal balance of, and all unpaid accrued interest on, this note shall, subject to the provisions of paragraph 12 below, immediately become due and payable at the option of the holders of notes evidencing at least a majority of the aggregate outstanding principal amount notes of this series upon the occurrence of one or more of the following events of default (individually and collectively, hereinafter called a "Default"): (i) The failure or refusal of Maker to pay all or any part of the principal or accrued interest on this note as and when the same becomes due and payable in accordance with the terms hereof, and the continuation of such failure or refusal for a period of one hundred eighty (180) days after the due date prior to July 15, 1990, or for a period of thirty (30) days thereafter; (ii) The maturity of Senior Debt (as hereinafter defined) having an aggregate principal amount of $5,000,000 or more shall be accelerated by action of the holder or holders thereof, and such acceleration shall not have been rescinded or such Senior Debt paid in full within one hundred and eighty days (180) after the date of such acceleration (provided, however, that if the Senior Debt that has been accelerated includes Senior Debt under (x) the Credit Agreement among Maker, certain of Maker's affiliates listed therein, the Banks listed therein and Irving Trust Company, as Agent, dated as of March 18, 1987, or (y) the 12 1/2% Senior Subordinated Notes due 1997, issued under the Indenture dated as of March 18, 1987 between GLI Merger Company and Connecticut National Bank, as Trustee, then such acceleration shall constitute a Default immediately upon the occurrence thereof); (iii) Maker shall (a) voluntarily seek, consent to, or acquiesce in the benefit or benefits of any Debtor Relief Law (hereinafter defined), or (d) be made the subject of any proceeding provided for by any Debtor Relief Law that could suspend or otherwise affect any of the rights of the 2 EX-10.6 7 TRADEMARK LICENSE AGREEMENT DATED MARCH 18, 1987 1 EXHIBIT 10.6 TRADEMARK LICENSE AGREEMENT Agreement made as of the 18th day of March, 1987 by and between The Greyhound Corporation, an Arizona corporation (hereinafter referred to as "Greyhound"), and GLI Holding Company, a Delaware corporation (hereinafter referred to as "GLI Holding"), and GLI Operating Company, a Delaware corporation (hereinafter referred to as "GLI Operating"), GLI Holding and GLI Operating being hereinafter collectively referred to as "Licensee" unless the context otherwise requires. WITNESSETH THAT: WHEREAS, Licensee and Greyhound are parties to an Acquisition Agreement dated December 22, 1986, as amended (the "Acquisition Agreement"), whereby GLI Holding acquired the stock in certain companies engaged or to be engaged in the transportation business; and WHEREAS, as provided in said Acquisition Agreement Greyhound has agreed to grant to Licensee a license to use certain trademarks and service marks in the United States and Mexico; and WHEREAS, Greyhound and Licensee wish to memorialize the terms, covenants and conditions of that license. NOW, THEREFORE, in consideration of the above-stated premises, the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, the parties agree as follows: -1- 2 1. Definitions. For the purposes of this Agreement, the following terms shall have the following meanings: (a) "Marks" shall mean the trademarks and service marks listed in Schedules C-1 and C-2 attached hereto and by this reference incorporated herein. (b) "Business" shall mean the business of travel and transportation (except by water) including without limitation the transportation by ground and/or air of passengers (including by charter and tour), baggage, package express or other property in or between the United States and Mexico. (c) "Transportation Subsidiary" shall mean any corporation which is engaged in the Business and over 50% of the voting capital stock of which is owned or controlled directly or indirectly by Licensee. (d) The "CPI CHANGE FACTOR" for any calender year shall be the figure obtained by dividing the Consumer Price Index (all items) for the year 1986 (328.4) by the Consumer Price Index (all items) for such calendar year. The Index utilized in said calculation shall be the Consumer Price Index published at regular intervals by the Bureau of Labor Statistics of the United States Department of Labor or any similar successor index. (e) The term "ADJUSTED REVENUE" for any calendar year shall be the GLI Holding's total audited consolidated bus and travel revenues for said calendar year, multiplied by the CPI CHANGE FACTOR for that year 2. Grant. (a) Subject to all of the Provisions of this Agreement, Greyhound hereby grants to Licensee and its Transportation Subsidiaries the sole and exclusive right to use the Marks listed on Schedule C-1, together with all of the goodwill associated therewith, in the United States and Mexico in connection with -2- 3 the Business. (The exclusivity of such grant shall be subject to the existing license agreements set forth in Schedule C-3.) (b) During the term and subject to all of the provisions of this Agreement, Greyhound hereby grants to Licensee and its Transportation Subsidiaries the non-exclusive right to use the Marks listed on Schedule C-2, related to prints and publications, together with all of the goodwill associated therewith, in the United States and Mexico in connection with the Business. (c) It is understood and agreed that Licensee and its Transportation Subsidiaries shall also have the sole and exclusive right to use the term "Greyhound" as part of a trade name in connection with the Business; provided, however, that Licensee shall obtain Greyhound's prior written approval (which approval will not be unreasonably withheld with respect to the Business) before adopting said term as part of a trade name; it being further understood that such approval is not required where "Greyhound" is used as part of a trade name for any type or aspect of the surface transportation businesses as conducted by Greyhound Lines, Inc. and its subsidiaries on the date hereof and "Greyhound" is combined with a word or words descriptive of an aspect of such surface transportation businesses. Approval is hereby given to use the trade names: Greyhound Lines, Inc., Eastern Greyhound Lines Co., Southern Greyhound Lines Co., Central Greyhound Lines Co., Western Greyhound Lines Co., and Greyhound Travel Services Inc. (d) At Licensee's request, Greyhound will, in a separate agreement, license others to use the Marks in connection with the Business in the United States and Mexico. -3- 4 3. Rights and Obligations of the Transportation Subsidiaries. (a) It is agreed that the rights and obligations of Licensee in this Agreement shall also be the rights and obligations (other than the obligations set forth in Section 4) of its Transportation Subsidiaries unless expressly stated to the contrary or as the context otherwise requires. (b) Licensee agrees that it will cause each of its Transportation Subsidiaries to fulfill all of the obligations of this Agreement that are applicable to such Transportation Subsidiaries. (c) It is agreed that Licensee and Transportation Subsidiaries may assign as collateral their rights under the Agreement. 4. Consideration. (a) As consideration for the licenses granted herein GLI Holding shall pay Greyhound certain royalties contingent upon GLI Holding's ADJUSTED REVENUES. Said royalties shall be paid for the calendar years 1989 through 1993. Each calendar year's royalty payments shall be based on GLI Holdings ADJUSTED REVENUE for said year and shall be calculated according to the following schedule: -4- 5 Royalty Schedule (In Millions of Dollars)
IF ADJUSTED REVENUE IS: ROYALTY AMOUNT - -------------------------------------- ------------------------------------------- Below $600 -0- From 600 to 650 $ -0- plus .5% times the amount in excess of $600 From 650 to 700 .25 plus 1.0% times the amount in excess of 650 From 700 to 750 .75 plus 1.5% times the amount in excess of 700 From 750 to 800 1.50 plus 2.0% times the amount in excess of 750 From 800 to 850 2.50 plus 2.5% times the amount in excess of 800 From 850 to 900 3.75 plus 2.0% times the amount in excess of 850 From 900 to 950 4.75 plus 1.5% times the amount in excess of 900 From 950 to 1000 5.50 plus 1.0% times the amount in excess of 950 Above 1000 6.00 plus .5% times the amount in excess of 1000
(b) The parties hereto agree that all payments made pursuant to this Agreement shall be considered and treated consistently by each party as a "Contingent Payment" as such term is used and defined in Sections 1253(c) and (d)(1), respectively, of the Internal Revenue Code of 1986, as amended. (c) Payment of royalties required to be paid by GLI Holding shall be made within ninety (90) days following the end of each calendar year for each of the years 1989 through 1993. Each such payment shall be on account of the royalties which have accrued during the preceding calendar year and shall be accompanied by a report giving such particulars of the business hereunder during such calendar year as are pertinent to an accounting for royalty under this Agreement. (d) GLI Holding agrees to keep true, accurate and usual books of account and records relating to operations under this Agreement, and such books -5- 6 and records shall be open at all reasonable times during the term of this Agreement to inspection by a representative of Greyhound, who shall have the right to examine such books and records in accordance with generally accepted auditing standards, including such tests and such other auditing procedures as they may consider necessary to verify the correctness and accuracy of GLI Holding's reports. 5. Compliance with Laws. Licensee shall operate its Business using the Marks in material compliance with all applicable laws, ordinances, regulations and other requirements of any federal, state, county, municipal or other government body. 6. Conduct. Licensee shall refrain from committing any act or pursing any course of conduct which tends to bring the Marks into disrepute. 7. Ownership of Marks. (a) Licensee hereby agrees that, as between Licensee and Greyhound, Greyhound is the sole owner of the Marks and all the goodwill relating thereto, that the same, at all times hereunder, shall be and remain the sole and exclusive property of Greyhound and that Licensee, by reason of this Agreement, has not acquired any right, title, interest or claim of ownership in such Marks in the United States and Mexico, except for the licenses granted herein. The use by Licensee of the Marks in the United States and Mexico and any and all goodwill arising from such use shall inure solely to the benefit of Greyhound and shall be deemed to be solely the property of Greyhound. (b) Licensee agrees that it will cause to appear on all vehicles, buildings, signs, business materials and the like bearing the Marks, and on all advertising, promotional or display materials used in connection with the Marks, the appropriate statutory notice of trademark registration, all in the form approved by Greyhound in writing. -6- 7 8. Quality of Business. (a) Licensee understands and hereby acknowledges that uniform and high standards of quality with respect to the Business using the Marks are necessary in order to maintain the public image and widespread consumer recognition of such Marks, and that Greyhound has the right to establish and enforce such quality standards with respect to such Marks. Such current standards with respect to such Marks are set forth in the Quality Control Manual set forth in Schedule C-4 attached hereto and made a part hereof. Greyhound acknowledges that the present operation of the Business complies with such standards. (b) In the performance of Business under the Marks, Licensee shall meet Greyhound's standards of quality set forth in Schedule C-4 applicable to the Marks, which may be revised from time to time. Licensee shall not at any time use the Marks in any manner except as permitted herein. 