Document:

exv10w1

 

Exhibit 10.1

AMENDMENT NUMBER ONE TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

     This Amendment Number One to Amended and Restated Loan and Security
Agreement (“Amendment”) is entered into as of July 6, 2004, by and among
GREYHOUND LINES, INC., a Delaware corporation (“Borrower”), on the one hand,
and the financial institutions listed on the signature pages hereof (such
financial institutions, together with their respective successors and assigns,
are referred to hereinafter each individually as a “Lender” and collectively as
the “Lenders”), and WELLS FARGO FOOTHILL, INC., a California corporation
(formerly known as Foothill Capital Corporation), as agent (“Agent”), on the
other hand, in light of the following:

     A. Borrower, Lenders, and Agent have previously entered into that certain
Amended and Restated Loan and Security Agreement, dated as of May 14, 2003 (as
amended and modified, from time to time, the “Agreement”).

     B. Borrower, Lenders, and Agent desire to amend the Agreement as provided
for and on the conditions herein.

     NOW, THEREFORE, Borrower, Lenders, and Agent hereby amend and supplement
the Agreement as follows:

     1. DEFINITIONS. All initially capitalized terms used in this Amendment
shall have the meanings given to them in the Agreement unless specifically
defined herein.

     2. AMENDMENTS.

(a) The following definitions are hereby added to Section 1.1 of the
Agreement:

             “Acceptable Projections” has the meaning set forth in Section
3.4.

             “Activation Period” has the meaning set forth in Section 2.8.

             “Adjusted Wholesale Value” means, with respect to a Vehicle,
and as of any date of measurement, the product of (x) the
Wholesale Value of such Vehicle times (y) the difference of (i)
1.00 minus (ii) (A) the Adjustment Factor times (B) the number of
calendar months that have begun since Agent’s receipt of the most
recent Current Appraisal, commencing with July 1, 2004; provided,
however, that in the event Borrower delivers to Agent a subsequent
Current Appraisal which ascribes the same or higher aggregate
value to the Vehicles than was ascribed in the prior Current
Appraisal, then Adjusted Wholesale Value shall, until any
subsequent Current Appraisal, mean the Wholesale Value of such
Vehicles.

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             “Adjustment Factor” means 0.005 from the Amendment Effective
Date until delivery by Borrower to Agent of the next Current
Appraisal, and thereafter from the delivery of each new Current
Appraisal until the delivery of the next Current Appraisal;
provided, however, that in the event Borrower delivers to Agent a
Current Appraisal which ascribes a lower aggregate value to the
Vehicles than was attributed to such Vehicles based upon the
immediately preceding Current Appraisal, then the Adjustment
Factor shall be recalculated as follows: (A) the difference of (i)
the aggregate value attributed to such Vehicles based upon the
prior Current Appraisal less (ii) the aggregate value attributed
to such Vehicles based upon in the most recent Current Appraisal,
divided by (B) the aggregate value attributed to such Vehicles
based upon the prior Current Appraisal, the quotient of which
shall be divided by 12.1

             “Amendment Effective Date” means July 6, 2004.

             “Applicable Prepayment Premium” means, as of any date of
determination (which shall be the actual date on which the
termination of the Commitments occurs), an amount equal to (a)
during the period from and after the Amendment Effective Date
through October 24, 2005, 1% times the Prepayment Calculation
Amount, (b) during the period from and including October 25, 2005
through October 23, 2006, 0.5% times the Prepayment Calculation
Amount, and (c) during the period from and after October 24, 2006,
irrespective of whether Borrower has extended the Maturity Date
pursuant to the terms of Section 3.4, $0.

             “Chief Financial Officer” means the principal accounting or
financial officer of Borrower.

             “Leverage Ratio” means, as of any date of determination, a
ratio of Borrower’s Total Indebtedness (measured as of the end of
Borrower’s most recent fiscal quarter) to Borrower’s Consolidated
Cash Flow (measured as of the end of Borrower’s most recent fiscal
quarter and calculated on a trailing four fiscal quarter basis).

             “Prepayment Calculation Amount” means (A) in the event
Borrower delivers notice to Agent of its intent to terminate this
Agreement and prepay the Obligations, the greater of (i) the
Maximum Revolving Amount on such notice date, or (ii) the Maximum
Revolving Amount on the date 120 days prior to such notice date,
and (B) in the event this Agreement is terminated and the
Obligations are prepaid as set forth in the last sentence of
Section 3.6, the Maximum Revolving Amount immediately prior to
such termination.

