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EXHIBIT 10.58
[MOTOR COACH INDUSTRIES LOGO]
September 26, 1995
Xx. Xxxxxx X. Xxxxx
Executive Vice President and CFO
Greyhound Lines, Inc.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Re: 1995 Bus Order -- Amendment #2
Dear Xxxxx:
Reference is made to that certain letter from Xxxxxx Xxxxxx to you
dated May 31, 1995 respecting the 1995 Bus Order, as amended ("Letter") and the
New Coach Lease (GLI-1995) between Greyhound Lines, Inc., as Lessee, and MCI
Acceptance Corp., as Lessor, ("Lease"). All initially capitalized terms used in
this Amendment #2 without definition have the same meaning herein as in the
Letter or the Lease, as applicable.
We have agreed that anything contained in the Letter or the Lease to
the contrary notwithstanding, effective as of May 31, 1995, we will amend the
Letter and the Lease as follows:
1. As to each Coach, the Initial Term of the Lease will commence
on the date Lessee takes delivery of the Coach and will end on
December 31, 1995, and the Basic Term of the Lease will
commence on January 1, 1996 and will end on December 31, 2002.
2. Lessee will pay interest during the Interim Term as follows:
(a) Prime Rate through September 30, 1995, and (b) Prime Rate
plus 1-1/2 percent from October 1, 1995 through December 31,
1995. The 102nd Coach will not be assessed interest during the
Interim Term.
3. Lessee will pay a rental rate of $3,425.00 per Coach per month
($3,352.64 per Coach per month if GLI orders during 1995 for
purchase and/or lease at least 151 coaches that are eligible
for discount under the Requirements Agreement).
4. The Lease is assignable by Xxxxxx on or after January 1, 1996
(but not before such date) without GLI's consent.
5. Lessee may elect anytime on or before December 31, 1995 to
purchase some or all of the Coaches or to have some or all of
the Coaches purchased on its behalf rather
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than to lease them. The purchase price will be the Gross
Purchase Price of $257,862.00 per Coach, less any discount
allowed under the Requirements Agreement. The purchase price
must be paid in cash on or before the purchase date. The
discount allowed under the Requirements Agreement shall be
based on 151 coaches (including the purchase of 50 coaches
currently being negotiated by the parties) provided GLI orders
during 1995, for purchase and/or lease at least 151 coaches
(subject to adjustment in the event GLI does not actually
purchase and/or lease all 151 coaches).
6. Lessor may require GLI to purchase up to 50 Coaches at anytime
on or between October 1, 1995 and December 31, 1995 by giving
GLI at least seven days advance written notice. The number of
requests to purchase and the number of Coaches per request is
entirely at Xxxxxx's discretion. The purchase price will be
paid in cash on the purchase date and will be the same as is
set forth in Item 5, above; provided, however, it is
understood that in the event Coaches are purchased, any
discount applicable under the Requirements Agreement to
Coaches being purchased will be applied against the Gross
Purchase Price of those Coaches, and any discount applicable
to Coaches remaining under lease will be pro rated over the
term of the Lease.
7. For purposes of calculating the Discounted Future Payment
described in Section 3 of the Lease, the rent will be the
actual rent owed for the applicable Coach and will be
discounted back from December 31, 2002.
If you agree that this letter states the understanding of the parties,
please so acknowledge in the space provided below and return an originally
executed copy of this Amendment #2 to me.
Sincerely,
/s/ XXXXXX X. XXXXX
Xxxxxx X. Xxxxx
Treasurer
Motor Coach Industries, Inc.
MCI Acceptance Corp.
ACKNOWLEDGED AND ACCEPTED
as of May 31, 1995
By: /s/ XXXXXX X. XXXXX
---------------------------------
Xxxxxx X. Xxxxx
Executive Vice President and CFO
Greyhound Lines, Inc.
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[MCII LOGO] TM
Motor Coach Industries International, Inc.
Xxxx X. Xxxx
President & Chief Operating Officer
July 11, 1995
Xx. Xxxxx Xxxxxxxx
President
Greyhound Lines, Inc.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, XX 00000
Re: 1995 Bus Order - Amendment #1 - Rev.
Dear Xxxxx:
Reference is made to that certain letter from Xxxxxx X. Xxxxxx to you dated May
31, 1995 respecting the 1995 Bus Order ("Letter") and the New Coach Lease
(GLI-1995) between Greyhound Lines, Inc., as Lessee, and MCI Acceptance Corp.
as Lessor ("Lease").
We have agreed that effective May 31, 1995 the warranty term on the Coaches (as
defined in the Letter and the Lease) is "24 months or 200,000 miles, whichever
come first, beginning on the date of delivery of each [C]oach, as stated in
Specification #0512, Revised April 5, 1995 (as referenced in the Letter) and
not "twenty-four (24) months, unlimited mileage" (as stated in Attachment B to
the Lease).
