Exhibit
10.3
 AMENDMENT
NO. 4 TO
 THIRD AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
 
 Amendment
No. 4 to Third Amended and Restated Loan and Security Agreement, dated as of
February 17, 2009 (this “Amendment”), by and among Wachovia Bank, National
Association, successor by merger to Congress Financial Corporation, in its
capacity as agent (in such capacity, “Agent”), acting for and on behalf of
Lenders (as hereinafter defined), the financial institutions from time to time
parties to the Loan Agreement (as hereinafter defined) as lenders (“Lenders”),
Atlantic Express Transportation Corp., a New York corporation (“Parent”), Amboy
Bus Co., Inc., a New York corporation (“Amboy”), Atlantic Escorts Inc., a New
York corporation (“Atlantic Escorts”), Atlantic Express Coachways, Inc., a New
Jersey corporation (“Coachways”), 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 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 Express of Upstate New York, Inc., formerly known as TNT Bus
Service, Inc., a New York corporation (“AE Upstate”), Atlantic Transit Corp., a
New York corporation (“ATC”), 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”), Fiore Bus Service,
Inc., a Massachusetts corporation (“Fiore”), Groom Transportation, Inc., a
Massachusetts corporation (“Groom”), G.V.D. Leasing Co., Inc., a New York
corporation (“GVD”), James McCarthy Limo Service, Inc., a Massachusetts
corporation (“Limo”), Jersey Business Land Co., Inc., a New Jersey corporation
(“JBL”), K. Corr, Inc., a New York corporation (“Corr”), Merit Transportation
Corp., a New York corporation (“Merit”), Metro Affiliates, Inc., a New York
corporation (“Metro”), Metropolitan Escort Service, Inc., a New York corporation
(“Metropolitan Escort”), Midway Leasing Inc., a New York corporation (“Midway”),
180 Jamaica Corp., a New York corporation (“Jamaica”), 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”), Staten Island Bus, Inc., a
New York corporation (“SI-Bus”), Temporary Transit Service, Inc., a New York
corporation (“TTS”), Transcomm, Inc., a Massachusetts corporation (“Transcomm”),
Winsale, Inc., a New Jersey corporation (“Winsale” and together with Parent,
Amboy, Atlantic Escorts, Coachways, AE-NE, AE-CA, AE-I, AELA, AE Missouri, AENJ,
AEP, AE Upstate, ATC, AH, AP, APNY, AQ, Block, Brookfield, Courtesy, Fiore,
Groom, GVD, Limo, JBL, Corr, Merit, Metro, Metropolitan Escort, Midway, Jamaica,
FBS, RBS, RBC, REC, McCarthy, SI-Bus, TTS and Transcomm, each individually a
“Borrower” and collectively, “Borrowers”) and the parties hereto from time to
time as guarantors (each individually a “Guarantor” and collectively,
“Guarantors”, as defined in the Loan Agreement).
 
  
 
 WITNESSETH:
 
 WHEREAS,
Agent, Lenders, Borrowers and Guarantors 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 Third
Amended and Restated Loan and Security Agreement, dated as of May 15, 2007, as
amended by Amendment No. 1 to Third Amended and Restated Loan and Security
Agreement, dated as of January 1, 2008, Amendment No. 2 to Third Amended and
Restated Loan and Security Agreement, dated as of August 28, 2008, and Amendment
No. 3 to Third Amended and Restated Loan and Security Agreement, dated as of
September 25, 2008, by and among Agent, Borrowers, Guarantors and Lenders (as
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”).  All
capitalized terms used herein shall have the meanings assigned thereto in the
Loan Agreement and the other Financing Agreements, unless otherwise defined
herein;
 
 WHEREAS,
Borrowers and Guarantors have requested that Agent and Lenders make certain
amendments to the Loan Agreement, and Agent and Lenders are willing to agree to
such request, and make certain other amendments to the Loan Agreement, subject
to the terms and conditions set forth herein; and
 
 WHEREAS,
by this Amendment, Agent, Lenders, Borrowers and Guarantors wish and intend to
evidence such amendments.
 
 NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements and
covenants contained herein, the parties hereto agree as follows:
 
 1.  Definitions.  For
purposes of this Amendment, unless otherwise defined herein, all terms used
herein shall have the respective meanings assigned to such terms in the Loan
Agreement and the other Financing Agreements.
 
