Exhibit
4.6


 


AMENDED AND RESTATED INTERCREDITOR AGREEMENT


 


THIS AMENDED AND RESTATED INTERCREDITOR
AGREEMENT (“Intercreditor Agreement”) dated as of March 3, 2005 is by and
among WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
successor to Congress Financial Corporation, a Delaware corporation, as
Revolving Loan Agent (as defined below) for the Revolving Loan Lenders (as
defined below), THE BANK OF NEW YORK, a New York banking corporation, as
collateral agent for the Trustee (as defined below) and the Noteholders (as
defined below) (in such capacity, together with its successors and assigns, if
any, in such capacity, the “Noteholder Collateral Agent”) and, Airlie
Opportunity Capital Management, L.P. as collateral agent for the Third Priority
Noteholders (as defined below) (in such capacity, together with its successors
and assigns, if any, in such capacity, the “Third Priority Collateral Agent”).  Revolving Loan Agent, Noteholder Collateral
Agent and Third Priority Agent are sometimes individually referred to herein as
a “Creditor” and collectively as “Creditors.”


 


W  I  T  N  E  S
S  E  T  H:


 


WHEREAS, Revolving Loan Agent and Revolving
Loan Lenders have entered into a Second Amended and Restated Loan and Security
Agreement dated as of April  22, 2004 (as amended, supplemented, and
restated or otherwise modified from time to time, the “Loan Agreement”) among
the Debtors (as such term is defined below) and the Revolving Loan Lenders
parties thereto, pursuant to which Debtors may borrow and, subject to the terms
and conditions specified therein, the Revolving Loan Agent, on behalf of the
Revolving Loan Lenders will from time to time make loans in an aggregate
principal amount of up to $23,000,000 and arrange for letter of credit
accommodations in an amount of up to $10,000,000 at any one time outstanding to
provide funds for the ongoing working capital needs of Debtors, which financing
arrangements with Debtors are secured by certain assets and properties of
Debtors; and


 


WHEREAS, the Debtors and the Noteholder
Collateral Agent and Noteholders entered into an Indenture, dated as of April 
22, 2004 (as amended, supplemented, restated or otherwise modified from time to
time, the “Note Indenture”) with The Bank of New York, as trustee (“Trustee”)
governing the rights and duties of Debtors thereunder and under the 12% Senior
Secured Notes due 2008 and the Senior Secured Floating Rate Notes due 2008 in
the original aggregate principal amount of $115,000,000 (together with any
notes issued in exchange for such notes and any additional notes issued under
such Indenture, the “Notes”) which Notes are secured by certain assets and
properties of Debtor;


 


WHEREAS, each of the Revolving Loan Agent and
the Noteholder Collateral Agent entered into an intercreditor agreement dated
as of April, 22 2004 (the “Existing Intercreditor Agreement”) to, among other
things, (i) confirm the relative priority of the security interests of
such Creditors in the assets and properties of Debtor and (ii) provide for the
orderly sharing


 





















 


among them, in accordance with such
priorities, of proceeds of such assets and properties upon any foreclosure
thereon or other disposition thereof;


 


WHEREAS, the Note Indenture has been or is
about to be amended and supplemented by the First Supplemental Indenture dated
as of the date hereof the (the “Supplemental Indenture”) to, inter alia, permit
the Debtors to borrow under a separate credit facility up to an additional
$15.0 million (plus the principal amount of new notes issued in connection with
the accrual of interest thereunder in respect of the principal amount of such
Notes) of secured debt, in the form of $15.0 million aggregate principal amount
(plus new PIK notes) of Third Priority Senior Secured Notes due 2008 and to
provide for permitted liens to secure such debt;


 


WHEREAS, each of Creditors desires to amend
and restate the Existing Intercreditor Agreement to (i) confirm the
relative priority of the security interests of Creditors in the assets and
properties of Debtor and (ii) provide for the orderly sharing among them, in
accordance with such priorities, of proceeds of such assets and properties upon
any foreclosure thereon or other disposition thereof.


 


NOW THEREFORE, in consideration of the mutual
benefits accruing to Creditors hereunder and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto do hereby agree as follows:


 


1.                                       DEFINITIONS


 


As used above and in this Intercreditor
Agreement, the following terms shall have the meanings ascribed to them below:


 


1.1                                 “Agreements” shall mean,
collectively, the Revolving Loan Agreements, the Noteholder Agreements and the
Third Priority Agreements.


 


1.2                                 “Capital Stock Assets” shall
mean all Capital Stock of Atlantic Express Transportation Corp. owned by
Atlantic Express Transportation Group, Inc., and all Capital Stock of each
direct or indirect subsidiary of Atlantic Express Transportation Corp. owned by
the Atlantic Express Transportation Corp. or any such subsidiary, and in each case
all proceeds thereof.


 


1.3                                 “Capital Stock” shall mean,
with respect to any Person, any and all shares, interests (including membership
interests in limited liability companies), participations, rights (including
options, warrants and the like convertible or exercisable into shares of
Capital Stock) or other equivalents (however designated, whether voting or
non-voting) of such Person’s capital, whether outstanding on, or issued after,
the Effective Date.


 


1.4                                 “Collateral” shall mean all
of the property and interests in property, real or personal, tangible or
intangible, now owned or hereafter acquired by Debtors or any of Obligors in or
upon which any or all of Creditors at any time has a Lien, and including,
without limitation, all proceeds of such property and interests in property.


 


1.5                                 “Creditors” shall mean,
collectively, Note Collateral Agent, on behalf or itself, the Trustee and the
Noteholders, Revolving Loan Agent, on behalf of itself and the Revolving Loan


 


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Lenders and their respective successors and
assigns, and Third Priority Collateral Agent, on behalf or itself, and the
Third Priority Noteholders.  Each of Note
Collateral Agent, Revolving Loan Agent and Third Priority Collateral Agent being
sometimes referred to herein individually as a “Creditor”.


 


1.6                                 “Debtors” shall mean Atlantic
Express Transportation Corp., a New York corporation, and substantially all of
the subsidiaries of Atlantic Express Transportation Group, Inc., and Atlantic
Express Transportation Corp., as more particularly set forth on Schedule 1
hereto and their respective successors and assigns, including, without
limitation, a receiver, trustee or debtor-in-possession on behalf of such
person or on behalf of any such successor or assign.


 


1.7                                 “Enforcement Action” shall
mean the exercise by any Creditor of any of its material enforcement rights and
remedies as a secured creditor under its Agreements, applicable law or
otherwise at any time following the occurrence and during the continuance of an
event of default under its Agreements (including, without limitation, the
demand for the immediate payment of all of the debt owed to it, the
solicitation of bids from third parties to conduct the liquidation of the
Collateral, the engagement or retention of sales brokers, marketing agents,
investment bankers, accountants, appraisers, auctioneers or other third parties
for the purposes of valuing, marketing, promoting and selling the Collateral,
the commencement of any action to foreclose on the security interests or liens
of such Creditor in all or any material portion of the Collateral, notification
of account debtors to make payments to such Creditor (in the case of Revolving
Loan Agent), any action to take possession of all or any material portion of
the Collateral or commencement of any legal proceedings or actions against or
with respect to all or any portion of the Collateral)


 


1.8                                 “Fixtures” shall mean all
fixtures of Debtors, whether now owned and hereafter acquired and wherever located
and proceeds of the foregoing.  The term “fixtures”
as used in this definition shall mean heating, ventilating, air conditioning
equipment, boilers, generators, plumbing and electrical equipment, wall and
floor coverings, walls and ceilings and other similar equipment installed in
and affixed to the Real Property and any other similar equipment which is so
related to any particular Real Property that an interest therein arises under
applicable real estate law


 


1.9                                 “Insolvency Proceeding” shall
mean, as to any Debtor, any of the following, occurring after the date
hereof:  (a) any case or proceeding with
respect to such Debtor under the U.S. Bankruptcy Code, any other federal, state
or provincial bankruptcy, insolvency, reorganization or other law affecting
creditors’ rights generally or any other or similar proceedings of any other
jurisdiction or otherwise seeking any stay, reorganization, arrangement,
liquidation, dissolution, composition or readjustment of the obligations and
indebtedness of such Debtor or (b) any proceeding seeking the appointment of
any receiver, administrative receiver, receiver and manager, examiner, judicial
custodian, trustee, liquidator, official manager, administrator or similar
official for any Debtor or any material part of its properties or (c) any
proceedings for liquidation, dissolution or other winding up of the business of
such Debtor or (d) the sale of all or substantially all of the assets or
capital stock of such Debtor or (e) any assignment for the benefit of creditors
or any marshaling of assets of such Debtor.