If you agree that this letter states the understanding of the parties, please
so acknowledge in the space provided below and return originally executed copy
of this letter agreement to me.
Sincerely,
/s/ XXXX X. XXXX
-------------------------------
President
Motor Coach Industries, Inc.
MCI Acceptance Corp.
ACKNOWLEDGED AND ACCEPTED
as of May 31, 1995
By: /s/ XXXXX XXXXXXXX
----------------------------
Xxxxx Xxxxxxxx
President
Greyhound Lines, Inc.
Approved as to form
By MES
------------
Attorney
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[MCII LOGO] TM
Motor Coach Industries International, Inc.
Xxxx X. Xxxx
President & Chief Operating Officer
June 21, 1995
Xx. Xxxxx Xxxxxxxx
President
Greyhound Lines, Inc.
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, XX 00000
Re: 1995 Bus Order - Amendment #1
Dear Xxxxx:
Reference is made to that certain letter from Xxxxxx X. Xxxxxx to you dated May
31, 1995 respecting the 1995 Bus Order ("Letter") and the New Coach Lease
(GLI-1995) between Greyhound Lines, Inc., as Lessee, and MCI Acceptance Corp.
as Lessor ("Lease").
We have agreed that effective May 31, 1995 the warranty term on the Coaches (as
defined in the Letter and the Lease) is "12 months or 200,000 miles, whichever
come first, beginning on the date of delivery of each [C]oach," as stated in
Specification #0512, Revised April 5, 1995 (as referenced in the Letter) and
not "twenty-four (24) months, unlimited mileage" (as stated in Attachment B to
the Lease.
If you agree that this letter states the understanding of the parties, please
so acknowledge in the space provided below and return originally executed copy
of this letter agreement to me.
Sincerely,
/s/ XXXX X. XXXX
-----------------------------
President
Motor Coach Industries, Inc.
MCI Acceptance Corp.
ACKNOWLEDGED AND ACCEPTED
as of May 31, 1995
By: /s/ XXXXX XXXXXXXX
------------------------
Xxxxx Xxxxxxxx
President
Greyhound Lines, Inc.
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[MCII LOGO] TM
Motor Coach Industries International, Inc.
Xxxxxx X. Xxxxxx May 31, 1995
Chairman & Chief Executive Officer
Xx. Xxxxx Xxxxxxxx
President
Greyhound Lines, Inc
00000 X. Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Re: 1995 Bus Order
Dear Xxxxx:
Motor Coach Industries, Inc. ("MCI") understands our agreement for the
lease or purchase (as the case may be) of new coaches as follows:
In consideration of MCI's manufacturing 102 new 1995 MCI MC-12 motor
coaches ("Coach" or "Coaches"), Greyhound Lines, Inc. ("GLI") agrees to lease
the Coaches from MCI or its designee, and XXX agrees to lease the Coaches to
GLI, as follows:
1. The Coaches will meet Specification #0512, Revised April 5,
1995.
2. MCI will deliver the first 50 Coaches on or before June 24,
1995, and will deliver the remaining 52 Coaches on or before
July 17, 1995. MCI acknowledges that the summer months
constitute GLI's prime business season and that time is of the
essence respecting timely delivery of the Coaches. XXX will
inform GLI if it believes deliveries will be delayed and, in
such event (without limiting GLI's remedies hereunder or
under the lease) will help GLI locate temporary substitute
units.
3. Coach bus numbers will run consecutively beginning with number
2606.
4. Prior to delivery of the first Coach, GLI will execute a lease
agreement substantially in the form of Exhibit 1, attached
hereto and hereby made a part hereof, which will become
effective as to each Coach upon delivery of the Coach to GLI
and will provide that GLI will lease the Coaches for an
Initial Term beginning at delivery, plus a Basic Term of 84
months beginning October 1, 1995 at a rental rate of $3425.00
per month per Coach payable monthly in advance. In addition,
upon delivery of each of the 102 Coaches the last three
months' rent of the Basic Term will be pre-paid together with
the first month's rent of the Basic
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Term, all to be held by the lessor without interest ("Pre-paid
Rent"). The lessor may, in its sole discretion, elect to lease
the Coaches to GLI under one lease or a series of leases, each
of which will be assignable on or after October 1, 1995 by the
lessor without GLI's consent.
