Exhibit
10.1


 


INVESTMENT
AGREEMENT


 


This Investment Agreement
(this “Agreement”) is entered into as of October 17, 2005 by and between
Atlantic Express Transportation Corp., a New York corporation (the “Company”),
and Atlantic Express Transportation Group Inc., a New York corporation (the “Parent”).


 


RECITALS


 


WHEREAS, the Company is a
wholly owned subsidiary of the Parent; and


 


WHEREAS, the Parent has
agreed to purchase and the Company has agreed to sell 293,663 shares of the
Company=s Common Stock, par value $.01 per share.


 


AGREEMENT


 


NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


 


1.             Purchase and Sale


 


(a)           Investments. 
On the Closing Date, the Company shall deliver to the Parent 293,633
shares of Common Stock (the “Securities”) to the Parent, at an aggregate
purchase price of $4,900,000.


 


(b)           Investment Closing. 
The closing of the transactions contemplated hereby (the “Closing”) will
take place at the offices of the Company, simultaneous with the closing of the
issuance by the Parent of its 10% Convertible Notes, or such other date as the
parties may mutually determine.  The
Closing may be conducted by mail, facsimile and delivery service.


 


2.               Representations and Warranties of the Company.  The Company represents and warrants to the
Parent as follows:


 


(a)           Organization and Standing.  The Company is a corporation duly organized,
validly existing and in good standing under the laws of the New York. The
Company is qualified as a foreign corporation and is in good standing in each
jurisdiction in which the conduct of its business or the assets and properties
owned or leased by it require such qualification, except to the extent that the
failure to qualify would not reasonably be expected to result in a material
adverse effect on the financial condition, operations, assets, business,
prospects or properties of the Company, taken as a whole (AMaterial Adverse
Effect@).


 


(b)           Corporate Power. 
The Company has all requisite legal and corporate power and authority to
execute and deliver this Agreement, to sell and issue the Securities hereunder,
to carry out and perform its obligations under the terms of this Agreement, and
to complete the transactions contemplated hereby.


 


 





















 


(d)           No Conflicts. 
The execution and delivery of this Agreement and the issuance of the
Securities to the Parent as contemplated hereby will not (i) require any
consent authorization or approval of or filing with any governmental entity or
third party, or (ii) result in any violation of, be in conflict with or
constitute a default under, the charter or by-laws of the Company or any law,
statute, regulation, ordinance, contract, agreement, instrument, judgment,
decree or order to which the Company is a party or by which the Company is
bound, where such violation, conflict or default could reasonably be expected
to have a Material Adverse Effect.


 


(e)           Authorization. 
All corporate action on the part of the Company, its officers, directors
and stockholders necessary for the authorization, execution, delivery and
performance of this Agreement by the Company, the authorization, sale, issuance
(or reservation for issuance) and delivery of the Securities and the
performance of all of the Company’s obligations, hereunder have been taken or
will be taken prior to the Closing.  This
Agreement constitute valid and legally binding obligations of the Company,
enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors= rights generally.


 


(f)            Valid Issuance of Stock.  The Securities, when issued, sold and
delivered in compliance with the provisions of this Agreement, will be duly and
validly issued, fully paid and nonassessable and issued in compliance with
applicable federal and state securities laws, 
however, that the Securities may be subject to restrictions on transfer
under state or federal securities laws.


 


(g)             Compliance with Securities Laws.  The offer and sale of the Securities to the
Parent hereunder constitutes transactions exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended (the
A1933 Act@), and any applicable state securities and blue sky laws.


 


3.             Conditions to Closing.   The obligation of the Parent to purchase the
Securities therefore, is subject to the satisfaction at or prior to the Closing
of the following conditions:


 


(a)           Representations and Warranties.  The representations and warranties contained
in Section 2 shall be true and accurate in all material respects on and
as of the Closing Date with the same effect as though made on and as of such
date.


 


(b)           All Proceedings to be Satisfactory.  All corporate and other proceedings and
actions to be taken by the Company in connection with the transactions
contemplated hereby.


 


(c)           Convertible Note. 
The Parent shall have received proceeds in the amount of not less than
$4,900,000 from the issuance of its 10% Convertible Note.


 


4.             Miscellaneous.


 


 


2





















 


(a)           This Agreement is governed by and construed in accordance
with the internal laws of the State of New York (excluding its conflicts of
laws principles).


 


(b)           The representations and warranties contained in this
Agreement shall survive the execution, delivery and performance of this
Agreement.


 


(c)           This Agreement or any term hereof may not be amended or
waived except with the written consent of the Company and the Investors.


 


(d)           Unless otherwise specifically provided herein, all
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (i) on the date of service if served personally on the
party to whom notice is to be given, (ii) on the day of transmission if sent by
facsimile transmission to the number given below, and telephonic confirmation
of receipt is obtained promptly after completion of transmission, (iii) on the
day after delivery to Federal Express or similar overnight courier, or (iv) on
the fifth day after mailing, if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid, and
properly addressed, return receipt requested, to the party.


 


(e)           This Agreement may be executed in two (2) or more
counterparts, and with counterpart signature pages, each of which shall be
deemed an original, and all of such counterparts together constitute but one
(1) and the same agreement. One (1) or more counterparts may be delivered by
facsimile with the same force and effect as an original.


 


IN WITNESS WHEREOF, the
parties have executed this Investment Agreement as of the date set forth above.


 


	
  COMPANY:

  
	
   

  
	
  ATLANTIC EXPRESS

  TRANSPORTATION CORP.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Domenic Gatto

  
	
  Name:

  	
  Domenic Gatto

  
	
  Title:

  	
  President

  
				



 


	
  PARENT:

  
	
   

  
	
  ATLANTIC EXPRESS

  TRANSPORTATION GROUP INC.

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Domenic Gatto

  
	
  Name: 

  	
  Domenic Gatto

  
	
  Title: 

  	
  President

  
				



 


 


 


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