 


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1.10                           “Lien” shall mean any
mortgage, deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance (including, but not limited to,
easements, rights of way and the like), lien (statutory or other), security
agreement or transfer intended as security, including without limitation, any
conditional sale or other title retention agreement, the interest of a lessor
under a capital lease or any financing lease having substantially the same
economic effect as any of the foregoing.


 


1.11                           “Motor Vehicles” shall mean
all motor vehicles, tractors, trailers and other like property, whether or not
title thereto is governed by a certificate of title or ownership.


 


1.12                           “Note Indenture” shall have
the meaning set forth in the second recital of the Intercreditor Agreement.


 


1.13                           “Noteholder Agreements” shall
mean the Note Indenture, the Supplemental Indenture and the agreements set forth
on Schedule 3 hereto and all other agreements, documents and instruments
at any time executed and/or delivered by Debtors, Obligors or any other person
with, to or in favor of Noteholder or in connection therewith or related
thereto, as all of the foregoing now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated, refinanced, replaced or
restructured.


 


1.14                           “Noteholder Collateral” shall
mean the Noteholder First Priority Real Property Collateral and the Noteholder
Motor Vehicle Collateral.


 


1.15                           “Noteholder Debt” shall mean
any and all obligations, liabilities and indebtedness of every kind, nature and
description owing by Debtors or any of Obligors to the Noteholders, Trustee and
Noteholder Collateral Agent under the Noteholder Agreements, including,
principal, interest, charges, fees, premiums, indemnities and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
whether now existing or hereafter arising, whether arising before, during or
after the initial or any renewal term of the Noteholder Agreements or after the
commencement of any case with respect to Debtor or any of Obligors under the
U.S. Bankruptcy Code or any similar statute (including the payment of interest
and other amounts which would accrue and become due but for the commencement of
such case, whether or not such amounts are allowed or allowable in whole or in
part in such case), whether 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
Noteholders.


 


1.16                           “Noteholder First Priority Real
Property Collateral” shall mean all of the Real Property of Debtors and
Obligors (including without limitation the Real Property described in Schedule 1.16
hereto) and the proceeds of any disposition thereof; provided, that,
Noteholder First Priority Real Property Collateral shall not include the Real
Property of Debtors located in Bordentown, New Jersey or the Revolving Loan
Real Property Collateral.


 


1.17                           “Noteholder Motor Vehicle
Collateral” shall mean all of the Motor Vehicles owned by Debtors in which
Noteholder Collateral Agent has a Lien and the proceeds of any disposition
thereof.


 


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1.18                           “Noteholders” shall mean
collectively, the holders of Noteholder Debt and their respective successors
and assigns; sometimes being referred to herein individually as a “Noteholder”.


 


1.19                           “Obligors” shall mean,
individually and collectively, any person liable on or in respect of the
Revolving Loan Debt, the Noteholder Debt or the Third Priority Debt, and its
successors and assigns, including, without limitation, a receiver, trustee or
debtor-in-possession on behalf of such person or on behalf of any such
successor or assign, other than Debtors.


 


1.20                           “Person” or “person”
shall mean any individual, sole proprietorship, partnership, corporation
(including, without imitation, any corporation which elects subchapter S status
under the Internal Revenue Code of 1986, as amended), limited liability
company, limited liability partnership, business trust, unincorporated
association, joint stock company, trust, joint venture, or other entity or any
government or any agency or instrumentality or political subdivision thereof.


 


1.21                           “Real Property” shall mean
all real property of Debtors and Obligors, whether now owned or hereafter
acquired and wherever located, including leasehold interests, together with all
Fixtures located thereon and all licenses, easements and appurtenances relating
thereto, wherever located and the proceeds of all of the foregoing.


 


1.22                           “Revolving Loan Agent” shall
mean Congress Financial Corporation, a Delaware corporation in its capacity as
agent pursuant to the Loan Agreement, acting for the benefit and on behalf of
Revolving Loan Lenders, and its successors and assigns (and including, without
limitation, any successor, assignee or additional person at any time acting as
agent for the benefit of or on behalf of it and/or Revolving Loan Lenders).


 


1.23                           “Revolving Loan Agreements”
shall mean, collectively, the Second Amended Loan and Security Agreement, dated
April 22, 2004, by and among Revolving Loan Agent, the Revolving Loan
Lenders and Debtors and all agreements, documents and instruments at any time
executed and/or delivered by any Debtor, Obligors or any other person with, to
or in favor of Revolving Loan Agent or Revolving Loan Lenders in connection
therewith or related thereto, as all of the foregoing now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated,
refinanced, replaced or restructured (in whole or in part and including any
agreements with, to or in favor of any other lender or group of lenders that at
any time refinances, replaces or succeeds to all or any portion of the
Revolving Loan Debt).


 


1.24                           “Revolving Loan Collateral”
shall mean all Collateral except for the Noteholder Motor Vehicle Collateral.


 


1.25                           “Revolving Loan Debt” shall
mean, all obligations, liabilities and indebtedness of every kind, nature and
description owing by Debtor or any of Obligors to Revolving Loan Agent and
Revolving Loan Lenders, including principal, interest, charges, fees, premiums,
indemnities and expenses, however evidenced, whether as principal, surety,
endorser, guarantor or otherwise, whether arising under the Revolving Loan
Agreements or otherwise, (including, without limitation the “Obligations” as
such term is defined in the Revolving Loan Agreements), whether now existing or
hereafter arising, whether arising before, during or after the initial or any


 


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renewal term of the Revolving Loan Agreements
or after the commencement of any case with respect to any Debtor or any of
Obligors under the U.S. Bankruptcy Code or any similar statute (including the
payment of interest and other amounts which would accrue and become due but for
the commencement of such case, whether or not such amounts are allowed or allowable
in whole or in part in such case), whether 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 Congress.


 


1.26                           “Revolving Loan Lenders”
shall mean, collectively, Congress Financial Corporation and its successors and
assigns (including any other lender or group of lenders that at any time
succeeds to or refinances, replaces or substitutes for all or any portion of
the Revolving Loan Debt at any time and from time to time in accordance with Section 4.2(c)
hereof); sometimes being referred to herein individually as a “Revolving Loan
Lender”.


 


1.27                           “Revolving Loan Priority Amount”
shall mean the sum of (a) (i) the outstanding principal amount of Revolving
Loan Debt not to exceed $23,000,000 in the aggregate, plus (ii) the
aggregate amount of Letter of Credit Accommodations and LC Advances (as such
terms are defined in the Revolving Loan Agreements) in an amount not to exceed
$10,000,000, plus (iii) the outstanding principal amount of any other
Revolving Loan Debt (in excess of the Revolving Loan Debt referenced in clause
(i) above) to the extent that such Revolving Loan Debt is permitted under Section 4.12
of the Indenture and clause (14) of the definition of “Permitted Indebtedness”
contained therein, plus (b) accrued but unpaid interest on and fees and
charges payable in connection with the Revolving Loan Debt set forth in clause
(a) above (including, without limitation, interest and fees accruing during any
Insolvency Proceeding whether or not allowable in whole or in part therein), plus
(c) Revolving Loan Agent’s costs and expenses paid or incurred and other
payments made in connection with collecting the Revolving Loan Debt and
enforcing Revolving Loan Lenders’ rights and remedies under the Revolving Loan
Agreements and applicable law, to the extent that such costs, expenses and
payments are chargeable to or are required to be paid or reimbursed by Debtors
under the Revolving Loan Agreements (including, without limitation, such
amounts arising during any Insolvency Proceeding whether or not allowable in
whole or in part therein).