5. In the event GLI decides prior to October 1, 1995 to purchase
some or all of the Coaches or to have some or all of the
Coaches purchased on its behalf rather than to lease them, GLI
or its designated purchaser will pay the lessor under the
lease described in Item 4, above, $257,862 per Coach ("Gross
Purchase Price"), less any discount allowed under the Bus
Purchase Requirements Agreement entered into as of March 18,
1987, as amended ("Requirements Agreement"), ("Net Purchase
Price") on or before September 30, 1995. In the event of such
a purchase, the purchaser will execute and deliver standard
purchase documents for up to 101 Coaches and such other
documents as may be reasonably requested under the
circumstances. At such time as GLI purchases 101 Coaches, the
102nd Coach will be transferred to and owned by GLI in
consideration of purchasing 101 Coaches and without further
consideration. In the event GLI elects to purchase the Coaches
or have the Coaches purchased on its behalf, all Pre-paid Rent
for the Basic Term, but not interest from the Initial Term,
will be applied to payment of the purchase price of those
Coaches which are purchased. If GLI purchases 101 Coaches,
prepaid rent on the 102nd Coach will be applied towards the
Net Purchase Price of the 101st Coach.
6. MCI's Limited Warranty will be assigned to GLI or its
designated purchaser.
This letter agreement is binding on and will inure to the benefit of
the parties and their respective successors and assigns. Notwithstanding the
foregoing, GLI may not assign all or any part of this letter agreement without
the prior written consent of MCI, in its sole discretion; provided, however,
that no consent will be required in connection with the financing of the
purchase price of the Coaches in accordance with Item 5, above, respecting
purchase of the Coaches or the warranty provisions of Item 6, above. Except as
provided herein, any attempt by GLI to assign any obligations under this letter
agreement without the prior written consent of MCI will be null and void. This
letter agreement must be assumed by any corporation resulting from a merger or
consolidation with GLI, or any person or entity which acquires or succeeds to a
majority of the stock or assets of GLI, in each such event whether by contract,
operation of law or otherwise.
This letter agreement will be interpreted and enforced in accordance
with the laws (except those respecting choice of law) of the State of North
Dakota. GLI and MCI each agree to submit to the personal jurisdiction of the
State and Federal courts of the State of North Dakota.
The Coaches leased or purchased hereunder apply against GLI's
obligations for 1995 under the Requirements Agreement; provided, however, in
the event that any provision of the Requirements Agreement is determined to be
void, voidable or unenforceable, this letter agreement will remain in full
force and effect.
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GLI understands that MCI must manufacture the Coaches and intends that
MCI rely on this letter agreement in proceeding to order parts and material and
to manufacture the Coaches so that they can be delivered for leasing in
accordance with this letter agreement.
If the above states your understanding and agreement, please
acknowledge in the space provided below and return an originally executed
duplicate copy of this letter agreement to me.
Sincerely,
/s/ XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx
Chairman
Motor Coach Industries, Inc.
Acknowledged and Agreed:
GREYHOUND LINES, INC.
/s/ XXXXX X. XXXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and CEO
Date:
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EXHIBIT 1
NEW COACH LEASE
(GLI - 1995)
MCI Acceptance Corp, having its principal office at Dallas, Texas, (Lessor) and
Greyhound Lines, Inc., having its principal office at Dallas, Texas (Lessee)
hereby agree as follows:
1. Lease of Equipment. Lessor hereby leases to Lessee, and Xxxxxx
hereby hires from Lessor, for the term and upon the terms and conditions
hereinafter set forth in this New Coach Lease ("Lease"), 102 new 1995 MCI MC-12
model motor coaches as shown on Attachment "A" to this Lease ("Equipment,"
"Coach" or "Coaches"), less any Coaches when purchased pursuant to Section 3,
below.
2. Acceptance. Lessee represents that it is knowledgeable about
the Equipment herein leased and maintains a staff competent to place and keep
said Equipment in working order. Xxxxxx agrees that Xxxxxx was given an
opportunity to inspect the Equipment as fully as Lessee desired, prior to its
acceptance by Xxxxxx. Removal of the Equipment by Lessee from the
manufacturer's plant shall be conclusive evidence of its acceptance by Lessee
in condition satisfactory to Lessee under this Lease. Upon acceptance, this
Lease becomes noncancelable, except as expressly provided hereinafter. Lessor
shall have no liability for any delivery, installation, or testing of the
Equipment. LESSOR NO EXPRESSED OR IMPLIED WARRANTY OR UNDERTAKING WITH RESPECT
TO SUITABILITY, DURABILITY, FITNESS FOR USE OR MERCHANTABILITY OF THE
EQUIPMENT, FOR THE PURPOSES AND USES OF THE LESSEE OR OTHERWISE. Lessor
represents that the Equipment is covered by the manufacturer's warranty set
forth on Attachment "B" to this Lease for a warranty period beginning as
respects each Coach on the date Lessee takes delivery of the Coach and ending
as provided in the warranty. Lessor will assist Lessee in making any warranty
claims against the Equipment manufacturer. Lessee shall be entitled to no
remedy against Lessor (unless Lessor is the manufacturer) regarding the
manufacture or delivery of the Coaches. In no event may Lessee terminate this
Lease or withhold rentals due in respect to a claim concerning the condition of
the Equipment.
