Exhibit 4.4
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SECURITY AND PLEDGE AGREEMENT
among
ATLANTIC EXPRESS TRANSPORTATION GROUP INC.,
ATLANTIC EXPRESS TRANSPORTATION CORP.,
CERTAIN OF ITS SUBSIDIARIES
PARTY HERETO
and
THE BANK OF NEW YORK,
as Trustee and Secured Party
Dated as of February 4, 1997.
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SECURITY AND PLEDGE AGREEMENT
THIS SECURITY AND PLEDGE AGREEMENT, dated as of February 4, 1997
(the "Security Agreement"), is entered into among ATLANTIC EXPRESS
TRANSPORTATION GROUP INC. (together with its successors and assigns, "AETG"),
ATLANTIC EXPRESS TRANSPORTATION CORP., a New York corporation and a subsidiary
of AETG (together with its successors and assigns, the "Company"), the
subsidiaries of the Company that are party hereto (collectively, together with
their permitted successors and assigns, the "Restricted Subsidiaries"), and THE
BANK OF NEW YORK, as the trustee under the Indenture (defined below) for the
benefit of the holders of the Notes (defined below) (together with its
successors and assigns, "Secured Party").
NOW, THEREFORE, in consideration of the premises and the covenants
set forth herein and in the Indenture, the parties hereto agree as follows.
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used herein, capitalized terms defined in the
Indenture and not otherwise defined herein are used herein as so defined. All
terms defined in the UCC (defined below) and not otherwise defined herein or in
the Indenture shall have the meanings assigned to them in the UCC.
"Accounts" shall mean all present and future rights of the Company
and each Restricted Subsidiary to payment for goods sold or leased or for
services rendered, which are not evidenced by instruments or chattel paper, and
whether or not earned by performance.
"Affiliate" of any specified Person shall mean any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with") shall mean, with respect to any
Person: (i) the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise; (ii) in
the case of a corporation, beneficial ownership of 10% or more of any class of
Capital Stock of such Person; and (iii) in the case of an individual, (A)
members of such Person's immediate family (as defined in Instruction 2 of Item
404(a) of Regulation S-K promulgated under the Securities Act of 1933, as
amended, as in effect on the date hereof), and (B) trusts, any trustee or
beneficiary of which is such Person or members of such Person's
immediate family. Notwithstanding the foregoing definitions, none of Xxxxxxxxx &
Company, Inc. and its Affiliates shall be considered Affiliates of the Company
or any of its Subsidiaries.
"Capital Stock" shall mean (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interest (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Collateral" shall have the meaning assigned to it in Article II
hereof.
"Indenture" shall mean the Indenture, dated February 4, 1997, among
the Company, the Restricted Subsidiaries and the Secured Party.
"Intercreditor Agreement" shall mean the Intercreditor Agreement,
dated February 4, 1997, between the Lender and the Secured Party.
"Inventory" shall mean all of the Company's and each Restricted
Subsidiary's now owned and hereafter existing or acquired inventory consisting
of fuel and oil and other supplies used or useful in the business of the Company
and each Restricted Subsidiary and spare parts for vehicles, wherever located.
"Lender" shall mean Congress Financial Corporation, as lender under
the Loan Agreement.
"Loan Agreement" shall mean the Loan and Security Agreement, dated
February 4, 1997, among the Lender, certain subsidiaries of the Company, as
borrowers, and the Company, as guarantor.
"Majority Holders" shall mean the Holder or Holders of a majority in
aggregate principal amount of the outstanding Notes.
"Notes" shall mean the 10 3/4% Senior Secured Notes due 2004 of the
Company, in the aggregate principal amount of $110,000,000.
"Person" or "person" shall mean and include any individual, sole
proprietorship, partnership, corporation (including, without limitation, any
corporation which elects subchapter S status under the Internal Revenue Code of
1986, as amended) limited liability company, business trust, unincorporated
association, joint stock corporation, trust, joint
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venture or other entity or any government or any agency or instrumentality or
political subdivision thereof.
"Purchase Agreement" shall mean the Purchase Agreement, dated
January 30, 1997, among the Company, AETG, Xxxxxxxxx & Company, Inc., as the
purchaser, and each Restricted Subsidiary.
"Records" shall mean all of the present and future books of account
of every kind or nature of the Company and each Restricted Subsidiary, purchase
and sale agreements, invoices, ledger cards, bills of lading and other shipping
evidence, statements, correspondence, memoranda, credit files and other data
relating to the Collateral or any account debtor, together with the tapes,
disks, diskettes and other data and software storage media and devices, file
cabinets or containers in or on which the foregoing are stored (including any
rights of the Company or any Restricted Subsidiary with respect to the foregoing
maintained with or by any other person).
"Secured Parties" shall mean the collective reference to the Secured
Party and each Holder of the Notes.
"Securities" shall have the meaning assigned to it in Article II
hereof.
"Stockholders' Agreement" shall mean the Stockholders' Agreement,
dated as of February 28, 1994, by and among AETG and each of the parties
signatory thereto, as amended by the First Amendment to the Stockholders'
Agreement, dated as of January 30, 1997, among AETG and each of the parties
signatory thereto.
"Subsidiary" shall mean with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of such Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such person or (b) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any combination thereof);
provided, however, that for the purposes of this Security Agreement, Atlantic
North Casualty Company shall not be considered a Subsidiary of the Company
except as otherwise expressly provided herein.
"UCC" shall mean the Uniform Commercial Code as in effect from time
to time in the State of New York.
"Voting Stock" shall mean, with respect to any Person: (a) one or
more classes of the Capital Stock of such Person having general voting power to
elect at least a majority of the board of directors, managers, or trustees of
such Person (irrespective of whether or not at the time Capital Stock of any
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other class or classes has or might have voting power by reason of the happening
of any contingency); and (b) any Capital Stock of such Person convertible or
exchangeable without restriction at the option of the holder thereof into
Capital Stock of such Person described in clause (a) of this definition.
