Exhibit 10.15


 


TAX SHARING AGREEMENT


 


TAX SHARING AGREEMENT (the “Agreement”), dated as of December 22,
2000, between Atlantic Express Transportation Group Inc., a New York
Corporation (“AETG”) and Atlantic Express Transportation Corp., a New York
Corporation (“AETC”).


 


W I T N E S S E T H:


 


WHEREAS, AETG is the common parent of an affiliated group of
corporations filing a consolidated federal income tax return which affiliated
group includes AETC and AETC’s subsidiaries.


 


WHEREAS, the parties hereto desire, to allocate liability for taxes
AETG Group (as defined below) on the one hand and AETC Group (as defined below)
on the other hand, and to agree as to certain other tax matters.


 


NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:


 


1.                                       DEFINITIONS


 


For purposes of this Agreement, the following words and phrases have
the following meanings:


 


“AETC Group” means AETC and the AETC Subsidiaries.


 


“AETC Subsidiaries” means the Subsidiaries of AETC and any additional
Subsidiaries which are acquired by AETC during the term of this Agreement.


 


“AETG Group” means AETG and the AETG Subsidiaries.


 


“AETG Subsidiaries” means the Subsidiaries of AETG and any additional
Subsidiaries which are acquired by AETC during the term of this Agreement,
other than AETC and each of the AETC Subsidiaries..


 


“Code” means the Internal Revenue Code of 1986, as amended.


 

















 


“Consolidated Federal Income Tax” means the regular federal income tax
shown on the consolidated federal income tax return of the Consolidated Group,
including interest and penalties, if any, as last determined reflecting any
adjustment made by an amended return, claim for refund, carryback claim, or
examination by the Internal Revenue Service.


 


“Consolidated Group” means the group of affiliated companies of which
AETG is the common parent.


 


“Consolidated Return” means the consolidated U.S. federal income Tax or
any combined state and/or local tax return of AETG for the taxable period
commencing on
                 
and each consolidated U.S. Federal Income Tax Return of AETG for each
subsequent taxable period until the termination of this Agreement.


 


“Effective Date” means the date set forth herein above.


 


“Final Determination” means the final resolution of liability for tax
for any tax period or for any tax issue as a result of (i) a final and
unappealable judgment or other order of a court of competent jurisdiction, (ii)
a closing agreement or accepted offer in compromise under sections 7121 or 7122
of the Code, or a comparable agreement under the laws of other jurisdictions,
which resolves the entire liability for such tax or such issue for such tax
period, or (iii) any other final deposition, including by reason of the
expiration of the applicable statute of limitations.


 


“Group” means in the context used herein either the AETG Group or the
AETC Group.


 


“IRS” means the Internal Revenue Service.


 


“Member” means AETG. AETC or any of their Subsidiaries.


 


“Non-Consolidated Taxes” means all Taxes other than Consolidated Taxes.


 


“Subsidiary” means with respect to any Person, (i) any corporation,
association or other business entity of which more than 80% of the total voting
power of shares of voting stock thereof is at the time owned or controlled,
directly or indirectly, by such person or one or more of the other subsidiaries
of that person or a combination thereof and (ii) any partnership in which such person
or any of its subsidiaries is a general partner.


 


“Substantial Authority” has the meaning provided in the Treasury
Regulations under section 6662 of the Code.


 


“Tax Dispute Accountant” means the national office of an independent
accounting firm of national reputation selected by AETG and reasonably
acceptable to AETC.


 


“Tax” means any federal, state or local, income tax, franchise tax or
tax on capital.


 


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2.                                       [INTENTIONALLY
OMITTED]


 


3.                                       FILING RESPONSIBILITY


 


3.1                                 Consolidated
Returns.  (a) AETG and AETC shall
and shall cause the AETC Subsidiaries and AETG Subsidiaries, respectively, to
join, in the Consolidated Returns to the extent each is eligible to join in
such return under the Code and the Treasury Regulations.  AETG shall cause the Consolidated Returns to
be timely prepared and filed, and shall timely prepare any consents and
requests for extension of time within which to file the Consolidated Returns or
any related information or similar returns. 
AETG shall make the Consolidated Returns available to AETC for review
prior to filing and shall furnish AETC with a copy of each such return promptly
after it is filed.