3. Term. As respects each Coach, the term of this Lease shall
commence on the date Lessee takes delivery of the Coach, as shown on Attachment
"A," and end on September 30, 2002 (with the period prior to October 1, 1995
being the "Initial Term," and the period from October 1, 1995 to September 30,
2002 being the "Basic Term.") unless sooner terminated as hereinafter provided.
Lessee may elect at any time during the Initial Term of this Lease to terminate
the Lease as to some or all of the Coaches by paying (or causing its financing
party to pay) Lessor cash upon termination for each such Coach in accordance
with that certain letter agreement dated May 31, 1995 from Xxxxxx X. Xxxxxx to
Xxxxx Xxxxxxxx respecting the "1995 Bus Order" ("Letter Agreement"). Promptly
after receipt of payment, Lessor will provide Lessee (or its financing party)
title documents for each such Coach transferring ownership "AS IS - WHERE IS"
and "WITH ALL FAULTS," but free of all liens and encumbrances caused by Lessor.
As long as Lessor has not sold or assigned this Lease during the Basic Term,
Lessee may prepay (in whole but not in part) the entire rent and other amounts
due and to become due under the Lease, including residual, calculated using an
assumed discount rate of ten percent as follows: (a) the
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present value of (i) $3,425 rent per Coach for each month remaining on the
Lease term, plus (ii) $73,153.11 residual value per Coach discounted back from
September 30, 2002 to the pre-payment date described in Section 4 of this
Lease, multiplied by (b) one, plus one percent for each year remaining on the
Lease term ("Discounted Future Payment"). As long as MCI Acceptance Corp. is
the Lessor, the prepayment penalty will be the actual prepayment penalty
incurred by MCI Acceptance Corp. with respect to the applicable Coaches rather
than the prepayment penalty described in Part (b) of the Discounted Future
Payment formula in this Section. For the purpose of calculating the number of
years remaining on the Lease term, each consecutive twelve month period will be
counted as one year, and any remaining period of less than twelve months will
be counted as an additional year.
By Way of Example
[(a)(1), which is the Discounted Future Rents +
(ii), which is the Discounted Residual] x [(b), which
is one plus the applicable Prepayment Penalty
Percentage] = Discounted Future Payment. As long as
MCI Acceptance Corp. is the Lessor, the prepayment
penalty will be the actual prepayment penalty
incurred by MCI Acceptance Corp. with respect to the
applicable Coaches rather than the prepayment penalty
described in Part (b) of the Discounted Future
Payment formula in this Section.
Years and Partial Year Remaining
Prepayment Penalty Percentage on Lease Term
----------------------------- -------------
7% 7
6% 6
5% 5
4% 4
3% 3
2% 2
1% 1
ONCE THIS LEASE HAS BEEN SOLD OR ASSIGNED THERE IS NO FURTHER PREPAYMENT
OPTION.
4. Coach Rental. During the Basic Term Lessee will pay Lessor
$3,425 per month in advance as rent for each Coach. Xxxxxx and Xxxxxx
acknowledge that the rent for the Coaches for the first month and the last
three months of the Basic Term will be pre-paid upon delivery of each Coach.
Lessee will not pay rent during the Interim Term; provided, however, during the
Interim Term Lessee Will pay interest as follows:
X. Xxxxxx will pay monthly in arrears on the last day of each
month, for each Coach delivered, the "Prime Rate" divided by
360, times the Net Purchase Price (as defined in the Letter
Agreement) for each of the first 101 Coaches delivered, for
each day from the delivery date of the Coach through the
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earlier of September 15, 1995 or the date the Coach's purchase
price is paid in full. The 102nd Coach will not be assessed
interest during the Interim Term.
B. Lessee will pay on September 30, 1995, for each Coach
delivered, the "Prime Rate" plus 4.5% divided by 360, times
the Net Purchase Price (as defined in the Letter Agreement)
for each of the first 101 Coaches delivered, for each day from
and including September 16, 1995 through the earlier of
September 30, 1995 or the date the Coach's purchase price is
paid in full. The 102nd Coach will not be assessed interest
during the Interim Term.
As used herein "Prime Rate" means the Prime Rate quoted in The Wall Street
Journal, as it may change from day to day; and in the event it is no longer so
quoted, such similar annual percentage rate as is generally accepted by the
financial community for such purposes. The foregoing notwithstanding, Lessee
will pre-pay the rent for 102 Coaches for the first month of the Basic Term and
the last three months of the Basic Term upon receipt of delivery of each Coach,
in accordance with the Letter Agreement.
5. Excess Mileage Charges. None.
6. Tires. Prior to the date required by the Coach manufacturer
Lessee shall provide tires for each Coach to the manufacturer for installation
on the Coach. The tires shall be of correct size, and in good and roadworthy
condition, and meet all federal and state motor vehicle safety standards.