ARTICLE II
GRANT OF SECURITY INTERESTS
2.1 Security Interest. As security for the prompt and complete
payment and performance in full of all the Obligations, the Company and the
Restricted Subsidiaries hereby grants to the Secured Party, for the benefit of
itself and the Holders, a security interest in and continuing lien on, all of
their right, title and interest in, to and under the following, in each case,
whether now owned or existing or hereafter acquired or arising, and wherever
located (all of which being the "Non-Security Collateral"):
(i) Accounts;
(ii) subject to the final paragraph of this Section 2.1, all present and
future contract rights (including, without limitation, all rights under service
contracts pursuant to which the Company or any Restricted Subsidiary renders its
services to its customers, which rights shall include any and all rights to all
retainages which may arise thereunder), general intangibles (including, but not
limited to, tax and duty refunds, patents, trade secrets, trademarks, service
marks, copyrights, trade names, applications and registrations for the
foregoing, goodwill, processes, drawings, blueprints, customer lists, licenses,
whether as licensor or licensee, choses in action and other claims), chattel
paper, documents, instruments, letters of credit, bankers' acceptances and
guaranties;
(iii) all present and future monies, securities, credit balances,
deposits, deposit accounts and other property of the Company or any Restricted
Subsidiary now or hereafter held or received by or in transit to Lender or its
Affiliates or at any other depository or other institution from or for the
account of the Company or any Restricted Subsidiary, whether for safekeeping,
pledge, custody, transmission, collection or otherwise, and all present and
future liens, security interests, rights, remedies, title and interest in, to
and in respect of Accounts and other Non-Security Collateral, including, without
limitation, (a) rights and remedies under or relating to guaranties, contracts
of suretyship, letters of credit and credit and other insurance related to the
Non-Security Collateral, (b) rights of stoppage in transit, replevin,
repossession, reclamation and other rights and remedies of an unpaid vendor,
lienor or secured party, (c) goods described in invoices, documents, contracts
or
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instruments with respect to, or otherwise representing or evidencing, Accounts
or other Non-Security Collateral, including, without limitation, returned,
repossessed and reclaimed goods, and (d) deposits by and property of account
debtors or other persons securing the obligations of account debtors;
(iv) Inventory;
(v) Records; and
(vi) all products and proceeds of the foregoing, in any form, including
without limitation, insurance proceeds and all claims against third parties for
loss or damage to or destruction of any or all of the foregoing.
In no event shall the Secured Party's security interest in a
contract or agreement of the Company or any Restricted Subsidiary be deemed to
be a present assignment, transfer, cponveyance, subletting or other disposition
(an "Assignment") of such contract or agreement to the Secured Party within the
meaning of any provision in such contract or agreement prohibiting, or requiring
any consent or establishing any other conditions for, an assignment thereof by
the Company or any Restricted Subsidiary. The Secured Party acknowledges that
any sale, transfer or Assignment of any such contract or agreement upon the
enforcement of the Secured Party's security interest therein would be subject to
the terms of such contract or agreement governing Assignment, except as
otherwise provided in Section 9-318 of the UCC. The Secured Party's security
interest in each contract or agreement of the Company or any Restricted
Subsidiary shall attach from the date hereof to all of the following, whether
now existing or hereafter arising or acquired: (i) all of the Company's and each
Restricted Subsidiary's Accounts and general intangibles for money due or to
become due arising under such contract or agreement; (ii) all proceeds paid or
payable to the Company or any Restricted Subsidiary from any sale, transfer or
assignment of such contract or agreement and all rights to receive such
proceeds; and (iii) all other rights and interests of the Company or any
Restricted Subsidiary in, to and under such contract or agreement to the fullest
extent that attachment thereto would not be a violation of such contract or
agreement directly or indirectly entitling a party thereto (other than the
Company or any Restricted Subsidiary or Affiliate thereof) to a legally
enforceable right to terminate such contract or agreement.
2.2 Pledge. As security for the prompt and complete payment and
performance in full of all the Obligations, each of AETG, the Company and each
Restricted Subsidiary hereby pledges, assigns, transfers, sets over and delivers
unto the Secured Party, for the benefit of itself and the Holders, and hereby
grants to the Secured Party, for the benefit of itself and the Holders, a
continuing security interest in all of the right, title and interest of AETG,
the Company or any Restricted
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Subsidiary in, to and under any and all of the following described property,
rights and interests, whether now owned or hereafter acquired:
(i) the issued and outstanding shares of capital stock of the Company and
the Subsidiaries identified on Schedule I hereto as owned by AETG and the
Company, respectively, on the date hereof and all shares of capital stock of the
Company and the Subsidiaries acquired by AETG, the Company or any Restricted
Subsidiary after the date hereof (collectively, the "Pledged Stock") and all
certificate(s) representing such capital stock; and
2.3 all proceeds and products of the Pledged Stock and such other
additional property, including without limitation dividends, distributions,
cash, instruments and other property or securities, now or hereafter at any time
or from time to time received or receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the Pledged Stock
and such other additional property (together with the Pledged Stock, the
"Securities" and, the Securities together with the Non-Security Collateral, the
"Collateral");
TO HAVE AND TO HOLD the Securities, together with all rights, titles, interests,
powers, privileges and preferences pertaining or incidental thereto, unto the
Secured Party and their respective successors and assigns.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of AETG, the Company and each Restricted Subsidiary hereby
jointly and severally represents and warrants to the Secured Party, which
representations and warranties shall survive execution and delivery of this
Security Agreement, as follows:
3.1 Validity, Perfection and Priority. (a) The security interests in
the Collateral granted to the Secured Party hereunder constitute valid and
continuing security interests in the Collateral.
(b) The security interests in the Collateral granted to the
Secured Party hereunder will constitute perfected security interests therein, to
the extent that such security interests may be perfected by the actions
described in subsection (i), (ii) and (iii), superior and prior to all Liens and
rights or claims of all other Persons, subject only to the terms of the
Intercreditor Agreement upon (i) the filing of financing statements naming the
Company or any Restricted Subsidiary as "debtor" and the Secured Party as
"secured party" and describing the Non-Security Collateral in the filing offices
set forth on Schedule
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II hereto, (ii) to the extent not subject to Article 9 of the Uniform Commercial
Code in any applicable jurisdiction, the recordation of the security interests
granted hereunder in patents, trademarks and copyrights in the applicable
patent, trademark and copyright registries and the registration of all
copyrights, and (iii) the delivery of certificates and instruments evidencing
all of the Securities identified on Schedule I hereto to the Secured Party,
indorsed in blank or accompanied by undated stock powers duly executed in blank,
as the case may be, with respect thereto.
