Exhibit 10.2
WAIVER
AGREEMENT
WAIVER AGREEMENT (
“Agreement” ) dated as of January 5, 2005
by and between Atlantic Express Transportation Corp. a New York
corporation (“AETC”), Amboy Bus Co., Inc., a New York
corporation (“Amboy”), Atlantic Express Coachways,
Inc., a New Jersey corporation (“Coachways”), Atlantic
Express of L.A., Inc. a California corporation
(“AELA”), Atlantic Express of Missouri Inc,. a Missouri
corporation (“AE Missouri”), Atlantic Express of New
Jersey, Inc., a New Jersey corporation (“AENJ”),
Atlantic Express of Pennsylvania, Inc., a Delaware
corporation (“AEP”), Atlantic-Hudson, Inc. a New York
corporation (“AH”), Atlantic Paratrans, Inc. a New York
corporation (“AP”), Atlantic Paratrans of NYC, Inc. a
New York corporation (“APNY”), Atlantic Queens Bus
Corp. a New York corporation (“AQ”), Block 7932, Inc. a
New York corporation (“Block”), Brookfield Transit
Inc., a New York corporation (“Brookfield”), Courtesy
Bus Co., Inc., a New York corporation (“Courtesy”),
G.V.D. Leasing Co., Inc. a New York corporation
(“GVD”), 180 Jamaica Corp. a New York corporation
(“Jamaica”), Merit Transportation Corp. a New York
corporation (“Merit”), Metro Affiliates, Inc., a New
York corporation (“Metro”), Metropolitan Escort
Service, Inc. a New York corporation (“Escort”), Midway
Leasing Inc. a New York corporation (“Midway”), Staten
Island Bus, Inc. a New York corporation (“SI-Bus”),
Temporary Transit Service, Inc. a New York corporation
(“TTS”), 201 West Sotello Realty, Inc. a California
corporation (“Sotello”), Wrightholm Bus Line, Inc. a
Vermont corporation (“Wrightholm”), Jersey Business
Land Co., Inc., a New Jersey corporation (“JBL”),
Atlantic Transit Corp. a New York corporation (“ATC”),
Airport Services, Inc. a Massachusetts corporation
(“Airport”), Atlantic Express New England, Inc. a
Massachusetts corporation (“AE-NE”), Atlantic Express
of California, Inc. a California corporation (“AE-CA”),
Atlantic Express of Illinois, Inc. an Illinois corporation
(“AE-I”), Atlantic Paratrans of Arizona, Inc. an
Arizona corporation (“AP-AZ”), Fiore Bus Service, Inc.
a Massachusetts corporation (“Fiore”), Groom
Transportation, Inc. a Massachusetts corporation
(“Groom”), James McCarthy Limo Service, Inc. a
Massachusetts corporation (“Limo”), K. Corr, Inc. a New
York corporation (“Corr”), McIntire Transportation,
Inc. a Massachusetts corporation (“McIntire”), Mountain
Transit, Inc. a Vermont corporation (“Mountain”),
Jersey Business Land Co., Inc. a New Jersey corporation
(JBL”), R. Fiore Bus Service, Inc. a Massachusetts
corporation (“FBS”), Raybern Bus Service, Inc. a New
York corporation (“RBS”), Raybern Capital Corp. a New
York corporation (“RBC”), Raybern Equity Corp. a New
York corporation (“REC”), Robert L. McCarthy & Son,
Inc. a Massachusetts corporation (“McCarthy”), T-NT Bus
Service, Inc., a New York corporation (“TNT”),
Transcomm, Inc., a Massachusetts corporation
(“Transcomm”) and Winsale, Inc., a New Jersey
corporation (“Winsale”, and together with AETC,
Coachways, Amboy, AELA, AE Missouri, AENJ, AEP, AP, APNY, AQ,
Block, Brookfield, Courtesy, GVD, Jamaica, Merit, Metro,
Escort, Midway, SI-Bus, TTS, Sotello, Wrightholm, ATC, Airport,
AE-NE, AE-CA, AE-I, AP-AZ, Fiore, Groom, Limo, Corr, McIntire,
Mountain, JBL, FBS, RBS, RBC, REC, McCarthy, TNT, and
Transcomm, ( each individually a “Borrower” and
collectively, “Borrowers” ), Central New York
Reorganization Corp. (f/k/a Central New York Coach Sales &
Service, Inc.), a New York
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corporation (“Central”), Jersey Bus
Sales, Inc., a New Jersey corporation (“Jersey” and
together with Central, ( each individually a
“Guarantor” and collectively,
“Guarantors” ).and Congress Financial Corporation,
in its capacity as agent (in such capacity,
“Agent” ) acting for and on behalf of
Lenders
W I T N E S S E T
H :
WHEREAS, Borrowers, Guarantors,
Agent and Lenders, have entered into financing arrangements
pursuant to which Agent and Lenders may make loans and advances and
provide other financial accommodations to Borrowers as set forth in
the Second Amended and Restated Loan and Security Agreement, dated
as of April 22, 2004, by and among Agent, Borrowers,
