Document:

Exhibit
10.5

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT
dated as of September 2, 2003 (the “Agreement”) among Atlantic Express
Transportation Group Inc., a New York corporation (“Group”), Atlantic Express
Transportation Corp., a New York corporation (the “Company”), and Neil J.
Abitabilo (the “Executive”).

 

WHEREAS, the Company
desires to employ the Executive as its Director of Finance and in such other
capacities as the Company and the Executive may agree from time to time.

 

NOW, THEREFORE, in
consideration of the foregoing and the respective covenants and agreements
hereinafter set forth and for other good and valuable consideration, the
Company, Group and the Executive hereby agree as follows:

 

1.                                       EMPLOYMENT
AND DUTIES

 

1.1.                              General.
The Company hereby employs the Executive, and the Executive agrees to serve, as
Director of Finance of the Company, upon the terms and conditions herein
contained during the Employment Term, and in such capacity the Executive agrees
to serve the Company faithfully and to the best of his ability.  During the Employment Term, the Executive
also agrees to serve, if requested by the Company, at no compensation in
addition to that provided for in this Agreement, in the position of Director of
Finance of Group and as an officer of the Company or Group and of any
subsidiary of Group or the Company.

 

1.2.                              Exclusive
Services. For so long as the Executive is employed by the Company, he shall
devote his full-time working hours to his duties hereunder. The Executive shall
not, directly or indirectly, render services to any other person or
organization for which he receives compensation or otherwise engage in
activities which would interfere with his faithful performance of his duties
hereunder.  Notwithstanding the
foregoing, the Executive may serve as a member of board of directors of and may
provide consultation services for third parties, provided, that such services
shall not interfere with the performance of Executive’s duties hereunder and further,
provided, that such third parties do not engage in any business in
competition with any business conducted by Group, the Company or their
respective subsidiaries.

 

1.3.                              Term
of Employment. The Executive’s employment under this Agreement shall
commence as of the date hereof (the “Effective Date”) and shall continue at the
will of the Company.  The Company shall
have the right to terminate the employment of the Executive at any time with or
without cause or reason.  Such period of
Executive’s employment under this Agreement shall be referred to herein as the
“Employment Term.”

 

2.                                       SALARY

 

2.1.                              Base
Salary.   (a)        From the Effective Date, the Executive shall be

 

 

entitled to receive a
base salary (“Base Salary”) at a rate of $225,000 per annum, payable in arrears
in equal installments in accordance with the Company’s payroll practices, with
such increases as may be provided in accordance with the terms hereof. Once
increased, such higher amount shall constitute the Executive’s annual Base
Salary.

 

(b)                                 Commencing
January 1, 2004, the Base Salary shall be increased to $250,000 per annum.

 

(c)                                  Commencing
May 1, 2004, the Base Salary shall be increased to $275,000 per annum.

 

(d)                                 Commencing  September 1, 2004, the Base Salary
shall be increased  to $300,000 per
annum.

 

(e)                                  Notwithstanding
anything set forth in this Section 2.1 which may be to the contrary, in
the event that prior to September 1, 2004, the Executive shall be
appointed as Chief Financial Officer of the Company or Group, the Base Salary
shall be increased as of the date of such appointment to $300,000 per annum,
and in such event Subsections (b), (c) or (d) as the case may be shall be of no
further force or effect.

 

(f)                                    Commencing
November 1, 2005 and each anniversary date thereof during the Employment
Term, the Base Salary shall be increased by a percentage which shall equal the
percentage increase in the consumer price index for the New York-Northern New
Jersey-Long Island, NY-NJ-CT metropolitan area, as reported by the United
States Department of Labor, for the immediately preceding 12-month period, provided,
such annual increase pursuant to this subparagraph (f) shall not be less than
3% and not greater than 5%.

