Exhibit
10.5


 


AMENDMENT NO. 5 TO SECOND
AMENDED

AND RESTATED LOAN AND SECURITY AGREEMENT


 


Amendment No. 5, dated as of March 3, 2005, by and among Wachovia
Bank, National Association, successor to Congress Financial Corporation, in its
capacity as agent (in such capacity, “Agent”) acting for and on behalf of
Lenders (as hereinafter defined), Atlantic Express Transportation Corp. a New
York corporation (“AETC”), Amboy Bus Co., Inc., a New York corporation (“Amboy”),
Atlantic Express Coachways, Inc., a New Jersey corporation (“Coachways”),
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-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”), G.V.D. Leasing Co., Inc. a New York corporation (“GVD”),
180 Jamaica Corp. a New York corporation (“Jamaica”), Merit Transportation
Corp. a New York corporation (“Merit”), Metro Affiliates, Inc., a New York
corporation (“Metro”), Metropolitan Escort Service, Inc. a New York corporation
(“Escort”), Midway Leasing Inc. a New York corporation (“Midway”), Staten
Island Bus, Inc. a New York corporation (“SI-Bus”), Temporary Transit Service,
Inc. a New York corporation (“TTS”), 201 West Sotello Realty, Inc. a California
corporation (“Sotello”), Wrightholm Bus Line, Inc. a Vermont corporation (“Wrightholm”),
Jersey Business Land Co., Inc., a New Jersey corporation (“JBL”), Atlantic
Transit Corp. a New York corporation (“ATC”), Airport Services, Inc. a
Massachusetts corporation (“Airport”), 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 Paratrans of Arizona, Inc. an Arizona
corporation (“AP-AZ”), Fiore Bus Service, Inc. a Massachusetts corporation (“Fiore”),
Groom Transportation, Inc. a Massachusetts corporation (“Groom”), James
McCarthy Limo Service, Inc. a Massachusetts corporation (“Limo”), K. Corr, Inc.
a New York corporation (“Corr”), McIntire Transportation, Inc. a Massachusetts
corporation (“McIntire”), Mountain Transit, Inc. a Vermont corporation (“Mountain”),
Jersey Business Land Co., Inc. a New Jersey corporation (JBL”), 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”), T-NT Bus Service, Inc., a
New York corporation (“TNT”), Transcomm, Inc., a Massachusetts corporation (“Transcomm”)
and Winsale, Inc., a New Jersey corporation (“Winsale”, and together with AETC,
Coachways, Amboy, AELA, AE Missouri, 
AENJ, AEP, AP, APNY, AQ, Block, Brookfield, Courtesy, GVD, Jamaica,
Merit,  Metro, Escort, Midway, SI-Bus,
TTS, Sotello, Wrightholm, ATC, Airport, AE-NE, AE-CA, AE-I, AP-AZ, Fiore,
Groom, Limo, Corr, McIntire, Mountain, JBL, FBS,  RBS, RBC, REC,  McCarthy,


 


1





















 


TNT, and Transcomm, each individually a “Borrower” and collectively, “Borrowers”),
and Central New York Reorganization Corp. (f/k/a Central New York Coach Sales
& Service, Inc.), a New York corporation (“Central”), Jersey Bus Sales, Inc.,
a New Jersey corporation (“Jersey” and together with Central, each individually
a “Guarantor” and collectively, “Guarantors”).


 


W
I  T  N  E  S  S  E  T  H
:


 


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 Second Amended and Restated Loan and Security
Agreement, dated as of April 22, 2004, by and among Agent, Borrowers,
Guarantors and the financial institutions from time to time parties thereto as
lenders (“Lenders”), whether by execution thereof or of an Assignment and
Acceptance, as amended by Amendment No. 1 to Second Amended and Restated Loan
and Security Agreement, dated as of June 14, 2004, by and among Borrowers,
Guarantors, Agent and Lenders, as amended by Amendment No. 2 to Second Amended
and Restated Loan and Security Agreement, dated as of September 15, 2004,
by and among Borrowers, Guarantors, Agent and Lenders, as amended by Amendment
No. 3 to Second Amended and Restated Loan and Security Agreement, dated as of October 14,
2004, by and among Borrowers, Guarantors, Agent and Lenders as amended by
Amendment No. 4 to Second Amended and Restated Loan and Security Agreement,
dated as of January 5, 2005, by and among Borrowers, Guarantors, Agent and
Lenders (as amended hereby and as the same may hereafter be further 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 have requested that Agent
and Lenders make certain amendments to the Loan Agreement and Agent and Lenders
are willing to agree to such requests, subject to the terms and conditions
contained herein; and