 


1.28                           “Revolving Loan Real Property
Collateral” shall mean the Real Property of Metro Affiliates, Inc. located
at 46-81 Metropolitan Avenue, Ridgewood, New York and the proceeds thereof.


 


1.29                           “Secured Debt” shall mean
either the Noteholder Debt, the Revolving Loan Debt, or the Third Priority
Debt, or any or all of these, as the case may be.


 


1.30                           “Supplemental Indenture”
shall have the meaning set forth in the fourth recital of this Intercreditor
Agreement.


 


1.31                           “Third Priority Agreements”
shall mean, collectively, (i) the Third Priority Note Purchase Agreement, (ii)
the agreements set forth on Schedule 4 hereto and (iii) all other
agreements, documents and instruments at any time executed and/or delivered by
Debtors, Obligors or any other person with, to or in favor of the Third
Priority Noteholders or in connection therewith or related thereto, as all of
the foregoing now exist or may hereafter be


 


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amended, modified, supplemented, extended,
renewed, restated, refinanced, replaced or restructured.


 


1.32                           “Third Priority Debt” shall
mean any and all obligations, liabilities and indebtedness of every kind,
nature and description owing by Debtors or any of Obligors to the Third
Priority Noteholders and Third Priority Collateral Agent under the Third
Priority Agreements, including, principal, interest, charges, fees, premiums,
indemnities and expenses, however evidenced, whether as principal, surety,
endorser, guarantor or otherwise, whether now existing or hereafter arising,
whether arising before, during or after the initial or any renewal term of the
Third Priority Agreements or after the commencement of any case with respect to
Debtor or any of Obligors under the U.S. Bankruptcy Code or any similar statute
(including the payment of interest and other amounts which would accrue and
become due but for the commencement of such case, whether or not such amounts
are allowed or allowable in whole or in part in such case), whether 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.


 


1.33                           “Third Priority Noteholders”
shall mean collectively, the holders of Third Priority Debt and their
respective successors and assigns; sometimes being referred to herein
individually as a “Third Priority Noteholder.”


 


1.34                           “Third Priority Note Purchase
Agreement” shall mean that certain Note and Warrant Purchase Agreement
dated as of the date hereof among Atlantic Express Transportation Corp. and
Airlie Opportunity Capital Management, L.P.


 


All terms
defined in the Uniform Commercial Code, unless otherwise defined herein shall
have the meanings set forth therein.  All
references to any term in the plural shall include the singular and all
references to any term in the singular shall include the plural.


 


2.                                       SECURITY
INTERESTS; PRIORITIES; REMEDIES


 


2.1                                 Acknowledgement of Liens. 
Each Creditor hereby acknowledges that:


 


(a)                                  Noteholder Collateral Agent, for the
benefit of the Noteholders, has been granted a Lien upon the Collateral
pursuant to the Noteholder Agreements to secure the Noteholder Debt;


 


(b)                                 Revolving Loan Agent, for the
benefit of Revolving Loan Lenders has been granted a Lien upon all of the
Collateral (other than the Noteholder Motor Vehicle Collateral) pursuant to the
Revolving Loan Agreements to secure the Revolving Loan Debt;


 


(c)                                  Third Priority Collateral Agent, for
the benefit of the Third Priority Noteholders, has been granted a Lien upon the
Collateral (other than Noteholder Motor Vehicle Collateral)  pursuant to the Third Priority Agreements to
secure the Third Priority Debt; and


 


(d)                                 None of the Revolving Loan Agent,
the Noteholder Collateral Agent or the Third Priority Collateral Agent has a
Lien on the Capital Stock Assets.


 


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2.2                                 Priority of Liens. 
Notwithstanding the time of incurrence of any Secured Debt, the order or
method of attachment or perfection of any Liens securing any Secured Debt, the
time or order of filing or recording of financing statements or other documents
filed or recorded to perfect any Lien upon any Collateral, the rules for
determining priority under any law governing relative priorities of Liens on
the Collateral or any conflicting terms or conditions which may be contained in
any of the Agreements:


 


(a)                                  The following Lien priorities shall
strictly apply in defining the respective Lien priorities of each Creditor in
the Revolving Loan Collateral (other than the Noteholder First Priority Real
Property Collateral):


 


(i)                                     first: 
the Liens upon such Collateral of Revolving Agent and Revolving Loan
Lenders to the full extent of the Revolving Loan Debt;


 


(ii)                                  second: 
the Liens upon such Collateral of Noteholder Collateral Agent, Trustee
and Noteholders to the full extent of the Noteholder Debt; and


 


(iii)                               third: the Liens upon such Collateral of
Third Priority Collateral Agent and Third Priority Noteholders to the full
extent of the Third Priority Debt.


 


(b)                                 The following Lien priorities shall
strictly apply in defining the respective Lien priorities of each Creditor in
the Noteholder First Priority Real Property Collateral:


 


(i)                                     first: 
the Liens upon such Collateral of Noteholder Collateral Agent, Trustee
and Noteholders to the full extent of the Noteholder Debt;


 


(ii)                                  second: 
the Liens upon such Collateral of Revolving Loan Agent and Revolving
Loan Lenders to the full extent of the Revolving Loan Debt; and


 


(iii)                               third: the Liens upon such Collateral of
Third Priority Collateral Agent and Third Priority Noteholders to the full
extent of the Third Priority Debt.


 


(c)                                  Only Noteholder Collateral Agent has
a Lien on the Motor Vehicles.


 


(d)                                 Notwithstanding anything to the
contrary contained herein, the principal amount of the Revolving Loan Debt in
excess of Revolving Loan Priority Amount shall not be entitled to the benefit
of the priority of the Liens of Revolving Loan Agent provided for in this Section 2.2.


 


2.3                                 Proceeds of Revolving Loan
Collateral.  Subject to Section 2.7 below, the
proceeds of any sale, disposition or other realization upon all or any part of
the Revolving Loan Collateral (other than Noteholder First Priority Real
Property Collateral) in connection with an Enforcement Action shall be applied
in the following order of priorities:


 


(a)                                  first, to Revolving Loan Agent for the
payment in full in cash or other immediately available funds of the outstanding
Revolving Loan Debt up to the Revolving Loan Priority Amount, in such order as
may be provided in the Revolving Loan Agreements;


 


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(b)                                 second, to the Noteholder Collateral Agent
for the payment in full in cash or other immediately available funds of all of
the Noteholder Debt in such order as may be provided in the Noteholder
Agreements;


 


(c)                                  third, to the Third Priority Collateral
Agent for the payment in full in cash or other immediately available funds of
all of the Third Priority Debt in such order as may be provided in the Third
Priority Agreements;


 


(d)                                 fourth, to the Revolving Loan Agent for
the payment of the Revolving Debt in excess of the Revolving Loan Priority
Amount until the Revolving Debt has been paid in full in cash or other
immediately available funds; and


 


(e)                                  fifth, to the Debtors, or their
respective successors or assigns or as required by applicable law.