Lessee shall be responsible for all repair or replacement of tires during the
Lease term. Upon Xxxxxx's return of the Equipment to Lessor, Lessor will, at
its option (a) keep the tires and compensate the owner of the tires at their
fair market value, or (b) return the tires to Lessee, freight collect, within
30 days.
7. Security Deposit. None.
8. Payment Terms. All sums payable by Lessee hereunder shall be
paid on or before the due date at 0000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxx 00000, or
such other place as Lessor may designate from time to time. Any sum payable
hereunder on an unspecified due date shall be payable on demand without the
right of setoff.
9. Indemnification. Lessee assumes all risk for the use,
operation, and storage of the Equipment, and agrees to assume liability for,
and to indemnify and hold Lessor harmless from and against, and agrees to
defend Lessor against, any and all losses, damages, claims, costs, penalties,
liabilities, and expenses, including, but not limited to, court costs and
attorney's fees, for injuries to or deaths of persons and damage to property,
howsoever arising from, incident to, or incurred because of the Equipment or the
selection, use, operation, storage, maintenance, repair, leasing, possession,
or ownership thereof, whether such persons be agents or employees of Lessee,
Lessor or of other persons and whether such damage be to property of Lessee,
Lessor, or of other persons; provided, however, if Lessor is the manufacturer
of the Equipment, Lessee does
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not hereby agree to indemnify, defend or hold Lessor harmless from its
negligence, acts or omissions as such manufacturer. Anything contained
in this indemnity provision to the contrary notwithstanding, Lessee will not be
required to indemnify Lessor for any loss or liability with respect to any
Equipment arising from acts or events which occur after the Equipment has been
returned to Lessor in accordance with this Lease, or loss or liability
resulting from the negligence of Lessor while inspecting the Equipment or
Lessee's books and records whether on Xxxxxx's premises or otherwise. The
indemnities contained herein will survive the expiration or termination of this
Lease. To secure performance hereunder, Lessee shall, at its sole expense, keep
the Equipment in good repair, insure the Equipment and otherwise observe, at
Xxxxxx's sole expense, its covenants elsewhere contained in the Lease. Further,
Lessee hereby authorizes Lessor to pay, at Xxxxxx's election, any insurer, tax
authority, repairman (including its own staff) or other person any sum or
expense which Lessee is required to pay or absorb hereunder and which is paid
by Lessor in good faith to secure itself with respect to Xxxxxx's undertaking
in this Lease to indemnify Lessor, and Xxxxxx will reimburse Lessor on demand
for any such payment.
10. Insurance. Lessee represents and warrants that it now has in
force, and covenants that it will keep in force with insurers reasonably
satisfactory to Lessor (i) comprehensive general liability insurance (including
contractual liability) and comprehensive automobile liability insurance against
claims for personal injury and property damage to the extent of at least
$5,000,000.00, and (ii) catastrophic property insurance insuring the Coaches
against those risks covered by fine and extended coverage insurance to the
extent of at least the replacement cost of the Coaches. The deductible under
the comprehensive insurance will not be greater than $1,500,000 per occurrence
and the deductible under the property insurance will not be greater than
$250,000 per occurrence. Lessee will obtain and deliver to Lessor, current
certificates of insurance evidencing the above and will cause its liability
insurers to name Lessor in its insurance policies as an additional insured
party and/or loss payee, as applicable, (entitled also to 30 day notice of
cancellation) without Lessor thereby incurring any liability for payment of
premiums therefor. The parties herein agree that naming of Lessor as an insured
or loss payee shall not affect in any way any recovery to which Lessor would be
entitled under the policy or policies were it not so named. Lessee agrees to
cause the aforementioned insurance coverage to continue in effect from the time
of delivery and acceptance of the Equipment by Lessee until the safe return of
the Equipment to Lessor. Subject only to the limitation that Lessor act in good
faith, Lessor may hereafter, by notice, require Lessee to provide other or
additional insurance with insurers in form and amount reasonably satisfactory
to Lessor; provided, however, that such other or additional insurance shall not
be inconsistent with that maintained on other buses and coaches in Lessee's
fleet. Notwithstanding the foregoing, Lessee shall be entitled to self-insure
the foregoing coverage to the extent permitted by the United States Interstate
Commerce Commission ("ICC") or any federal or state agency that may succeed the
ICC with respect to jurisdiction over motor coach common carriers and
applicable state authorities.