9. Display of Marks. (a) Greyhound shall have the right to establish and enforce the standards governing the manner in which Licensee may display the Marks. The current standards are set forth in the manual entitled Graphic Standards Guide for Trademarks of The Greyhound Corporation, a copy of which is attached hereto as Schedule C-5. Greyhound acknowledges that the present operation of the Business complies with such standards. (b) All use of the Marks hereunder in connection with the Business including premises, vehicles or business materials, or in advertising, promotional or display materials, shall be in accordance with Schedule C-5, as revised from time to time, unless otherwise approved by Greyhound in writing. -7- 8 (c) Upon selling or otherwise transferring use of ownership of any vehicle, building, facility, or equipment bearing the Marks, Licensee shall effectively obliterate the Marks therefrom. 10. Inspection. Greyhound shall have the right to have a qualified representative inspect, upon reasonable notice during regular business hours, facilities where Business under the Marks is conducted in order to determine whether, in such representative's opinion, the applicable quality standards are being complied with. 11. Indemnification. (a) Licensee shall hold Greyhound harmless from and indemnify and defend Greyhound and Greyhound's subsidiaries, affiliates, employees, agents and assigns against any suits, actions, claims, losses, demands, damages, liabilities, costs and expenses of every kind (including product liabilities), including costs and attorneys' fees for defending same, which may arise or result from Licensee's and its Transportation Subsidiaries' conduct of Business using Marks. (b) Greyhound shall hold Licensee and its Transportation Subsidiaries harmless from and indemnify and defend Licensee and Licensee's Transportation Subsidiaries and their directors, officers, employees, agents and assigns against any trademark infringement suits, actions, claims, losses, demands, damages, liabilities, costs and expenses, including costs and attorneys' fees for defending same, which may arise or result by reason of the use by Licensee and its Transportation Subsidiaries of the Marks licensed herein and in accordance with the terms hereof. (c) With respect to any claims falling within the scope of the foregoing indemnifications, -8- 9 (i) each party agrees to notify promptly the other in writing of, and to keep the other fully advised with respect to, such claims, and the progress of any legal actions relating thereto in which the other party is not a participant; (ii) the indemnifying party shall have the right and, if requested to do so by the indemnified party, the obligation, to assume, at its cost, the defense of such a claim instituted against the indemnified party; if the indemnifying party does not undertake the defense of such a claim, then the indemnified party shall be entitled to reimbursement of its reasonable attorneys' fees in defending the claim; (iii) each party shall have the right to participate at its expense in the defense of any claim instituted against it, and if such party does so participate, it shall not have the right to recover against the other party the costs and expenses (including its attorneys' fees) of its participation in such suit; (iv) the foregoing indemnifications shall not be deemed to entitle either party to recover against the other party for lost profits, whether actual, anticipated or estimated; (v) in the event that a party assumes the defense of a claim against the other party, the party assuming the defense shall not enter into any compromise or settlement of the claim without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. 12. Insurance. Licensee shall maintain insurance with respect to its business in such amounts and covering such risks as is customary for the Business and similar businesses, from time to time, including appropriate self insurance. 13. Maintenance of Marks. Greyhound shall, in a prompt and timely manner, take all such actions as may be necessary to secure and maintain the -9- 10 Marks in the United States and Mexico for which Licensee has a license hereunder. It is understood that Greyhound's obligations hereunder shall include the filing of applications to register Marks for goods and/or services applicable to Licensee's Business and for which the Marks are not currently registered. 14. Infringement. Each party shall give prompt notice to the other of any uses of trademarks or service marks by third parties deemed similar to the Marks, or the publication or registration of a trademark or service mark of which it becomes aware and believes to be confusingly similar to one or more of the Marks in the United States and Mexico. If requested by Licensee, Greyhound will promptly decide and notify Licensee whether or not it will institute any legal action in said cases. Licensee shall cooperate fully with Greyhound in any such legal action taken by Greyhound. In the event Greyhound does not institute action within thirty (30) days of receipt of notice from Licensee requesting such action, Licensee may, at its sole cost and expense, and after obtaining Greyhound's consent, which will not be unreasonably withheld, institute such legal action, and Greyhound agrees to cooperate with the Licensee in the prosecution of such action. Any amount awarded with respect to any such legal action shall be first allocated between Greyhound and Licensee in reimbursement of their respective expenses and the remainder shall be allocated to the party controlling the action. 15. Independent Contractor. It is understood that Licensee is an independent contractor and is not an agent, partner, joint venturer or employee of Greyhound, and no fiduciary relationship between the parties exists. Licensee shall have no right to bind or obligate Greyhound in any way, nor shall Licensee represent that it has any right to do so. Greyhound shall have no control over the terms and conditions of employment of Licensee's employees. -10- 11 16. Term. This Agreement shall commence as of the date hereof and shall continue in perpetuity unless earlier terminated as hereafter provided. 17. Abandonment of Use by Licensee of Marks. In the event that Licensee and its Transportation Subsidiaries abandon use of the Marks, Greyhound may, at its option, terminate the license herein with respect to such Marks. 18. Cessation of Use by Greyhound. (a) In the event Greyhound and all its active affiliated companies have ceased use of the term "Greyhound" in their corporate names, and have ceased use of the "Image of a Running Dog" as a corporate logo, then in that event Greyhound shall give prompt notice thereof to Licensee and shall, without additional payment, assign to Licensee or its designee all right, title and interest in the United States and Mexico in and to the trademarks and service marks "Greyhound" and the "Image of a Running Dog" together with the goodwill associated therewith and together with Greyhound's registrations and pending applications therefor in all classes of goods and services. Such assignment shall include the right to receive royalties for use of said trademarks and service marks by third parties. At any time after December 31, 1993 Licensee may purchase the right to receive royalties received from such third parties by payment to Greyhound of an amount equal to three (3) times the then aggregate annual amount of such royalties then being paid to Greyhound. Such annual royalties shall be determined on the basis of the four (4) calendar quarters immediately preceding. (b) Upon the assignment, this Agreement shall terminate except for GLI Holding's obligation to make contingent royalty payments to Greyhound as provided for in Section 4 of this Agreement. -11- 12 19. Default. (a) In the event that Licensee shall be in material breach of any provision of this Agreement and such material breach shall continue for a period of sixty (60) days after the later of (i) receipt of written notice from Greyhound setting forth the nature of the breach and the manner in which it may be remedied or (ii) determination by a tribunal of competent jurisdiction, that Licensee is, in fact, in breach of its obligations hereunder and/or that Licensee's attempted cure is inadequate to satisfy its obligations hereunder, then Greyhound, at its option, may terminate this Agreement with respect to the goods and/or services of the Business involved in the breach; provided, however, that in the event of any breach of the type which cannot be reasonably remedied within such sixty (60) day period, it shall be sufficient that Licensee shall have commenced such remedy within such sixty (60) day period and shall thereafter diligently pursue such remedy to completion. (b) In the event that Licensee shall be in non-material breach of this Agreement and such breach shall continue for a period of thirty (30) days after the later of (i) receipt of written notice from Greyhound setting forth the nature of the breach or (ii) determination by a tribunal of competent jurisdiction, that Licensee has, in fact, breached this Agreement and/or that Licensee's attempted cure is inadequate to satisfy its obligations hereunder, then Greyhound's remedy shall be limited to an award of money damages as may be determined by a tribunal of competent jurisdiction. 20. Obligations After Termination. (a) Upon termination of this Agreement, all of Licensee's rights and privileges hereunder shall cease, and Licensee shall cease using, or permitting to be used, anywhere and in any manner, and whether directly or indirectly: (a) the -12- 13 Marks and (b) all advertising and promotional materials, labels and signs bearing the Marks; provided, however, that Licensee shall have a reasonable period of time following termination to wind up its use of the Marks. After termination of this Agreement, Licensee will not adopt or use any trademark, service mark or trade name or trade style confusingly similar to Marks, no shall Licensee thereafter hold forth, declare or in any way suggest that Licensee has any connection with Greyhound. (b) Upon termination of this Agreement in accordance with Section 18(b), all of Greyhound's rights and privileges hereunder shall cease except for Greyhound's right to receive contingent royalties through 1993 in accordance with Section 4 hereof. After such termination, Greyhound and its affiliated companies shall cease using or granting licenses for the use thereof, anywhere and in any manner, whether directly or indirectly, the marks assigned to Licensee as provided for in Section 18(b) and all advertising and promotional materials, labels, and signs bearing said marks; provided, however, that Greyhound shall have a reasonable period of time following termination to wind up its use of said marks. After termination of this Agreement, Greyhound will not adopt or use any trademark, service mark or trade name or trade style confusingly similar to said marks, nor shall Greyhound thereafter hold forth, declare or in any way suggest that Greyhound has any connection with the Licensee. 21. Assignment. It is agreed that this Agreement shall not be assignable by Licensee, except in connection with the sale of the entire Business of Licensee and its Transportation Subsidiaries. 22. Notice. All notices which are required or may be given pursuant to the terms of this Agreement shall be in writing and shall be deemed given upon -13- 14 personal delivery or four business days after being sent by registered mail, postage prepaid, addressed as follows: If to Greyhound: The Greyhound Corporation Greyhound Tower Phoenix, Arizona 85077 Attention: Vice President and General Counsel If to GLI Holding: GLI Holding Company 2400 InterFirst Plaza 901 Main Street Dallas, Texas 75202 Attention: President If to GLI Operating: GLI Operating Company 2400 InterFirst Plaza 901 Main Street Dallas, Texas 75002 Attention: President