 

2.2                                 Deferred
Compensation Plan.   The Executive
shall be entitled to participate in the Company’s senior executive deferred compensation
plan whereby the Executive will receive deferred compensation after the end of
each calendar year of the Company, providing the Executive remains an employee
of the Company through the end of such calendar year, in an amount equal to
five (5%) percent of the Base Salary paid to the Executive during the prior
calendar year.

 

2.3                                 Bonus.   The Executive shall be entitled participate
in a senior bonus pool established for senior executives of the Company, other
than the Chief Executive Officer of the Company, the amount of which
participation shall be determined and shall be subject to the sole and
exclusive determination of the Company.

 

3.                                       EMPLOYEE
BENEFITS

 

3.1.                              General
Benefits. The Executive shall receive the following benefits during the
Employment Term:

 

(a)  the Executive, his spouse
and minor children will be eligible to participate in benefit and health
insurance programs of the Company consistent with those benefit programs

 

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provided from time to time to other senior executives of the Company;

 

(b)   an automobile allowance of $500 per month
commencing September 1, 2003, which allowance shall be increased to $750
per month commencing February 1, 2004 and thereafter increased to $1,000
per month commencing February 1, 2005;

 

(c)   a life insurance policy for term life
insurance in the amount of $100,000 provided in accordance with the Company’s
benefit plan for its senior executives and any disability insurance benefits
which the Company may provide in any future plan adopted for its senior
executives.

 

3.2.                              Vacation.  The Executive shall be entitled to (a) 10
days paid vacation for the fiscal year ending June 2004; (b) 15 days paid
vacation for each of the fiscal years ending June 30, 2005 and
June 30, 2006; and (c) thereafter 20 days paid vacation for each fiscal
year thereafter in accordance with the applicable policies of the Company.

 

3.3.                              Reimbursement
of Expenses.    The Company will
reimburse the Executive for reasonable, ordinary and necessary business
expenses incurred by him in the fulfillment of his duties hereunder (including
but not limited to expenses relating to telephone, cellular phone, computer
access during travel, facsimile, parking, hotel accommodations, meals and/or air
fare) upon presentation by the Executive of an itemized account of such
expenditures in accordance with the Company practices consistently applied.

 

4.                                       TERMINATION
OF EMPLOYMENT

 

4.1.1.                     General.
(a)  If the Executive’s employment is
terminated by the Company for Cause, the Executive shall be entitled only to
his accrued but unpaid Base Salary through and including the date of
termination (“Accrued Base Salary”);

 

(b)                                 If
the Executive is terminated by the Company (or any successor in interest to the
Company) Without Cause, the Executive shall be entitled only to (i) his Accrued
Base Salary through and including the date of termination; and (ii) a severance
payment (“Severance Payment”) equal to one month Base Salary, provided if such
termination occurs after January 1, 2004, the Severance Payment shall
equal a total of three months Base Salary, and if such termination occurs after
September 1, 2004 the Severance Payment shall equal a total of six months
Base Salary.  In the event of
termination Without Cause prior to September 1, 2005, which termination
occurs within ninety days following (i) a filing by the Company of a voluntary
petition for bankruptcy protection under the United States Bankruptcy Code; or
(ii) a Change of Control, the Executive shall receive an additional Severance
Payment equal to three months of his Base Salary.  The term “Change of Control” shall mean (A) transfer of all or
substantially all of the assets of the Company to one or more persons, other
than an affiliate of the Company, the majority shareholder of Group (such
majority owners to be determined as of the date immediately following the
effective date of the Company’s plan of reorganization by the United States
Bankruptcy Court) (the “Majority Holder”) or an affiliate of the Majority
Holder; (B) the acquisition by any person or persons, other than an affiliate
of the Company, the Majority Holder or an affiliate of the Majority Holder, of
ownership of

 

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more than 50% of the
aggregate ordinary voting power of the total capital stock of the Company, or
(C) any merger, recapitalization, reorganization or other similar event having
substantially the same result as described in the preceding clauses (A) or (B).