11. Lessee's Miscellaneous Covenants. The Lessee shall, at its
own expense:
A. Obtain any and all license plates, tags, and permits
required for the acceptance, use and operation by
Lessee of the Equipment;
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B. Keep the Equipment and all its parts and components
free and clear of all liens and encumbrances and, in
particular, pay any and all taxes or government
charges now or hereafter imposed on or in respect to
the Equipment or its use or otherwise in connection
with the Lease, except for taxes based on Lessor's
net income;
C. Furnish all fuel, oil, replacement tires, consumables,
parts and supplies in connection with the operation
and maintenance of the Equipment;
D. (i) Mark the Equipment in accordance with applicable
law to indicate that it is operated by and in the
service of Lessee and leased from the Lessor, and
(ii) only mark the equipment (whether pursuant to
Section 11.D.(i) or otherwise) with pressure
sensitive decals; provided, however, Lessee shall not
make any alteration or addition to, or affix any
accessory to, the Equipment (including without
limitation the application of pressure sensitive
decals) that could impair the originally intended
function of the Equipment or that is not readily
removable without causing damage to the Equipment
without the prior written consent of Lessor, all such
additions or accessories remaining the property of
Lessee if removed prior to returning the Equipment to
Lessor;
E. Hold and use the Equipment in a safe and careful
manner and in all cases following the manufacturer's
recommended standards of care and maintenance, comply
with all applicable laws regarding its use and
possession, and permit the Equipment to be operated
only by safe, competent, qualified licensed drivers,
and under no circumstances shall Lessee operate,
maintain or store the Equipment with less care than
Lessee applies to its other leased or owned coaches;
F. Keep and maintain the Equipment and all equipment
thereon in good repair, condition and working order,
and in all cases following the manufacturer's
recommended standards of care and maintenance and the
standards set forth on Attachment "C" [it being
understood that Lessee may change the standards set
forth on Attachment C from time to time so long as
the changes are not inconsistent with reasonably
prudent industry practice, the changes are applicable
to all buses and coaches in Lessee's fleet, no
material reduction in preventive maintenance is made
without Lessor's consent (which may not be
unreasonably withheld), and Lessor is given prompt
notice of all changes];
G. Maintain exclusive control over the Equipment
(subject to the right to pool or operate the
Equipment under and pursuant to the terms of any
"Through Service Agreements" entered into by Lessee
in the ordinary and customary course of its business,
so long as (i) Lessee remains responsible for and
complies with all of its obligations under this
Lease, and (ii) such Through
5
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Service Agreements are applicable to a substantial
portion of Xxxxxx's fleet, and not just to the
Equipment), use the Equipment only in the ordinary
course of Lessee's business and in strict compliance
with any insurance policies and manufacturer's
warranties (if applicable); not lend, sublease, sell
or make assignment of the Equipment or assign any
rights or duties respecting the Equipment or the
Lease, and keep the Equipment at all times within the
limits of the Continental United States, Canada and
Mexico;
H. Promptly advise Lessor of any materially defective
Equipment and the nature of the defect;
I. Promptly advise Lessor of any accident involving the
Equipment, and of all correspondence, notices and
documents received by Lessee in connection with any
claim or demand involving or relating to the
Equipment and charging any or all of Lessee, Lessor,
Motor Coach Industries, Inc. or Motor Coach
Industries International, Inc. with liability;
J. Record and maintain complete and accurate records of
all maintenance, preventative maintenance and
warranty work, and of all other matters normally kept
by coach operators, and permit Lessor to inspect and
copy such records at any reasonable time;
K. Acknowledging that Lessor is entitled to and will
conduct periodic inspections of the Equipment and
Lessee's records concerning the Equipment and this
Lease, garage the Equipment at periodic intervals at
Lessee's facilities in the United States and, on
reasonable demand by Lessor, cause the Coaches to be
returned to such facility/facilities at reasonable
intervals to facilitate or permit repossession or
periodic inspection by Lessor (Lessor being hereby
authorized to enter freely upon Lessee's premises for
such purposes);
L. Promptly notify Lessor of any change in the principal
business office of Lessee, and upon Lessor's request
provide Lessor with a list of the locations of the
facilities where the Equipment is garaged;
M. Immediately upon Lessor's request, Lessee will
provide its most recent public 10-Q and 10-K
reports or, if Lessee is not required to file 10-Q
or 10-K reports then Lessee will provide consolidated
income statements, balance sheets, cash flow
statements and stockholders equity statements, all in
reasonable detail and with corresponding prior period
numbers, certified by the Chief Financial Officer for
all quarterly statements and additionally, audited,
for each fiscal year end, by an independent
accounting firm acceptable to the Lessor which
independent accounting firm has given an unqualified
opinion. 10-Q's or quarterly financial statements
shall be received by the Lessor within 60 days of the
first three fiscal quarter ends
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and 10-K's or annual audited statements shall be
received by the Lessor within 100 days of the fiscal
year end. In the event Lessee is in default hereunder
or under any agreement or document referred to in
Section 15(d) hereof, immediately upon Lessor's
request Lessee will provide the most recent, and, if
requested, within ten days after the end of such
calendar month Lessee will provide such month's,
consolidated and consolidating balance sheets of
Lessee and its subsidiaries as at the end of the
applicable month and the related consolidated and
consolidating statements of income and cash flows.