 


(b)                                 AETC
and the AETC Subsidiaries shall each furnish to AETG, on a timely basis, such
information, schedules, analysis and other items as may be reasonably requested
by AETG to prepare the Consolidated Returns.


 


(c)                                  AETC
and the AETC Subsidiaries shall execute and deliver all documentation
reasonably required (including powers of attorney) to enable AETG to timely
file, and take all actions necessary or incidental to the filing of, the
Consolidated Returns or any amendment of the Consolidated Returns.  AETG shall determine in its sole discretion
whether to file an amended return, and no consent of AETC or an AETC Subsidiary
shall be required for the filing of any such amended return.


 


(d)                                 AETG
shall pay or cause to be paid all Taxes with respect to the Consolidated
Returns, and shall act as the agent of AETC, the AETC Subsidiaries and the AETG
Subsidiaries in all Tax matters having to do with the Consolidated Returns.


 


4.                                       SHARING OF
CONSOLIDATED FEDERAL INCOME TAX


 


(A)                              Taxable
Income.  The AETC Group and AETG
Group shall pay to AETG for each taxable year during the term of this Agreement,
an amount equal to the result of the following equation:


 


(i)                                     the separate
taxable income of each Group (but not less than zero) divided by


 


(ii)                                  the sum of the
Separate Taxable Incomes of each Member of the Consolidated Group that has positive
Separate Taxable Income for the year, the resulting quotient multiplied by


 


(iii)                               the federal income tax
liability of the Consolidated Group, prior to the application of foreign tax
credits, if any, for the year.


 


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(B)                                Separate Taxable
Income.  For purposes of this
Agreement, the Separate Taxable Income of each Member of the Consolidated Group
shall be determined under Treas. Reg. Section 1.1502-12 with the
adjustments provided in Treas. Reg. Section 1.1552-1(a)(1)(ii).


 


 


(C)                                Subsequent
Adjustments.  In the event that the
separate income of any Member of the AETG Group or AETC Group is adjusted by
reason of an amended return, claim for refund, or examination by the Internal
Revenue Service, the amount due from such Group under paragraph 4.A shall be
recomputed using the adjusted Separate Taxable Income and such Group shall pay
to AETG any additional amount owed with applicable interest (with full credit
given for any prior payments for the year), and AETG agrees to pay to AETC
Group or any AETG Subsidiary any overpayment made by AETC Group or such AETG
Subsidiary.


 


(D)                               Refunds.  In the event that the separate taxable
income of any Member of the Consolidated Group is negative (determined without
reference to the adjustments provided in Treas. Reg.
Section 1.1552-1(a)(1)(ii) and such Member would be entitled to
receive a refund for the year if the Member were not a member of the
Consolidated Group, AETG shall pay to such Member an amount equal to such
refund.  In no event, however, shall the
amount payable by AETG pursuant to this paragraph 4.D exceed the amount
previously paid by the Member to AETG during the relevant carryback period
under Section 172 of the Code, or any successor provision.


 


5.                                       PAYMENT
PROCEDURE


 


A.                                   Current Year Tax
Liability.  Payments to be made by
AETC Group and AETG Group to AETG pursuant to paragraph 4.A with respect to any
year shall be made in installments, as set forth in this paragraph.


 


1.                                       Quarterly
Installments.  Within 30 days afer
the close of each calendar quarter, AETC Group and AETG Group will pay to AETG
an amount equal to a percentage of the current estimated payment, which
percentage shall be the percentage of the Consolidated Tax paid by such Group
for the prior tax year.


 


2.                                       Final Installment.  Within 10 days after each Group has received
from AETG a copy of its separate federal income tax return for the relevant tax
year, such Group will pay to AETG the excess, if any, of such Group’s liability
over the sum of all payments with respect to such year made by such Group
pursuant to paragraph 5.A.1.  If the sum
of the payments with respect to such year made by the Group pursuant to
paragraph 5.A.1. plus the amount of fuel tax credit earned by such Group
exceeds such Group’s liability, then AETG shall refund the difference within 30
days to such Group.


 


B.                                     Payment of
Subsequent Adjustments.  Payments to
be made by each Group to AETG pursuant to paragraph 4.C. shall be made within
30 days after such Group has received from AETG a copy of the filed amended
return or an agreement in writing with the Internal Revenue Service on


 


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proposed adjustments.  Payments
made by AETG to a Member or a Group pursuant to paragraph 4.C. or paragraph
4.D. shall be made within 30 days after receipt by AETG of a refund, or offset
against adjustments of the Consolidated Group, resulting from the filing of a
return, an amended return, Form 1139 Corporation Application for Tentative
Refund, claim for refund, or agreement in writing with the Internal Revenue
Service on proposed adjustments.