Guarantors and the financial institutions from time to time parties
thereto as lenders (“Lenders”), whether by execution
thereof or of an Assignment and Acceptance, as amended by Amendment
No. 1 to Second Amended and Restated Loan and Security Agreement,
dated as of June 14, 2004, by and among Borrowers, Guarantors,
Agent and Lenders, as amended by Amendment No. 2 to Second Amended
and Restated Loan and Security Agreement, dated as of
September 15, 2004, by and among Borrowers, Guarantors, Agent
and Lenders and as amended by Amendment No. 3 to Second Amended and
Restated Loan and Security Agreement, dated as of October 14,
2004, by and among Borrowers, Guarantors, Agent and Lenders,(as
amended hereby and as the same may hereafter be further amended,
modified, supplemented, extended, renewed, restated or replaced the
“Loan Agreement”, and together with all agreements,
documents and instruments at any time executed and/or delivered in
connection therewith or related thereto, as from time to time
amended, modified, supplemented, extended, renewed, restated or
replaced, collectively, the “Financing
Agreements”);
WHEREAS, as of the date hereof,
Borrowers are in default under the Loan Agreement and Financing
Agreements as more particularly described below; and
WHEREAS, the circumstances described
herein constitute Events of Default under the Loan Agreement and
the other Financing Agreements; and
WHEREAS, Borrowers have requested
that Agent and Lenders waive their rights as a result of such
Events of Default, which are continuing, that Agent and Lenders
provide financial accommodations to Borrowers notwithstanding such
Events of Default; and
WHEREAS, Agents and Lender are
willing to agree to waive certain of their rights and remedies, to
continue to provide certain financial accommodations to Borrowers
for the period and on the terms and conditions specified herein,
and to waive the Existing Defaults on the terms and conditions
specified herein;
NOW, THEREFORE, in consideration of
the foregoing, and the respective agreements, warranties and
covenants contained herein, the parties hereto agree, covenant and
warrant as follows:
1. Interpretation.
All capitalized terms used herein (including the recitals
hereto) shall
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have the respective meanings assigned thereto in
the Loan Agreement unless otherwise defined herein.
2. Additional Definitions.
As used herein, the following terms shall have the
respective meanings given to them below and the Loan Agreement is
hereby amended to include, in addition and not in limitation, each
of the following definitions:
(a) “Existing Defaults”
shall mean the following Events of Default:
(i)
Failure of
Borrowers to comply with the provisions of Section 9.17 of the
Loan Agreement which requires Borrowers to have EBITDA of not less
than $23,000,000 at the month ended September 30, 2004 (for
the twelve (12) consecutive month period then ended) and at the end
of each month thereafter.
(b) “Events of Default”
shall include, without limitation, any default of the Borrowers in
respect to the terms and conditions of this Agreement.
3. Acknowledgment of
Obligations. Borrowers and Guarantors hereby
acknowledge, confirm and agree that as of January 4, 2005,
Borrowers are indebted to Agent and Lenders in the principal amount
of approximately $29,945,533, including $10,000,000 of Letter of
Credit Accommodations. All such Obligations, together with
interest accrued and accruing thereon, and fees, costs, expenses
and other charges now or hereafter payable by Borrowers to Agent
and Lenders, are owing by Borrowers to Agent and Lenders, without
offset, defense or counterclaim of any kind, nature or description
whatsoever.
4. Acknowledgment of Security
Interests. Borrowers hereby acknowledge, confirm and
agree that Agent and Lenders have and shall continue to have valid,
enforceable and perfected first-priority liens upon and security
interests in the Collateral, other than the Noteholder First
Priority Real Property Collateral (as such term is defined in the
Intercreditor Agreement), heretofore granted to Agent and Lenders
pursuant to the Financing Agreements or ot
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