 


2.4                                 Proceeds of Noteholder First
Priority Real Property Collateral.  Subject to Section 2.7
below, the proceeds of any sale, disposition or other realization upon all or
any part of the Noteholder First Priority Real Property Collateral shall be
applied in the following order of priorities:


 


(a)                                  first, to the Noteholder Collateral Agent
for the payment of the Noteholder Debt until such Noteholder Debt has been paid
in full in cash or other immediately available funds, in such order as may be
provided in the Noteholder Agreements; and


 


(b)                                 second, to the Revolving Loan Agent for
the payment in full in cash or other immediately available funds of the
outstanding Revolving Loan Debt up to the Revolving Priority Amount, in such order
as may be provided for in the Revolving Loan Agreements;


 


(c)                                  third, to the Third Priority Collateral
Agent for the payment of the Third Priority Debt until such Third Priority Debt
has been paid in full in cash or other immediately available funds, in such
order as may be provided in the Third Priority Agreements;


 


(d)                                 fourth, to the Revolving Loan Agent for
the payment of the Revolving Debt in excess of the Revolving Loan Priority
Amount until the Revolving Debt has been paid in full in cash or other
immediately available funds; and


 


(e)                                  fifth, to the Debtors, or their
respective successors or assigns or as required by applicable law.


 


2.5                                 Proceeds of Noteholder Motor Vehicle
Collateral.  Subject to Section 2.7 below, the
proceeds of any sale, disposition or other realization upon all or any part of
the Noteholder Motor Vehicle Collateral shall be applied to the payment in full
in cash or other immediately available funds of the Noteholder Debt in whatever
manner and order Noteholder Collateral Agent chooses in accordance with the
Noteholder Agreements and applicable law.


 


2.6                                 Priorities Unaffected by Action on
Inaction.  The lien priorities provided in Section 2.2
shall not be altered or otherwise affected by any amendment, modification,
supplement, extension, renewal, restatement, replacement or refinancing of the
Revolving Loan


 


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Debt, the Noteholder Debt or the Third
Priority Debt nor by any action or inaction which any Creditor may take or fail
to take in respect of the Collateral.


 


2.7                                 Perfection; No Contest of Liens. 
Subject to Section 4.5, each Creditor shall be solely responsible
for perfecting and maintaining the perfection of its Lien in and to each item
constituting the Collateral in which such Creditor has been granted a
Lien.  The foregoing provisions of this
Intercreditor Agreement are intended solely to govern the respective Lien
priorities as between the Creditors and shall not impose on any Creditor any
obligations in respect of the disposition of proceeds of foreclosure on any
Collateral which would conflict with prior perfected claims therein in favor of
any other person or any order or decree of any court or other governmental
authority or any applicable law.  Each
Creditor agrees that it will not contest the validity, perfection, priority or
enforceability of the Liens upon the Collateral of the other Creditors and that
as between Creditors, the terms of this Intercreditor Agreement shall govern
even if part or all of the Revolving Loan Debt, the Noteholder Debt or the
Third Priority Debt or the Liens securing payment and performance thereof are
avoided, disallowed, set aside or otherwise invalidated in any judicial
proceeding or otherwise.


 


2.8                                 Right to Enforce Security Interests.


 


(a)                                  With respect to (i) the Noteholder
Collateral Agent, so long as any Noteholder Debt remains outstanding, (ii) the
Revolving Loan Agent, so long as any Revolving Loan Debt remains outstanding,
and (iii) the Third Priority Collateral Agent, so long as any of the Third
Priority Debt remains outstanding, the Agent with the senior Lien on any of the
Collateral will have the sole and exclusive right to control, administer,
account for and otherwise deal with such Collateral, and to determine the
manner of every sale or other disposition of such Collateral upon enforcement
of such Agent’s interest therein or the enforcement of any other right or
remedy with respect thereto.  The Agent
with the senior Lien on any of the Collateral may foreclose on such Collateral
in any order in which it in its sole discretion, deems appropriate.


 


(b)                                 The Noteholder Collateral Agent will
have the sole and exclusive right to control, administer, account for and
otherwise deal with the Motor Vehicles, and to determine the manner of every
sale or other disposition of the Motor Vehicles in connection with an
Enforcement Action.  The Collateral Agent
may foreclose on the Motor Vehicles in any order in which it in its sole
discretion deems appropriate.


 


2.9                                 Rights of Creditor with the Most
Senior Lien.


 


(a)                                  Notwithstanding anything to the
contrary contained in any of the Agreements, only the Creditor with the most
senior Lien in the Collateral shall have the right to restrict or permit, or
approve or disapprove, the sale, transfer or other disposition of such
Collateral in connection with an Enforcement Action.  To the extent any Collateral is sold or
otherwise disposed of by or on behalf of or at the request of the Creditor with
the senior Lien (including by the Debtor with the consent of the Creditor with
the most senior Lien in the Collateral) in connection with an Enforcement
Action, each Creditor with a junior Lien on such Collateral shall:  (i) be deemed to have automatically and
without further action released and terminated any Liens it may have on such
Collateral, (ii) be deemed to have authorized the


 


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Creditor with the most senior Lien to file
UCC amendments and terminations covering the Collateral so sold or otherwise
disposed of on behalf of each Creditor with a junior Lien, (iii) promptly
upon the request of the Creditor with the most senior Lien in the Collateral
execute and deliver such other release documents and confirmations of the
authorization to file UCC amendments and terminations (and other release
documents) provided for herein, in each case as the Creditor with the most
senior Lien in the Collateral may require in connection with such sale or other
disposition by or on behalf of such Creditor (including by the Debtor with the
consent of the Creditor with the most senior Lien in the Collateral) to
evidence and effectuate such termination and release, provided, that,
any such release or UCC amendment or termination by or on behalf of Creditor or
Creditors, as the case may be, with a junior Lien in such Collateral shall not
extend to or otherwise affect any of the rights, if any, of such Creditor’s
rights to the proceeds from any such sale or other disposition of such
Collateral upon the payment and satisfaction in full of the indebtedness owing
to the Creditor with the most senior Lien, and (iv) be deemed to have consented
under the Agreements of the each Creditor with a junior Lien thereon and the
Lenders, Noteholders or Third Priority Noteholders, as the case may be, for whom
such Creditor is acting to such sale or other disposition.  Any sale or other disposition of any of the
Collateral by the Creditor with the most senior lien thereon (other than sales
supervised by a court) under the Uniform Commercial Code or other applicable
law shall be conducted in a commercially reasonable manner under the
circumstances based on such information available to the Creditor with the most
senior Lien thereon relevant to such determination.


 


(b)                                 To the extent that the Revolving
Loan Priority Amount has been paid in full but Revolving Debt remains
outstanding, Revolving Loan Agent shall, at its option, or at the written
request of Noteholder Collateral Agent, turn over the enforcement proceedings
with respect to Revolving Loan Collateral to Noteholder Collateral Agent, and
at all times thereafter, subject to Section 2.9(c), Noteholder Collateral
Agent shall be deemed to be the Creditor with the most senior Lien for purposes
of this Section 2.9; provided, that, the priorities of
payment in respect of the Secured Debt set forth herein shall remain unchanged.


 


(c)                                  To the extent that Noteholder Debt
has been paid in full and the Revolving Loan Priority Amount has been paid in
full but Third Priority Debt remains outstanding, Revolving Loan Agent or
Noteholder Collateral Agent, as applicable, shall, at its option, or at the
written request of Third Priority Collateral Agent, turn over the enforcement
proceedings with respect to Revolving Loan Collateral to Third Priority
Collateral Agent, and at all times thereafter, Third Priority Collateral Agent
shall be deemed to be the Creditor with the most senior Lien for purposes of
this Section 2.9; provided, that, the priorities of payment
in respect of the Secured Debt set forth herein shall remain unchanged.