 


6.                                       STATE
TAXES.  To the extent appropriate, rules
similar to the provisions of Sections 4 and 5 of this Agreement shall be
applied to the payment of state and local franchise or income tax liabilities
to which any Member of the Consolidated Group is subject and which are required
to be determined on a unitary, combined or consolidated basis.


 


7.                                       OTHER
TAXES.  AETC shall pay or reimburse AETG
(but without duplication of any amounts that either is otherwise obligated to
pay to AETG under this Agreement) for its Pro Rata Share of any taxes, charges
or assessments (including but not limited to capital, net worth, gross
receipts, excise, intangibles or similar taxes, charges or assessments)
required to be paid by AETG by virtue of (a) its being incorporated or having
capital stock outstanding (but not by virtue of owning stock of any corporation
other than AETC), (b) being a holding company parent of AETC or receiving
dividends from or other distributions from ATEC or any subsidiary thereof.  For purposes of this Section, “Pro Rata
Share” shall mean, for AETC, the fraction obtained by dividing the book value
of such Company’s Group by the aggregate book value of the AETC.


 


8.                                       DISPUTE
RESOLUTION.  In the event of a dispute
between AETG and AETC as to any computation of federal, state, local income or
franchise Tax liability pursuant to this Agreement, or the amount of any
payment with respect thereto, the disputed item shall be submitted to the Tax
Dispute Accountants.  AETG and AETC
shall present their arguments to the Tax Dispute Accountants within 30 days
after such submission.  The Tax Dispute
Accountants shall resolve the dispute in a fair and equitable manner and in
accordance with applicable tax law, provided that the Tax Dispute
Accountants shall not resolve a legal issue against AETG unless the Tax Dispute
Accountants determines that AETG’s position with respect to such legal issue
does not have Substantial Authority. 
The Tax Dispute Accountants’ determination shall be binding on the
parties.  AETC shall be responsible for
the cost and fees of the Tax Dispute Accountants.


 


9.                                       TERM.  This Agreement shall be effective as of the
year and day first above written and shall continue thereafter until the
parties hereto terminate this Agreement by mutual consent.


 


10.                                 METHOD
OF ALLOCATION.  This Agreement shall
have no effect on, and shall not be affected by, the method of allocation of
tax liability between Members of the Consolidated Group selected by the
Consolidated Group pursuant to Section 1552 of the Internal Revenue Code.


 


11.                                 FINANCIAL
STATEMENT REPORTING.  For financial
statement reporting purposes, AETC Group shall record current and deferred tax
assets and liabilities in accordance with the Statement of Financial Accounting
Standards No. 109- Accounting For Income Taxes.


 


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12.                                 GENERAL
PROVISIONS


 


12.1                           Notices.  Any notice or other communication required
or permitted to be given under this Agreement shall be sufficiently given if
sent by express, certified or registered mail, postage prepaid, or by an
independent next business day delivery service, or by telefax, addressed as
follows and shall be effective upon receipt, or if mailed, three days after
mailing:


 


(a)                                  If
to AETG, addressed to:


 


	
  Atlantic Express Transportation Group Inc.

  
	
  7 North Street

  
	
  Staten Island, NY 10302

  
	
  Fax:

  	
   

  	
  (718) 442-5105

  
	
  Telephone:

  	
   

  	
  (718) 442-7000

  
	
  Attention:

  	
   

  	
  President

  



 


With a copy to:


 


	
  Silverman, Collura & Chernis, P.C.

  
	
  381 Park Avenue South

  
	
  New York, NY 10016

  
	
  Fax:

  	
   

  	
  (212) 7798858

  
	
  Telephone:

  	
   

  	
  (212) 779-8600

  
	
  Attention:

  	
   

  	
  Peter R. Silverman

  



 


(b)                                 If to AETC, addressed
to:


 


	
  Atlantic Express Transportation Corp.

  
	
  7 North Street

  
	
  Staten Island, NY 10302

  
	
  Fax:

  	
   

  	
  (718) 442-5105

  
	
  Telephone:

  	
   

  	
  (718) 442-7000

  
	
  Attention:

  	
   

  	
  President

  



 


With a copy to:


 


	
  Silverman, Collura & Chernis, P.C.