 2.  Minimum
EBITDA.  Section 9.17 of the Loan Agreement is hereby amended
by deleting such Section in its entirety and replacing it with the
following:
  2
  “9.17
Minimum EBITDA.
 At the end of each calendar month, Parent and its Subsidiaries shall have
EBITDA of not less than $26,000,000 for the twelve (12) consecutive month period
then ended; provided, that, (a) Parent and
its Subsidiaries shall not be required to comply with this Section for any
calendar month if Excess Availability is equal to or greater than: (i)
$4,500,000, at all times prior to July 31, 2009, (ii) $4,000,000, at all times
during the period from August 1, 2009 to September 15, 2009, (iii) $4,500,000,
at all times during the period from September 16, 2009 to November 1, 2009, (iv)
$8,000,000, at all times during the period from November 2, 2009 to June 30,
2010, (v) $5,000,000, at all times during the period from July 1 to September 15
of any year (commencing in 2010), and (vi) $8,000,000, at all times during the
period from September 16 of any year (commending in 2010) through June 30 of the
immediately following year; (b) solely for purposes of this Section 9.17: (i)
the calculation of EBITDA shall not include the effects of any non cash
accounting adjustments for FASB 133, and (ii) at all times prior to April 1,
2009, the calculation of the Borrowing Base for purposes of the calculation of
Excess Availability shall not include Reserves established to reflect
obligations, liabilities or indebtedness (contingent or otherwise) of Borrowers
or Guarantors to Agent or any Bank Product Provider arising under or in
connection with any Hedge Agreement in an amount of up to $5,000,000; and (c) to
the extent Parent and its Subsidiaries have failed to maintain the minimum
EBITDA required by this Section 9.17 as of the end of any such calendar month,
to the extent that Parent receives a cash capital contribution from any of its
Permitted Holders or AETG no later than the EBITDA Capital Contribution Deadline
that would if it had been received prior to the end of such month meant that
Parent was in compliance with this Section 9.17, then Parent and its
Subsidiaries shall be deemed to have complied with this Section 9.17 for such
month.”.
  3.  Amendment
Fee.  In addition to all other fees, charges, interest and
expenses payable by Borrowers and Guarantors to Agent and Lenders under the Loan
Agreement and the other Financing Agreements, Borrowers shall pay to Agent, for
the benefit of Lenders, an amendment fee in the amount of $10,000, which fee
shall be fully earned as of and payable on the date hereof and may be charged to
any loan account of Borrowers maintained by Agent.
  4.  Additional Representations,
Warranties and Covenants.  Each Borrower and Guarantor, jointly
and severally, represents, warrants and covenants with and to Agent and Lenders
as follows, which representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof, and the truth and accuracy of,
or compliance with each, together with the representations, warranties and
covenants in the other Financing Agreements, being a continuing condition of the
making of Loans by Agent or any Lender to Borrowers:
 
 (a)  This
Amendment has been duly authorized, executed and delivered by all necessary
action on the part of each Borrower and Guarantor which is a party hereto and,
if necessary, their respective members or stockholders, as the case may be, and
are in full force and effect as of the date hereof, as the case may be, and the
agreements and obligations of Borrowers and Guarantors contained herein
constitute legal, valid and binding obligations of Borrowers and Guarantors
enforceable against them in accordance with their terms.
 
 (b)  As
of the date hereof, all of the representations and warranties set forth in the
Loan Agreement and the other Financing Agreements are true and correct in all
material respects on and as of the date hereof as if made on the date hereof,
except to the extent any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall have been
true and correct as of such date.
 
 (c)  Neither
the execution, delivery and performance of this Amendment, nor the consummation
of any of the transactions contemplated herein (i) are in contravention of
law or any indenture, agreement or undertaking to which any Borrower or
Guarantor is a party or by which any Borrower or Guarantor or its property are
bound (including without limitation the Note Indenture) or (ii) violates
any provision of the certificate of incorporation, certificate of formation,
operating agreement, by-laws or other governing documents of any Borrower or
Guarantor.
  3
 
 (d)  No
Default or Event of Default exists or has occurred and is continuing as of the
date of this Amendment.
 
 5.  Conditions
Precedent.  The effectiveness of the amendments contained
herein shall be subject to the satisfaction of each of the following, in a
manner satisfactory to Agent and its counsel:
 
 (a)  Agent
shall have received this Amendment, duly authorized, executed and delivered by
Borrowers and Guarantors; and
 
 (b)  No
Default or Event of Default shall have occurred and be continuing as of the date
of this Amendment.
 