 

(c)                                  If
the Executive resigns from his employment hereunder, or in the event of the
death of the Executive or disability of the Executive which prevents him from
performing the usual and customary duties of his employment hereunder for a
period in excess of 45 days, the Executive (or his estate) shall be entitled
only to payment of his Accrued Base Salary, if any, as of the date of such
resignation, death or disability.

 

(d)                                 Except
as otherwise provided herein, the Executive shall have no further right to
receive any other compensation, or to participate in any other plan,
arrangement, or benefit, after any termination or resignation of employment,
subject to the terms of such plans or arrangements.

 

4.1.2.                     Date of
Termination. The date of termination shall be the date of the written notice
of termination provided by the Company. 
The date of resignation shall be the date specified in the written
notice of resignation from the Executive to the Company, or such earlier date
following such notice as the Company may designate.

 

4.1.3.                     Notice of
Termination for Cause. Termination of the Executive’s employment by the
Company for Cause shall be effected by delivery of a written notice of
termination from the Company to the Executive, which notice shall specify the
event or events set  forth in Section 4.2
giving rise to such termination.

 

4.1.4.                     Notice of
Termination Without Cause. Termination of the Executive’s employment for a
Termination Without Cause shall be effected by written notice of termination
from the Company to the Executive, specifying a termination date.

 

4.2.                              Termination
for Cause. Termination for “Cause” shall mean termination by the Company of
the Executive’s employment because the Executive (a) admits to, has been
convicted of or has entered into a plea of nolo contendere to a crime punishable by
imprisonment for more than one year, (b) has materially failed to perform the
normal and customary duties required of his position of employment, such as
willful insubordination, habitual absence from work or habitual insobriety or
drug addiction, or (c) has engaged in fraudulent or illegal conduct in
connection with his employment.

 

4.3.                              Termination
Without Cause. “Termination Without Cause” shall mean any termination by
the Company of the Executive’s employment at any time during the Employment
Term for any reason other than Cause, death or disability.

 

5.                                       Intentionally
Omitted

 

6.                                       NONCOMPETITION/NONSOLICITATION
AND CONFIDENTIALITY

 

6.1.                              Noncompetition/Nonsolicitation.
The Executive shall not, directly or indirectly,

 

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as a sole proprietor,
member of a partnership, stockholder or investor, officer or director of a
corporation, or as an employee, associate, consultant or agent of any person,
partnership, corporation or other business organization or entity other than
the Company: (a) engage in, or acquire 
an interest in any entity or enterprise which engages in, any business
that is in competition with any business actively conducted by Group, the Company
or any of their respective subsidiaries within (i) the counties then served by
Group, the Company or their respective subsidiaries as well as adjacent
counties, and (ii) any other counties in which Group, the Company or their
respective subsidiaries has made a bid within 36 months prior to the
Executive’s termination and any adjacent counties in which Group, the Company
or their respective subsidiaries conducts business; (b) solicit or endeavor to
entice away from Group, the Company or any of their respective subsidiaries any
person who is, or was during the then most recent 36-month period, employed by
or associated with Group, the Company or any of their respective subsidiaries,
or (c) solicit or endeavor to entice away from Group, the Company or any of
their respective subsidiaries, or otherwise interfere with the business
relationship of Group, the Company or any of their respective subsidiaries
with, any person or entity who is, or was within the then most recent 36-month
period, a customer, client or prospect of Group, the Company or any of their
respective subsidiaries. The obligations of this Section 6.1 shall apply
for a period of 6 months following termination of employment; as well as during
employment and shall be extended by a period of time equal to any period during
which the Executive shall be in breach of such obligations.

 

6.2.                              Confidentiality.
The Executive covenants and agrees with the Company that he will not at any
time, except in performance of his obligations to the Company hereunder or with
the prior written consent of the Company, directly or indirectly, disclose any
secret or confidential information that he may learn or has learned by reason
of his association with Group, the Company or any of their respective
subsidiaries and affiliates. The term “confidential information” includes
information not previously disclosed to the public or to the trade by the
Company’s or Group’s management, or otherwise in the public domain, with
respect to the Company’s or Group’s or any of their respective affiliates’ or
subsidiaries’ products, services, facilities, applications and methods, trade
secrets and other intellectual property, systems, procedures, manuals,
confidential reports, product or service price lists, customer lists, technical
information, financial information (including the revenues, costs or profits
associated with any of the Company’s or Group’s products), business plans,
prospects or opportunities.