	1	 	For example, if the prior Current Appraisal attributed an aggregate value
of $100 to the Vehicles, and the aggregate value attributed to such Vehicles
based upon the most recent Current Appraisal is $80, the Adjustment Factor
would be calculated as follows: 100 − 80 = 20; 20 ÷ 100 = 0.2; 0.2 ÷ 12 =
0.017; thus, the recalculated Adjustment Factor would be 0.017.

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(b) The following definitions set forth in Section 1.1 of the Agreement
are hereby amended to read as follows:

             “Base Rate Margin” means, as of any date of determination,
the following per annum margin based upon Borrower’s most recent
Leverage Ratio calculation (determined as set forth in the
following paragraph):

	 	 	 	 	 	 	 
	Level
	 	Leverage Ratio
	 	Base Rate Margin

	I
	 	Less than or equal to 2.50:1.00	 	 	0.375 	%
	II
	 	Greater than 2.50:1.00 but	 	 	0.75 	%
	 
	 	less than or equal to 2.75:1.00	 	 	 	 
	III
	 	Greater than 2.75:1.00 but	 	 	1.125 	%
	 
	 	less than or equal to 3.00:1.00	 	 	 	 
	IV
	 	Greater than 3.00:1.00 but	 	 	1.50 	%
	 
	 	less than or equal to 3.25:1.00	 	 	 	 
	V
	 	Greater than 3.25:1.00 but	 	 	1.875	%
	 
	 	less than or equal to 3.50:1.00	 	 	 	 
	VI
	 	Greater than 3.50:1.00	 	 	2.25 	%

During the period from the Amendment Effective Date through the
first day of the month following the date Borrower is required to
deliver to Agent the certified calculation of the Leverage Ratio
pursuant to Section 6.4(d) for the fiscal quarter ending September
30, 2004, the Base Rate Margin shall be set at the margin in the
row styled “Level IV” and thereafter, the Base Rate Margin shall
be re-determined each quarter on the first day of the month
following the date Borrower is required to deliver to Agent the
certified calculation of the Leverage Ratio pursuant to Section
6.4(d); provided, however, that, in any case, if such
certification is not delivered to Agent when due, the applicable
Base Rate Margin shall be set at the margin in the row styled
“Level VI” as of the first day of the month following the date on
which the certification was required to be delivered until the
date on which such certification is delivered (on which date (but
not retroactively), without constituting a waiver of any Default
or Event of Default occasioned by the failure to timely deliver
such certification, the Base Rate Margin shall be set at the
margin based upon the Leverage Ratio calculation disclosed by such
certification). Notwithstanding anything in this Agreement to the
contrary, in the event that the audited financial statements of
Borrower required hereunder for any fiscal year indicate that the
actual Leverage Ratio was higher or lower for the fourth fiscal
quarter in such fiscal year than previously reported in the
quarterly financial statements for such quarter, then the Base
Rate Margin shall be adjusted retroactively (to the effective date
of the Base Rate Margin which was based upon the delivery of such
incorrect financial statements) to reflect the correct margin, and
either (a) Borrower shall make payments to Agent, for the ratable
benefit of Lenders, or (b) Agent shall credit the Loan Account, as
applicable, to reflect such adjustment.

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             “Eurodollar Rate Margin” means, as of any date of
determination, the following per annum margin based upon
Borrower’s most recent Leverage Ratio calculation (determined as
set forth in the following paragraph):

	 	 	 	 	 	 	 
	Level
	 	Leverage Ratio
	 	Eurodollar Rate Margin

	I
	 	Less than or equal to 2.50:1.00	 	 	2.375 	%
	II
	 	Greater than 2.50:1.00 but	 	 	2.75 	%
	 
	 	less than or equal to 2.75:1.00	 	 	 	 
	III
	 	Greater than 2.75:1.00 but	 	 	3.125 	%
	 
	 	less than or equal to 3.00:1.00	 	 	 	 
	IV
	 	Greater than 3.00:1.00 but	 	 	3.50 	%
	 
	 	less than or equal to 3.25:1.00	 	 	 	 
	V
	 	Greater than 3.25:1.00 but	 	 	3.875 	%
	 
	 	less than or equal to 3.50:1.00	 	 	 	 
	VI
	 	Greater than 3.50:1.00	 	 	4.25 	%