or at such other address as any party hereto shall have designated by notice in writing to the other party hereto. 23. Representations. (a) Greyhound represents and warrants that all registrations of the Marks are subsisting on the trademark registers set forth in Schedules C-1 and C-2 attached hereto and are in full force and effect and all applications listed on Schedules C-1 and C-2 are pending in the trademark offices of such jurisdictions. Greyhound will use commercially reasonable efforts to keep such registrations of Marks subsisting on the trademark registers in full force and effect. (b) Greyhound represents and warrants that as of the date of this Agreement, Greyhound is the direct and unrestricted owner of all right, title and interest in and to the Marks and in and to the registrations thereof and applications therefor listed on Schedules C-1 and C-2, and will use commercially reasonable efforts to retain such direct and unrestricted ownership in the Marks. -14- 15 No such right, title and interest has been mortgaged, pledged, transferred, assigned or, except as set forth in Schedule C-3, licensed to any third party or is held subject to any trust or similar right in favor of any third party. During the term of this Agreement, Greyhound will not mortgage, pledge, transfer or assign (except to a controlled subsidiary and affiliate) the Marks to any third party or allow the Marks to be held subject to any trust or similar right in favor of any third party. Any such mortgage, pledge, transfer or assignment to a controlled subsidiary or affiliate of Greyhound shall be subject to the terms of this Agreement. (c) The Marks including the trademarks listed on Exhibit B of the Acquisition Agreement comprise all the material trademarks and trade names (including all applications, registrations, extensions, and renewals thereof) which are necessary to permit the continuation of the Licensee's or any of its subsidiaries' Business in the same manner as now conducted. 24. Miscellaneous. (a) Nothing contained in this Agreement shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision of this Agreement and of any statute, law, ordinance, order or regulation contrary to which the parties hereto have no legal right to contract, the latter shall prevail; provided, however, that in such event the provisions of this Agreement so affected shall be curtailed and limited only to the extent necessary to permit compliance with the minimum legal requirement and no other provisions of this Agreement shall be affected thereby. (b) This Agreement shall be governed and construed under and in accordance with the laws of the State of Arizona. -15- 16 (c) No waiver of any term or condition of this Agreement shall be construed as a waiver of any other term or condition; nor shall any waiver of any default under this Agreement be construed as a waiver of any other default. (d) This Agreement may not be amended except by a writing executed by the parties hereto. IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written. THE GREYHOUND CORPORATION By /s/ RICHARD C. STEPHAN R. C. Stephan, Vice President GLI HOLDING COMPANY By /s/ CRAIG R. LENTZSCH Craig R. Lentzsch, Vice President GLI OPERATING COMPANY By /s/ RICHARD C. STEPHAN R. C. Stephan, Vice President -16- 17 SCHEDULE C-1 UNITED STATES TRADEMARK REGISTRATIONS
TRADEMARK CASE REG. NO. REG. DATE SERIAL NO. CLASSIFICATION - ----------------------------------- ---------- -------- --------- ---------- -------------- DISCOVER GREYHOUND AMERICA 030380001 915812 06/29/71 279066 39 GO GREYHOUND 034030001 1164951 08/11/81 251440 39 GREYHOUND 028730001 541198 04/17/51 530197 39 GREYHOUND 028730003 805794 03/15/66 226051 39 GREYHOUND 028730034 887322 03/10/70 311032 16 GREYHOUND 028730038 886508 02/17/70 311134 39 GREYHOUND 028730039 888813 03/03/70 311868 42 GREYHOUND 028730043 888952 04/07/70 311131 12 GREYHOUND 028730066 989213 07/23/74 460954 39 GREYHOUND 028730174 1189538 02/09/82 282709 35 GREYHOUND PUTS IT ALL TOGETHER 034580001 1236736 05/03/83 368344 39 GREYHOUND -- IRD (OLD) 028740001 541197 04/17/51 530196 39 GREYHOUND -- IRD (OLD) 028740008 805796 03/15/66 226053 39 IRD 029090001 805795 03/15/66 226052 39 IRD 029090004 886509 02/17/70 311265 39 IRD 029090009 887695 03/17/70 311137 16 IRD 029090012 888954 04/07/70 311262 12 IRD 029090013 890634 05/05/70 312191 42 IRD (OLD) 023760001 541199 04/17/51 530198 39 STRIPE DESIGN (COMPAC 2) 034330001 1204367 08/10/82 293699 39 STRIPE DESIGN (COMPAC) 029140003 1195382 05/11/82 293676 39 STRIPE DESIGN (COMPACT) 029140002 1010865 05/13/75 461134 39
MEXICAN TRADEMARK REGISTRATIONS AND APPLICATIONS
TRADEMARK CASE REG. NO. REG. DATE SERIAL NO. CLASSIFICATION - ----------------------------------- ---------- -------- --------- ---------- -------------- GREYHOUND 028730065 91427 10/28/57 62 GREYHOUND 028730035 16371 61 GREYHOUND 028730036 16449 61 GREYHOUND -- IRD 091000010 39060 06/09/48 62 IRD (OLD) 003760013 91768 10/28/57 62 IRD 003090095 16372 63 IRD 003090096 16450 63
IRD means Image of the Running Dog 18 SCHEDULE C-2 UNITED STATES TRADEMARK REGISTRATIONS
TRADEMARK CASE REG. NO. REG. DATE SERIAL NO. CLASSIFICATION - -------------------------------------------------------------------------------------------------------- GREYHOUND 338730037 886350 02/17/70 311133 16 IRD 329090013 888302 03/24/70 311264 16 MEXICAN TRADEMARK REGISTRATIONS AND APPLICATIONS - -------------------------------------------------------------------------------------------------------- TRADEMARK CASE REG. NO. REG. DATE SERIAL NO. CLASSIFICATION - -------------------------------------------------------------------------------------------------------- GREYHOUND 338730059 146188 07/18/68 23576 38 IRD 329090025 146193 11/23/68 23583 38
IRD means Image of a Running Dog 19 SCHEDULE C-3
LICENSEE NAME DATE TERM MARKS LICENSED - ---------------------------- ------- --------------- ---------------------------------------- A. GENERAL Texas, New Mexico & 1/10/78 perpetual AMERICRUISER, AMERIPASS, BUS DESIGN, Oklahoma Coaches, Inc. GREYHOUND, IRD, SCENICRUISER, STRIPE DESIGN (COMPACT), SUPER 7 & DESIGN Greyhound Lines of Unwritten authorization to use the marks Canada, Ltd. GREYHOUND, IRD and other transportation-related marks in connection with transportation operations crossing the U.S.-Canada border
Greyhound Travel International Inc., Greyhound Holdings Ltd. and their subsidiary companies use the name "Greyhound" and the "Image of a Running Dog" logotype in the United States and Mexico as trade names (business names) in connection with travel agency and tour services which are booked outside of the United States and Mexico. Whenever such name and/or logotype is used as provided herein the U.S. and Mexico, a disclaimer will be provided that the user is not affiliated with Licensee. B. TRANSPORTATION FRANCHISE LICENSES Delta Bus Lines, Inc. 6/21/85 5 years GREYHOUND, IRD and other transportation-related marks Kerrville Tours, Inc. 6/7/85 10 years same American Coach Lines, Inc. 4/30/86 5 years same Northwestern Stage Lines, 7/8/85 5 years same Inc. Raz Transportation Company 8/5/85 5 years same C. PICK-UP & DELIVERY LICENSES Various Pick-up & various 60 days notice BUS DESIGN, GPX, GREYHOUND, GREYHOUND Delivery Contractors PACKAGE EXPRESS, IRD, NBO, NEXT BUS OUT
Greyhound Lines, Inc. ("GLI"), a subsidiary of Greyhound, has entered into pick-up and delivery service agreements ("P&D Agreement") with various parties ("Contractors") whereby the Contractors pick up and deliver package express and baggage between GLI bus terminal and the premises of various customers. In connection with such P&D Agreements, Greyhound granted each Contractor a non-exclusive non-transferable, royalty-free license ("License Agreement") to use the marks identified above in a defined territory, typically defined by U.S. Postal Service zip code areas. Any such License Agreement remains in effect for the period of the companion P&D Agreement, which is terminable by either party on ten days prior written notice, and in any event, such License Agreement is terminable by Greyhound upon 60 days prior written notice. 20 SCHEDULE C-4 QUALITY CONTROL MANUAL 21 SCHEDULE C-5 GRAPHICS STANDARD GUIDE FOR TRADEMARKS OF THE GREYHOUND CORPORATION EX-10.7 8 ASSIGNMENT OF EXHIBIT B TRADEMARKS DATED 3/18/87 1 EXHIBIT 10.7 RECORDABLE ASSIGNMENT OF EXHIBIT B TRADEMARKS WHEREAS, The Greyhound Corporation, an Arizona corporation, located at Greyhound Tower, Phoenix, Arizona 85077 ("Assignor") has adopted, used and is using the marks identified on Exhibit B attached hereto and made a part hereof; and WHEREAS, GLI Holding Company, a Delaware corporation located at 2400 InterFirst Plaza, 901 Main Street, Dallas, Texas 75202 ("Assignee") is desirous of acquiring said marks and registrations thereof. NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, Assignor does hereby assign unto the Assignee all its rights, title and interest in and to said marks, together with the goodwill of the business symbolized by the marks and the registrations thereof. THE GREYHOUND CORPORATION By /s/ RICHARD C. STEPHAN R. C. Stephan, Vice President STATE OF ARIZONA ) ) ss COUNTY OF MARICOPA ) The foregoing instrument was acknowledged before me this 18th day of March, 1987 by R. C. Stephan of The Greyhound Corporation, an Arizona corporation, on behalf of the corporation. SEAL /s/ STELLA MATIJEVICH Notary Public My Commission Expires Dec. 9, 1988 2 EXHIBIT B UNITED STATES TRADEMARK REGISTRATIONS
REG. REG. SERIAL TRADEMARK CASE NO. DATE NO. CLASSIFICATION - ----------------------------------------------------------- --------- ------- -------- ------ -------------- AMAZING AMERICA VACATION 029160001 914746 06/08/71 330278 39 AMERI-LODGING 033950001 1159523 06/30/81 225437 42 AMERICRUISER 028670002 987565 07/02/74 454620 39 AMERICRUISER 028670003 1056555 01/18/77 67599 12 AMERICRUISER 2 033880001 1154827 05/19/81 214642 12 39 AMERIPASS 028680001 975681 12/25/73 437771 39 AND LEAVE THE DRIVING TO US 029030001 766891 03/17/64 154241 39 AND LEAVE THE DRIVING TO US 029030002 888953 04/07/70 311140 12 AND LEAVE THE MOVING TO US 028690001 923363 11/02/71 339013 39 AUTOBUSES LATINOS 031000001 1056284 01/11/77 65406 39 BUS DESIGN 028700001 987562 07/02/74 447860 39 DISCOVER AMERICA 029150001 915813 06/29/71 279067 39 ELECTRONICRUISER 029040001 880663 11/11/69 310562 39 ELECTRONICRUISER 029040002 887032 03/03/70 274619 12 FAST 500 033920001 1153419 05/05/81 220815 39 GPX 029060001 849607 05/21/68 266327 39 HELPING HAND 031220001 1048297 09/14/76 70056 39 LEAVE THE REST TO US! 037860001 1398029 06/17/86 435760 42 LUCKY STREAK 034910001 1303149 10/30/84 452781 39 NEXT BUS OUT 028790001 988608 07/16/74 454545 39 OMNI-PAK 034550001 1280148 05/29/84 361439 39 SCENICRUISER 028820005 876380 09/09/69 311143 12 SCENICRUISER 028820008 676464 03/31/59 52488 39 STRIPE DESIGN(AIRPORT EXPRESS) 035060001 1359728 09/10/85 521865 39 SUPER 7 AND DESIGN 028810002 1161349 07/14/81 202491 39 SUPERCRUISER 028980002 873635 07/22/69 306482 39 SUPERCRUISER 028980003 391502 05/26/70 334481 12 SUPERCRUISER 028980004 910861 04/06/71 335569 28 TAKE THE BUS AND LEAVE EVERY 028990001 832024 07/11/67 239261 100 TAKE THE BUS AND LEAVE EVERY 033910001 1170583 09/22/81 219728 39 TOURMASTER 030000001 843018 01/23/68 247016 36 USABUS 033940001 1182456 12/15/81 225436 39 WE'VE GOT MORE DRIVE 034020001 1167704 09/01/81 250766 39 WHEELS TO WINGS 034420001 1209059 09/14/82 337158 39 XPRESSPAK 033660001 1127660 12/11/79 181083 39 UNREGISTERED TRADEMARKS TRADEMARK - ----------------------------------------------------------- BUS DESIGN II PACKAGEXPRESS (DESIGN)