3.2 No Liens; Other Financing Statements. (a) Except for the Lien
granted to the Secured Party hereunder and the Lien granted to the Lender under
the Loan Agreement, the Company and each Restricted Subsidiary owns and, as to
all Collateral whether now existing or hereafter acquired will continue to own,
each item of the Collateral free and clear of all Liens, rights and claims, and
the Company and each Restricted Subsidiary shall defend the Collateral against
all claims and demands of all Persons at any time claiming the same or any
interest therein adverse to the Secured Party on the Collateral entitled to
priority therein under applicable law.
(b) No financing statement or other evidence of Lien covering
or purporting to cover any of the Collateral is on file and is effective in any
public office other than (i) financing statements filed or to be filed in
connection with the security interests granted to the Secured Party hereunder,
(ii) financing statements filed in connection with the Loan Agreement, and (iii)
financing statements for which proper, executed termination statements have been
delivered to the Secured Party for filing.
3.3 Chief Executive Office. The chief executive office of the
Company and each Restricted Subsidiary is 0 Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxx
Xxxx 00000. The originals of the Records are located at such chief executive
office of the Company. All Records are maintained at, and controlled and
directed (including, without limitation, for general accounting purposes) from
the chief executive office or other offices identified on Schedule III as such.
3.4 Location of Inventory. All Inventory is kept only at (or shall
be in transit to) the locations listed on Schedule III hereto. None of such
Inventory is in the possession of an issuer of a negotiable document (as defined
in Section 7-104 of the UCC) therefor or otherwise in the possession of a bailee
or other Person.
3.5 Tradenames; Prior Names. The only names under which the Company
or any Restricted Subsidiary has conducted business during the last five years
are as set forth on Schedule IV hereto.
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3.6 Pledged Securities. (a) AETG and the Company are the legal,
record and beneficial owners of, and have good title to, the Securities listed
on Schedule I hereto and such Securities are not subject to any put, call,
option or other right in favor of any other Person whatsoever, (b) except for
the capital stock of the Subsidiaries of AETG that are not engaged in the
transportation business, the Securities listed on Schedule I hereto constitute
all of the capital stock or other ownership or equity interests owned legally or
beneficially by AETG, the Company or any Restricted Subsidiary and all other
instruments in which AETG, the Company or any Restricted Subsidiary has a legal
or beneficial ownership interest on the date hereof, (c) neither AETG, the
Company, nor any Restricted Subsidiary has options or other rights to acquire
any capital stock or other ownership or equity interests of any other Person,
(d) neither AETG, the Company nor any Restricted Subsidiary is a party to or
bound by any agreement with any other Person (including, without limitation, any
Subsidiary or any other stockholder of any Subsidiary) that restricts the
ability of AETG, the Company or any Restricted Subsidiary to vote, transfer or
dispose of any capital stock or any of the other Securities, except for such
restrictions on AETG under the Stockholders' Agreement, (e) other than the
consent of the Commissioner of the Vermont Department of Banking, Insurance,
Securities and Health Care Administration (the "Vermont Department") for the
pledge, voting, and the exercise of other corporate rights by the Secured Party,
whether in connection with the exercise of remedies pursuant to this Security
Agreement or otherwise, with respect to the shares of capital stock of Atlantic
North Casualty Company pledged hereunder, which consent for the pledge of
Securities hereunder has already been obtained, no consent of any other Person
is required to be obtained in connection with the pledge of any of the
Securities or the consummation of the other transactions contemplated hereby,
including, without limitation, the exercise by the Secured Party of the voting
or other rights provided for in this Security Agreement with respect to the
Securities or the remedies in respect of the Securities provided pursuant to
this Security Agreement, and (f) all of the Securities listed on Schedule I have
been duly and validly issued, and are fully paid and nonassessable.
3.7 Receivables.
(a) Each Account arises from the actual and bonafide sale and
delivery of goods by the Company or a Restricted Subsidiary or rendition of
services by the Company or a Restricted Subsidiary in the ordinary course of its
business which transactions are completed in all material respects with those
terms and provisions contained in any document related thereto.
(b) The representations and warranties contained in this
Section shall be deemed to be repeated by the Company and each Restricted
Subsidiary as of the time when each Account arises.
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3.8 Intellectual Property. (a) Schedule IV sets forth (i) all United
States, state and foreign registrations of and applications for patents,
trademarks, servicemarks and copyrights of the Company and each Restricted
Subsidiary and (ii) all patent licenses, trademark and servicemark licenses and
copyright licenses material to the business of the Company and the Restricted
Subsidiaries; and
(b) the Company and each Restricted Subsidiary owns, or has
valid rights to use, all patents, trademarks, trade secrets, copyrights, and
similar intellectual property rights material to the business of the Company and
the Restricted Subsidiaries and used in the conduct of the Company's or any
Restricted Subsidiary's business.
3.9 Basic Representations and Warranties. Each of AETG, the Company
and each Restricted Subsidiary (a) is duly organized and validly existing in
good standing (except in the case of the Restricted Subsidiaries identified on
Schedule 3.9 hereto, where the failure to be in good standing would not, in the
aggregate, have a Material Adverse Effect (as defined in the Purchase
Agreement)) under the laws of the jurisdiction of its formation or other
jurisdiction in which it is qualified to do business; (b) has the power and
authority to execute, deliver and carry out the terms and provisions of this
Security Agreement and consummate the transactions contemplated hereby; (c) has
taken all necessary action to authorize the execution, delivery and performance
of this Security Agreement and the consummation of the transactions contemplated
hereby; and (d) has duly executed and delivered this Security Agreement. This
Security Agreement constitutes each such party's legal, valid and binding
obligation, enforceable against each such party in accordance with its terms.
