| $4,900,000 | August 5, 2004 |
ALL AMOUNTS AT ANY TIME OWING BY THE BORROWER UNDER THIS SENIOR UNSECURED TERM NOTE (THIS "NOTE") TO THE GSC LENDERS HEREUNDER ARE SUBORDINATED IN RIGHT OF PAYMENT SOLELY TO THE INDEFEASIBLE PAYMENT AND SATISFACTION IN FULL OF ALL PRESENT AND FUTURE OBLIGATIONS, LIABILITIES AND INDEBTEDNESS OF THE BORROWER UNDER THIS NOTE TO CONGRESS FINANCIAL CORPORATION (AND ITS SUCCESSORS AND ASSIGNS) IN ITS CAPACITY AS AGENT PURSUANT TO THE SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, DATED APRIL 22, 2004, BY AND AMONG THE BORROWER UNDER THIS NOTE, CERTAIN AFFILIATES OF THE BORROWER UNDER THIS NOTE, CONGRESS FINANCIAL CORPORATION AND THE LENDERS PARTY THERETO, AS PROVIDED BY AND AS OTHERWISE SUBJECT TO THE SUBORDINATION AGREEMENT, DATED AS OF THE DATE HEREOF, BETWEEN THE LENDERS AND CONGRESS FINANCIAL CORPORATION, AS AGENT. THIS NOTE IS NOT SUBORDINATED TO ANY OTHER OBLIGATIONS, LIABILITIES OR INDEBTEDNESS OF THE BORROWER.
FOR VALUE RECEIVED, the undersigned, Atlantic Express Transportation Corp., a New York corporation (the "Borrower"), hereby promises to pay to the order GSCP II Holdings (AE), L.L.C., a Delaware limited liability company, and GSC Recovery II, L.P., a Delaware limited partnership (collectively, the "GSC Lenders"), at 500 Campus Drive, Florham Park, NJ 07932 (or such other place as the GSC Lenders may direct from time to time), in lawful money of the United States of America and in immediately available funds, the principal amount of four million, nine hundred thousand Dollars ($4,900,000) on the Maturity Date (as such term is defined below) and to pay interest on said principal amount as set forth below.
If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) at the per annum rate of seventeen percent (17%).
All interest payable hereunder shall be computed on the basis of actual days elapsed and a year of 360 days.
Capitalized terms used herein but not otherwise defined shall have the meanings set forth in the Second Amended and Restated Loan and Security Agreement (the "Second Amended Loan and Security Agreement") dated April 22, 2004 by and among the Borrower and other parties on the signature page thereto as Borrowers, Jersey Bus Sales, Inc. and Central New York Reorganization Corp. as Guarantors, Congress Financial Corporation as Agent and the Lenders from time to time party thereto, as in effect on the date hereof.
1. Maturity Date. The Maturity Date shall mean the earlier of (i) April 23, 2007 or (ii) such date as Excess Availability exists under the Second Amended Loan and Security Agreement in an amount in excess of $7,000,000 after giving effect to the repayment of the principal of this Note.
2. Interest Payments. Interest shall be computed at the per annum rate of fifteen percent (15%) and shall be paid on said principal amount (i) monthly in arrears, payable on the last Business Day of each month, commencing on August 31, 2004 until September 30, 2004, and thereafter (ii) quarterly in arrears, payable on the last Business Day of each quarter, commencing on December 31, 2004 until the Maturity Date; provided, however, that no interest payment shall be made unless (a), after giving effect to such interest payment, at least $1,000,000 of Excess Availability exists under the Second Amended Loan and Security Agreement and (b) no Event of Default exists under the Second Amended Loan and Security Agreement.
3. Representations and Warranties. The Borrower hereby agrees that each of the representations and warranties made inSection 8 of the Second Amended Loan and Security Agreement (i) are true and correct as of the date hereof, (ii) shall be deemed made as of the date hereof and (iii) are deemed incorporated into this Note with the same force and effect as if such representations and warranties were set forth in their entirety in this Note.
4. Covenants. The Borrower hereby agrees to comply with each of the covenants, agreements, undertakings and other promises made by it inSection 9 of the Second Amended and Restated Loan and Security Agreement as in effect on the date hereof regardless of whether or the not the Second Amended Loan and Security Agreement remains in full force and effect or the Obligations under the Second Amended Loan and Security Agreement remain outstanding. The covenants, agreements, undertakings and other promises made by the Borrower inSection 9 of the Second Amended and Restated Loan and Security Agreement shall be deemed incorporated by reference into this Note with the same force and effect as if such covenants, agreements, undertakings and other promises were set forth in their entirety in this Note.
5. Events of Default. The occurrence or existence of any one or more of the following events are referred to herein individually as an "Event of Default", and collectively as "Events of Default":
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of the GSC Lenders herein provided are cumulative and not exclusive of any rights or remedies provided by law.
| If to the GSC Lenders: | GSCP II Holdings (AE), L.L.C. 12 East 49th Street, Suite 3200 New York, NY 10017 Attention: Matthew Kaufman Telephone No.: 212-884-6200 Telecopy No.: 212-884-6197 | |
| If to the Borrower: | Atlantic Express Transportation Corp. 7 North Street Staten Island, New York 10302 Attention: President Telephone No.:718-442-7000 Telecopy No.: 718-442-5105 |
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or at such other address as may be designated by such party from time to time in a notice complying with the terms of this section. Any notice shall be deemed given upon receipt.
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BEFORE A JURY; THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE GSC LENDERS ENTERING INTO THIS NOTE.
| ATLANTIC EXPRESS TRANSPORTATION CORP. | |||
By: | /s/ NEIL J. ABITABILO Name: Neil J. Abitabilo Title: Chief Financial Officer | ||
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