EX-10.8 9 BUS PURCHASE REQUIREMENTS AGREEMENT DATED 3/18/87 1 EXHIBIT 10.8 BUS PURCHASE REQUIREMENTS AGREEMENT This Bus Purchase Requirements Agreement (the "Agreement") is entered into as of March 18, 1987, by and among GLI Operating Company, a Delaware corporation ("GLI Operating"), Greyhound Lines, Inc. a California corporation ("Seller"), Transportation Manufacturing Corporation, a Delaware Corporation ("TMC"), and Motor Coach Industries, Inc., a Delaware corporation ("MCI"). As used herein, the term "TMC or MCI" shall mean whichever or both of TMC or MCI as is applicable in the context of the sentence in which it is contained. WITNESSETH: WHEREAS, GLI Operating requires additional new motor coaches to perform its business and desires to make arrangements to obtain for use motor coaches manufactured by TMC or MCI; and WHEREAS, the United States Department of Justice has advised the parties of its position that the purchase of buses from Seller, TMC or MCI may conflict with certain prohibitions contained in the Final Judgment entered in the matter of United States of America v. The Greyhound Corporation (Civil Action No. 57C1107) D.C. N.D. Illinois, 1957 (the "Judgment"). NOW, THEREFORE, the parties agree as follows: 1. Obligation to Purchase or Lease Buses. For calendar years 1987 through 1991, GLI Operating shall lease or purchase pursuant to the terms of this Agreement not less than 75% of its motor coaches for each such year of the type manufactured by TMC or MCI as of August 1 of the preceding year or planned to be manufactured by TMC or MCI in such year (not including vans and the like made by major manufacturers) which shall be manufactured by TMC or MCI (the "Buses"). For the purposes of determining compliance with the 2 minimum purchase requirements of this Agreement, Buses ordered and purchased or leased under the Bus Purchase Agreement by and between GLI Holding Company and Seller of even date herewith (the "Bus Purchase Agreement") shall be included. GLI Operating shall be obligated to lease from Seller or an affiliate of Seller, and Seller or an affiliate of Seller shall be obligated to lease to GLI Operating any bus delivered pursuant to this Agreement prior to the expiration of 60 days after the vacation or termination of the Judgment, or until 60 days after an amendment is entered into eliminating the applicable restrictions contained in the Judgment. Any Buses delivered thereafter pursuant to this Agreement shall be purchased by GLI Operating from TMC or MCI, and TMC or MCI agrees to sell to GLI Operating any such Buses. 2. Lease Terms. Buses that GLI Operating shall lease in accordance with the terms of this Agreement from Seller or an affiliate of Seller shall be leased pursuant to operating leases from Seller or an affiliate of Seller at reasonable commercial lease rates based upon the bus prices otherwise in effect for 1987 orders as described in Section 3 below and thereafter based upon the published list prices as described in Section 3 below less cost justified volume discounts as described in Section 4 below. 3. Purchase Price. During 1987, the purchase price to be paid by GLI Operating to Seller, TMC or MCI for each Bus to be purchased in accordance with the terms of this Agreement shall be TMC's or MCI's published list price in effect. During the remainder of this agreement, the purchase price to be paid by GLI Operating to TMC or MCI for each Bus to be purchased in accordance with the terms of this Agreement shall be the published list price less cost justified volume discounts based on annual volume of Buses purchased or leased pursuant to the terms of this Agreement as described in Section 4 below and shall be payable in accordance with TMC's or MCI's then published terms (which terms as of the date hereof are "Net 30 days"). For purposes of this Agreement, the published list price shall not be any greater than the lowest prices paid by any intercity bus company customer of TMC or MCI for such Buses. 2 3 4. Volume Discounts. The parties agree that the amount of the volume discount (from the published list price) and from the amount used to ascertain lease rental amounts on all Buses purchased or leased pursuant to the terms of this Agreement during any calendar year shall be at least the amounts set forth below:
BUSES PURCHASED AND LEASED PER CALENDER YEAR DISCOUNT - ------------------------- -------- Less than 51 None 51 - 100 2.5% 101 - 150 4.5% More than 150 6.5%
The initial amount paid by GLI Operating or used to ascertain lease rental amounts shall be based on its annual requirements estimate. For the purposes of calculating the discount, such estimate shall include buses ordered under the Bus Purchase Agreement. If at the end of any calendar year, GLI Operating has purchased and leased in the aggregate more or less than the estimated number of Buses, then the purchase price for all Buses purchased during such calendar year shall be appropriately adjusted in accordance with the foregoing table, and TMC or MCI, or GLI Operating, as the case may be, shall promptly pay any difference to the other for Buses purchased, or, for Buses leased, Seller or an affiliate of Seller shall make appropriate adjustment to the lease rental amounts, retroactively to the inception of the lease. 5. Estimate and Firm Order. GLI Operating will provide TMC with its best estimate of its minimum requirements for Buses during each calendar year. Its estimate for 1987 shall be delivered within ten days after the execution of this Agreement and for 1988, 1989, 1990 and 1991, shall be delivered no late than June 1 of the year prior to each such year. GLI Operating will provide TMC with a firm order no later than August 1 of the prior year which order shall include the specifications (including options and accessories) of the Buses to be purchased or leased. MCI and TMC shall build such Buses in accordance with industry standards for quality and reliability. 3 4 6. Buses. GLI Operating reserves the right to request that TMC incorporate minor modifications in the options or accessories requested in the firm order with respect to the Buses by written notice to TMC within a reasonable time for implementing such modifications. GLI Operating will bear the cost of making such modifications. 7. Cooperation; Consent. GLI Operating will cooperate with TMC and MCI to provide stable configurations, substantial order lead times, and orderly delivery dates. With respect to Buses purchased and sold under the Purchase Agreement, TMC hereby (a) consents to the assignment by Seller, or its assignees, or any and all manufacturers' warranties to GLI Operating or any of its direct or indirect subsidiaries, and (b) agrees that GLI Operating or any of its direct or indirect subsidiaries shall be entitled to enforce such warranties directly in its own name, and for its own account. 8. Delivery. TMC or MCI shall tender delivery of the Buses to GLI Operating F.O.B. at Roswell, New Mexico, or Pembina, North Dakota, as applicable. 9. Assignment. Neither TMC and MCI nor GLI Operating may assign their rights and duties under this Agreement without the prior written consent of the other parties hereto; provided, however, an assignment without such consent shall be valid if made to an affiliate of such party and, if in the case of GLI Operating, it remains subject to the obligations of this Agreement. 10. Governing Law. The parties agree that this Agreement and performance hereunder shall be interpreted and enforced in accordance with the laws of the State of Texas. 11. Entire Agreement. This Agreement encompasses the entire agreement and understanding between the parties. No representations, agreements, arrangements, or understandings, oral or written, between the parties and relating to the subject matter of this Agreement shall survive its execution. 4 5 12. Amendments. This Agreement may not be amended or modified except in writing, signed by all parties hereto, and, subject to the restriction provided in Section 9 hereof, this Agreement shall be binding upon and inure to the benefit of the respective parties hereto, their successors, legal representatives and assigns. 13. Captions. The underscored captions contained herein are inserted only for the convenience of the parties and are not substantively part of this Agreement. 14. Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws in effect during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. 15. Notices. All notices required to be given hereunder shall be in writing and be hand delivered, telexed or mailed via U.S. Certified Mail, return receipt requested, or express mail (such as Federal Express), in either case with postage prepaid, and addressed as follows: If to GLI Operating: 2400 InterFirst Plaza 901 Main Street Dallas, Texas 75202 Attention: President If to Seller: Transportation Leasing Co. Greyhound Tower Phoenix, Arizona 85077 Attention: President
5 6 If to TMC or MCI, as applicable: Transportation Manufacturing Corporation Earl Cummings Blvd., Bldg. 1083 P.O. Box 5760 (R.I.A.C.) Roswell, New Mexico 88201 or Motor Coach Industries, Inc. 1149 St. Matthew Avenue Winnipeg, Manitoba R3G OJ8
In Witness Whereof, the parties have executed this Agreement effective the day and year first above written. GLI OPERATING COMPANY GREYHOUND LINES, INC. By /s/ CRAIG LENTZSCH By /s/ RICHARD STEPHAN Craig R. Lentzsch R. C. Stephan Vice President Vice President TRANSPORTATION MANUFACTURING CORPORATION MOTOR COACH INDUSTRIES, INC. By /s/ F. E. LAKE By /s/ F. E. LAKE F. E. Lake F. E. Lake Treasurer Treasurer
6 EX-10.9 10 EQUIPMENT SUBLEASE DATED MARCH 18, 1987 1 EXHIBIT 10.9 (LEASED BUSES) EQUIPMENT SUBLEASE This Equipment Sublease Agreement ("Sublease") is made as of March 18, 1987, between GREYHOUND LINES, INC., a California corporation ("Sublessor") and GLI OPERATING COMPANY, a Delaware corporation ("Sublessee"). WHEREAS, Sublessor is the lessee of certain intercity buses (individually a "Unit of Equipment," and collectively the "Equipment") described on Exhibit A attached hereto, pursuant to one or more bus leases described on Exhibit B attached hereto (such bus leases are individually or collectively referred to herein as the "Master Leases") as such Master Leases may have been amended or assigned from time to time; and WHEREAS, Sublessee is desirous of subletting the Equipment and Sublessor is agreeable to subletting the Equipment to Sublessee; NOW, THEREFORE, in consideration of the foregoing, and the covenants and conditions herein contained, Sublessor does hereby sublease the Equipment to Sublessee, subject to the following terms and conditions; 1. The term of this Sublease with respect to each Unit of Equipment shall be the corresponding term of the Master Lease applicable to such Unit of Equipment. 2. This Sublease is subject to all of the terms, conditions and rentals of each Master Lease (i) except those which are inconsistent with the express terms and conditions of this Sublease, (ii) except that Sublessee agrees promptly to reimburse Sublessor, upon being invoiced therefor, for the tire rental rates and all other costs attributable to the Equipment that Sublessor is required to pay and does pay to The Goodyear Tire & Rubber Company ("Goodyear") on behalf of itself or Sublessee in accordance with the terms of the Agreement between Sublessor and Goodyear dated August 9, 1983, for the lease of tires, as such Agreement may be amended from time to time (the "Goodyear Agreement") and (iii) except that the rent for Equipment leased by Sublessor under the Master Lease shall be as set forth on Exhibit C attached hereto; and Sublessee agrees to abide by the obligations of Sublessor under said Master Lease, a copy of which has been provided to Sublessee and is made a part hereof by reference. For the purposes of the incorporation of the Master Leases herein, the term "Lessor" shall mean and refer to Sublessor, the term "Lessee" shall mean and refer to Sublessee, 2 and the term "Equipment" shall mean and refer to the Equipment under this Sublease. 3. If, at any time on or before the third anniversary of this Sublease, there shall occur a strike, lockout or labor controversy or the entry of any injunction respecting a labor dispute which prevents Sublessee from operating a material portion of its scheduled intercity transportation services (such events being collectively referred to as a "Work Stoppage"), then Sublessee shall be entitled to obtain relief from its obligation to make timely payment of certain Equipment rentals (excluding tire rentals) due under this Sublease. The Sublessee may, at its option, obtain such relief by executing a promissory note substantially in the form attached hereto as Exhibit D, for up to six months of payments with respect to (a) all Equipment of 1979 and 1980 model years, and (b) all Equipment of 1981 and 1982 model years which are leased pursuant to the Master Lease of Motor Vehicles dated December 15, 1982, between Sublessor and Security Pacific Equipment Leasing, Inc. 4. Sublessee acknowledges that to the extent it desires, it has had full opportunity to inspect or cause to be inspected the Equipment and agrees to sublease the Equipment "AS IS -- WHERE IS"; however, Sublessee shall have no obligation to repair, alter or restore the Equipment to a condition other than that existing on the date hereof, ordinary wear and tear excepted. 5. Sublessee shall have the power, without obtaining the consent of Sublessor, to make collateral assignments of its rights under this Sublease and to sublease the Equipment. Sublessee shall, however, remain primarily liable for the rental due Sublessor and all other terms and conditions of this Sublease. Sublessor hereby acknowledges that Sublessee has assigned its rights hereunder as collateral for its obligations under that certain Credit Agreement dated as of March 18, 1987, among Sublessee, Irving Trust Company, as Agent, and others. 6. All notices or consents required hereunder to be given to Sublessor shall be in writing and be hand delivered or Telexed to Sublessor, or mailed to it via U.S. Certified Mail, postage prepaid, addressed to: Sublessor at: Transportation Leasing Co. Greyhound Tower 111 West Clarendon Phoenix, Arizona 85077 Attention: President