 


2.10                           Rights of Junior Creditor. 
Each Creditor with a junior Lien on any Collateral will not, directly or
indirectly, (a) exercise any of its rights or remedies upon a default or event
of default by Debtor or any of Obligors under its Agreements against such
Collateral, or (b) seek to foreclose or realize upon (judicially or non
judicially) its junior Lien on such Collateral or assert any claims or interest
therein (including, without limitation, by setoff or notification of account
debtors) or (c) take any other action that would interfere in any manner with
the rights of the Creditor with the most senior Lien in such Collateral.  Notwithstanding the foregoing, if Insolvency
Proceeding shall be commenced against any Debtor, each Creditor shall be entitled
to


 


11





















 


file proofs of claim and commence other
proceedings in order to evidence and protect its interest in the Collateral so
long as such filings are not in any manner inconsistent with the provisions of
this Intercreditor Agreement.


 


2.11                           Access to Noteholder First Priority
Real Property Collateral.


 


(a)                                  In the event that Noteholder
Collateral Agent or, subject to the provisions of this Intercreditor Agreement,
Revolving Loan Agent shall acquire control or possession of any of the
Noteholder First Priority Real Property Collateral, or shall, through the
exercise of remedies under its Agreements, sell or otherwise transfer any of
the Real Property of Debtor(s) to any third party (a “Third Party Purchaser”),
Noteholder Collateral Agent or Revolving Loan Agent, as applicable, shall
permit Revolving Loan Agent (if applicable) and Third Priority Collateral Agent
(or require as a condition of such sale to a Third Party Purchaser that the
Third Party Purchaser agree to permit Revolving Loan Agent (if applicable) and
Third Priority Collateral Agent), at its option, to enter and use any or all of
the Noteholder Real Property Collateral during normal business hours in order
to inspect, remove or take any action with respect to the other Collateral or
to enforce, in the case of the Revolving Loan Agent, Revolving Loan Agent’s and
Revolving Loan Lenders’ rights with respect thereto, and, in the case of Third
Priority Collateral Agent, Third Priority Collateral Agent’s and Third Priority
Noteholders’ right with respect thereto, in each case including, but not
limited to, the examination and removal of such other Collateral in which
Revolving Loan Agent or Third Priority Collateral Agent, as the case may be,
has the most senior Lien and the examination and duplication of the books and
records of Debtor related to such other Collateral or to otherwise handle, deal
with or dispose of any of the Collateral, such right to include, without
limiting the generality of the foregoing, the right to conduct one or more
public or private sales or auctions thereon. 
The access and use rights of Revolving Loan Agent set forth in this Section as
to the Noteholder First Priority Real Property Collateral, to the extent
applicable,  shall continue until the
date one hundred twenty (120) days after the earlier of (i) the date Revolving
Loan Agent receives written notice from Noteholder Collateral Agent that
Noteholder Collateral Agent has commenced a foreclosure proceeding or other
legal proceeding to take possession of such Noteholder Real Property or to
appoint a receiver of rents or (ii) the date that Revolving Loan Agent
commences an Enforcement Action with respect to the Collateral subject to its
senior Lien.  The rights of Third Priority
Collateral Agent set forth in this Section as to the Noteholder Real
Property shall continue until the date one hundred twenty (120) days after the
earlier of (i) the date Third Priority Collateral Agent receives written notice
from Noteholder Collateral Agent that Noteholder Collateral Agent has commenced
a foreclosure proceeding or other legal proceeding to take possession of such
Noteholder Real Property or to appoint a receiver of rents or (ii) the date
that Third Priority Collateral Agent commences an Enforcement Action with
respect to the Collateral subject to its senior Lien.  In no event shall the use by Revolving Loan
Agent or Third Priority Collateral Agent of the Real Property constitute an
assumption by Revolving Loan Agent, any Revolving Loan Lender, Third Priority
Collateral Agent, or any Third Priority Noteholder of the Revolving Loan
Agreements, the Noteholder Agreement or the Third Priority Agreements, as
applicable.


 


(b)                                 Revolving Loan Lenders shall
indemnify and hold harmless Noteholder Collateral Agent, Noteholders and any
Third Party Purchaser from and against (i) any loss, liability, claim, damage
or expense arising out of any claim asserted by any third party as a result


 


12





















 


of any acts or omissions by Revolving Loan
Agent in connection with the exercise by Revolving Loan Agent, of the rights of
access and use set forth in this Section 2.11 and (ii) any damage to any
of the Noteholder Real Property Collateral caused by any act of Revolving Loan
Agent.  In no event shall Revolving Loan
Agent have any liability to Noteholder Collateral Agent, Noteholders,  or any Third Party Purchaser pursuant to this
Section 2.11 or otherwise solely as a result of any condition on or with
respect to the Noteholder Real Property Collateral existing prior to the date
of the exercise by Revolving Loan Agent of its rights under this Section 2.11.


 


(c)                                  Third Priority Noteholders shall
indemnify and hold harmless Noteholder Collateral Agent, Noteholders and any Third
Party Purchaser from and against (i) any loss, liability, claim, damage or
expense arising out of any claim asserted by any third party as a result of any
acts or omissions by Third Priority Collateral Agent in connection with the
exercise by Third Priority Collateral Agent, of the rights of access and use
set forth in this Section 2.11 and (ii) any damage to any of the
Noteholder Real Property Collateral caused by any act of Third Priority
Collateral Agent.  In no event shall
Third Priority Collateral Agent have any liability to Noteholder Collateral
Agent, Noteholders, or any Third Party Purchaser pursuant to this Section 2.11
or otherwise solely as a result of any condition on or with respect to the
Noteholder Real Property Collateral existing prior to the date of the exercise
by Third Priority Collateral Agent of its rights under this Section 2.11.


 


2.12                           Access to Revolving Loan Real
Property Collateral.


 


(a)                                  In the event that Revolving Loan
Agent or, subject to the provisions of this Intercreditor Agreement, Noteholder
Collateral Agent, shall acquire control or possession of any of the Revolving
Loan Real Property Collateral, or shall, through the exercise of remedies under
its Agreements, sell or otherwise transfer any of the Real Property of Debtor(s)
to any third party (a “Third Party Purchaser”), Revolving Loan Agent shall
permit Noteholder Collateral Agent (if applicable) and Third Priority
Collateral Agent (or require as a condition of such sale to a Third Party
Purchaser that the Third Party Purchaser agree to permit Noteholder Collateral
Agent (if applicable) and the Third Priority Collateral Agent), at its option,
to enter and use any or all of the Revolving Loan Real Property Collateral
during normal business hours in order to inspect, remove or take any action
with respect to the Noteholder Collateral or to enforce Noteholder Collateral
Agent’s rights with respect thereto, including, but not limited to, the
examination and removal of such other Collateral in which Noteholder Collateral
Agent or the Third Priority Collateral Agent, as the case may be, has the most
senior Lien and the examination and duplication of the books and records of
Debtor related to such other Collateral or to otherwise handle, deal with or
dispose of any of the Collateral, such right to include, without limiting the
generality of the foregoing, the right to conduct one or more public or private
sales or auctions thereon.  The rights of
access and use of Noteholder Collateral Agent set forth in this Section as
to the Revolving Loan Real Property Collateral, to the extent applicable, shall
continue until the date one hundred twenty (120) days after the earlier of (i)
the date Noteholder Collateral Agent receives written notice from Revolving
Loan Agent that Revolving Loan Agent has commenced a foreclosure proceeding or
other legal proceeding to take possession of such Revolving Loan Real Property
Collateral or to appoint a receiver of rents or (ii) the date that Revolving
Loan Agent commences an Enforcement Action with respect to the Collateral
subject to its senior Lien.  The rights
of Third Priority Collateral Agent set forth in this Section as to the
Revolving Loan Real Property Collateral shall continue until the date one
hundred twenty (120) days after 


 


13





















 


the earlier of (i) the date Third Priority
Collateral Agent receives written notice from Revolving Loan Agent that
Revolving Loan Agent has commenced a foreclosure proceeding or other legal
proceeding to take possession of such Revolving Loan Real Property Collateral
or to appoint a receiver of rents or (ii) the date that Third Priority
Collateral Agent commences an Enforcement Action with respect to the Collateral
subject to its senior Lien.  In no event
shall the use by Noteholder Collateral Agent or Third Priority Collateral
Agent, as the case may be, of the Revolving Loan Real Property Collateral
constitute an assumption by Noteholders or Third Priority Collateral Agent, as
the case may be, of the Revolving Loan Agreements.