During the period from the Amendment Effective Date through the
first day of the month following the date Borrower is required to
deliver to Agent the certified calculation of the Leverage Ratio
pursuant to Section 6.4(d) for the fiscal quarter ending September
30, 2004, the Eurodollar Rate Margin shall be set at the margin in
the row styled “Level IV” and thereafter, the Eurodollar Rate
Margin shall be re-determined each quarter on the first day of the
month following the date Borrower is required to deliver to Agent
the certified calculation of the Leverage Ratio pursuant to
Section 6.4(d); provided, however, that, in any case, if such
certification is not delivered to Agent when due, the applicable
Eurodollar Rate Margin shall be set at the margin in the row
styled “Level VI” as of the first day of the month following the
date on which the certification was required to be delivered until
the date on which such certification is delivered (on which date
(but not retroactively), without constituting a waiver of any
Default or Event of Default occasioned by the failure to timely
deliver such certification, the Eurodollar Rate Margin shall be
set at the margin based upon the Leverage Ratio calculation
disclosed by such certification). Notwithstanding anything in
this Agreement to the contrary, in the event that the audited
financial statements of Borrower required hereunder for any fiscal
year indicate that the actual Leverage Ratio was higher or lower
for the fourth fiscal quarter in such fiscal year than previously
reported in the quarterly financial statements for such quarter,
then the Eurodollar Rate Margin shall be adjusted retroactively
(to the effective date of the Eurodollar Rate Margin which was
based upon the delivery of such incorrect financial statements) to
reflect the correct margin, and either (a) Borrower shall make
payments to Agent, for the ratable benefit of Lenders, or (b)
Agent shall credit the Loan Account, as applicable, to reflect
such adjustment.

(c) Section 2.1(a) of the Agreement is hereby amended to read as follows:

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             “(a) Subject to the terms and conditions of this Agreement,
each Lender agrees to make advances (“Advances”) to Borrower in an
amount at any one time outstanding not to exceed such Lender’s
Pro-Rata Share of an amount equal to the lesser of (i) the Maximum
Revolving Amount less the aggregate amount of all undrawn or
unreimbursed Letters of Credit, or (ii) the Borrowing Base less
the aggregate amount of all undrawn or unreimbursed Letters of
Credit. For purposes of this Agreement, “Borrowing Base,” as of
any date of determination, shall mean the result of:

	 	(x)	 	80% of the Adjusted Wholesale Value of Core
Vehicles; plus
	 
	 	(y)	 	the least of (i) 65% of the Quick Sale
Value of Core Real Property
Collateral, (ii) 45% of the total
amount available under clause
2.1(a)(x) above, and (iii) the
Maximum Real Estate Amount; minus
	 
	 	(z)	 	the aggregate amount of reserves, if any,
established by Agent under Sections
2.1(b) or 10.”

(d) Section 2.7(c) of the Agreement is hereby amended to read as follows:

             “(c) Default Rate. Upon the occurrence and during the
continuation of an Event of Default at the election of Agent or
the Required Lenders,

                                                            (i) all Obligations (except for undrawn Letters of Credit)
that have been charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof at a per
annum rate equal to 3% above the per annum rate otherwise
applicable to such Obligations hereunder, and

                                                            (ii) the Letter of Credit fee provided for above shall be
increased to 3% above the per annum rate otherwise applicable
hereunder.”

(e) Section 2.8 of the Agreement is hereby amended to read as follows:

             “2.8 Collection of Accounts. Borrower shall at all times
maintain lockboxes (the “Lockboxes”) and shall instruct all
Account Debtors with respect to the Accounts, General Intangibles,
and Negotiable Collateral of Borrower to remit all Collections in
respect thereof to such Lockboxes or to local deposit accounts at
financial institutions reasonably acceptable to Agent.

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Borrower, Agent, and the Lockbox Banks shall enter into the
Lockbox Agreements, which among other things shall provide for the
opening of a Lockbox Account for the deposit of Collections at a
Lockbox Bank. Borrower agrees that: (i) all good funds on
deposit in each local collection account (other than a local
collection account which is either an Excluded Account or which is
subject to a Control Agreement) in excess of $25,000 per account
shall be swept pursuant to standing instructions (by wire transfer
or ACH transaction) on a daily basis to a Lockbox Account; and
(ii) all Collections and other amounts received by Borrower from
any Account Debtor or any other source immediately upon receipt
shall be deposited into a Lockbox Account. No Lockbox Agreement
or arrangement contemplated thereby shall be modified by Borrower
without the prior written consent of Agent. Upon the terms and
subject to the conditions set forth in the Lockbox Agreements,
during the period following a notice of exclusive control (each
such notice, a “Lockbox Notice”) from the Agent to the relevant
Lockbox Bank and continuing until such time, if any, as Agent has
delivered to such Lockbox Bank a Subsequent Notice as set forth
below (such period, an “Activation Period”), all amounts received
in each Lockbox Account shall be wired each Business Day into an
account (the “Agent’s Account”) maintained by Agent at a
depositary selected by Agent. Notwithstanding anything to the
contrary contained in this Section 2.8 or elsewhere in this
Agreement, all amounts in the applicable Lockbox Account shall be
forwarded pursuant to the instructions of Borrower given to such
Lockbox Bank from time to time unless an Activation Period is then
in effect. Agent shall be entitled to give the Lockbox Notice to
the Lockbox Bank at any time after either (i) Borrower’s
Availability is less than $25,000,000 for five consecutive
Business Days, or is less than $10,000,000 on any Business Day, or
(ii) the occurrence of an Event of Default. If a Lockbox Notice
has been sent and both (x) there does not exist any Event of
Default (and any Event of Default upon which such Lockbox Notice
was based has been waived pursuant to the terms of this
Agreement), and (y) Borrower’s Availability has been $25,000,000
or more for at least the last five consecutive Business Days,
then, in Agent’s sole discretion, Agent may give the relevant
Lockbox Bank an instruction permitting Borrower to once again
direct the disbursement of funds on deposit in such Lockbox
Account (such instruction a “Subsequent Notice”).”

