Exhibit 10.6


 


Advisory
Services Agreement dated as of December 24, 2003
(this “Agreement”), among (i) Atlantic Express Transportation Group Inc.
and Atlantic
Express Transportation Corp., each a New York corporation (together,
the “Company”), and (ii) GSCP, Inc. (“GSCP”) ( “Advisor”).


 


Witnesseth:


 


Whereas, the Company desires to receive
advisory services from the Advisor, and the Advisor desires to provide such
services to the Company and subsidiaries of the Company.


 


Whereas, the First Amended Joint Plan of
Reorganization of Atlantic Express and its debtor subsidiaries, dated
July 21, 2003, filed in those certain Chapter 11 cases identified as Case
No. 02-42560 (PCB) and confirmed on September 5, 2003  by order of the United States Bankruptcy
Court for the Southern District of New York (the “Plan”), contemplates
that the Company shall pay to the Advisor an aggregate annual fee of $500,000
for such services.


 


Now, therefore, in consideration of the
premises and the respective agreements hereinafter set forth and the mutual
benefits to be derived here from, the parties hereto hereby agree as follows:


 


1.                                       Engagement.
The Company hereby engages the Advisor to provide advisory services to the
Company, all on the terms and subject to the conditions set forth below.


 


2.                                       Services.


 


(a)                                  The
Advisor hereby agrees, during the term of this Agreement, to advise and consult
with the Board of Directors and management of the Company and subsidiaries of
the Company in such manner and on such business, operational and financial
matters, and provide such other advisory services, as may be reasonably
requested from time to time by the Board of Directors of the Company, including
but not limited to advisory services with respect to:


 


(i)                                     the
raising of additional debt and equity capital from time to time for the Company
and subsidiaries of the Company;


 


(ii)                                  establishing
and maintaining banking, consulting, advising and other business relationships
for the Company and subsidiaries of the Company;


 


(iii)                               developing
and implementing corporate and business strategy and planning for the Company
and subsidiaries of the Company, including plans and programs for improving
operating, marketing and financial performance, budgeting of future corporate
investments, acquisition and divestiture strategies, and reorganizational
programs; and


 

















 


(iv)                              providing
such other consulting and advisory services as the Company may reasonably
request.


 


(b)                                 The
Company will furnish from time to time to the Advisor with such information as
the Advisor reasonably believes appropriate to their engagement hereunder (all
such information so furnished being referred to herein as the “Information”).
The Company recognizes and confirms that: (i) the Advisor will use and rely
primarily on the Information and on information available from generally
recognized public sources in performing the services to be performed hereunder;
and (ii) the Advisor does not assume responsibility for the accuracy or
completeness of the Information and such other information.


 


3.                                       Fee.
In consideration of providing the foregoing services, the Company will pay in
cash to the Advisor an annual fee of $500,000 (payable quarterly in advance)
(the “Advisory Fee”); provided, such payment shall accrue, with interest
at the annual rate of interest paid from time to time by the Company or its
subsidiaries, as applicable, under the Credit Agreement, dated
December   , 2003 entered into among the Company, Atlantic
Express Transportation Corp., Congress Financial Corporation and the other
parties thereto as amended and in effect from time to time, including without
limitation any refinancing or replacement thereof (the “Senior Credit
Facility”) (or if there be no Senior Credit Facility, the highest rate that
would have been payable from time to time under the most recent Senior Credit
Facility), to the extent that the current cash payment of the Advisory Fee, or
the distribution to the Company by subsidiaries of the Company of funds
necessary to enable the Company pay the Advisory Fee, is not allowed under the
Senior Credit Facility.


 


4.                                       Payment
of Expenses. The Company will also reimburse the Advisor promptly for the
Advisor’s reasonable out-of-pocket costs and expenses incurred by the Advisor
or its employees, agents or advisors or “Affiliates” (as defined pursuant to
rules promulgated from time to time under the Securities Act of 1933, as
amended (the “Securities Act”)) in connection with the performance of the
Advisor’s services requested hereunder by the Company, including but not
limited to any reasonable fees and expenses of any legal, accounting or other
professional advisors to the Advisor engaged in connection with the services
being provided hereunder (collectively, “Expenses”).


 


5.                                       Term,
etc.


 


(a)                                  This
Agreement shall terminate upon Advisor and its Affiliates (which, for purposes
of this Agreement, shall include without limitation any fund managed by GSCP or
its Affiliates (including without limitation GSCP II Holdings (AE), LLC, GSC
Recovery II, L.P. and GSC Partners CDO Fund, Limited)) ceasing to own of record
(or by designated nominees) any shares of the Common Stock issued to them
initially pursuant to the Plan.


 


(b)                                 Upon
any termination of this Agreement, any accrued and unpaid installment of the
fees hereunder or portion thereof (pro-rated, with respect to the month in
which such termination occurs, for the portion of such month that precedes such
termination), and any unpaid and unreimbursed Expenses that shall have been
incurred prior to such


 


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termination (whether or not such Expenses shall then have become
payable), shall be immediately paid or reimbursed, as the case may be, by the
Company.