  
	
  381 Park Avenue South

  
	
  New York, NY 10016

  
	
  Fax:

  	
   

  	
  (212) 7798858

  
	
  Telephone:

  	
   

  	
  (212) 779-8600

  
	
  Attention:

  	
   

  	
  Peter R. Silverman

  



 


or to such other address(es) as AETG or AETC shall give notice to the
other by like means.  Any such notice or
communication shall be deemed to have been given (i) if by personal delivery on
the day after such delivery, (ii) if by certified or registered mail, on the fifth
day after the mailing thereof, (iii) if by next-day or overnight mail or
delivery, on the day delivered, or (iv) if by fax on the next day following the
day on which such fax was sent.


 


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12.2                           Parties in Interest.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal representatives.


 


12.3                           No Third Party
Beneficiaries.  Nothing in this
Agreement shall confer any rights upon any person or entity other than the
parties hereto and their respective heirs, successors and permitted assigns.


 


12.4                           Governing Law; Disputes.  (a) 
This Agreement shall be governed in all respects, including as to
validity, interpretation and effect, by the internal laws of the State of New
York, without giving effect to the conflict of laws rules thereof .


 


(b)                                 Each party
acknowledges and agrees that any controversy which may arise under this
Agreement is likely to involve complicated and difficult issues, and therefore
each such party hereby irrevocably and unconditionally waives any right such
party may have to a trial by jury in respect of any litigation directly or
indirectly arising out of or relating to this Agreement, or the breach,
termination or validity of this Agreement, or the transactions contemplated by
this Agreement.  Each party certifies
and acknowledges that (i) no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce the foregoing waiver, (ii) each
such party understands and has considered the implications of this waiver,
(iii) each such party makes this waiver voluntarily, and (iv) each such party
has been induced to enter into this Agreement by, among other things, the
mutual waivers and certifications in this Section.


 


12.5                           Assignment.  This Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
the other parties hereto, and any purported assignment or other transfer
without such consent shall be void and unenforceable.


 


12.6                           Amendment; Waivers, etc.  No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought.  Any such waiver shall constitute a waiver
only with respect to the specific matter described in such writing and shall in
no way impair the rights of the party granting such waiver in any other respect
or at any other time.  Neither the
waiver by any of the parties hereto of a breach of or a default under any
occasions, to enforce any of the provisions of this Agreement or to exercise
any right or privilege hereunder, shall be construed as a waiver of any other
breach or default of a similar nature, or as a waiver of any of such
provisions, rights or privileges hereunder. 
The rights and remedies herein provided are cumulative and none is
exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.  The
rights and remedies of any party based upon, arising out of or otherwise in
respect of any breach of any covenant or agreement or failure to fulfill any
condition shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such breach is
based may also be the subject matter of any other covenant or agreement as to
which there is no breach.


 


12.7                           Severability.  If any provision, including any phase,
sentence, clause, section or subsection, of this Agreement is invalid,
inoperative or unenforceable for any reason, such provision shall be valid and
enforceable to the fullest extent permitted by law and such circumstances shall
not have the effect of rendering such provision in question invalid,
inoperative or unenforceable in any


 


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other case or circumstance, or of rendering any other provision herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.


 


12.8                           Headings.  The headings continued in this Agreement are
for purposes of convenience only and shall not affect the meaning or
interpretation of this Agreement.


 


12.9                           Entire Agreement.  All understandings and agreements between
the parties are merged into this Agreement, which fully and completely
expresses their agreement and supersedes any prior agreement or understanding
relating to the subject matter hereof.


 


12.10                     Counterparts.  This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one
instrument.  A signature of a party
delivered by telecopy or other electronic communication shall constitute an
original signature of such party.


 


IN WITNESS WHEREOF, the undersigned have duly
executed this Agreement as of the date first above written.


 


 


	
   

  	
  ATLANTIC
  EXPRESS TRANSPORTATION

  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DOMENIC
  GATTO

  
	
   

  	
  Name: 

  	
  Domenic
  Gatto

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  ATLANTIC
  EXPRESS TRANSPORTATION

  CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DOMENIC
  GATTO

  
	
   

  	
  Name:

  	
  Domenic
  Gatto

  
	
   

  	
  Title:

  	
  President

  
				



 


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