 6.  Effect of this
Amendment.  Except as expressly set forth herein, no other
amendments, consents, changes or modifications to the Financing Agreements are
intended or implied, and in all other respects the Financing Agreements are
hereby specifically ratified, restated and confirmed by all parties hereto as of
the effective date hereof and Borrowers shall not be entitled to any other or
further amendment or consent by virtue of the provisions of this Amendment or
with respect to the subject matter of this Amendment.  To the extent
of conflict between the terms of this Amendment and the other Financing
Agreements, the terms of this Amendment shall control.  The Loan
Agreement and this Amendment shall be read and construed as one
agreement.
 
 7.  Governing
Law.  The validity, interpretation and enforcement of this
Amendment and any dispute arising out of the relationship between the parties
hereto shall be governed by the internal laws of the State of New York but
excluding any principles of conflicts of law or other rule of law that would
cause the application of the law of any jurisdiction other than the laws of the
State of New York.
 
 8.  Binding
Effect.  This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
 
 9.  Headings.  The
headings listed herein are for convenience only and do not constitute matters to
be construed in interpreting this Amendment.
 
 10.  Counterparts.  This
Amendment may be executed in any number of counterparts, each of which shall be
an original and all of which shall together constitute but one and the same
agreement.  In making proof of this Amendment, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties hereto.  Delivery of an executed counterpart of
this Amendment by telefacsimile or other means of electronic transmission shall
have the same force and effect as delivery of an original executed counterpart
of this Amendment.  Any party delivering an executed counterpart of
this Amendment by telefacsimile or other means of electronic transmission also
shall deliver an original executed counterpart of this Amendment, but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment as to such party
or any other party.
  4
  IN
WITNESS WHEREOF, Agent, Lenders, Borrowers and Guarantors have caused these
presents to be duly executed as of the day and year first above
written.
 
 BORROWERSATLANTIC
      EXPRESS TRANSPORTATION CORP.AMBOY
      BUS CO., INC.ATLANTIC
      ESCORTS INC.ATLANTIC
      EXPRESS COACHWAYS, INC.ATLANTIC
      EXPRESS NEW ENGLAND, INC.ATLANTIC
      EXPRESS OF CALIFORNIA, INC.ATLANTIC
      EXPRESS OF ILLINOIS, INC.ATLANTIC
      EXPRESS OF L.A., INC.ATLANTIC
      EXPRESS OF MISSOURI INC.ATLANTIC
      EXPRESS OF NEW JERSEY, INC.ATLANTIC
      EXPRESS OF PENNSYLVANIA, INC.ATLANTIC
      EXPRESS OF UPSTATE NEW YORK, INC.ATLANTIC
      TRANSIT CORP.ATLANTIC-HUDSON,
      INC.ATLANTIC
      PARATRANS, INC.ATLANTIC
      PARATRANS OF NYC, INC.ATLANTIC
      QUEENS BUS CORP.BLOCK
      7932, INC.BROOKFIELD
      TRANSIT INC.COURTESY
      BUS CO., INC.FIORE
      BUS SERVICE, INC.GROOM
      TRANSPORTATION, INC.G.V.D.
      LEASING CO., INC.JAMES
      MCCARTHY LIMO SERVICE, INC.JERSEY
      BUSINESS LAND CO., INC.K.
      CORR, INC.MERIT
      TRANSPORTATION CORP.METRO
      AFFILIATES, INC.METROPOLITAN
      ESCORT SERVICE, INC.MIDWAY
      LEASING INC.180
      JAMAICA CORP.R.
      FIORE BUS SERVICE, INC.RAYBERN
      BUS SERVICE, INC.RAYBERN
      CAPITAL CORP.RAYBERN
      EQUITY CORP.ROBERT
      L. MCCARTHY & SON, INC.STATEN
      ISLAND BUS, INC.TEMPORARY
      TRANSIT SERVICE, INC.TRANSCOMM,
      INC.WINSALE,
      INC.By:
                    /s/Nathan SchlenkerName:
                    Nathan
      SchlenkerTitle:
                    CFO
  
  AGENT AND
LENDERS
 
 WACHOVIA
BANK, NATIONAL ASSOCIATION,
 successor
by merger to Congress Financial Corporation,
 as Agent
and as Lender
 
 By:
                /s/ Herb KornName:
      Herb KornTitle:  
      Director