 


(b)                                 Noteholders shall indemnify and hold
harmless Revolving Loan Agent and Revolving Loan Lenders and any Third Party
Purchaser from and against (i) any loss, liability, claim, damage or expense
arising out of any claim asserted by any third party as a result of any acts or
omissions by Noteholder Collateral Agent in connection with the exercise by
Noteholder Collateral Agent, of the rights of access and use set forth in this Section 2.12
and (ii) any damage to any of the Revolving Loan Real Property Collateral
caused by any act of Noteholder Collateral Agent.  In no event shall Noteholder Collateral Agent
and Noteholders have any liability to Revolving Loan Agent or any Third Party
Purchaser pursuant to this Section 2.12 or otherwise solely as a result of
any condition on or with respect to the Revolving Loan Real Property Collateral
existing prior to the date of the exercise by Noteholder Collateral Agent of
its rights under this Section 2.12.


 


(c)                                  Third Priority Noteholders shall
indemnify and hold harmless Revolving Loan Agent and Revolving Loan Lenders and
any Third Party Purchaser from and against (i) any loss, liability, claim,
damage or expense arising out of any claim asserted by any third party as a
result of any acts or omissions by Third Priority Collateral Agent in
connection with the exercise by Third Priority Collateral Agent, of the rights
of access and use set forth in this Section 2.12 and (ii) any damage
to any of the Revolving Loan Real Property Collateral caused by any act of
Third Priority Collateral Agent.  In no
event shall Third Priority Collateral Agent and Third Priority Noteholders have
any liability to Revolving Loan Agent or any Third Party Purchaser pursuant to
this Section 2.12 or otherwise solely as a result of any condition on or
with respect to the Revolving Loan Real Property Collateral existing prior to
the date of the exercise by Third Priority Collateral Agent of its rights under
this Section 2.12.


 


2.13                           Right to Cure. 
Revolving Loan Agent shall have the right one (1) time in any twelve
(12) month period, but not any obligation, to cure any events of default under
the Noteholder Agreements or the Third Priority Agreements for the account of
Debtor or any of Obligors within fifteen (15) days after the receipt by Congress
of written notice of such event of default from the Creditor or thereafter with
the consent of Creditor.  In no event
shall Revolving Loan Agent, by virtue of the payment of amounts or performance
of any obligation required to be paid or performed by Debtor or any of
Obligors, be deemed to have assumed any obligation of Debtor or any of Obligors
to Noteholders, the Third Priority Noteholders or any other person.


 


2.14                           Notices of Default. 
Each Creditor shall give to the others concurrently with the giving
thereof to Debtor, (a) a copy of any written notice by such Creditor of either
a default or an event of default under its Agreements with Debtors, or written
notice of demand of payment from Debtors, and (b) any written notice sent by
such Creditor to Debtors at any time an event of default under such Creditor’s
Agreements exists stating such Creditor’s intention to exercise any


 


14





















 


of its enforcement rights or remedies,
including written notice pertaining to any foreclosure on any of the Collateral
or other judicial or non judicial remedy in respect thereof, and any legal
process served or filed in connection therewith; provided, that
the failure of any party to give notice as required hereby shall not affect the
relative priorities of Creditor’s respective Liens as provided herein or the
validity or effectiveness of any such notice as against any Debtor and shall
not give rise to any claim or cause of action by any Creditor against the other
Creditors.  Each Creditor shall, upon the
request of the other, provide to such other Creditor a statement of the amount
of the indebtedness of Debtors then owing to it.  Debtors hereby authorize and consent to each
Creditor sending any such notices and other information to the other.


 


2.15                           Access to Books and Records. 
In the event that any of Creditors shall, in the exercise of its
respective rights under its Agreements or otherwise, receive possession or
control of any books and records of Debtors or any of Obligors which contain
information identifying or pertaining to any of the property of Debtors or any
of Obligors in which the other Creditors have been granted a Lien, it shall
notify the other Creditors that it has received such books and records and
shall, as promptly as practicable thereafter, make available to the other
Creditors such books and records for inspection and duplication.


 


3.                                       REPRESENTATIONS
AND WARRANTIES


 


3.1                                 Additional Revolving Loan Agent
Representations.  Revolving Loan Agent hereby represents and
warrants to the Noteholder Collateral Agent, each Noteholder, the Third
Priority Collateral Agent and each Third Priority Noteholder that:


 


(a)                                  the execution, delivery and
performance of this Intercreditor Agreement by the Revolving Loan Agent, on
behalf of each Revolving Loan Lender is within the powers of such Revolving
Loan Agent under the Revolving Loan Agreements, and has been duly authorized by
such Revolving Loan Agent on behalf of the Revolving Loan Lender;


 


(b)                                 the Revolving Loan Agent has been duly
directed to execute, deliver and perform this Intercreditor Agreement, on
behalf of the Revolving Loan Lender pursuant to the terms of the Revolving Loan
Agreements, and this Intercreditor Agreement constitutes the legal, valid and
binding obligations of Revolving Loan Agent, enforceable against the Revolving
Loan Agent, in its capacity as agent under the Revolving Loan Agreements, and
Revolving Loan Lenders in accordance with its terms and shall be binding on
each of them;


 


(c)                                  as of the date hereof, no default or
event of default, or event which with notice or passage of time or both would
constitute an event of default exists or has occurred under the Revolving Loan
Agreements;


 


(d)                                 the Revolving Loan Debt is not
subject to any lien, security interest, financing statements, subordination,
assignment or other claim.


 


3.2                                 Additional Noteholder
Representations.  Noteholder Collateral Agent hereby represents
and warrants to the Revolving Loan Agent, each Revolving Loan Lender, the Third
Priority Collateral Agent and each Third Priority Noteholder that:


 


15





















 


(a)                                  the execution, delivery and
performance of this Agreement by the Noteholder Collateral Agent, on behalf of
each Noteholder is within the powers of the Noteholder Collateral Agent under
the Indenture, and has been duly authorized by such Noteholder Collateral Agent
on behalf of the Noteholders.


 


(b)                                 the requisite majority of
Noteholders have consented to the Noteholder Collateral Agent’s execution,
deliverance and performance of this Intercreditor Agreement, on behalf of the
Noteholders pursuant to the terms of the Indenture and the other Noteholder
Agreements and this Agreement constitutes the legal, valid and binding
obligations of each Noteholder, enforceable against the Noteholder Collateral
Agent, in its capacity as collateral agent under the Noteholder Agreements, and
each Noteholder in accordance with its terms and shall be binding on each of
them;


 


(c)                                  as of the date hereof, no default or
event of default, or event which with notice or passage of time or both would
constitute an event of default exists or has occurred under the Noteholder
Agreements; and


 


(d)                                 the Noteholder Debt is not subject
to any lien, security interest, financing statements, subordination, assignment
or other claim.


 


3.3                                 Additional Third Priority Noteholder
Representations.  Third Priority Collateral Agent hereby
represents and warrants to the Revolving Loan Agent and each Revolving Loan
Lender and to the Noteholder Collateral Agent and each Noteholder that:


 


(a)                                  the execution, delivery and
performance of this Agreement by the Third Priority Collateral Agent, on behalf
of each Third Priority Noteholder is within the powers of the Third Priority
Collateral Agent under the Third Priority Note Purchase Agreement, and has been
duly authorized by such Third Priority Collateral Agent on behalf of the Third
Priority Noteholders.