(f) Section 2.12(b) of the Agreement is hereby amended to read as follows:

             “(b) Unused Line Fee. On the first day of each month during
the term of this Agreement, an unused line fee in an amount equal
to 0.375% per annum times the Average Unused Portion of the
Maximum Revolving Amount;”

(g) Section 2.12(c) of the Agreement is hereby amended to read as follows:

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             “(c) Financial Examination Fees. For the sole account of
Agent, a fee of $1,000 per day per examiner, plus reasonable
out-of-pocket expenses for each financial analysis and examination
(i.e., audits) of Borrower performed by personnel employed by
Agent.”

(h) Section 2.13(c) of the Agreement is hereby amended to read as follows:

             “(c) Automatic Conversion; Optional Conversion by Agent. Any
Eurodollar Rate Loan shall automatically be continued for an
additional one month Interest Period upon the last day of the
applicable Interest Period, unless Agent has received a contrary
request to cancel, convert, or continue such Eurodollar Rate Loan
at least two Business Days prior to the end of such Interest
Period in accordance with the terms of Section 2.13(a). Any
Eurodollar Rate Loan shall, at Agent’s option, upon notice to
Borrower, convert to a Base Rate Loan in the event that (A) an
Event of Default shall have occurred and be continuing as of the
last day of the Interest Period for such Eurodollar Rate Loan, or
(B) this Agreement shall terminate, and Borrower shall pay to
Agent (for the benefit of the Lender Group), any amounts required
by Section 2.17 as a result thereof.”

(i) Section 3.4 of the Agreement is hereby amended to read as follows:

             “3.4 Term. This Agreement shall become effective upon the
execution and delivery hereof by Borrower and the Lender Group and
shall continue in full force and effect for a term ending on the
earlier of (a) October 24, 2006 (the “Maturity Date”), or (b)
termination hereof by the Lender Group pursuant to Section 9.1(b)
following an Event of Default. Without limiting the foregoing,
the Borrower shall have the right to extend the Maturity Date of
this Agreement to October 24, 2007 provided that (i) Borrower
gives Agent written notice of its request to extend the term by
August 24, 2006, (ii) the Lender Group has not otherwise already
terminated this Agreement pursuant to Section 9.1(b) following an
Event of Default, (iii) no Default or Event of Default then
exists, (iv) Borrower has delivered to Agent, on or before August
24, 2006, an annual forecast and financial projections (to include
forecasted consolidated and consolidating balance sheets, income
statements and cash flow statements) for Borrower and its
Subsidiaries as at the end of and for each then remaining month
and quarter of Borrower’s fiscal year ended 2006 and for each
month and quarter of Borrower’s fiscal year ended 2007, in form
and substance satisfactory to Agent and Required Lenders (the
“Acceptable Projections”), and (v) Borrower has incurred Permitted
Refinancing Indebtedness in respect of the Senior Notes, the terms
of which shall provide for, inter alia, a maturity date no
earlier than January 24, 2008.”