 


WHEREAS, by this Amendment No. 5, 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.                                       Additional
Definitions.  Section 1 of the
Loan Agreement is amended to add the following definition:


 


“1.114 
‘Aggregate Obligation Limit’ shall mean, at any time the amount equal to
the lesser of:


 


(i)                                     eighty-five
(85%) percent of the aggregate Net Amount of Eligible Accounts of all Borrowers
minus Reserves;


 


2





















 


or


 


(ii)                                  $30,000,000.”


 


2.                                       Meaning
of Terms.  As used herein, the
following terms shall have the respective meanings given to them below:


 


(a)                                  “Amendment
No. 5” shall mean this Amendment No. 5 to Second Amended and Restated Loan and
Security Agreement, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.


 


(b)                                 “Congress”
shall mean and include Wachovia Bank, National Association as successor to
Congress Financial Corporation.


 


(c)                                  “New
PIK Notes” shall mean the New PIK Notes issued pursuant to the Third Priority
Note Purchase Agreement.


 


(d)                                 “Third
Priority Agreements” shall mean collectively, (i) the Third Priority Note
Purchase Agreement, (ii) the Third Priority Senior Secured Notes, and (iii) all
other agreements, documents and instruments at any time executed and or
delivered by Borrowers or Guarantors in favor of Third Priority Noteholders, as
all of the foregoing now exist or may hereafter be amended, modified,
supplemented extended, renewed, restated or replaced.


 


(e)                                  “Third
Priority Collateral Agent” shall mean Airlie Opportunity Capital Management,
L.P., /and its successors or assigns.


 


(f)                                    “Third
Priority Debt” shall mean any and all obligations, liabilities and Indebtedness
of every kind, nature or description owing by Borrowers or Guarantors to the
Third Priority Noteholders, and Third Priority Collateral Agent, including the
obligations due under the Third Priority Senior Secured Notes and the Third
Priority Agreements. and whether or not such obligations are direct or
indirect, absolute or contingent, joint or several, due or not due, primary or
secondary, liquidated or unliquidated, secured or unsecured and whether arising
directly or howsoever acquired by the Third Priority Noteholders.


 


(g)                                 “Third
Priority Note Purchase Agreement” shall mean that certain Note and Warrant
Purchase Agreement dated as of date hereof among Parent and Airlie Opportunity
Capital Management, L.P.


 


(h)                                 “Third
Party Noteholders” shall mean collectively the holders of the Third Priority
Senior Secured Notes.


 


(i)                                     “Third
Priority Senior Secured Notes” shall mean the Third Priority Senior Notes due
2008 plus the New PIK Notes issued in connection therewith, in an aggregate
principal amount not to exceed $15.0 million plus the aggregate principal
amount of New PIK Notes issued in connection therewith, issued pursuant to the
Third Priority Agreements.


 


3.                                       Interpretation.  For purposes of this Amendment No. 5, unless
otherwise defined herein, all terms used herein, including, but not limited to,
those terms used and/or defined in


 


3





















 


Sections 1 and 2 shall have the respective meanings assigned to such
terms in the Loan Agreement and the other Financing Agreements.


 


4.                                       Reserves.  Section 1.102(c) of the Loan Agreement
is hereby amended to add the words “and LC Advances” after the term “Letter of
Credit Accommodations”.


 


5.                                       Revolving
Loans.  Section 2.1 of the Loan
Agreement is amended as herein provided:


 


(a)                                  Section 2.1(c)
is hereby amended to include the additional clause (iv) as follows:


 


“and (iv) the aggregate amount of the
Revolving Loans, LC Advances, and the letter of Credit Accommodations
outstanding at any time not exceed the Aggregate Obligation Limit.”; and


 


(b)                                 Section 2.1(d)
is hereby amended to add “or the aggregate amount of the Revolving Loans, LC
Advances and the Letter of Credit Accommodations outstanding at any time
exceeds the Aggregate Obligation Limit” immediately before the words “, then in
effect,”.