ARTICLE IV
COVENANTS
Each of AETG, the Company and each Restricted Subsidiary jointly and
severally, covenants and agrees with the Secured Party that from and after the
date of this Security Agreement:
4.1 Further Assurances. Each of AETG, the Company and each
Restricted Subsidiary will from time to time at its own expense, promptly
execute, deliver, file and record all further instruments, indorsements and
other documents, and take such further action as the Secured Party may deem
necessary or desirable in obtaining the full benefits of this Security Agreement
and of the rights, remedies and powers herein granted, including, without
limitation, the following:
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(i) the filing of any financing statements, in form acceptable
to the Secured Party under the Uniform Commercial Code in effect in any
jurisdiction with respect to the liens and security interests granted
hereby (and each of AETG, the Company and each Restricted Subsidiary
hereby (x) authorizes the Secured Party to file any such financing
statement without its respective signature to the extent permitted by
applicable law and (y) agrees that a photocopy or other reproduction of
this Security Agreement shall be sufficient as a financing statement and
may be filed in lieu of the original to the extent permitted by applicable
law); and
(ii) furnish to the Secured Party from time to time statements
and schedules further identifying and describing the Collateral and such
other reports in connection with the Collateral as the Secured Party may
request, all in reasonable detail and in form satisfactory to the Secured
Party.
4.2 Change of Name, Identity, Corporate Structure, Chief Executive
Office, or Location of Inventory. Neither the Company nor any Restricted
Subsidiary will change its name, identity, corporate structure or the location
of its chief executive office or location of its Inventory without (i) giving
the Secured Party at least thirty (30) days' prior written notice clearly
describing such new name, identity, corporate structure or new location and
providing such other information in connection therewith as the Secured Party
may reasonably request, and (ii) taking all action reasonably satisfactory to
the Secured Party as the Secured Party may reasonably request to maintain the
security interest of the Secured Party in the Collateral intended to be granted
hereby at all times fully perfected with the same or better priority and in full
force and effect. All Accounts and Records of the Company and each Restricted
Subsidiary will continue to be maintained at, and controlled and directed
(including, without limitation, for general accounting purposes) from, such
chief executive office or a location identified as a location at which Accounts
or Records are maintained, controlled and directed on Schedule III, or such new
locations as the Company or any Restricted Subsidiary may establish in
accordance with this Section 4.2.
4.3 Maintain Records. The Company and each Restricted Subsidiary
will keep and maintain at its own cost and expense satisfactory and complete
records of the Collateral, including, but not limited to, the originals of all
documentation with respect to all Accounts and records of all payments received
and all credits granted on the Accounts, and all other dealings therewith.
4.4 Right of Inspection. The Secured Party shall at all times have
full and free access during normal business hours
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and upon reasonable notice to all the books, correspondence and records of AETG,
the Company and each Restricted Subsidiary, and the Secured Party and its
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and each of AETG, the Company and each Restricted
Subsidiary agrees to render the Secured Party at the cost and expense of AETG,
the Company and the Restricted Subsidiaries, such clerical and other assistance
as may be reasonable requested with regard thereto.
4.5 Payment of Obligations. AETG, the Company and each Restricted
Subsidiary will pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon the Collateral, as well as all claims of any kind
(including, without limitation, claims for labor, materials, supplies and
services) against or with respect to the Collateral, except that no such charge
need be paid if (i) the validity thereof is being contested in good faith by
appropriate proceedings, (ii) such proceedings do not involve, in the sole
opinion of the Secured Party, any material danger for the sale, forfeiture or
loss of any of the Collateral or any interest therein and (iii) such charge is
adequately reserved against on the books of AETG, the Company or the applicable
Restricted Subsidiary, as the case may be, in accordance with GAAP.
4.6 Negative Pledge. None of AETG, the Company nor any Restricted
Subsidiary will create, incur or permit to exist, and each of them will defend
the Collateral against, and will take such other action as is necessary to
remove, any Lien or claim on or to the Collateral, other than the Liens created
hereby, Liens in favor of the Lender under the Loan Agreement and Permitted
Liens.
4.7 Limitations on Dispositions of Collateral. None of AETG, the
Company nor any Restricted Subsidiary will sell, transfer, lease or otherwise
dispose of any of the Collateral, or attempt, offer or contract to do so except
as permitted in the Indenture.
4.8 Subsequently Acquired Securities, etc. If at any time or from
time to time after the date hereof, AETG, the Company or any Restricted
Subsidiary shall acquire any additional Securities (by purchase, stock dividend,
in lieu of interest or otherwise), AETG, the Company or such Restricted
Subsidiary, as the case may be, will forthwith pledge and deposit such
Securities with the Secured Party and deliver to the Secured Party certificates
or instruments therefor, indorsed in blank or accompanied by undated stock
powers duly executed in blank, and such other documentation required by the
Secured Party to perfect its first-priority Lien therein.
4.9 Performance by the Secured Party of the Obligations of AETG, the
Company or any Restricted Subsidiary; Reimbursement. If AETG, the Company or any
Restricted Subsidiary fails to perform or comply with any of its agreements
contained
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herein, the Secured Party may, without consent by AETG, the Company or any
Restricted Subsidiary, but upon notice to the Company reasonably given, perform
or comply or cause performance or compliance therewith, and the expenses of the
Secured Party incurred in connection with such performance or compliance,
together with interest thereon at a rate per annum borne by the Notes, shall be
payable by AETG, the Company and the Restricted Subsidiaries to the Secured
Party on demand and such reimbursement obligation shall be secured hereby.
4.10 No Impairment. Except as expressly permitted herein or in the
Indenture, neither AETG, the Company nor any Restricted Subsidiary will take or
knowingly permit to be taken any action which could impair the Secured Party's
rights in the Collateral.
4.11 Insurance. Except as otherwise permitted by the terms of the
Indenture, (a) AETG, the Company and each Restricted Subsidiary will maintain,
with financially sound and reputable insurers acceptable to the Secured Party
and licensed to do business in each state in which any of the Collateral covered
by any policy is located, insurance with respect to the Collateral and its use,
against loss or damage of the kinds customarily insured against by reputable
companies in the same or similar businesses, similarly situated, such insurance
to be of such types and in such amounts (with such deductible amounts) as is
customary for such companies under the same or similar circumstances, similarly
situated. All policies of insurance shall (i) name the Secured Party as
additional insured (with respect to liability insurance policies) or loss payees
with a lender's loss payable endorsement, in each case as their respective
interests may appear, (ii) include waivers by the insurer of all claims for
insurance premiums against the Secured Party, (iii) provide that any losses
shall be payable to the Secured Party notwithstanding (A) any act, failure to
act or negligence of or violation of warranties, declarations or conditions
contained in such policy by AETG, the Company, or the Secured Party, (B) any
foreclosure or other proceedings or notice of sale relating to any Collateral
insured thereunder, or (C) any change in the title to or ownership of any
Collateral insured thereunder, and (iv) provide that no cancellation,
termination or lapse in coverage thereof shall be effective until at least 30
days after receipt by the Secured Party of written notice thereof.