and all notices or consents required hereunder to be given to Sublessee shall be in writing and be hand delivered or Telexed to 2 3 Sublessee or mailed to it via U.S. Certified Mail, postage pre-paid, addressed to: Sublessee at: GLI Operating Company 2400 InterFirst Plaza 901 Main Street Dallas, Texas 75202 Attention: President
or to such other address as either party may designate in writing to the other party. 7. Anything contained in any provisions of this Sublease to the contrary notwithstanding, Sublessee agrees, with respect to the Equipment, to comply with and remedy any default within the period allowed to Sublessor under the Master Lease, even if such time period is shorter than the period otherwise allowed therein due to the fact that notice of default from Sublessor to Sublessee is given after the corresponding notice of default from lessor under the Master Lease to Sublessor. Sublessor agrees to forward to Sublessee, upon receipt thereof by Sublessor, a copy of each notice of default received by Sublessor in its capacity as lessee under the Master Lease. Sublessee agrees to forward to Sublessor, upon receipt thereof, copies of any notices received by Sublessee relating to the Equipment, the Master Lease or this Sublease. 8. Sublessor hereby assigns to Sublessee any and all manufacturer's warranties on the Equipment, until expiration or termination of this Sublease. 9. Anything contained in this Sublease or the Master Lease to the contrary notwithstanding, Sublessor or Sublessee shall provide all tires for the Equipment in accordance with the terms of the Goodyear Agreement. 10. Sublessee shall keep logs and records of mileage, maintenance and service for each Unit of Equipment in such form as Sublessor may reasonably request from time to time, and shall make such logs and records available to Sublessor, or its agent, for inspection and copying at any reasonable time. 11. This Sublease is the entire agreement between the parties with respect to the rental of the Equipment, and it shall not be modified or amended except by a written agreement signed by the parties. 3 4 IN WITNESS WHEREOF, the parties have caused this Sublease to be executed by their duly authorized officers as of the date first written above. GREYHOUND LINES, INC. /s/ RICHARD STEPHAN By RICHARD STEPHAN R. C. Stephan, Vice President GLI OPERATING COMPANY /s/ RICHARD STEPHAN By RICHARD STEPHAN R. C. Stephan, Vice President 4 EX-10.10 11 MASTER LEASE DATED MARCH 18, 1987 1 EXHIBIT 10.10 MASTER LEASE This "LEASE," dated as of March 18, 1987, is made by and between GREYHOUND LINES, INC., a California corporation ("Lessor") and GLI REALTY COMPANY, a Delaware corporation ("Lessee"). 1. RECITALS. Pursuant to Section 2.1 of that certain "Acquisition Agreement" dated December 22, 1986, among The Greyhound Corporation, Lessor, GLI Operating Company, GLI Holding Company, GLI Bus Operations Holding Company, and GLI Merger Company, Lessor has agreed to lease certain facilities to Lessee and Lessee has agreed to lease such facilities from Lessor on the terms and conditions set forth herein. It is contemplated pursuant to Section 7.02 of the Acquisition Agreement that subsequent to the execution hereof Lessor will change its name to "Transportation Leasing Co." and that Lessee's parent corporation, GLI Operating Company, a Delaware corporation, will change its name to "Greyhound Lines, Inc." Notwithstanding such similarity of names all references herein to Greyhound Lines, Inc. are intended to refer to Lessor, a California corporation, as it exists on the date hereof and shall hereafter apply to Lessor regardless of such other names under which it may subsequently operate. 2. PREMISES. Lessor hereby leases to Lessee and Lessee leases from Lessor for the term, at the rental, and upon all of the conditions set forth herein, those parcels of real property situated at the locations described in Exhibits "A" and "B" attached hereto ("Terminal(s)" or "Premises"), together with all improvements thereon and appurtenances thereto, subject to any existing leases, licenses or easements for portions of the Premises previously granted by Lessor. The Terminals described in Exhibit "A" (the "Owned Terminals") are owned by Lessor, and the 2 Terminals described in Exhibit "B" (the "Subleased Terminals") are leased by Lessor under written leases described in Exhibit "B". The written leases of the Subleased Terminals described in Exhibit "B" are referred to herein as "Prime Leases". In addition to the provisions of this Lease, the Subleased Terminals are subject to the terms and conditions of the Prime Leases and to the additional provisions set forth in Exhibit "C" attached hereto. 3. TERM. 3.1 Term. The "Term" of this Lease shall be five (5) years, beginning March 19, 1987 and expiring March 18, 1992, or with respect to the Subleased Terminals, any earlier expiration date provided for in any Prime Lease, unless sooner terminated pursuant to any provision hereof. 3.2 Termination by Lessor. (a) During each "Lease Year" of this Lease (the twelve month period beginning March 19 and ending March 18), Lessor shall have the right to terminate this Lease with respect to any seven (7) of the Owned Terminals at any time during the Lease Year, except that during the fifth Lease Year, Lessor shall have the right to terminate this Lease with respect to eight (8) of the Owned Terminals. Lessor shall give Lessee at least six (6) months advance written notice of the termination date of each such Terminal, except with respect to the Owned Terminals located in Cleveland, Ohio, San Francisco, California, and St. Louis, Missouri, as to which 3 Terminals Lessor shall give Lessee at least one (1) year advance written notice of the termination date. Any termination election by Lessor, once exercised, may not be revoked without Lessee's approval. Effective upon the termination date for any Terminal, this Lease shall terminate with respect to such Terminal, 2 3 provided, however, that such termination shall not affect any of the rights or obligations of the parties which may have accrued, or liabilities, accrued or otherwise, which may have arisen prior to termination. (b) In addition, it is hereby agreed that the termination date with respect to the following Subleased Terminals shall be the dates set forth below, unless Lessor provides written notice to Lessee, at least one (1) year prior to the applicable date for a Subleased Terminal, that this lease shall not terminate with respect to such Terminal on the specified date. Lessor's notice shall also advise Lessee of the date when this Lease will terminate or expire with respect to such Subleased Terminal:
SUBLEASED TERMINAL TERMINATION DATE -------------------------- -------------------------- Chicago, Illinois December 31, 1989 San Jose, California December 30, 1987 Dallas, Texas December 31, 1989 San Diego, California December 14, 1989 Kansas City, Missouri June 29, 1987* St. Petersburg, Florida September 30, 1987*
* (Notwithstanding the stated termination date Lessee shall have the benefit of any extended terms or earlier termination rights provided for in the Kansas City, Missouri, and/or St. Petersburg, Florida, Prime Leases in respect of delays in completion or rapid completion of alternate terminals for Lessee's operations). Any terminations of this Lease with respect to Subleased Terminals shall be included in the terminations permitted in paragraph 3.2(a). 3 4 3.3 Termination by Lessee. At any time after the expiration of the second Lease Year, Lessee shall have the right to terminate this Lease with respect to any of the Owned Terminals provided that in no event may Lessee exercise such right with respect to more than five (5) of the Owned Terminals during any Lease Year. Lessee shall give Lessor at lease one (1) year advance written notice of the termination date of each such Terminal (it is agreed that a termination notice may be given prior to the end of the second Lease Year so long as it does not specify a termination date prior to the end of the second Lease Year). Effective upon the termination date for any Terminal, this Lease shall terminate with respect to such Terminal, provided, however, that such termination shall not affect any of the rights or obligations of the parties which may have accrued, or liabilities, accrued or otherwise, which may have arisen prior to termination. 4. RENT. 4.1 Base Rent. Lessee shall pay to Lessor as rent for the use of the Premises base rent as set forth in Exhibit "D" attached hereto, payable in advance on or before the first day of each calendar month of the Term. Rent for any period less than one month shall be a pro rata portion of the monthly installment. Rent shall be payable to Lessor at 1842 Greyhound Tower, Phoenix, Arizona 85077 or to such other person or at such other place as Lessor may designate by notice as provided herein. In the event this Lease is terminated with respect to any Terminal, the base rent shall be reduced, effective as of the date of termination, by the amount of base rent attributable to the Terminal in question as specified on Exhibit "D". 4.2 Additional Rent. Lessee shall pay all taxes, insurance premiums, operating expenses, and other expenses 4 5 associated with the Premises, including but not limited to those items described in detail in this Lease, but excluding only the base rents required to be paid under the Prime Leases, which shall remain Lessor's obligation. The expenses and any other amounts payable by Lessee under this Lease shall be additional rent, and Lessor shall have the same rights and remedies for nonpayment of additional rent that Lessor has for nonpayment of monthly base rent. 4.3 Interest. If any payment required to be made pursuant to this Lease is not made within ten (10) days of the date on which it is due, then it shall bear interest at the lesser of fifteen percent (15%) per annum or the maximum rate permitted by law, from the date due until paid. 4.4 Net Lease. This Lease shall be deemed and construed to be a "net lease" and Lessee shall pay to Lessor absolutely net throughout the Term of this Lease the rent and other payments due hereunder, free of any charges, assessments, impositions, expenses or deductions of any kind and without abatement, deduction or set-off, and, except for the base rents required to be paid under the Prime Leases, which shall remain Lessor's obligation, under no circumstances or conditions, whether now existing or hereafter arising, shall Lessor be expected or required to make any payment of any kind whatsoever or be under any obligation or liability hereunder, and Lessee agrees to pay all costs and expenses of every kind and nature whatsoever arising out of or in connection with the Premises which may arise during the Term of this Lease or be reasonably allocable to Lessee, and which, except for the execution and delivery hereof, would otherwise have been payable by Lessor. 5 6 4.5 Rent Deferral During Work Stoppage. If, at any time during the first three and one-half (3 1/2) Lease Years, there shall occur a strike, lockout or labor controversy or the entry of any injunction respecting a labor dispute affecting Lessee's operations (such events are referred to as "Work Stoppage"), which materially impairs Lessee's operations at one or more Terminals, then Lessee shall be entitled to defer the payment of the Base Rent described in paragraph 4.1 with respect to the Terminals affected by the Work Stoppage for the duration of the Work Stoppage but in no event more than six (6) months. Upon cessation of the Work Stoppage or, if earlier, upon the date six (6) months after commencement of the Work Stoppage, Lessee shall deliver to Lessor its promissory note for the amount of the deferred Base Rent, bearing interest at the rate of eleven percent (11%) per annum, due and payable one (1) year from the date of such note. Lessee shall only be entitled to defer the payment of Base Rent to Lessor due to a Work Stoppage, and in no event may Lessee defer the payment of Additional Rent as described in paragraph 4.2. 