The covenants set forth above are material conditions of this Lease. Xxxxxx's
breach of any covenant is a material breach of this Lease. Lessor's failure at
any time to require strict performance by Xxxxxx of any of the provisions
herein shall not waive or diminish Lessor's right thereafter to demand strict
compliance with that or any other provision. Waiver of any default shall not
waive any other default. Xxxxxx's rights hereunder are cumulative and not
alternative.
12. Loss and Damage. Lessee hereby assumes and shall bear the
entire risk of loss, theft, destruction or damage to the Equipment from any and
every cause whatsoever. Lessee shall notify Lessor immediately upon the
occurrence of any such event. In the event of damage, Lessee shall immediately
repair the Equipment to good working order and condition. In the event of
irreparable damage, loss, theft, or destruction to the Equipment, Lessee shall
either (a) purchase the Equipment within ten days of the destruction or damage
in its then condition for an amount equal to the Discounted Future Payment
(except that the residual value per Coach will be discounted back to the actual
payment date; and as long as MCI Acceptance Corp. is the Lessor, the prepayment
penalty will be the actual prepayment penalty incurred by MCI Acceptance Corp.
with respect to the applicable Coaches rather than the prepayment penalty
described in Part (b) of the Discounted Future Payment formula set forth in
Section 3 of this Lease) or for the fair market value, whichever is greater, or
(b) within ten days of the damage or destruction replace the Equipment with
Equipment of the same or a comparable model of the same or a later year which
is in proper working order with no damage and only with normal wear and tear.
13. Return and Repossession. Upon expiration, termination or other
event requiring Lessee to return the Equipment, Lessee will return the
Equipment in as good a condition as received, less normal wear and tear. Lessee
shall arrange for, prepay and absorb the costs of returning the Equipment to
the nearest facility/facilities of Xxxxxxx Bus Sales, Inc. or to any reasonable
place Lessor may designate. XXXXXX WAIVES ANY RIGHTS LESSEE MAY HAVE TO PRIOR
NOTICE OR OPPORTUNITY TO BE HEARD IN COURT REGARDING XXXXXX'S RIGHT TO
REPOSSESS THE EQUIPMENT FROM LESSEE, and in the event that Xxxxxx's
repossession should for any reason prove wrongful as to Lessee, Xxxxxx's sole
remedy shall be the right to terminate the Lease as of the date of such
wrongful repossession and/or to recover damages.
14. Late Charges and Interest. Lessor shall be entitled to a late
charge on each rental payment not received within one week of the due date in
the amount of eighteen percent
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per annum or the highest-rate allowed by law, if less, prorated on a daily
basis, from the due date until paid.
15. Default. The following are events of default hereunder: (a)
(i) nonpayment of any rent or other amount due Lessor hereunder within ten days
after receipt by Xxxxxx of written notice of default; (a) (ii) nonperformance
under any other provision herein within twenty days after Lessor has made
written demand therefore; (b) Lessee's bankruptcy, receivership, insolvency,
assignment for the benefit of creditors or similar action or condition relating
to Lessee or Lessee's property which causes Lessor in good faith to deem itself
insecure with respect to the collection of the total rent for the unexpired
term of the Lease; (c) without Lessor's prior written consent, Lessee attempts
to remove or sell or transfer or encumber or sublet or part with possession of
the Equipment; or (d) Lessee is in default under any agreement, sub-lease or
lease agreement with or any note payable to Motor Coach Industries
International, Inc. ("MCII") or any of its subsidiaries or affiliates, or is
more than 60 days in arrears of payment for any trade items (except good faith
disputes) purchased from MCII or any of its subsidiaries or affiliates;
provided, however, with respect to the Bus Purchase Requirements Agreement
entered into as of March 18, 1987, as amended, Lessee will not be deemed to be
in default thereunder for purposes of this Lease unless and until either (i) a
judgment against Lessee has been rendered by a court of competent jurisdiction,
or (ii) Lessee has agreed in writing that it is in default under such Agreement
and to terms of settlement of such default, and the judgment or settlement
amount is not satisfied within 30 days or such later date as may be required or
agreed to.