 


6.                                       Interest.  Section 3.1(a) of the Loan Agreement is
amended by deleting the words “Reimbursement Obligations” and “LC Advances” is
substituted in place thereof.


 


7.                                       Encumbrances.  Section 9.8 of the Loan Agreement is
amended to add the following Subsection (m) thereto:


 


“(m) the security interests and in and
mortgages and liens upon the Collateral in favor of the Third Priority
Collateral Agent to secure the Third Priority Debt.”


 


8.                                       Indebtedness.  Section 9.9 of the Loan Agreement is
amended to add the following Subsection (m) thereto:


 


“(m) Indebtedness to the Third Priority
Noteholders evidenced and arising under the Third Priority Agreements ( as in
effect on the date hereof) provided that the principal amount of such
Indebtedness shall not exceed $15.0 million as provided in the Third Priority
Agreements ( as in effect on the date hereof), less the aggregate amount of all
repayments, repurchases or redemptions thereof, plus interest thereon
(including any New PIK Notes) at the rate provided in the Noteholder Agreements
as in effect on the date hereof.”


 


9.                                       Minimum
EBITDA.  Section 9.17 of the
Loan Agreement is deleted and the following is substituted in place thereof:


 


“ 9.17 
Minimum EBITDA. At the end of each calendar month commencing with
the month ended December 31, 2004, for the


 


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immediately preceding twelve (12) consecutive
month period, Parent and its Subsidiaries shall have EBITDA of not less than
the following amounts:


 


	
  Month(s) Ended

  	
   

  	
  Minimum EBITDA for

  immediately preceding

  twelve (12) months

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 2004
  and each month thereafter through September 2005

  	
   

  	
  $

  	
  14,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 2005

  	
   

  	
  16,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 2005

  	
   

  	
  16,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 2005

  	
   

  	
  19,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 2006

  	
   

  	
  19,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 2006

  	
   

  	
  19,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 2006
  and each month

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  thereafter

  	
   

  	
  23,000,000

  	
   

  
					



 


10.                                 Term.  Section 13.1(a)(ii) of the Loan
Agreement is amended by deleting the words “March 1, 2005” and “March 31,
2005” is substituted in place thereof.


 


11.                                 Conditions
Precedent.  The effectiveness of
Amendment No. 5 is further conditioned upon the satisfaction of the following
conditions precedent in a manner satisfactory to Agent and Lenders:


 


(i)                                     Agent
shall have received an original of this Amendment No. 5 duly authorized,
executed and delivered by the parties hereto.


 


(ii)                                  The
Third Priority Agreements shall have been executed by Borrowers, Guarantors,
the Third Priority Collateral Agent and other parties thereto and are deemed
effective.


 


(iii)                               The
Agent shall have received executed copies of the Third Priority Agreements.


 


(iv)                              Agent
shall have received satisfactory proof that the Borrowers have, pursuant to the
Third Priority Agreements, received funds from the Third Priority


 


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Noteholders in the aggregate gross amount of not less than $15.0
million.


 


12.                                 Additional
Representations, Warranties and Covenants. 
Borrowers represent, warrants and covenant 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 to Borrowers:


 


(a)                                  This
Amendment No. 5 has been duly executed and delivered by Borrowers and is in
full force and effect as of the date hereof and the agreements and obligations
of Borrowers contained herein constitute legal, valid and binding obligations
of such Borrowers enforceable against such Borrowers in accordance with their
respective terms.


 


13.                                 Miscellaneous.


 


(a)                                  Entire
Agreement; Ratification and Confirmation of the Financing Agreements.  This Amendment No. 5 contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior or contemporaneous term sheets, proposals, discussions,
negotiations, correspondence, commitments and communications between or among
the parties concerning the subject matter hereof.  This Amendment No. 5 may not be modified or
any provision waived, except in writing signed by the party against whom such
modification or waiver is sought to be enforced.  Except for those provisions specifically
modified or waived pursuant hereto, the Loan Agreement and other Financing
Agreements are hereby ratified, restated and confirmed by the parties hereto as
of the effective date hereof.  To the extent
of conflict between the terms of this Amendment No. 5 and the Loan Agreement
and other Financing Agreements, the terms of this Amendment No. 5 shall
control.