5. USE. 5.1 Use. The Premises shall be used by Lessee for the conduct of Lessee's business operation of a bus terminal, for the loading and unloading of passengers, baggage, mail, and package express, and for uses incidental thereto. 5.2 Compliance with Law. Lessee, at Lessee's expense, shall at all times comply with all applicable statutes, ordinances, rules, regulations, orders and requirements in effect during the Term regulating the use by Lessee of the Premises; provided, however, that all matters relating to compliance with environmental laws and related matters shall be governed by the 6 7 Acquisition Agreement. Lessee shall not use the Premises in any manner which tends to create waste or a nuisance. 5.3 Condition of Premises. Lessee hereby accepts the Premises in the physical condition existing as of the date of this Lease, AS IS -- WHERE IS, and acknowledges that the Premises are subject to all applicable zoning, municipal, county and state laws, ordinances and regulations governing and regulating the use of the Premises, and accepts the Lease subject thereto and to all matters disclosed thereby and by any Exhibits hereto. The foregoing, however, shall not be construed as a waiver by Lessee of the benefit of any of the representations, warranties, indemnities, covenants, or other rights set forth herein or in the Acquisition Agreement and/or the exhibits hereto or thereto. 6. EXISTING LEASES. The existing leases entered into by Lessor for portions of the Premises are described in Exhibit "E" attached hereto ("Existing Leases"). Lessee acknowledges receipt of a copy of each Existing Lease. Lessor hereby assigns to Lessee, its successors and assigns, all of Lessor's right, title and interest in and to such Existing Leases, which shall be subleases between Lessee and the tenants under such leases effective as of the date of this Lease for the period of the Term of this Lease; provided, however, that Lessor reserves the rights of termination contained in such Existing Leases. Upon the giving of any notice of termination of this Lease with respect to any or all Terminals, Lessor shall have the right either to request Lessee to terminate the Existing Leases relating to the affected Terminals, or Lessor may terminate such Existing Leases directly, but in either event Lessor shall be liable for payment of any termination penalties or damages arising as a result of such termination of Existing Leases. Lessee, for itself and its successors and assigns, does hereby accept, assume, take over, and succeed to all 7 8 Lessor's right, title and interest in and to such Existing Leases and all their terms, conditions, provisions, covenants and obligations, and Lessee hereby covenants to fully and faithfully make, keep and perform all such terms, conditions, provisions, covenants and obligations effective upon the date of this Lease for the period of the Term of this Lease. Lessor hereby indemnifies and holds Lessee harmless from any and all claims arising from any breach or default in the performance of any of Lessor's obligations under such Existing Leases or from any other activity or matter related to or arising from any of such Existing Leases and accrued prior to the commencement of the Term of this Lease, including any and all costs, attorneys' fees, expenses and liabilities incurred in the defense of any such claim or any action brought thereon. Upon the expiration of the Term of this Lease or any earlier date upon which this Lease shall terminate with respect to any or all Terminals, Lessee hereby reassigns to Lessor all of Lessee's right, title and interest in and to any of the Existing Leases which have not been terminated, and in and to any other subleases of the affected Terminals or portions thereof which Lessee may have granted during the Term hereof which have not been terminated. Lessee hereby indemnifies and holds Lessor harmless from any and all claims arising from any breach or default in the performance of any of Lessee's obligations under such Existing Leases or subleases during the Term (or from any of Lessor's obligations thereunder which were assumed by Lessee) or from any other activity or matter related to or arising during the Term from any of such Existing Leases or subleases, including any and all costs, attorney's fees, expenses and liabilities incurred in the defense of any such claim or any action brought thereon. 8 9 7. QUIET ENJOYMENT. Lessor covenants and agrees that so long as Lessee observes and performs all of the agreements and covenants required of it hereunder, Lessee shall peaceably and quietly have, hold and enjoy the Premises for the Term without any encumbrance or hindrance by Lessor. If Lessee's use of any Terminal is limited or denied through rezoning, environmental impact edict, or other action of any public or quasi-public agency, this Lease, at the sole option of Lessee, shall terminate with respect to such Terminal as of the effective date of such action and the rent applying to the unexpired portion of the Term with respect to such Terminal will abate. 8. UTILITIES. Lessee shall pay for all utilities used by it, and shall be responsible for repair and maintenance of all utility systems serving the Premises. 9. ASSIGNMENT AND SUBLETTING. Lessee shall not assign this lease or sublet all or any part of any Terminal without Lessor's prior written consent, which shall not be unreasonably withheld. If Lessee requests approval of any assignment or sublease and Lessor fails to respond thereto within 5 business days, Lessor shall be deemed to have approved such request. Any disapproval of any such request by Lessor shall specify the reasons for such disapproval. However, Lessee shall have the right to assign to its parent corporation or to a wholly owned (directly or indirectly) subsidiary or its parent corporation without Lessor's consent. Any sublease or assignment in violation of this paragraph shall be voidable by Lessor. Any sublease submitted to Lessor for consent shall be substantially in the form of the lease attached hereto as Exhibit "F"; provided that Lessor shall not unreasonably withhold its consent to changes in such form. If Lessee assigns this Lease or subleases all or a part of any Terminal, Lessee agrees to remain primarily liable for the 9 10 performance of all obligations under this Lease for the remaining Term. Upon the expiration or earlier termination of this Lease, each Terminal shall be surrendered to Lessor free of all subtenancies. 10. ALTERATIONS AND ADDITIONS. 10.1 Permitted Alterations; Removal. Lessee may make any alterations, improvements, or additions in, on or about the Premises which Lessee, in its sole discretion, deems necessary for the proper conduct of its business so long as such alterations are nonstructural and the value and utility of the Premises are not materially lessened thereby. Lessor, at its option, may require Lessee to remove all or part of such alterations, improvements, or additions upon expiration or termination of this Lease, and to restore the Premises to its condition prior to installation of the alteration, improvement or addition, all at Lessee's expense. Any personal property, trade fixtures, alterations, improvements, or additions not removed by Lessee within 90 days after the end of the Term shall automatically become the property of Lessor. 10.2 Ownership of Alterations and Additions. Unless Lessor requires their removal, as set forth in paragraph 10.1, all alterations, improvements or additions which may be made to the Premises shall become the property of Lessor and remain upon and be surrendered with the Premises at the termination of this Lease. 11. MECHANICS' LIENS. Lessee shall pay, when due, all claims for labor or materials furnished to Lessee at or for use in the Premises. Lessee shall not permit any mechanics' or materialmen's liens to be levied against the Premises for any labor 10 11 or material furnished to Lessee or to Lessee's agents or contractors in connection with work of any character performed on the Premises at the direction of Lessee. 12. REPAIRS AND MAINTENANCE. 12.1 Lessor's Obligations. Lessor shall not be obligated to make any repairs to the Premises, whether structural or nonstructural. Lessee expressly waives the benefits of any statute or judicial decision now or hereafter in effect which would otherwise afford Lessee the right to make repairs at Lessor's expense or to terminate this Lease because of Lessor's failure to keep the Premises in good condition and repair. 12.2 Lessee's Obligations. Subject to paragraphs 16 and 17 hereof and reasonable wear and tear, Lessee, at Lessee's expense, shall keep the Premises any every part thereof in good order, condition and repair (regardless of whether the damaged portion of the Premises or the means of repairing it are readily accessible to Lessee), including, but not limited to, the foundations, exterior walls, roof, all plumbing, heating, air conditioning, ventilating, electrical and lighting facilities and equipment, fixtures, interior walls and store front, ceilings, windows, doors, plate glass, and skylights, located on the Premises and all sidewalks, landscaping, driveways, parking lots, fences and signs located in the areas adjacent to the Premises. 12.3 Lessor's Rights. If Lessee fails to perform Lessee's obligations under this Section 12, Lessor shall have the right, at its option, to enter the Premises, after at least ten (10) days prior notice to Lessee, and put the same in good order, condition and repair. The cost thereof together with interest at the lesser of three (3) percentage points above the prime or base 11 12 rate announced by Citibank, N.A., from time to time, or the maximum rate permitted by law, shall become due and payable to Lessor as additional rent, to be paid with Lessee's next rent installment. 12.4 Major Repairs. If Lessee is required by the terms of this Lease, or otherwise desires, to make a repair to an Owned Terminal which (i) would cost more than $200,000.00; and (ii) would constitute a capital expenditure under generally accepted accounting principles; and (iii) is not a result of Lessee's negligent or willful act or omission with respect to the Terminal or of a policy or decision by Lessee to defer maintenance of the item needing repair, and Lessee wishes to have the benefit or paragraphs 12.4, 12.5 and 12.6, then Lessee shall notify Lessor in writing prior to making the repair, describing the nature of the repair, the reason why it is necessary, and the estimated cost. Within thirty (30) days after receipt of such notice, Lessor shall elect either to permit Lessee to terminate this Lease with respect to such Owned terminal in accordance with paragraph 12.5 in lieu of making such repair, or to permit the repair, subject to the penalty for early termination described in paragraph 12.6. 12.5 Termination by Lessee. If Lessor elects to permit Lessee to terminate this Lease with respect to such Owned Terminal, Lessor shall so notify Lessee within thirty (30) days after receipt of such notice from Lessee. Within sixty (60) days after receipt of Lessor's notice permitting termination, Lessee may, if it elects to so terminate the Lease as to the Terminal in question, inform Lessor of the effective date of termination, which shall be at least four (4) months, but no more than six (6) months after the date of Lessor's notice permitting termination. Such termination by Lessee shall not affect any of the rights or 12 13 obligations of the parties which may have accrued, or liabilities, accrued or otherwise, which may have arisen prior to termination. 12.6 Penalty for Early Termination. If Lessor does not elect to permit termination by Lessee, and Lessee desires to obtain the benefit of this Section 12.6 with respect to the repair in question, then Lessee shall make the repair substantially in accordance with Lessee's proposal, and shall submit to Lessor reasonable documentation as to the cost of such repair. If at any time thereafter Lessor elects to terminate this Lease with respect to such Owned Terminal pursuant to paragraph 3.2, then Lessor shall pay to Lessee a termination penalty upon the effective date of termination in the amount of Lessee's then net book value of the capital repair item as of the effective date of termination, provided such net book value shall be based upon a straight-line amortization over a five (5) year period. 