(j) Section 3.6 of the Agreement is hereby amended to read as follows:

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             “3.6 Early Termination by Borrower. Borrower has the option,
at any time upon 30 days prior written notice to Agent, to
terminate this Agreement by paying to Agent, in cash, the
Obligations (including either (i) providing cash collateral (or
backstop letters of credit issued by a Person acceptable to the
Agent) to be held by Agent for the benefit of the Lenders in an
amount equal to 105% of the Letter of Credit Usage, or (ii)
causing the original Letters of Credit to be returned to the
Issuer), in full, together with the Applicable Prepayment Premium
(to be allocated based upon agreements between Agent and
individual Lenders). If Borrower has sent a notice of termination
pursuant to the provisions of this Section, then the Commitments
shall terminate and Borrower shall be obligated to repay the
Obligations (including either (i) providing cash collateral (or
backstop letters of credit issued by a Person acceptable to the
Agent) to be held by Agent for the benefit of the Lenders in an
amount equal to 105% of the Letter of Credit Usage, or (ii)
causing the original Letters of Credit to be returned to the
Issuer), in full, together with the Applicable Prepayment Premium,
on the date set forth as the date of termination of this Agreement
in such notice. In the event of the termination of this Agreement
and repayment of the Obligations at any time prior to the Maturity
Date, for any other reason, including (a) termination upon the
election of the Required Lenders to terminate after the occurrence
and during the continuation of an Event of Default, (b)
foreclosure and sale of Collateral, (c) sale of the Collateral in
any Insolvency Proceeding, or (d) restructure, reorganization, or
compromise of the Obligations by the confirmation of a plan of
reorganization or any other plan of compromise, restructure, or
arrangement in any Insolvency Proceeding, then, in view of the
impracticability and extreme difficulty of ascertaining the actual
amount of damages to the Lender Group or profits lost by the
Lender Group as a result of such early termination, and by mutual
agreement of the parties as to a reasonable estimation and
calculation of the lost profits or damages of the Lender Group,
Borrower shall pay the Applicable Prepayment Premium to Agent (to
be allocated based upon agreements between Agent and individual
Lenders), measured as of the date of such termination.”

(k) Section 4.3 of the Agreement is hereby amended to read as follows:

             “4.3 Collection of Accounts, General Intangibles, and
Negotiable Collateral. Agent, Borrower, and the Lockbox Banks
have entered into the Lockbox Agreements or Control Agreements, as
applicable, pursuant to which, following notification from Agent
under the terms of Section 2.8, Borrower’s Collections (excluding
Collections in the local collection accounts not covered by
Control Agreements (which will be forwarded pursuant to Section
2.8) and Excluded Accounts and receipts generated from Mexico and
Canada and proceeds of Investments) will be forwarded to Agent on
a daily basis. At any time following the occurrence of an Event
of Default, Agent or Agent’s designee may, and shall if directed
by Required Lenders: (a) notify customers or Account Debtors of
Borrower that the Accounts, General Intangibles, or Negotiable
Collateral have been assigned to Agent (on behalf of the Lender
Group) or that

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Agent has a security interest therein; and (b) collect the
Accounts, General Intangibles, and Negotiable Collateral directly
and charge the collection costs and expenses to the Loan Account.
Borrower agrees that during either (i) an Activation Period, or
(ii) the continuance of an Event of Default, Borrower will hold in
trust for the Lender Group, as the Lender Group’s trustee, any
Collections that it receives and immediately will deliver said
Collections to Agent in their original form as received by
Borrower.”

(l) Section 6.4(d) of the Agreement is hereby amended to read as follows:

             “(d) Concurrently with the delivery of Borrower’s company
prepared balance sheet, income statement, and statement of cash
flows required under Section 6.4(a)(i) for the fiscal quarters
ending March 31, June 30, and September 30, and concurrently with
the delivery of Borrower’s audited financial statements required
under Section 6.4(a)(ii) for the fiscal quarter ending December
31, Borrower shall deliver to Agent a Financial Covenant
Compliance Certificate signed by its Chief Financial Officer,
indicating the financial ratios set forth in Section 7.19, as of
the end of such quarter, and containing such supporting data and
calculations, in reasonable detail, as Agent shall require.
Without limiting the foregoing, Borrower shall also deliver to
Agent, on or before February 15th of each calendar year, a
certificate signed by its Chief Financial Officer indicating the
unaudited Leverage Ratio calculation for the fiscal quarter ending
on the preceding December 31.”

(m) Section 6.4(g) of the Agreement is hereby amended to read as follows:

             “(g) Borrower shall deliver to Agent, not less than 30 days
prior to the end of each of Borrower’s fiscal years, an annual
forecast and financial projections (to include forecasted
consolidated and consolidating balance sheets, income statements
and statements of cash flows) for Borrower and its Subsidiaries as
at the end of and for each month and quarter of Borrower’s
immediately subsequent 2 fiscal years.”