 


(b)                                 the Third Priority Collateral Agent
has been duly directed to execute, deliver and perform this Intercreditor
Agreement, on behalf of the Third Priority Noteholders pursuant to the terms of
the Third Priority Agreements and this Agreement constitutes the legal, valid
and binding obligations of each Third Priority Noteholder, enforceable against
the Third Priority Collateral Agent, in its capacity as collateral agent under
the Third Priority Agreements, and each Third Priority Noteholder in accordance
with its terms and shall be binding on each of them;


 


(c)                                  as of the date hereof, no default or
event of default, or event which with notice or passage of time or both would
constitute an event of default exists or has occurred under the Third Priority
Agreements; and


 


(d)                                 the Third Priority Debt is not
subject to any lien, security interest, financing statements, subordination,
assignment or other claim.


 


16





















 


4.                                       MISCELLANEOUS


 


4.1                                 Amendments. 
Any waiver, permit, consent or approval by any of Creditors of or under
any provision, condition or covenant to this Intercreditor Agreement must be in
writing and shall be effective only to the extent it is set forth in writing
and as to the specific facts or circumstances covered thereby.  Any amendment of this Intercreditor Agreement
must be in writing and signed by each of the parties to be bound thereby.


 


4.2                                 Successors and Assigns.


 


(a)                                  This Intercreditor Agreement shall
be binding upon each Creditor and its successors and assigns and shall inure to
the benefit of each Creditor and its successors, participants and assigns.


 


(b)                                 Each Creditor reserves the right to
grant participations in, or otherwise sell, assign, transfer or negotiate all
or any part of, or any interest in, the Revolving Loan Debt,  the Noteholder Debt and the Third Priority
Debt; provided, that, no Creditor shall be obligated to give any
notices to or otherwise in any manner deal directly with any participant in the
Revolving Loan Debt, the Noteholder Debt or the Third Priority Debt, as the
case may be, and no participant shall be entitled to any rights or benefits
under this Intercreditor Agreement except through the Creditor with which it is
a participant.  In connection with any
participation or other transfer or assignment, a Creditor (i) may, subject to
its Agreements, disclose to such assignee, participant or other transferee or
assignee all documents and information which such Creditor now or hereafter may
have relating to Debtor, any of Obligors or the Collateral and (ii) shall
disclose to such participant or other transferee or assignee the existence and
terms and conditions of this Intercreditor Agreement.  In the case of an assignment or transfer, the
assignee or transferee acquiring any interest in the Revolving Loan Debt, the
Noteholder Debt or the Third Priority Debt, as the case may be, shall execute
and deliver to each of Creditors a written acknowledgement of receipt of a copy
of this Intercreditor Agreement and the written agreement by such person to be
bound by the terms of this Intercreditor Agreement.


 


(c)                                  In connection with any assignment or
transfer of any or all of the Revolving Loan Debt, the Noteholder Debt or the
Third Priority Debt, or any or all rights of any Creditor in the property of
Debtors or any of Obligors (other than pursuant to a participation), each
Creditor agrees to execute and deliver an agreement containing terms
substantially identical to those contained herein in favor of any such assignee
or transferee and, in addition, will execute and deliver an agreement
containing terms substantially identical to those contained herein in favor of
any third person who succeeds to or refinances, replaces or substitutes for any
or all of financing of Debtor and of any of Obligors, whether such successor or
replacement financing occurs by transfer, assignment, “takeout” or any other
means or vehicle.


 


4.3                                 Insolvency. 
This Intercreditor Agreement shall be applicable both before and after
the filing of any petition by or against any Debtor or any of Obligors under
the U.S. Bankruptcy Code and all converted or succeeding cases in respect thereof,
and all references herein to Debtor or any of Obligors shall be deemed to apply
to a trustee for Debtor or any of Obligors and Debtor or any of Obligors as
debtor-in-possession.  The relative
rights of Creditors to repayment of the Revolving Loan Debt, the Noteholder
Debt or the Third Priority Debt,


 


17





















 


respectively, and in or to any distributions
from or in respect of Debtor or any of Obligors or any Collateral or proceeds
of Collateral, shall continue after the filing thereof on the same basis as
prior to the date of the petition, subject to any court order approving the
financing of, or use of cash collateral by, Debtor or any of Obligors as
debtor-in-possession.


 


4.4                                 Bankruptcy Financing. 
If any Debtor shall become subject to a proceeding under the U.S.
Bankruptcy Code and if Revolving Loan Agent desires to permit the use of cash
collateral or to provide financing to Debtors under either Section 363 or Section 364
of the U.S. Bankruptcy Code, Noteholder Collateral Agent, Noteholders and Third
Priority Collateral Agent and Third Priority Noteholders agree as follows:  (a) adequate notice shall have been provided
for such financing or use of cash collateral if Noteholder Collateral Agent and
the Third Priority Collateral Agent receive notice three (3) business days
prior to the entry of the order approving such financing or use of cash
collateral and (b) no objection will be raised by Noteholder Collateral Agent
or the Third Priority Collateral Agent to any such financing on the ground of a
failure to provide “adequate protection” for the Liens of Noteholder Collateral
Agent and the Liens of the Third Priority Collateral Agent or any other
grounds, provided, that, (i) each of Noteholder Collateral
Agent and Third Priority retain a Lien on the Collateral (including proceeds
thereof arising after the commencement of such proceeding) and obtain a
replacement Lien on post-petition Collateral to the same extent and with the
same priority as existed prior to the commencement of the proceeding under the
U.S. Bankruptcy Code, and (ii) the maximum amount outstanding under such
post-petition financing, together with the aggregate principal amount of the
pre-petition Revolving Loan Debt, shall not exceed the Revolving Loan Priority
Amount.  For purposes of this Section,
notice of a proposed financing or use of cash collateral shall be deemed given
when given, in the manner prescribed by Section 4.6 hereof, to Noteholder
Collateral Agent and Third Priority Collateral Agent.


 


4.5                                 Bailee for Perfection. 
Each Creditor hereby appoints each other Creditor, and each hereby
agrees to serve, as agent and bailee for the other Creditors for the limited
purpose of perfecting their respective Liens on the Collateral which may at any
time be in its possession or under its control during the term of this
Intercreditor Agreement.  The Creditor
having the most senior Lien thereon shall not have any duty to protect or
preserve any rights pertaining to any of the Collateral in its possession and
each of the other Creditors hereby waives and releases the Creditor holding the
most senior Lien from all claims and liabilities at any time arising pursuant
to the role of such senior Creditor as agent and bailee with respect to the
Collateral in its actual possession (or control) other than gross negligence or
willful misconduct.  The Creditor with
the most senior Lien on any Collateral shall, after all obligations of Debtor
to it have been fully and finally paid and performed, deliver the remainder of
Collateral, if any, and the books and records relating to such Collateral in
its possession (or under its control) to the Creditor with the next most senior
Lien as set forth herein, except in the event and to the extent that (a) such
senior Creditor has retained or otherwise acquired such Collateral in full or
partial satisfaction of the Obligations owing to such senior Creditor, (b) such
Collateral is sold or otherwise disposed of by such Creditor or by Debtor as
provided herein or (c) except as may otherwise be required by applicable law or
any court order.