13. TAXES. 13.1 Payment of Taxes. Lessee shall pay to Lessor additional rent the amount of all real estate taxes applicable to the Premises during the Term, within ten (10) days after Lessor notifies Lessee of the amount of taxes due. Lessor shall pay such taxes and provide evidence of payment to Lessee prior to the date upon which such taxes would become delinquent or subject to penalty. Lessee shall pay all taxes assessed against and levied upon Lessee's trade fixtures and all other personal property of Lessee contained in the Premises. 13.2 Definition of "Real Estate Taxes". As used herein, the term "real estate tax" includes any form of assessment, license fee, rent tax, levy, penalty, or tax imposed by any 13 14 authority having the direct or indirect power to tax, including any city, county, state or federal government, or any school, agricultural, lighting, drainage or other improvement district thereof, upon any legal or equitable interest of Lessor in the Premises, upon Lessor's right to rent or business of leasing the Premises, or upon Lessee's use or occupancy of the Premises; provided, however, that no tax upon Lessor's net income, or any inheritance, capital levy, franchise, or similar tax imposed upon Lessor as an entity, shall be treated as a "real estate tax" for purposes of this lease. 14. INSURANCE. 14.1 Property and Public Liability. Lessee shall maintain throughout the Term a policy or policies of: (a) Insurance against loss or damage to the Premises from time-to-time subject to this Lease in the amount of the full replacement cost thereof, against all perils included within the classifications of fire, extended coverage, vandalism, malicious mischief, and special extended perils ("all risks"), but subject to a deductible amount of up to $500,000.00, naming Lessor as loss payee as its interest may appear; and (b) Comprehensive general liability insurance, providing coverage for liability with respect to the Premises, with a combined single limit of liability of not less than Ten Million Dollars ($10,000,000.00) per occurrence, naming Lessor as an additional insured; provided however that such insurance shall contain provisions to the effect that the naming of Lessor as an additional insured shall not affect any recovery to which Lessor would be entitled under 14 15 the policy if it were not so named, and that the insurance is primary and shall be without contribution from any similar insurance in effect by Lessor. 14.2 Other Coverages. Lessee shall maintain throughout the Term, and Lessee shall require its permitted contractors or subtenants to maintain throughout the Term, at its or their sole cost and expense, in a form and in a company satisfactory to Lessor, the following policies of insurance: (a) Comprehensive Automobile Liability Insurance providing coverage for owned, non-owned, hired and leased vehicles used in connection with the Premises with limits of liability of not less than $5,000,000.00 combined single limit, per occurrence, naming Lessor as an additional insured; provided however that such insurance shall contain provisions to the effect that the naming of Lessor as an additional insured shall not affect any recovery to which Lessor would be entitled under the policy if it were not so named, and that the insurance is primary and shall be without contribution from any similar insurance in effect by Lessor; and (b) Workers' Compensation fully insuring Lessee, or its contractors or subtenants under the laws of the state in which the Premises is located, and Employer's Liability Insurance providing a limit of liability of at least $500,000.00. 14.3 Certificates. Lessee agrees to provide a certificate of insurance evidencing the coverages specified in 14.1 and 14.2, providing for thirty (30) days' prior written notice to Lessor of any cancellation or reduced coverage, and Lessee shall 15 16 provide a renewal certificate at least thirty (30) days prior to the expiration of any such coverages. 14.4 Waiver of Subrogation. Lessor and Lessee each hereby waive any rights of subrogation against the other, and Lessee and Lessor shall each require its respective permitted contractors or subtenants to waive any rights of subrogation against the other party hereto, for any loss to property insured under any policies of insurance, even if caused by the fault or negligence of the other party hereto. 15. INDEMNITY. 15.1 Lessee's Indemnification of Lessor. Subject to Section 14.4 above, Lessee hereby indemnifies and holds Lessor harmless from any and all claims arising from: (a) Lessee's use of the Premises, the conduct of its business, or any activity, work or things which are done or permitted by Lessee in or about the Premises; (b) any and all claims arising from any breach or default in the performance of any of Lessee's obligations under this Lease or arising from any act or omission of Lessee or any of its agents, contractors or employees; and (c) any and all costs, attorney's fees, expenses and liabilities incurred in the defense of any such claim or any action brought thereon. 15.2 Lessor's Indemnification of Lessee. Subject to paragraph 14.4 above, Lessor hereby indemnified and holds Lessee harmless from any and all claims arising from (a) Lessors (or its affiliates') use of the Premises, the conduct of its business, or any activity, work, or things which were done or permitted to be done in or about the Premises prior to the commencement of the Term, (b) any and all claims arising from any breach or default in the performance of any of Lessor's obligations under 16 17 this Lease or arising from any act or omission of Lessor or any of its agents, contractors, or employees; and (c) any and all costs, attorneys' fees, expenses, and liabilities incurred in the defense of any such claim or action brought thereon. 15.3 Indemnification Consistent. The foregoing indemnity obligations are intended to be supplementary to, and consistent with, the indemnities provided in the Acquisition Agreement. In the event of any conflict between the rights of the parties to indemnity hereunder and the rights thereto set forth in the Acquisition Agreement, the terms of the Acquisition Agreement shall control. 16. DAMAGE OR DESTRUCTION. If a Terminal is partially damaged by fire or other casualty such that the cost to repair the damage is $100,000.00 or less, Lessee shall repair and restore such Terminal to a good tenantable condition with reasonable promptness and diligence. If a Terminal is damaged or destroyed by fire or other casualty such that the cost to repair the damage is more than $100,000.00, Lessee may at its option either terminate this Lease with respect to such Terminal or repair the Premises within a reasonable time. If Lessee elects to repair the Premises, it shall receive the proceeds of the "all risk" insurance and shall apply such proceeds to the cost of repair or restoration. If Lessee elects to terminate this Lease, it shall assign to Lessor the proceeds of any "all risk" insurance applicable to such Terminal received as a result of the damage or destruction, and shall pay to Lessor the deductible portion of such casualty loss. 17. CONDEMNATION. If all of a Terminal or a substantial portion thereof is taken under the power of eminent domain, or sold under the threat of the exercise of said power (all of which) 17 18 are herein called "condemnation"), this Lease shall automatically terminate with respect to such Terminal as of the date the condemning authority takes title or possession, whichever occurs first; however, if the condemning authority assumes Lessor's obligations under this Lease with respect to such Terminal, then Lessee shall have the right to elect, within thirty (30) days after the date of assumption to be bound by this Lease or to terminate this Lease with respect to such Terminal. If any other taking adversely and substantially affects Lessee's use of a Terminal then Lessee may elect to terminate this Lease with respect to such Terminal as of the date the condemning authority takes possession. Lessee's election to terminate shall be made in writing within thirty (30) days after Lessor has given Lessee written notice of the taking (or in the absence of such notice, within thirty (30) days after the condemning authority has taken possession). If Lessee does not terminate this Lease with respect to such Terminal in accordance with this paragraph 17, this Lease shall remain in full force and effect as to the portion of the Terminal remaining, except that rent shall be reduced in the proportion that the area taken diminishes the value and use of the Terminal to Lessee. In addition, Lessee, at its expense, to the extent condemnation awards are available to Lessee for such purposes, shall promptly repair any damage to the Terminal caused by condemnation and restore the remainder of the Terminal to the reasonable satisfaction of Lessor. Any award or payment made upon condemnation of all or any part of a Terminal shall be the property of Lessor, whether such award or payment is made as compensation for the taking of the fee or as severance damages; provided Lessee shall be entitled to any separate award or payment for loss of or damage to 18 19 Lessee's trade fixtures, removable personal property, and alterations, additions and improvements made to the Terminal by Lessee after the commencement of this Lease, and to a portion of Lessor's award or payment which does not exceed ten percent (10%) of the value of the improvements at the Terminal in question for repair or restoration of the Terminal pursuant to this paragraph 17. Lessor shall give notice to Lessee within thirty (30) days after receipt of notification from any condemning authority of its intention to take all or a portion of a Terminal. Notwithstanding anything, expressed or implied, to the contrary contained in this Lease, Lessee, at its own expense, may in good faith contest any such award for loss or damage to Lessee's trade fixtures, removable personal property, and additions, alterations and improvements made to the Terminal by Lessee, and for repair or restoration of the Terminal. A termination of this Lease by lessor due to condemnation of a Terminal shall not be counted as a termination pursuant to paragraph 3.2 of this Lease. 18. DEFAULTS; REMEDIES. 18.1 Defaults. The occurrence of any one or more of the following events constitutes a material default and breach of this Lease by Lessee: (a) The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where the failure continues for a period of ten (10) days after notice thereof from Lessor to Lessee. 19 20 (b) The failure by Lessee to observe or perform any of the covenants, conditions, or provisions of this Lease to be observed or performed by Lessee, other than those described in subparagraph (a) above, where the failure continues for a period of thirty (30) days after notice thereof from Lessor to Lessee; provided, however, that if the nature of Lessee's default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commences such cure within the thirty (30) day period and thereafter diligently completes the cure. 18.2 Remedies upon Default. In the event of any such material default or breach by Lessee, Lessor may, after giving notice as provided above, pursue those remedies available to Lessor under the laws or judicial decisions of the state(s) in which the Premises (or the applicable portions thereof) are located. A breach or default by Lessee under Clause 18.1(a) above with respect to one Terminal shall constitute a default with respect to all Terminals. However, any breach or default by Lessee under Clause 18.1(b) above with respect to any one Terminal shall not constitute a default with respect to other Terminals and Lessor's termination or other rights in respect of such default shall be limited to the Terminal with respect to which such default occurred. 