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ARTICLE V
POWER OF ATTORNEY
AETG, the Company and each Restricted Subsidiary hereby irrevocably
constitute and appoint the Secured Party and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of AETG, the Company and
each Restricted Subsidiary and in the name of AETG, the Company and each
Restricted Subsidiary, from time to time in the Secured Party's discretion, for
the purpose of carrying out the terms of this Security Agreement, to take any
and all appropriate action, and to execute in any appropriate manner any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement.
AETG, the Company and each Restricted Subsidiary hereby ratifies all
that said attorneys shall lawfully do or cause to be done by virtue hereof. This
power of attorney is a power coupled with an interest and shall be irrevocable.
ARTICLE VI
REMEDIES; RIGHTS UPON DEFAULT
6.1 Voting, etc. (a) Unless and until an Event of Default shall have
occurred and be continuing under the Indenture, AETG, the Company and the
Restricted Subsidiaries shall be entitled to (i) receive all cash dividends,
interest and other payments made upon or with respect to the Securities and (ii)
vote any and all of the Securities and to give consents, waivers or
ratifications in respect thereof; provided, that no vote shall be cast or any
consent, waiver or ratification given or any action taken that would violate or
be inconsistent with any of the terms of this Security Agreement, the Purchase
Agreement or the Indenture or any other instrument or agreement relating to the
Obligations, or that would have the effect of impairing the position or
interests of the Secured Party hereunder or thereunder or that would authorize
or effect actions prohibited under the terms of this Security Agreement, the
Purchase Agreement, the Indenture or any instrument or agreement relating to the
Obligations. Upon the occurrence and during the continuance of any Event of
Default, all such rights to vote and to give consents, waivers and ratifications
shall cease upon notice from the Secured Party. AETG, the Company and each
Restricted Subsidiary hereby grants to the Secured Party an irrevocable proxy to
vote the Securities, which proxy shall be effective immediately upon the
occurrence and during the continuance of an Event of Default. After the
occurrence and during the continuance of an Event of Default and upon request of
the Secured Party, AETG, the Company and each Restricted Subsidiary agree to
13
deliver to the Secured Party such further evidence of such irrevocable proxy or
such further irrevocable proxies to vote the Securities as the Secured Party may
request.
(b) If an Event of Default shall occur and be continuing under the
Indenture, the Secured Party shall be entitled to (i) on notice to the Company,
receive all cash dividends, interest and other payments made upon or with
respect to the Securities; (ii) exercise all voting, corporate and other rights
pertaining to all or any portion of the Securities at any meeting of the
shareholders of the issuer thereof or otherwise pursuant to the irrevocable
proxy granted to it by the Company or any Subsidiary herein and (iii) the
Secured Party may register all or any portion of the Securities in the name of
the Secured Party or its nominee, and the Secured Party or its nominee may
thereafter exercise all voting, corporate and other rights pertaining to such
Securities at any meeting of shareholders of the issuer thereof or otherwise and
any and all rights of conversion, exchange, subscription and any other rights,
privileges or options pertaining to such Securities as if it were the absolute
owner thereof (including, without limitation, the right to exchange at its
discretion any and all of such Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of the issuer thereof, or upon the exercise by the Company, its
Subsidiaries or the Secured Party of any right, privilege or option pertaining
to such Securities, and in connection therewith, the right to deposit and
deliver any and all of such Securities with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as it
may determine), all without liability except to account for property actually
received by it, but the Secured Party shall have no duty to the Company and its
Subsidiary to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing. The Secured Party
hereby acknowledges that (i) the rights contained herein regarding voting,
corporate and other rights pertaining to the capital stock of Atlantic North
Casualty Company are subject in all cases to the prior approval of the
Commissioner of the Vermont Department and (ii) such stock may not be
registered.
6.2 Rights and Remedies Generally. (a) If an Event of Default shall
occur and be continuing, then and in every such case, the Secured Party shall
have all the rights of a secured party under the UCC, shall have all rights now
or hereafter existing under all other applicable laws, and, subject to any
mandatory requirements of applicable law then in effect, shall have all the
rights set forth in this Security Agreement and all the rights set forth with
respect to the Collateral or this Security Agreement in any other agreement
between the parties.
(b) If an Event of Default occurs and is continuing, the
Secured Party may, and within three Business Days after instructions from the
Majority Holders shall, commence the
14
taking of such actions toward collection or enforcement of this Security
Agreement and the Collateral (or any portion thereof), including, without
limitation, action toward foreclosure upon any Collateral, as the Secured Party
deems in its discretion to be appropriate or as otherwise instructed by the
Majority Holders. The Secured Party hereby acknowledges that taking any action
toward collection or enforcement of its rights with respect to the capital stock
of Atlantic North Casualty Company is subject to the supervision and approval of
the Commissioner of the Vermont Department.
6.3 Assembly of Collateral. If an Event of Default shall occur and
be continuing, upon five days notice to AETG, the Company and each Restricted
Subsidiary, AETG, the Company or any such Restricted Subsidiary shall, at its
own expense, assemble the Collateral (or from time to time any portion thereof)
and make it available to the Secured Party at any place or places designated by
the Secured Party which is reasonably convenient to both parties.
6.4 Disposition of Collateral. The Secured Party will determine the
circumstances and manner in which the Collateral will be disposed of,
including, but not limited to, the determination of whether to foreclose on the
Collateral following an Event of Default. The Secured Party will give AETG, the
Company and each Restricted Subsidiary reasonable notice of the time and place
of any public sale of the Collateral or any part thereof or of the time after
which any private sale or any other intended disposition thereof is to be made.