 


6.                                       Indemnification.
The Company agrees to indemnify, defend, hold harmless and reimburse the Advisors
and its Affiliates and their respective directors, officers, partners, members,
employees, agents, advisors, representatives and “controlling persons” (within
the meaning of the Securities Act) (each, an “Indemnitee” from and
against any and all claims, obligations, liabilities, causes of action, action,
suits, proceedings, investigations, judgments, assessments, decrees, losses,
damages, reasonable fees, costs and expenses (including interest, penalties,
and reasonable fees and disbursements of attorneys, accountants, investments
bankers and other professional advisors, (in each case whether incurred,
arising or existing with respect to third parties or otherwise at any time or
from time to time (“Obligations”) in any way resulting from, arising out
of or in connection with, based upon or relating to the performance by the
Advisor of services under this Agreement, except to the extent that any such
Obligation of any Indemnitee is found in a final judgment by a court of
competent jurisdiction to have resulted from the gross negligence or
intentional misconduct of such Indemnitee or its directors, officers, partners,
members, employees, agents, advisors, representatives or controlling persons
and, in each case, acting in such capacity (with respect to any indemnitee, its
“Related Persons”), including any and all fees, costs and expenses
(including reasonable fees and disbursements of attorneys) incurred by or on
behalf of any Indemnitee in asserting, exercising or enforcing any of its
rights, powers, privileges or remedies in respect of this Agreement.


 


7.                                       Independent
Contractor Status. The parties agree that the Advisor shall perform
services hereunder as an independent contractor, retaining control over and
responsibility for its own operations and personnel. Neither the Advisor nor
any of its employees or agents shall, solely by virtue of this Agreement or the
arrangements hereunder, be considered employees or agents of the Company nor
shall any of them have authority to contract in the name of the Company, except
as expressly agreed to in writing by the Company.


 


8.                                       Taxes.  The Advisor shall assume sole responsibility
for the payment of all income or other taxes, including self-employment taxes,
resulting from the Advisory Fees or any other fees or expenses paid pursuant to
this Agreement. The Advisors shall indemnify and hold the Company and its
affiliates harmless, from and against any and all taxes, interest, and/or
penalties incurred by the Company or its affiliates attributable to taxes,
interests, and/or penalties, that the Advisors are responsible for under this Section 8.


 


9.                                       Notices.
All notices, requests, demands, waivers and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly give if (i) delivered personally, (ii) mailed,
certified or registered mail with postage pre-paid, (iii) sent by next day or
overnight mail or delivery or (iv) sent by telecopy or telegram, as follows:


 


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  If to the Company, to:

  	
   

  
	
   

  	
   

  
	
  Atlantic Express Transportation Group Inc.

  	
   

  
	
  7 North Street

  	
   

  
	
  Staten Island, NY  10302

  	
   

  
	
  Fax: 718-442-5105

  	
   

  
	
  Telephone: 718-442-7000

  	
   

  
	
  Attention: Chairman of the Board of Directors

  	
   

  
	
   

  	
   

  
	
  If to the Advisor, to:

  	
   

  
	
   

  	
   

  
	
  c/o GSC Partners

  	
   

  
	
  12 East 49th Street, Suite 3200

  	
   

  
	
  New York, New York 10017

  	
   

  
	
  Attention: Sanjay H. Patel

  	
   

  
	
  Telephone:

  	
  212.884.6200

  
	
  Facsimile:

  	
  212.884.6184

  
			



 


or to such other person or address as such party shall furnish to the
other parties in writing. All such notices, requests, demands, waivers and
other communications shall be deemed to have been received (i) if by personal
delivery, on the day after such delivery, (ii) if by certified or registered
mail, on the fifth business day after the mailing thereof, (iii) if by next-day
or overnight mail delivery, on the day delivered, or (iv) if by telecopy or
telegram, on the day on which such telecopy or telegram was sent, provided that
a copy is also sent by certified or registered mail.


 


10.                                 Entire Agreement.
This Agreement contains the complete and entire understanding and agreement of
each party hereto with respect to the subject matter hereof and supersedes all
prior and contemporaneous understandings, conditions and agreements, oral or
written, express or implied, in respect of the subject matter hereof.


 


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


 


12.                                 Counterparts.
This Agreement may be executed in several counterparts, each of which shall be
deemed an original and all of which shall together constitute one and the same
instrument.


 


13.                                 Binding Effect;
Assignment. This Agreement shall be binding upon and inure to the benefit
of the parties to this Agreement and their respective successors and assigns,
provided that no party hereto may assign any of its rights or obligations under
this Agreement without the express written consent of each other party hereto.
By operation of merger, this Agreement shall be binding upon and inure to the
benefit of the surviving entity of a merger. This Agreement is not intended to
confer any right or remedy hereunder upon any person other than the parties to
this Agreement and their respective successors and permitted assigns.


 


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14.                                 Governing Law.
This Agreement shall be governed in all respects, including validity,
interpretation and effect, by laws of the State of New York, regardless of the
laws that might be applied under principles of conflicts of laws. In the event
of any dispute over the subject matter of this Agreement, the parties agree to
bring suit in the appropriate federal and state courts located in the borough
of Manhattan in the State of New York, and waive any objection that any such
court is an inconvenient forum. Each party hereby irrevocably waives any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby.


 


15.                                 Amendment; Waivers.
No amendment, modification, supplement 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, supplement, discharge or waiver is sought, and acknowledged by
the other party. 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. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party may otherwise have at law or
in equity or otherwise.


 


16.                                 Joint and Several
Obligations of the Company. The obligations of Atlantic Express
Transportation Group Inc. and Atlantic Express Transportation Corp. hereunder
shall be joint and several.


 


[Signature
page follows.]


 


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In witness whereof, the parties hereto have
caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.


 


	
   

  	
  Company:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Atlantic Express Transportation Group Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DOMENIC
  GATTO

  	
   

  
	
   

  	
  Print name:

  	
  Domenic
  Gatto

  	
   

  
	
   

  	
  Print title:

  	
  President,
  CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Advisor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GSCP, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SANJAY
  H. PATEL

  
	
   

  	
  Print name:

  	
  Sanjay H.
  Patel

  
	
   

  	
  Print title:

  	
   

  
								



 


Advisory Services Agreement


 


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