18.3 Default by Lessor. Lessor shall not be in default unless Lessor fails to perform obligations required of it within a reasonable time, but in no event later than thirty (30) days after notice by Lessee to Lessor; provided that if the nature of Lessor's obligation is such that more than thirty (30) days are reasonably required for performance, then Lessor shall not be in default if Lessor commences performances within the thirty (30) day period and thereafter diligently completes performance. 20 21 18.4 Lender Protective Provisions. Lessor, upon providing Lessee with any notice of (i) a default by Lessee in the payment of rentals or other monies, or (ii) any breach of any other covenants of this Lease, shall at the same time provide a copy of such notice to every leasehold mortgagee of Lessee who has provided Lessor with notice of its mortgage. No notice of any default or breach of Lessee shall be deemed to have been duly given by Lessor unless and until a copy thereof has been provided to every mortgagee entitled thereto. From and after the date such notice has been given to Lessee and such mortgagees, each of such mortgagees shall have the same period for remedying such default or beach as is given to Lessee to remedy, commence remedying or cause to be remedied the default or breach specified in any such notice. Lessor shall accept such performance by or at the instigation of any such mortgagee as if the same had been done by Lessee. Lessee authorizes each mortgagee to take any such action at such mortgagee's option and does hereby authorize entry upon the Premises by the mortgagee(s) for such purposes. Anything contained in this Lease to the contrary notwithstanding, if any default shall occur which entitles Lessor to terminate this lease, Lessor shall have no right to so terminate this Lease so long as any such mortgagee shall (i) pay or cause to be paid the rent and other monetary obligations of Lessee under this Lease as the same becomes due, and continue its good faith efforts to perform all of Lessee's other obligations under the Lease, and (ii) if not enjoined or stayed, take steps to acquire or sell Lessee's interest in this Lease and the Premises by foreclosure of the mortgage or other appropriate means and prosecute the same to completion with due diligence. The time for completion by such mortgagee of its proceedings shall continue so long as such mortgagee is enjoined or stayed and thereafter for 21 22 so long as such mortgagee proceeds to complete steps to acquire and sell Lessee's interest in the Lease and the Premises by foreclosure of the mortgage or by other appropriate means, with reasonable diligence and continuity. Nothing in this paragraph, however, shall be construed to extend this Lease beyond the Term, nor to require a mortgagee to continue such foreclosure proceedings after the default has been cured. If the default shall be cured and the mortgagee shall discontinue such foreclosure proceedings, this Lease shall continue in full force and effect as if Lessee had not defaulted hereunder. Upon the acquisition of the leasehold estate herein by such mortgagee or its designee or any other purchaser at a foreclosure sale or otherwise, and with respect to the Subleased Terminals, provided any required consents of Overlandlords are obtained, this Lease shall continue in full force and effect as if Lessee had not defaulted hereunder. 19. SUBORDINATION. Lessor shall have the right, at any time or times during the Term of this Lease, to mortgage Lessor's interest in the Premises for any purposes, and Lessee will, if requested by the lender, subordinate its interest in the Premises to the lien of lender's mortgage or trust deed, provided the lender agrees in writing, in recordable form, not to disturb Lessee's possession of the Premises under this Lease, so long as Lessee is not in default of any of the terms, conditions, and covenants of this Lease, and to accept the performance by Lessee of its covenants and obligations hereunder if such mortgage shall be foreclosed (hereinafter referred to as "non-disturbance agreement"). Any mortgage or lien created against the Premises or any portion thereof shall contain, and the mortgagee or lienholders shall execute, a non-disturbance agreement in favor of Lessee and its successors and assigns. 22 23 20. SURRENDER. 20.1 General. On the last day of the Term, or on any sooner termination, Lessee shall surrender the Premises to Lessor in broom clean and good condition, subject to paragraphs 16 and 17 hereof, and ordinary wear and tear excepted. Lessee shall repair any damage to the Premises occasioned by Lessee's use thereof, or by Lessee's removal of items pursuant to paragraph 10.1, which shall include the patching and filling of holes and repair of structural damage. 20.2 Lessee's Obligations Upon Termination. Lessee expressly covenants and agrees that upon termination of cancellation of this Lease with respect to any or all Terminals, Lessee shall provide Lessor with a written statement and/or such other reasonable evidence acceptable to Lessor, representing and warranting that no impairment to the environment exists from its operations or facilities on the Premises. Lessee further covenants and agrees that it shall be held solely and fully liable for, and shall indemnify and hold Lessor harmless from, any and all citations, fees, penalties, fines, environmental control measures or other expenses which may in any manner result from or be associated with Lessee's use of the Premises, and which did not exist or accrue prior to the commencement date of the Term. This clause shall survive termination of this Lease. 21. HOLDING OVER. If Lessee remains in possession of any Terminal after the expiration of the Term, or after termination of this Lease, and without the execution of a new Lease, Lessee shall be deemed to be occupying the Terminal in question as a tenant from month-to-month, at a monthly rent of twice the rent being paid by Lessee in respect of such Terminal in the last month of the Term, plus all other charges payable with respect to 23 24 such Terminal, and shall otherwise be subject to all of the conditions, provisions and obligations of this Lease insofar as they are applicable to a month-to-month tenancy. 22. SIGNS. Lessee may erect such signs on the exterior or interior of the Premises as lessee may deem desirable if the signs do not violate the laws, rules, or regulations of the municipality in which the premises is situated. Lessee shall remove all signs, whether existing at the commencement of this Lease or erected thereafter, from the interior and exterior of each Terminal at the expiration or termination of this Lease with respect to such Terminal. 23. LESSOR'S ACCESS. Lessor and Lessor's agent shall have the right to enter the Premises at reasonable times during normal business hours upon 24 hours advance notice to Lessee, for the purpose of inspecting, showing to prospective purchasers or lenders, and making such alterations, repairs, improvements or additions to the Premises or to the building of which it is a part as Lessor deems necessary or desirable. 24. NOTICES. All acceptances, approvals, consents, notices, demands or other communications required or permitted to be given or sent by either party to the other, shall be deemed to have been fully given when made in writing and delivered in person or deposited in the United States mail, certified and postage prepaid, addressed to: LESSOR: The Greyhound Corporation Real Estate Department Mail Station 502 Greyhound Tower Phoenix, Arizona 85077 24 25 LESSEE: GLI Realty Company 2400 InterFirst Plaza Dallas, Texas 75202
The address to which any such written communication may be given or sent to either party may be changed by written notice given by such party as above provided. 25. RULES OF CONSTRUCTION. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof. The language in all parts of this Lease shall be construed as a whole according to its fair meaning, and not strictly for or against either Lessor or Lessee. "Premises" may mean one Terminal or all Terminals as the context requires. 26. EFFECT OF WAIVERS. No waiver by Lessor or Lessee of any provision hereof shall be deemed a waiver of any other provision or of any subsequent breach by Lessee or Lessor of the same or any other provision. Lessor's consent to or approval of any act by Lessee shall not be deemed to render unnecessary the obtaining of Lessor's consent to or approval of any subsequent act by Lessee. 27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. 28. BINDING EFFECT. This Lease shall bind the parties hereto and their personal representatives, successors and assigns. 29. AMENDMENTS. This Lease may not be modified or amended in any manner except by an instrument in writing executed by the parties hereto. 25 26 30. TAXES, UTILITIES AND MECHANICS' LIENS. Notwithstanding anything expressed or implied to the contrary contained in this Lease, Lessee, at its own expense, may in good faith contest charges for taxes or utilities or mechanics' lien claims and, in the event of such contest, may permit the items contested to remain unpaid during the period of the contest and any appeal therefrom; provided that such nonpayment shall not be permitted to cause a loss or forfeiture of any part of the Premises. Lessor shall render to Lessee all assistance reasonably possible in contesting such charges including joining in and signing any protest or pleadings which Lessee deems advisable to file. Should any refund be made of any charges paid by Lessee, the amount of such refund shall belong to and be paid to Lessee. 31. MISCELLANEOUS. 31.1 Attachments, Headings, Terms. All attachments referred to herein are hereby incorporated by reference into this Lease. The headings and underscorings contained herein are for convenience purposes only and shall not be used to interpret nor be deemed to extend or limit the specific sections. The word or words enclosed in quotation marks shall be construed as defined terms for purposes of this agreement. The terms "Lessor" and "Lessee" shall be construed to mean, when required by the context, the directors, officers, elected officials, employees, invitees, contractors, materialmen, servants and agents of Lessor and Lessee. 31.2 Attorneys' Fees. If either party named herein brings an action to enforce the terms of this Lease or to declare rights hereunder, the prevailing party in any such action, on trial or appeal, shall be entitled to his reasonable attorneys' fees, together with all reasonable investigation and similar 26 27 costs and all actual court costs to be paid by the losing party as fixed by the court. 31.3 Executive and Delivery. This Lease shall not be binding nor confer any rights upon either party unless and until executed and mutually delivered by and between both parties. 31.4 Relationship of Parties. This Lease does not create the relationship of principal and agent or a partnership or joint venture or of any association other than that of Lessor and Lessee. 31.5 Lessor's Interests. With respect to the Owned Terminals, the liabilities of the "Lessor" hereunder shall be borne solely by the owner or owners of the Terminal in question (whether Lessor or Lessor's successors or assigns) at the time the liability in question arose; provided, however, that no transfer or assignment of an Owned Terminal shall release or relieve any owner thereof in respect of any liability or obligation which has accrued hereunder as of the transfer. With respect to the Subleased Terminals, no transfer or assignment by the original Lessor hereunder shall release or relieve such original Lessor from its contractual liabilities and obligations to Lessor under this Lease (accrued or yet to accrue), but the provisions of the preceding sentence shall be applicable to any of the original Lessor's successors or assigns. 31.6 Governing Law. With respect to each Terminal, this Lease shall be governed by and construed in accordance with the laws of the State in which such Terminal is located. 27 28 IN WITNESS WHEREOF, the parties hereto have executed or caused this instrument to be executed as of the day and year first above written. LESSOR: GREYHOUND LINES, INC., a California corporation By: /s/ RICHARD C. STEPHAN ---------------------------- Name: -------------------------- Title: Vice President LESSEE: GLI REALTY COMPANY, a Delaware corporation By: /s/ CRAIG R. LENTZSCH ---------------------------- Name: -------------------------- Title: Vice President 28 -----END PRIVACY-ENHANCED MESSAGE-----