AETG, the Company and each Restricted Subsidiary agrees that the requirements of
reasonable notice to it shall be met if such notice is mailed, postage prepaid
to its address specified in Section 7.3 of this Security Agreement (or such
other address that AETG, the Company or any Restricted Subsidiary may provide to
the Secured Party in writing) at least ten (10) days before the time of any
public sale or after which any private sale may be made.
6.5 Proceeds. If an Event of Default shall occur and be continuing,
(i) all proceeds and distributions on the Collateral received by AETG, the
Company or any Restricted Subsidiaries shall be held in trust for the Secured
Party, segregated from other funds of AETG, the Company and the Restricted
Subsidiaries in a separate deposit account containing only such proceeds and
distributions, and shall forthwith upon receipt thereof, be turned over to the
Secured Party in the same form received (appropriately indorsed or assigned to
the order of the Secured Party or in such other manner as shall be satisfactory
to the Secured Party) and (ii) any and all such proceeds and distributions
received by the Secured Party (whether from AETG, the Company or any Restricted
Subsidiary or otherwise), or any part thereof, may, in the sole discretion of
the Secured Party, be held by the Secured Party in a separate account as
Collateral hereunder and/or then or at any time or from time to time thereafter,
be applied by the Secured Party against the
15
Obligations (whether matured or unmatured) and related expenses, including
attorney's fees as provided in Section 6.8 below.
6.6 Registration Rights; Private Sales.
(a) If the Secured Party shall determine to exercise its
rights to sell any or all of the Securities, and if in the opinion of the
Secured Party it is necessary or advisable to have the Securities, or that
portion thereof to be sold, registered under the provisions of the Securities
Act of 1933, as amended (the "Securities Act"), each of AETG, the Company and
each Restricted Subsidiary will use its reasonable best efforts to cause the
issuer thereof to, (i) execute and deliver, and cause the directors and officers
of the issuer thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
reasonable opinion of the Secured Party, necessary to register the Securities,
or that portion thereof to be sold, under the provisions of the Securities Act
and, (ii) use its reasonable best efforts to cause the registration statement
relating thereto to become effective and to remain effective for a period of
three years from the date of the first public offering of the Securities, or
that portion thereof to be sold, (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Secured Party, are necessary or
advisable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable
thereto, (iv) comply with the provisions of the securities or "Blue Sky" laws of
any and all jurisdictions which the Secured Party shall designate and (v) make
available to its security holders, as soon as practicable, an earnings statement
(which need not be audited) which will satisfy the provisions of Section 11(a)
of the Securities Act.
(b) Each of AETG, the Company and each Restricted Subsidiary
(i) recognizes that the Secured Party may be unable to effect a public sale of
any or all the Securities, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers that will be obliged to agree, among other things, to acquire such
securities for their own account for investment and not with a view to the
distribution or resale thereof and (ii) acknowledges and agrees that any such
private sale may result in prices and other terms less favorable than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale shall not be deemed to have been made in a commercially
unreasonable manner by virtue of such sale having been private. The Secured
Party shall be under no obligation to delay a sale of any of the Securities for
the period of time necessary to permit the issuer to register such securities
for public sale under the Securities Act, or under applicable state securities
laws, even if the issuer thereof would agree to do so.
16
(c) Each of AETG, the Company and each Restricted Subsidiary
further agrees (i) to use its reasonable best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales of all or any
portion of the Securities pursuant to this Section 6.6 valid and binding and in
compliance with any and all other applicable requirements of law and (ii) that a
breach of any of the covenants contained in this Section 6.6 will cause
irreparable injury to the Secured Party and the Holders, that the Secured Party
and the Holders have no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section 6.6 shall
be specifically enforceable against AETG, the Company, and the Restricted
Subsidiaries and each such person hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for
a defense that no Event of Default has occurred.
6.7 Recourse. AETG, the Company and the Restricted Subsidiaries
shall jointly and severally pay or remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
satisfy the Obligations. AETG, the Company and the Restricted Subsidiaries shall
also be jointly and severally liable for all expenses of the Secured Party
incurred in connection with collecting such deficiency, including, without
limitation, the fees and disbursements of any attorneys employed by the Secured
Party to collect such deficiency.
6.8 Expenses; Attorneys Fees. AETG, the Company and the Restricted
Subsidiaries shall jointly and severally pay or reimburse the Secured Party for
all its expenses in connection with the exercise of its rights hereunder,
including, without limitation, (i) all reasonable attorneys' fees and legal
expenses incurred by the Secured Party and (ii) all filing fees and related
expenses contemplated by Section 4.1 hereof. Expenses of retaking, holding,
preparing for sale, selling or the like shall include the reasonable attorneys'
fees and legal expenses of the Secured Party. All such expenses shall be secured
hereby.
6.9 Limitation on Duties Regarding Preservation of Collateral. (a)
The Secured Party's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the UCC or otherwise, shall be to deal with it in the same manner as the
Secured Party deals with similar property for its own account.
(b) The Secured Party shall have no obligation to take any
steps to preserve rights against prior parties to any Collateral.
(c) Neither the Secured Party nor any of its directors,
officers, employees or agents shall be liable for failure to demand, collect or
realize upon all or any part of the Collateral or for any delay in doing so or
shall be under any
17
obligation to sell or otherwise dispose of any Collateral upon the request of
the Debtor or otherwise.
ARTICLE VII
MISCELLANEOUS
7.1 Indemnity. Each of AETG, the Company and each Restricted
Subsidiary agrees jointly and severally to indemnify, reimburse and hold the
Secured Party and its officers, directors, employees, representatives and agents
("Indemnitees") harmless from any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs or expenses or
disbursements (including reasonable attorneys' fees and expenses) for whatsoever
kind or nature ("Losses") which may be imposed on, asserted against or incurred
by any of the Indemnitees in any way relating to or arising out of this Security
Agreement or the transactions contemplated hereby, except to the extent that
such Losses are caused by the gross negligence or wilful misconduct of such
Indemnitees. The obligations of AETG, the Company and each Restricted Subsidiary
under this Section shall be secured hereby and shall survive payment and
performance or discharge of the Obligations and the termination of this Security
Agreement.