(n) Section 6.18 of the Agreement is hereby amended to read as follows:

             “6.18 Updated Current Appraisals. The Agent, in its
reasonable discretion, may require new appraisals from time to
time on the General Intangibles (including the Borrower’s and its
Restricted Subsidiaries’ individual and collective enterprise
value), Vehicles or the Core Real Property Collateral. Borrower
will cooperate with all reasonable requests and do all acts
reasonably required by Agent and any Persons employed by them as
appraisers in order to assure the timely completion of such new
appraisals, and Borrower shall pay to Agent the actual charges
paid or incurred by Agent for: (a) one full site appraisal in
each calendar year for the Vehicles, (b) one appraisal during the

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period from the Amendment Effective Date through and
including the Maturity Date, for the General Intangibles
(including the Borrower’s and its Restricted Subsidiaries’
individual and collective enterprise value), (c) one appraisal in
each calendar year for each parcel of Core Real Property
Collateral, (d) following a request by Borrower for an extension
of the Maturity Date as provided in Section 3.4, such additional
site, full, or desk top appraisals of the Vehicles, the General
Intangibles, and the Core Real Property, as Agent shall require,
and (e) following an Event of Default, such additional site, full,
or desk top appraisals of the assets of Borrower and its
Restricted Subsidiaries as Agent shall require.”

(o) Section 7.19 of the Agreement is hereby amended to read as follows:

             “7.19 Financial Covenants. Fail to maintain:

                           (a) Leverage Ratio. A Leverage Ratio that is not greater
than the following amount as of the end of the following fiscal
quarters of Borrower:

	 	 	 	 	 
	Fiscal Quarter Ending
	 	Maximum Ratio

	 6/30/04
	 	 	4.75:1.00	 
	 9/30/04
	 	 	4.75:1.00	 
	  12/31/04
	 	 	4.75:1.00	 
	 3/31/05
	 	 	3.89:1.00	 
	 6/30/05
	 	 	3.91:1.00	 
	 9/30/05
	 	 	3.38:1.00	 
	  12/31/05
	 	 	3.20:1.00	 
	 3/31/06
	 	 	3.44:1.00	 

                           (b) Minimum Consolidated Interest Coverage Ratio. A
Consolidated Interest Coverage Ratio of at least the following
amount as of the end of the following fiscal quarters of Borrower,
calculated on a trailing four fiscal quarter basis:

	 	 	 	 	 
	Fiscal Quarter Ending
	 	Minimum Ratio

	 6/30/04
	 	 	2.00:1.00	 
	 9/30/04
	 	 	2.00:1.00	 
	  12/31/04
	 	 	2.00:1.00	 
	 3/31/05
	 	 	2.59:1.00	 
	 6/30/05
	 	 	2.68:1.00	 
	 9/30/05
	 	 	2.80:1.00	 
	  12/31/05
	 	 	3.00:1.00	 
	 3/31/06
	 	 	3.19:1.00	 

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                           (c) Minimum Consolidated Cash Flow. Consolidated Cash Flow
of at least the following amount as of the end of the following
fiscal quarters of Borrower calculated on a trailing four fiscal
quarter basis (except as specifically set forth to the contrary
below):

	 	 	 	 	 
	Fiscal Quarter Ending
	 	Minimum Cash Flow

	6/30/04
	 	$	7,000,000	 
	(for the two quarters then ended)
	 	 	 	 
	9/30/04
	 	$	59,224,000	 
	 12/31/04
	 	$	62,543,000	 
	3/31/05
	 	$	67,522,000	 
	6/30/05
	 	$	70,268,000	 
	9/30/05
	 	$	73,245,000	 
	 12/31/05
	 	$	78,605,000	 
	3/31/06
	 	$	83,424,000	 

provided, however, in the event that Borrower’s financial
projections are timely delivered to Agent pursuant to the terms of
this Agreement, Borrower and Agent will negotiate in good faith to
determine new levels for each of the financial covenants set forth
in paragraphs 7.19(a), (b) and (c) above for periods commencing
June 30, 2006 and thereafter. With respect to the covenant levels
set forth in Sections 7.19(a) and (b), Agent shall set such new
financial covenant levels at 80% of those projected in the
Acceptable Projections, and, with respect to the covenant levels
set forth in Section 7.19(c), at 85% of those projected in the
Acceptable Projections. In the event that such reset covenants
are acceptable to Required Lenders and Borrower, this Agreement
will be amended accordingly. An amendment solely to address the
resetting of covenants for periods after March 31, 2006 pursuant
to this Section 7.19 shall not require the payment of a fee to
Agent or the Lenders.