 

6.3.                              Exclusive
Property. The Executive confirms that all confidential information is and
shall remain the exclusive property of Group and the Company. All business
records, papers and documents kept or made by the Executive relating to the
business of Group, the Company or their respective subsidiaries shall be and
remain the property of Group and the Company.

 

6.4.                              Injunctive
Relief. Without intending to limit the remedies available to Group and the
Company, the Executive acknowledges that a breach of any of the covenants
contained in this Section 6 may result in material and irreparable injury
to Group, the Company or their respective affiliates or subsidiaries for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or
threat thereof, Group and the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary or permanent injunction restraining the
Executive from engaging in activities prohibited by this

 

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Section 6 or such
other relief as may be required specifically to enforce any of the covenants in
this Section 6. If for any reason a final decision of any court determines
that the restrictions under this Section 6 are not reasonable or that
consideration therefor is inadequate, such restrictions shall be interpreted,
modified or rewritten by such court to include as much of the duration and
scope identified in this Section 6 as will render such restrictions valid
and enforceable.

 

7.                                       Intentionally
Omitted

 

8.                                       MISCELLANEOUS

 

8.1.                              Notices.
All notices or communications hereunder shall be in writing and shall be deemed
to have been duly given when received if personally delivered; the day after it
is sent, if sent for next day delivery by a recognized overnight delivery
service; or upon receipt, if sent by certified or registered mail, return
receipt requested, addressed as follows:

 

To the Company or Group,
to it at:

 

Atlantic Express
Transportation Corp.

7 North Street

Staten Island, NY 10302

Attention: Chief
Executive Officer

 

with a copy to each of:

 

GSCP III Holdings (AE),
LLC

c/o Greenwich Street
Capital Partners, Inc.

388 Greenwich Street, 36th
Floor

New York, NY 10013

Attention: Sanjay Patel

 

and:

 

Silverman Sclar Shin
& Byrne P.C.

381 Park Avenue South,
Suite 1601

New York, NY 10016

Attention: Peter R.
Silverman

 

To the Executive:

 

Neil J. Abitabilo

36 Bradford Road

East Windsor, NJ  08520

 

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with copy to:

 

Genova Burns and Vernoia

354 Eisenhower Parkway

Plaza 2

Suite 2575

Livingston, NJ  07039

Attn:  Frank Vernoia, Esq.

 

Any such notice or
communication shall be sent certified or registered mail, return receipt
requested, addressed as above (or to such other address as such party may
designate in writing from time to time), and the actual date of receipt shall
determine the time at which notice was given.

 

8.2.                              Severability.
If a court of competent jurisdiction determines that any term or provision
hereof is invalid or unenforceable, (a) the remaining terms and provisions
hereof shall be unimpaired and (b) such court shall have the authority to
replace such invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision.

 

8.3.                              Assignment.
This Agreement shall inure to the benefit of the heirs and representatives of
the Executive and the assigns and successors of the Company, but neither this
Agreement nor any rights hereunder shall be assignable or otherwise subject to
hypothecation by the Executive. Each of Group and the Company may assign this
Agreement without prior written approval of the Executive upon the transfer of
all or substantially all of its business and/or assets (whether by purchase,
merger, consolidation or otherwise), provided that the successor to such
business and/or assets shall expressly assume and agree to perform this
Agreement.

 

8.4.                              Entire
Agreement; Amendment. This Agreement represents the entire agreement of the
parties with respect to the subject matter hereof and shall supersede any and
all previous contracts, arrangements or understandings between or among Group,
the Company and the Executive, including the Prior Agreement. The Agreement may
be amended at any time by mutual written agreement of the parties hereto.