7.2 Governing Law. THIS SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS).
7.3 Notices. Except as otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy, telex, or cable
communication), and shall be deemed to have been duly given or made when
delivered by hand, or five days after being deposited in the United States mail,
postage prepaid, or, in the case of telex notice, when sent, answer-back
received, or in the case of telecopy notice, when sent, or in the case of a
nationally recognized overnight courier service, one business day after delivery
to such courier service, addressed, in the case of each party hereto as follows:
c/o Atlantic Express Transportation Corp., 0 Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxx
Xxxx 00000-0000, telecopy number: (000)000-0000, or to such other address as may
be designated by any party in a written notice to the other party hereto, with a
copy to Xxxxxxxxx, Xxxxxxx & Xxxxxxx, P.C., 000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxx Xxxx, Xxx Xxxx 00000, telecopy number (000) 000-0000, Attention: Xxxxx
Xxxxxxxxx.
7.4 Successors and Assigns. This Security Agreement shall be binding
upon and inure to the benefit of AETG, the Company and each Restricted
Subsidiary, the Secured Party, all
18
future holders of the Obligations and their respective successors and assigns,
except that AETG, the Company and each Restricted Subsidiary may not assign or
transfer any of its rights or obligations under this Security Agreement without
the prior written consent of the Secured Party.
7.5 Waivers and Amendments. None of the terms or provisions of this
Security Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with the terms of Article IX of the Indenture. In the case
of any waiver, AETG, the Company, each Restricted Subsidiary and the Secured
Party shall be restored to their former position and rights hereunder and under
the outstanding Obligations, and any Default or Event of Default waived shall be
deemed to be cured and not continuing, but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
7.6 No Waiver; Remedies Cumulative. No failure or delay on the part
of the Secured Party in exercising any right, power or privilege hereunder and
no course of dealing among AETG, the Company, each Restricted Subsidiary and the
Secured Party shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Secured Party would otherwise have on any future occasion. The rights and
remedies herein expressly provided are cumulative and may be exercised singly or
concurrently and as often and in such order as the Secured Party deems expedient
and are not exclusive of any rights or remedies which the Secured Party would
otherwise have whether by security agreement or now or hereafter existing under
applicable law. No notice to or demand on AETG, the Company and each Restricted
Subsidiary in any case shall entitle AETG, the Company and each Restricted
Subsidiary to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Secured Party to any
other or future action in any circumstances without notice or demand.
7.7 Termination; Release. When the Obligations have been
indefeasibly paid and performed in full this Security Agreement shall terminate,
and the Secured Party, at the request and sole expense of AETG, the Company and
each Restricted Subsidiary, will execute and deliver to AETG, the Company and
each Restricted Subsidiary the proper instruments (including UCC termination
statements) acknowledging the termination of this Security Agreement, and will
duly assign, transfer and deliver to the AETG, the Company and each Restricted
Subsidiary, without recourse, representation or warranty of any kind whatsoever,
such of the Collateral and Securities as may be in possession of the
19
Secured Party and has not theretofore been disposed of, applied or released.
7.8 Headings Descriptive. The headings of the several sections and
subsections of this Security Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Security Agreement.
7.9 Severability. In case any provision in or obligation under this
Security Agreement or the Obligations shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
7.10 Additional Restricted Subsidiaries. Each new Restricted
Subsidiary of the Company shall become a party to this Security Agreement for
purposes of this Security Agreement upon execution and delivery by such
Restricted Subsidiary of an addendum to this Security Agreement in the form of
Annex 1 hereto.
7.11 Counterparts. This Security Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Security
Agreement by signing any such counterpart.
20
IN WITNESS WHEREOF, the parties hereto have caused this Security and
Pledge Agreement to be duly executed and delivered as of the date first above
written.
ATLANTIC EXPRESS TRANSPORTATION ATLANTIC EXPRESS TRANSPORTATION
GROUP INC. CORP.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
AMBOY BUS CO., INC. COURTESY BUS CO., INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
STATEN ISLAND BUS, INC. X. XXXX, INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
XXXXXXX CAPITAL CORP. XXXXXXX EQUITY CORP.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
21
METROPOLITAN ESCORT SERVICE, INC. METRO AFFILIATES, INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
MERIT TRANSPORTATION CORP. MIDWAY LEASING INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
TEMPORARY TRANSIT SERVICE, INC. BROOKFIELD TRANSIT INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
ATLANTIC-XXXXXX, INC. ATLANTIC PARATRANS, INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
180 JAMAICA CORP. BLOCK 7932, INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
22
ATLANTIC EXPRESS COACHWAYS, INC. ATLANTIC-CONN. TRANSIT, INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
ATLANTIC EXPRESS OF PENNSYLVANIA, INC. ATLANTIC EXPRESS OF MISSOURI INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
ATLANTIC PARATRANS OF KENTUCKY INC. G.V.D. LEASING CO., INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
XXXXXXX BUS SERVICE, INC. THE BANK OF NEW YORK, as Trustee
and Secured Party
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Title: President, Chief Executive
Officer Officer
23
Annex A
ADDENDUM TO SECURITY AND PLEDGE AGREEMENT
The undersigned, [INSERT NAME OF NEW RESTRICTED SUBSIDIARY], a
corporation:
(i) agrees to all of the provisions of the Security and Pledge
Agreement, dated as of February 4, 1997 (as amended, supplemented or otherwise
modified prior to the date hereof (the "Security Agreement"), made by AETG, the
Company and the Restricted Subsidiaries (each as defined therein), in favor of
The Bank of New York (the "Secured Party") pursuant to the Indenture, dated as
of February 4, 1997 among the Company, the Restricted Subsidiaries and the
Secured Party (the "Indenture"), and
(ii) effective on the date hereof becomes a party to the Security
Agreement, as a Restricted Subsidiary, with the same effect as if the
undersigned were an original signatory to the Security Agreement (with the
representations and warranties contained therein) being deemed to be made by the
undersigned Restricted Subsidiary as of the date hereof.
Terms defined in the Security Agreement and the Indenture shall have such
defined meanings when used herein.
By its acceptance hereof, each undersigned Restricted Subsidiary
hereby ratifies and confirms its respective obligations under the Guaranty, as
supplemented hereby.
[NAME OF NEW SUBSIDIARY]
By:___________________________________
Name:_________________________________
Title:________________________________
Date: __________, 199__
24
SCHEDULE I
Pledged Securities Owned By Atlantic Express Transportation Group Inc.