 


14.                                 Governing
Law.  This Amendment No. 5 and the
rights and obligations hereunder of each of the parties hereto shall be
governed by and interpreted and determined in accordance with the internal laws
of the State of New York, without regard to principles of conflicts of law.


 


15.                                 Binding
Effect.  This Amendment No. 5 shall
be binding upon and inure to the benefit of each of the parties hereto and
their respective successors and assigns.


 


16.                                 Counterparts.  This Amendment No. 5 may be executed in any
number of counterparts, but all of such counterparts shall together constitute
but one and the same agreement.  In
making proof of this Amendment No. 5 it shall not be necessary to produce or
account for more than one counterpart thereof signed by each of the parties
hereto.


 


17.                                 Headings.  The headings listed herein are for
convenience only and do not constitute matters to be construed in interpreting
this Amendment No. 5.


 


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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.


 


	
   

  	
  BORROWERS

  
	
   

  	
   

  
	
   

  	
  Atlantic Express Transportation Corp.

  
	
   

  	
  Amboy Bus Co., Inc.

  
	
   

  	
  Atlantic Express Coachways, Inc.

  
	
   

  	
  Atlantic Express of L.A. Inc.

  
	
   

  	
  Atlantic Express of Missouri Inc.

  
	
   

  	
  Atlantic Express of New Jersey, Inc.

  
	
   

  	
  Atlantic Express of Pennsylvania, Inc.

  
	
   

  	
  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.

  
	
   

  	
  Jersey Business Land Co., Inc.

  
	
   

  	
  G.V.D. Leasing Co., Inc.

  
	
   

  	
  180 Jamaica Corp.

  
	
   

  	
  Merit Transportation Corp.

  
	
   

  	
  Metro Affiliates, Inc.

  
	
   

  	
  Metropolitan Escort Service, Inc.

  
	
   

  	
  Midway Leasing Inc.

  
	
   

  	
  Staten Island Bus, Inc.

  
	
   

  	
  Temporary Transit Service, Inc.

  
	
   

  	
  201 West Sotello Realty, Inc.

  
	
   

  	
  Wrightholm Bus Line, Inc.

  
	
   

  	
  Atlantic Transit Corp.

  
	
   

  	
  Airport Services, Inc.

  
	
   

  	
  Atlantic Express New England, Inc.

  
	
   

  	
  Atlantic Express of California, Inc.

  
	
   

  	
  Atlantic Express of Illinois, Inc.

  
	
   

  	
  Atlantic Paratrans of Arizona, Inc.

  
	
   

  	
  Fiore Bus Service, Inc.

  
	
   

  	
  Groom Transportation, Inc.

  
	
   

  	
  James McCarty Limo Service, Inc.

  
	
   

  	
  K. Corr, Inc.

  
	
   

  	
  McIntire Transportation, Inc.

  
	
   

  	
  Mountain Transit, Inc.

  
	
   

  	
  R. Fiore Bus Service, Inc.

  
	
   

  	
  Raybern Bus Service, Inc.

  



 


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  Raybern Capital Corp.

  
	
   

  	
  Raybern Equity Corp.

  
	
   

  	
  Robert L. McCarthy & Son, Inc.

  
	
   

  	
  T-NT Bus Service, Inc.

  
	
   

  	
  Transcomm, Inc.

  
	
   

  	
  Winsale, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Neil
  Abitabilo

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
  GUARANTORS

  	
   

  
	
   

  	
   

  
	
  JERSEY BUS SALES, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Neil
  Abitabilo

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
  Chief
  Financial Officer

  	
   

  	
   

  
	
   

  	
   

  
	
  CENTRAL NEW YORK REORGANIZATION CORP.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Neil
  Abitabilo

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
  Chief
  Financial Officer

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGENT

  	
   

  
	
   

  	
   

  
	
  WACHOVIA BANK, NATIONAL ASSOCIATION,
  successor to

  CONGRESS FINANCIAL CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Herb
  Korn

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
  Vice
  President

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  LENDER

  	
   

  
	
   

  	
   

  
	
  WACHOVIA BANK, NATIONAL ASSOCIATION,
  successor to

  CONGRESS FINANCIAL CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Herb
  Korn

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
  Vice President