 

8.5.                              Withholding.
The Company shall be entitled to withhold, or cause to be withheld, from
payment any amount of withholding taxes required by law with respect to
payments made to the Executive in connection with his employment hereunder.

 

8.6.                              Governing
Law. This Agreement shall be construed, interpreted, and  governed in accordance with the laws of the
State of New York without reference to principles of conflict of laws.

 

8.7.                              Survival.
Article 4 (relating to early termination), Article 6 (relating to
noncompetition, nonsolicitation and confidentiality) and Section 8.6
(relating to governing law) shall survive the termination hereof.

 

7

 

8.8.                              Headings.
Headings to sections in this Agreement are for the convenience of the parties
only and are not intended to be a part of or to affect the meaning or
interpretation hereof.

 

8.9.                              Binding
effect.   This Agreement shall be
binding upon the parties hereto, their successors in interest, and in the case
of the Executive, upon his heirs, executors or administrators.

 

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

 

IN WITNESS WHEREOF, the
Company and Group have caused this Agreement to be duly executed by their
authorized representatives and the Executive has hereunto set his hand, in each
case effective as of the day and year first above written.

 

	
   

  	
  ATLANTIC EXPRESS

  
	
   

  	
  TRANSPORTATION GROUP
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DOMENIC GATTO

  	
   

  
	
   

  	
   

  	
  Name: Domenic Gatto

  
	
   

  	
   

  	
  Title:   Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  ATLANTIC EXPRESS

  
	
   

  	
  TRANSPORTATION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DOMENIC GATTO

  	
   

  
	
   

  	
   

  	
  Name: Domenic Gatto

  
	
   

  	
   

  	
  Title:   Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  /s/ NEIL J. ABITABILO

  	
   

  
	
   

  	
  Neil J. Abitabilo

  

 

8Exhibit 10.6

 

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

 

Witnesseth:

 

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

 

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

 

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

 

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

 

2.                                       Services.

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

5.                                       Term,
etc.

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

3

 

	
  If to the Company, to:

  	
   

  
	
   

  	
   

  
	
  Atlantic Express Transportation Group Inc.

  	
   

  
	
  7 North Street

  	
   

  
	
  Staten Island, NY  10302

  	
   

  
	
  Fax: 718-442-5105

  	
   

  
	
  Telephone: 718-442-7000

  	
   

  
	
  Attention: Chairman of the Board of Directors

  	
   

  
	
   

  	
   

  
	
  If to the Advisor, to:

  	
   

  
	
   

  	
   

  
	
  c/o GSC Partners

  	
   

  
	
  12 East 49th Street, Suite 3200

  	
   

  
	
  New York, New York 10017

  	
   

  
	
  Attention: Sanjay H. Patel

  	
   

  
	
  Telephone:

  	
  212.884.6200

  
	
  Facsimile:

  	
  212.884.6184

  
			

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

15.                                 Amendment; Waivers.
No amendment, modification, supplement or discharge of this Agreement, and no
waiver hereunder, shall be valid or binding unless set forth in writing and
duly executed by the party against whom enforcement of the amendment,
modification, supplement, discharge or waiver is sought, and acknowledged by
the other party. Any such waiver shall constitute a waiver only with respect to
the specific matter described in such writing and shall in no way impair the
rights of the party granting such waiver in any other respect or at any other
time. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party may otherwise have at law or
in equity or otherwise.

 

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

 

[Signature
page follows.]

 

5

 

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

 

	
   

  	
  Company:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Atlantic Express Transportation Group Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DOMENIC
  GATTO

  	
   

  
	
   

  	
  Print name:

  	
  Domenic
  Gatto

  	
   

  
	
   

  	
  Print title:

  	
  President,
  CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Advisor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GSCP, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SANJAY
  H. PATEL

  
	
   

  	
  Print name:

  	
  Sanjay H.
  Patel

  
	
   

  	
  Print title:

  	
   

  
								

 

Advisory Services Agreement

 

6

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