 


4.6                                 Notices. 
All notices, requests and demands to or upon the respective parties
hereto shall be in writing and shall be deemed duly given, made or
received:  if delivered in person, immediately
upon delivery; if by telex, telegram or facsimile transmission, immediately


 


18





















 


upon sending and upon confirmation of
receipt; if by nationally recognized overnight courier service with
instructions to deliver the next business day, one (1) business day after
sending; and if mailed by certified mail, return receipt requested, five (5)
days after mailing to the parties at their addresses set forth below (or to
such other addresses as the parties may designate in accordance with the
provisions of this Section):


 


	
  To Revolving
  Loan Agents:

  	
   

  	
  Congress Financial Corporation

  
	
   

  	
   

  	
  1133 Avenue of the Americas

  
	
   

  	
   

  	
  New York, New York 10036

  
	
   

  	
   

  	
  Attention: Mr. Robert Strack

  
	
   

  	
   

  	
  Fax: (212) 840-6259

  
	
   

  	
   

  	
   

  
	
  To
  Noteholder Collateral Agent:

  	
   

  	
  The Bank of New York

  
	
   

  	
   

  	
  Corporate Trust Department

  
	
   

  	
   

  	
  101 Barclay Street, Floor 8W

  
	
   

  	
   

  	
  New York, New York 10286

  
	
   

  	
   

  	
  Attention: Fax: 212-815-5707

  
	
   

  	
   

  	
   

  
	
  To Third
  Priority Collateral Agent:

  	
   

  	
  Airlie Opportunity Capital Management, L.P.

  
	
   

  	
   

  	
  115 East Putnam Avenue

  
	
   

  	
   

  	
  Greenwich, CT 06830

  



 


Any of the
above Creditors may change the address(es) to which all notices, requests and
other communications are to be sent by giving written notice of such address
change to the other Creditor in conformity with this Section 4.6, but such
change shall not be effective until notice of such change has been received by
the other Creditors.


 


4.7                                 Counterparts; Effective Date. 
This Intercreditor Agreement may be executed in any number of
counterparts, each of which shall be an original with the same force and effect
as if the signatures thereto and hereto were upon the same instrument.  Delivery of an executed counterpart of a
signature page to this Intercreditor Agreement by facsimile shall be effective
as delivery of a manually executed counterpart of this Intercreditor
Agreement.  This Agreement shall become
effective (the “Effective Date”) when (i) the Loan Agreement has been duly
executed and delivered by each party thereto and is effective by its terms,
(ii) the Indenture has been duly executed and delivered by each party thereto
and is effective by its terms, and (iii) counterparts of this Intercreditor
Agreement has been duly executed and delivered on behalf of each party hereto


 


4.8                                 Governing Law. 
The validity, interpretation and enforcement of this Intercreditor
Agreement and any dispute arising out of the relationship between the parties
hereto whether in contract, tort, equity or otherwise, 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.


 


19





















 


4.9                                 Consent to Jurisdiction; Waiver of
Jury Trial.  Each of the parties hereto hereby irrevocably
consents to the non-exclusive jurisdiction of Supreme Court of New York, New
York County and the United States District Court for the Southern District of
New York, New York County and waives trial by jury in any action or proceeding
with respect to this Intercreditor Agreement. 
The Bank of New York executes this Agreement solely in its capacity as
Noteholder Collateral Agent, and as such there is no recourse against The Bank
of New York, individually


 


4.10                           Complete Agreement. 
This written Intercreditor Agreement is intended by the parties as a
final expression of their agreement and is intended as a complete statement of
the terms and conditions of their agreement.


 


4.11                           No Third Parties Benefitted. 
Except as expressly provided in Section 4.2, this Intercreditor
Agreement is solely for the benefit of the Creditors and their respective
successors, participants and assigns, and no other person shall have any right,
benefit, priority or interest under, or because of the existence of, this
Intercreditor Agreement.


 


4.12                           Disclosures; Non-Reliance. 
Each Creditor has the means to, and shall in the future remain, fully
informed as to the financial condition and other affairs of Debtors and no
Creditor shall have any obligation or duty to disclose any such information to
any other Creditor.  Except as expressly
set forth in this Intercreditor Agreement, the parties hereto have not
otherwise made to each other nor do they hereby make to each other any warranties,
express or implied, nor do they assume any liability to each other with respect
to:  (a) the enforceability, validity,
value or collectability of any of the Revolving Loan Debt, the Noteholder Debt
the Third Priority Debt or any guarantee or security which may have been
granted to any of them in connection therewith, (b) any Debtor’s or
Obligors’ title to or right to transfer any of the Collateral, or (c) any other
matter except as expressly set forth in this Intercreditor Agreement.


 


4.13                           Term. 
This Intercreditor Agreement is a continuing agreement and shall remain
in full force and effect until the indefeasible satisfaction in full of all of
the Revolving Loan Debt and the Noteholder Debt.


 


4.14                           Amendment and Restated of April 2004
Intercreditor Agreement.  The parties
hereto agree that this is an amendment and restatement of, and supersedes, the
Existing Intercreditor Agreement; provided, however, that if in contravention
of the intention of parties hereto, this agreement is rendered invalid or unenforceable
as a matter of law, the parties agree that the Existing Intercreditor Agreement
shall automatically be re-instated and shall be binding and enforceable on the
parties thereto.


 


 


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20





















 


IN WITNESS WHEREOF, the parties have caused
this Intercreditor Agreement to be duly executed as of the day and year first
above-written.


 


	
   

  	
  WACHOVIA
  BANK, NATIONAL

  ASSOCIATION (as successor by merger to

  CONGRESS
  FINANCIAL CORPORATION),

  as Revolving Loan Agent

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Herbert
  Korn

  	
   

  
	
   

  	
  Name: Herbert
  C. Korn

  
	
   

  	
  Title:   Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF
  NEW YORK,

  solely in its capacity as Noteholder Collateral

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Julie
  Salovitch-Miller

  	
   

  
	
   

  	
  Name: Julie
  Salovitch-Miller

  
	
   

  	
  Title:   Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AIRLIE
  OPPORTUNITY CAPITAL

  MANAGEMENT, L.P.

  solely in its capacity as Third Priority Collateral

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Adam
  Goodfriend

  	
   

  
	
   

  	
  Name: Adam
  Goodfriend

  
	
   

  	
  Title:   Managing
  Director

  
	
   

  	
   

  	
   

  	
   

  
					



 





















 


The undersigned hereby acknowledges and
agrees to the foregoing terms and provisions. 
By its signature below, the undersigned agrees that it will, together
with its successors and assigns, be bound by the provisions hereof.


 


The undersigned agrees that any of Creditors
holding Collateral does so as bailee (under the UCC) for each other of
Creditors which has a Lien on such Collateral and is hereby authorized to and
may turn over to such other Creditor upon request therefor any such Collateral,
after all obligations and indebtedness of the undersigned to the bailee
Creditor have been fully paid and performed.


 


The undersigned acknowledges and agrees
that:  (i) although it may sign this
Intercreditor Agreement it’s not a party hereto and does not and will not
receive any right, benefit, priority or interest under or because of the
existence of the foregoing Intercreditor Agreement, and (ii) it will execute
and deliver such additional documents and take such additional action as may be
necessary or desirable in the reasonable opinion of any of Creditors to
effectuate the provisions and purposes of the foregoing Intercreditor
Agreement.


 


	
   

  	
  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.

  



 


[SIGNATURES CONTINUED ON
FOLLOWING PAGE]


 





















 


[SIGNATURES -CONTINUED FROM
PREVIOUS PAGE]


 


	
   

  	
  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.

  	 

	
   

  	
  Raybem
  Capital Corp.

  	 

	
   

  	
  Raybern
  Equity Corp.

  	 

	
   

  	
  Robert L.
  McCarthy & Son, Inc.

  	 

	
   

  	
  T-NT Bus
  Service, Inc.

  	 

	
   

  	
  Transcomm,
  Inc.

  	 

	
   

  	
  Winsale,
  Inc.

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By 

  	
  /s/ Neil J. Abitabilo

  	
   

  
	
   

  	
  Name: Neil J. Abitabilo

  	 

	
   

  	
  Title:   Chief Financial
  Officer