16. Remedies on Default. Whenever an event of default has occurred
or is continuing, Lessor or its agents shall have the right, but not the
obligation, to exercise, by way of example and not by way of limitation, one or
more of the following remedies:
A. to declare due and payable an amount equal to the
Discounted Future Payment (except that the residual
value per Coach will be discounted back to the actual
payment date; and as long as MCI Acceptance Corp. is
the Lessor, the prepayment penalty will be the actual
prepayment penalty incurred by MCI Acceptance Corp.
with respect to the applicable Coaches rather than
the prepayment penalty described in Part (b) of the
Discounted Future Payment formula set forth in
Section 3 of this Lease), and to sue for and recover
same from Xxxxxx;
B. to take possession of the Equipment, wherever
located, without demand or notice and without any
court order or other legal or administrative
process;
C. to lease or to sell the Equipment;
D. to sue for and/or otherwise recover from Lessee all
costs of taking possession, storing, repairing and
selling the Equipment;
E. to sue for and recover damages incurred by Xxxxxx as
a result of Xxxxxx's default;
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F. to sue for and/or otherwise recover after sale of
Equipment an amount equal to the Discounted Future
Payment (except that the residual value per Coach
will be discounted back to the actual payment date;
and as long as MCI Acceptance Corp. is the Lessor,
the prepayment penalty will be the actual prepayment
penalty incurred by MCI Acceptance Corp. with respect
to the applicable Coaches rather than the prepayment
penalty described in Part (b) of the Discounted
Future Payment formula set forth in Section 3 of this
Lease) less the net proceeds of such sale;
G. to terminate the Lease as to the Equipment, take such
Equipment into Lessor's inventory and sue for or
otherwise recover actual damages; and
H. to pursue any other remedy now or hereafter existing
at law or in equity by reason for Xxxxxx's
default(s).
17. Notices. Notices shall be addressed as follows: to Lessor at
0000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxx 00000; to Lessee, attention Contract
Administration Department, at 00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000;
or to such other place as either designate by written notice. Notices shall be
in writing and their delivery may be given (i) in person or by expedited
courier service or (ii) by mailing same First Class, Postage Prepaid, in which
case notice shall be deemed to have been received 48 hours after the Post
Office stamp date.
18. Law. The Lease shall be governed by and construed in
accordance with the laws of the State of North Dakota. Lessor and Xxxxxx each
agree to submit to the personal jurisdiction of the state and federal courts of
the State of North Dakota. If any provision of the Lease shall be found by a
court of competent jurisdiction to be void or unenforceable, in that it imposes
a restraint upon the Lessee more extensive than the legitimate interests of the
Lessor sought to be protected, the Lessor waives such provision, but only to
the extent that such provision is found by such court to be void or
unenforceable. The Lessor and the Lessee agree that such provision may and
should be modified by such court so that it becomes reasonable and enforceable
and, as modified, will be enforced as any other provision hereof, all the other
provisions hereof continuing in full force and effect. Such a modification,
however, will be effective only in the legal proceeding of which it is a part
and only on the facts to which it is applied; all provisions herein will be
applied as written, to the extent enforceable, in any other legal proceeding or
on any other facts.
19. Power/Authority/Consent of Signer and Lessee. The undersigned
officer of Lessee on behalf of Xxxxxx represents and warrants that Lessee has
statutory and corporate power and authority, and has obtained all government or
other consents, necessary and desirable, to enter into and perform under this
Lease.
20. Assignment by Xxxxxx. This Lease is binding on and will inure
to the benefit of the parties and their respective successors and assigns.
Notwithstanding the foregoing, Lessee may not assign all or any part of this
Lease without the prior written consent of Lessor, in its sole
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discretion. Any attempt by Xxxxxx to assign any obligations under this Lease
without prior written consent of Lessor will be null and void. This Lease must
be assumed by any corporation resulting from a merger or consolidation with
Lessee, or any person or entity which acquires or succeeds to a majority of the
stock or assets of Lessee in each such event whether by contract, operation of
law or otherwise.
21. Assignment by Lessor. Lessor may assign this Lease at any time
during the Basic Term without Xxxxxx's prior written consent; provided,
however, if Lessor is the manufacturer of the Equipment, no such assignment
will relieve Lessor of its obligations under the manufacturer's Limited
Warranty. If Xxxxxx sells, assigns or otherwise transfers the Lease to any
third party in such a manner that such third party becomes entitled to only a
portion of the rent owed hereunder ("Reduced Rent") and Xxxxxx is entitled to
the remainder of such rent, then Lessor and Xxxxxx will enter into good faith
negotiations intended to provide Lessee with some benefit of the Reduced Rent.
22. Entire Agreement. This Lease, plus any attachments, riders or
other documents specifically referred to herein, constitutes the entire
agreement between the parties. Any change, amendment or modification shall not
be effective unless executed in writing by both parties.
LESSEE: GREYHOUND LINES, INC. LESSOR: MCI ACCEPTANCE CORP.
By: /s/ XXXXX XXXXXXXX By: /s/ XXXXXX X. XXXXX
------------------------ ------------------------
Name: Name: Xxxxxx X. Xxxxx
Title: Title: Treasurer
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