Percentage
Stock Number of
Stock Class of Certificate Par of Outstanding
Issuer Stock Number Value Shares Shares*
----------------- ---------- -------------- ------- --------- -----------------
Atlantic Express common 1 None 100 100%
Transportation Corp.
Pledged Securities Owned By Atlantic Express Transportation Corp.
Percentage
Stock Number of
Stock Class of Certificate Par of Outstanding
Issuer Stock Number Value Shares Shares
------------------ ------------ --------------- -------- --------- -----------------
Xxxxxxx Capital common 4 None 10 100%
Corp.
Xxxxxxx Xxx xxxxxx 0 Xxxx 00 100%
Service, Inc
Atlantic-Xxxxxx, common 4 None 100 100%
Inc.
Atlantic Express of common 4 None 100 100%
Pennsylvania, Inc.
Xxxxxxx Equity common 6 None 20 100%
Corp.
X. Xxxx, Inc. common 3 None 10 100%
Courtesy Bus Co., common 10 None 100 100%
Inc.
25
Percentage
Stock Number of
Stock Class of Certificate Par of Outstanding
Issuer Stock Number Value Shares Shares
------------------ ------------ --------------- -------- --------- -----------------
Xxxxxx Xxxxxx Xxx, xxxxxx 00 Xxxx 000 100%
Inc.
Merit Transporta- common 3 None 100 100%
tion Corp.
Metropolitan Escort common 10 None 100 100%
Service, Inc.
Metro Affiliates, Inc. common 10 None 100.1 100%
Brookfield Transit common 3 None 100 100%
Inc.
Atlantic Express common 5 None 100 100%
Coachways, Inc.
Temporary Transit common 9 None 99.9 100%
Service, Inc.
Amboy Bus Co., common 14A None 600 100%
Inc.
Atlantic-Conn. common 5 None 100 100%
Transit, Inc.
G.V.D. Leasing common 12 None 200 100%
Co., Inc.
Block 7932, Inc. common 2 None 10 100%
180 Jamaica Corp. common 2 None 10 100%
Atlantic North common 2 None 10 100%
Casualty Company
Atlantic Paratrans common 2 None 10 100%
of Kentucky Inc.
Atlantic Express of common 2 None 10 100%
Missouri Inc.
Atlantic Paratrans, common 9 None 100 100%
Inc.
Midway Leasing common 9 None 99.9 100%
Inc.
26
Schedule II
Filing Offices
27
Schedule III
Location of Collateral
Atlantic Express Coachways, Inc. Amboy Bus Co., Inc.
0 Xxxxx Xxxxxx Xxxxxxx Xxxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxx Setauket
Staten Island Bus, Inc. Amboy Bus Co., Inc.
00 Xxxxxxx Xxxxxx 0000 Xxxxx 000
Xxxxxx Xxxxxx, Xxx Xxxx Port Jefferson Station, New York
Atlantic Express Coachways, Inc. Courtesy Bus Co., Inc.
0000 Xxxx Xxxxxxx Xxxx Xxxxxx Blvd.
West Shore Expressway Oceanside, New York
Staten Island, New York
Amboy Bus Co., Inc. X. Xxxx, Inc.
Atlantic Paratrans, Inc. 0000 Xxx Xxxxxxx
Xxxxx Xxxxxxxxxxxxxx Xxxx. Xxxxxxxxxxx, Xxx Xxxx
00000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx
Amboy Bus Co., Inc. Xxxxxxx Bus Service, Inc.
000-00 000xx Xxxxxx 00 Xxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxx Xxxx Farmingdale, New York
Amboy Bus Co., Inc. Atlantic Paratrans, Inc.
0000 Xxxxx Xxxxxxx 0000 Xxxx Xxxx
Xxxxxxxx Xxx Xxxxxx Xxxxxxxx, Xxx Xxxxxx
Amboy Bus Co., Inc. Atlantic Express of Pennsylvania, Inc.
0000-00 Xxxxx Xxxxxx 0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx Philadelphia, Pennsylvania
Amboy Bus Co., Inc. Atlantic Express of Pennsylvania, Inc.
Atlantic-Xxxxxx, Inc. 0000 Xxxxxxxx Xxxxx
Exterior Street Philadelphia, Pennsylvania
Bronx, New York
Amboy Bus Co., Inc. Atlantic Express of Pennsylvania, Inc.
x/x Xxxxxx Xx. Xxxx Xxxxxx 0000 Xxxxxxxx Drive
Route 202 Xxxxxx, New York Philadelphia, Pennsylvania
Atlantic Paratrans Inc. Atlantic-Conn Transit, Inc.
000 Xxxxxxxxx Xxx. 00 Xxxxx Xx.
Xxxxxxx, Xxx Xxxx Ridgefield, Connecticut
28
Atlantic Paratrans of Kentucky Inc.
000 Xxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxx
Atlantic Express of Missouri Inc.
000 Xxxxxx Xx.
Xx. Xxxxx, Xxxxxxxx
Atlantic Express of Missouri Inc.
0000 Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx
Atlantic Express of Missouri Inc.
0000 Xx. 0xx Xx.
Xx. Xxxxx, Xxxxxxxx
Atlantic Express of Missouri Inc.
0000 Xxxxxxxx Xx.
Xx. Xxxxx, Xxxxxxxx
29
Schedule IV
1. Tradenames
ATLANTIC EXPRESS
2. Registered Trademarks and Servicemarks and Application
AE ATLANTIC EXPRESS U.S. Ser. No. Filed
TRANSPORTATION GROUP and DESIGN ------------ ----------
75-121,810 6/18/96
ATLANTIC EXPRESS U.S. Reg. No. Registered
------------ ----------
1,964,915 4/2/96
AE (Stylized Letters) U.S. Reg. No. Registered
------------ ----------
1,667,874 12/10/91
3. Patents and Patent Applications
None
4. Copyright Registrations and Applications
None
5. Material Licenses
None
30
Schedule 3.9
Xxxxxxx Equity Corp.
Metropolitan Escort Service, Inc.
Midway Leasing Inc.
Atlantic-Xxxxx, Inc.
G.V.D. Leasing Co., Inc.
31