   Notwithstanding the foregoing, in the event that Borrower
fails to timely deliver to Agent the financial projections
required under this Agreement, the financial covenants set forth
in Section 7.19 shall be set for the fiscal quarter ending June
30, 2006 and for each fiscal quarter thereafter, as follows: (A)
the minimum Leverage Ratio required under Section 7.19(a) shall be
3.20:1.00; (B) the minimum Consolidated Interest Coverage Ratio
required under Section 7.19(b) shall be 3.19:1.00; and (C) the
minimum Consolidated Cash Flow required under Section 7.19(c)
shall be $83,424,000.”

                  (p) Schedules C-1, 5.3(a), and 5.8 to the Agreement are hereby deleted in
their entirety and replaced with Schedules C-1, 5.3(a), and 5.8 attached
hereto.

     3. REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to Agent and
the Lenders that all of Borrower’s representations and warranties set forth

11

 

in the Agreement are true and correct in all material respects as of the
date hereof (except to the extent that such representations and warranties
relate solely to an earlier date).

     4. NO DEFAULTS. Borrower hereby affirms to Agent and the Lenders that no
Event of Default has occurred and is continuing as of the date hereof.

     5. CONDITIONS TO EFFECTIVENESS.

         (a) Conditions Precedent. The effectiveness of this Amendment is expressly
conditioned upon the following:

             (i) Payment by Borrower to Agent, for the ratable benefit of the
Lenders, based upon their commitments set forth in Schedule C-1 attached
hereto, of an amendment fee in the aggregate amount of $750,000, such fee
to be charged to Borrower’s loan account pursuant to Section 2.7(e) of
the Agreement;

             (ii) Receipt by Agent of a duly executed amendment to each Mortgage
on Core Real Property and such other Real Property Collateral as Agent,
in its discretion, shall request; and

             (iii) Receipt by Agent of a copy of this Amendment executed by
Borrower and all Lenders.

         (b) Condition Subsequent. As a condition subsequent to the effectiveness
of this Amendment, within 45 days of the date of this Amendment, Borrower shall
have delivered to Agent, in respect of each parcel of Core Real Property
Collateral, such title insurance policies or endorsements as Agent determines
to be necessary for such parcel to be considered Core Real Property Collateral
as defined in the Agreement. The failure by Borrower to satisfy the foregoing
condition in the prescribed time period shall permit the Agent to create a
reserve against the Borrowing Base under Section 2.1, by such amount as
determined by Agent in its sole discretion.

     6. COSTS AND EXPENSES. Borrower shall pay to Agent all of Agent’s
reasonable out-of-pocket costs and expenses (including, without limitation, the
reasonable fees and expenses of its counsel, which counsel may include any
local counsel deemed necessary, search fees, filing and recording fees,
documentation fees, appraisal fees, travel expenses, and other fees) arising in
connection with the preparation, execution, and delivery of this Amendment and
all related documents.

     7. LIMITED EFFECT. In the event of a conflict between the terms and
provisions of this Amendment and the terms and provisions of the Agreement, the
terms and provisions of this Amendment shall govern. In all other respects,
the Agreement, as amended and supplemented hereby, shall remain in full force
and effect.

     8. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which when so executed and delivered shall be deemed to be an original. All
such counterparts, taken together, shall constitute but one and the same
Amendment. This Amendment shall

12

 

become effective upon the execution of a counterpart of this Amendment by
each of the parties hereto.

     9. AGREEMENT TO AMEND LOCKBOX AGREEMENTS. Agent agrees that, promptly
following the effectiveness of this Amendment, it will cooperate with Borrower
and each Lockbox Bank to amend any existing Lockbox Agreements to effectuate
the changes provided for in this Amendment with regard to the Lockbox Accounts.

[remainder of this page left blank intentionally; signatures to follow]

13

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first set forth above.

	 	 	 	 	 
	 	WELLS FARGO FOOTHILL, INC.,

as Agent and as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 
	 	 	Title:  	 
	 

S-1

Amendment Number One to Amended and Restated

Loan and Security Agreement

 

	 	 	 	 	 
	 	CONGRESS FINANCIAL CORPORATION (SOUTHWEST),

as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 
	 	 	Title:  	 
	 

S-2

Amendment Number One to Amended and Restated

Loan and Security Agreement

 

	 	 	 	 	 
	 	FLEET CAPITAL CORPORATION,

as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 
	 	 	Title:  	 
	 

S-3

Amendment Number One to Amended and Restated

Loan and Security Agreement

 

	 	 	 	 	 
	 	GREYHOUND LINES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Stephen E. Gorman 	 
	 	 	Title:  	President and CEO 	 
	 

S-4

Amendment Number One to Amended and Restated

Loan and Security Agreement

 

     Each of the undersigned has executed a Continuing Guaranty in favor of the
Lender Group (as defined in each Continuing Guaranty) respecting the
obligations of Greyhound Lines, Inc., a Delaware corporation (“Borrower”) owing
to the Lender Group. Each of the undersigned acknowledges the terms of the
above Amendment and reaffirms and agrees that its Continuing Guaranty remains
in full force and effect; nothing in such Continuing Guaranty obligates the
Lender Group to notify the undersigned of any changes in the financial
accommodations made available to Borrower or to seek reaffirmations of the
Continuing Guaranty; and no requirement to so notify the undersigned or to seek
reaffirmations in the future shall be implied by the execution of this
reaffirmation.

	 	 	 	 	 
	 	ATLANTIC GREYHOUND LINES OF VIRGINIA, INC.,

a Virginia corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Cheryl W. Farmer 	 
	 	 	Title:  	Vice President-Finance 	 
	 
	 	SISTEMA INTERNACIONAL DE TRANSPORTE DE AUTOBUSES,

INC., a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Stephen E. Gorman 	 
	 	 	Title:  	President and CEO 	 
	 
	 	GLI HOLDING COMPANY,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Stephen E. Gorman 	 
	 	 	Title:  	President and CEO 	 
	 

S-5

Amendment Number One to Amended and Restated

Loan and Security Agreement

 

	 	 	 	 	 
	 	TEXAS, NEW MEXICO & OKLAHOMA COACHES, INC., 

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Cheryl W. Farmer 	 
	 	 	Title:  	Vice President-Finance 	 
	 
	 	VERMONT TRANSIT CO., INC.,

a Vermont corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Cheryl W. Farmer 	 
	 	 	Title:  	Vice President-Finance 	 
	 
	 	T.N.M. & O. TOURS, INC.,

a Texas corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Cheryl W. Farmer 	 
	 	 	Title:  	Vice President-Finance 	 
	 
	 	RCL LIQUIDATION, L.L.C.,

a Delaware limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	Stephen E. Gorman 	 
	 	 	Title:  	President and CEO 	 
	 
	 	CAROLINA COACH COMPANY,

a Virginia corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Cheryl W. Farmer 	 
	 	 	Title:  	Vice President-Finance 	 
	 

S-6

Amendment Number One to Amended and Restated

Loan and Security Agreement

 

	 	 	 	 	 
	 	SEASHORE TRANSPORTATION COMPANY,

a North Carolina corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Cheryl W. Farmer 	 
	 	 	Title:  	Vice President-Finance 	 
	 
	 	LSX DELIVERY, L.L.C.,

a Delaware limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	Stephen E. Gorman 	 
	 	 	Title:  	Chairman of the Board 	 
	 
	 	VALLEY GARAGE COMPANY,

a Texas corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Cheryl W. Farmer 	 
	 	 	Title:  	Vice President-Finance 	 
	 
	 	

VALLEY TRANSIT CO., INC.,

a Texas corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Cheryl W. Farmer 	 
	 	 	Title:  	Vice President-Finance 	 
	 
	 	ON TIME DELIVERY SERVICE, INC.,

a Minnesota corporation

 	 
	 	By:  	 	 
	 	 	Name:  	Stephen E. Gorman 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

S-7

Amendment Number One to Amended and Restated

Loan and Security Agreement

 

Schedule C-1

Commitments

	 	 	 	 	 
	Wells Fargo Foothill
	 	$	50,000,000	 
	Congress Financial
Corporation (Southwest)
	 	$	45,000,000	 
	Fleet Capital Corporation
	 	$	30,000,000	 
	 
	 	 	
 	 
	Total
	 	$	125,000,000	 

Schedule C-1exv4w2

 

EXHIBIT 4.2

Amendment No. 1 to Assisted Living Concepts, Inc. 2002 Incentive Award Plan

The Board of Directors and Compensation Committee of Assisted Living Concepts,
Inc. (the “Company”) approved the following amendment to the Company’s 2002
Incentive Award Plan (the “Stock Option Plan”) on March 31, 2004 increasing the
aggregate number of shares that may be issued under the Stock Option Plan to
750,000.

     1. Section 2.1(a) of the Stock Option Plan is hereby amended to provide in
its entirety as follows:

      2.1 Shares Subject to Stock Option Plan

      (a) The shares of stock subject to Awards shall be Common Stock,
initially shares of the Company’s Common Stock. Subject to adjustment as
provided in Section 11.3, the aggregate number of such shares which may
be issued upon exercise of such Options or rights or upon any such Awards
under the Plan shall not exceed 750,000. The shares of Common Stock
issuable upon exercise of such Options or rights or upon any such awards
may be either previously authorized but unissued shares or treasury
shares.

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