shl Doc 150 Filed 11/26/13 Entered 11/26/13 14:18:14 Main Document Pg 1 of 10

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1 Pg 1 of 10 AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York, New York Tel: (212) Fax: (212) Lisa G. Beckerman Rachel Ehrlich Albanese AKIN GUMP STRAUSS HAUER & FELD LLP 1333 New Hampshire Avenue, N.W. Washington, DC Tel: (202) Fax: (202) Scott L. Alberino (Admitted Pro Hac Vice) Proposed Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK Chapter 11 In re: METRO AFFILIATES, INC., et al., 1 Case No (SHL) Jointly Administered Debtors. NOTICE OF FILING OF FORM OF SECOND AMENDMENT TO RATIFICATION AGREEMENT 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal taxpayer identification number, are: 180 Jamaica Corp. (7630); Amboy Bus Co., Inc. (2369); Atlantic Escorts, Inc. (8870); Atlantic Express Coachways, Inc. (2867); Atlantic Express New England, Inc. (4060); Atlantic Express of California, Inc. (5595); Atlantic Express of Illinois, Inc. (5759); Atlantic Express of LA, Inc. (1639); Atlantic Express of Missouri, Inc. (3116); Atlantic Express of New Jersey, Inc. (8504); Atlantic Express of Pennsylvania, Inc. (0330); Atlantic Express Transportation Corp. (4567); Atlantic Queens Bus Corp. (0276); Atlantic Paratrans of NYC, Inc. (1114); Atlantic Paratrans, Inc. (3789); Atlantic Transit, Corp. (7142); Atlantic-Hudson, Inc. (5121); Block 7932, Inc. (3439); Brookfield Transit, Inc. (8247); Courtesy Bus Co., Inc. (5239); Fiore Bus Service, Inc. (1233); Groom Transportation, Inc. (7208); G.V.D. Leasing, Inc. (0595); James McCarty Limo Services, Inc. (8592); Jersey Business Land Co. Inc. (3850); K. Corr, Inc. (4233); Merit Transportation Corp. (8248); Metro Affiliates, Inc. (0142); Metropolitan Escort Service, Inc. (9197); Midway Leasing, Inc. (7793); R. Fiore Bus Service, Inc. (3609); Raybern Bus Service, Inc. (9412); Raybern Capital Corp. (6990); Raybern Equity Corp. (3830); Robert L. McCarthy & Son, Inc. (4617); Staten Island Bus, Inc. (6818); Temporary Transit Service, Inc. (0973); Atlantic Express of Upstate New York Inc. (1570); Transcomm, Inc. (4493); and Winsale, Inc. (2710). The Debtors service address at Metro Affiliates, Inc. s corporate headquarters is 7 North Street, Staten Island, NY

2 Pg 2 of 10 PLEASE TAKE NOTICE that on November 4, 2013, the above-captioned debtors and debtors in possession (collectively, the Debtors ) filed the Debtors Motion for Entry of Interim and Final Orders Pursuant to 11 U.S.C. 105, 361, 362, 363, 364 and 507 and Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (I) Authorizing the Debtors to Incur Postpetition Secured Indebtedness with Priority Over Existing Secured Indebtedness and with Administrative Superpriority, (II) Granting Liens, (III) Authorizing the Debtors to Use Cash Collateral and Providing for Adequate Protection, (IV) Modifying Automatic Stay and (V) Scheduling a Final Hearing [ECF No. 16] (the DIP Motion ), 2 to which that certain Ratification and Amendment Agreement (the Ratification Agreement ) was attached as Exhibit B. The Debtors, the DIP Lender and, with respect to section 5.8 thereof, BNYM, are parties to the Ratification Agreement. PLEASE TAKE FURTHER NOTICE that the United States Bankruptcy Court for the Southern District of New York (the Court ) approved the DIP Motion on an interim basis by so ordering the record on November 6, 2013, and on November 8, 2013, entered the Order Pursuant to 11 U.S.C. 105, 361, 362, 363, 364 and 507 and Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (I) Authorizing Debtors to Obtain Interim Post-Petition Secured Financing with Priority over Certain Existing Secured Indebtedness and with Administrative Superpriority, (II) Granting Liens, (III) Authorizing the Debtors to Use Cash Collateral and Providing for Adequate Protection; (V) Modifying the Automatic Stay and (V) Scheduling a Final Hearing [Docket No. 56] (the Interim DIP Order ). PLEASE TAKE FURTHER NOTICE that on November 15, 2013, the Debtors filed the Notice of Filing of Form of First Amendment to the Ratification Agreement [ECF No. 89] (the First RA Amendment ). In accordance with the Interim DIP Order, the First RA Amendment was executed and became effective on November 20, PLEASE TAKE FURTHER NOTICE that annexed hereto as Exhibit A is a form of the second Amendment to the Ratification Agreement (the Second RA Amendment ). PLEASE TAKE FURTHER NOTICE that pursuant to the terms of the Interim DIP Order, the Second RA Amendment will become effective two (2) business days after the later of the date the Second RA Amendment is served or the date the Second RA Amendment is filed with the Court, if no objection to the Second RA Amendment is filed during that time. In the event no objection is received in accordance with the terms of the Interim DIP Order, the Debtors expect that the Debtors and the DIP Lender will execute the Second RA Amendment. PLEASE TAKE FURTHER NOTICE that the Debtors reserve all rights to further amend, revise or supplement the Ratification Agreement, the First RA Amendment or the Second RA Amendment in accordance with the terms of the Interim DIP Order. PLEASE TAKE FURTHER NOTICE that the DIP Motion, the Ratification Agreement, the Interim DIP Order, the First RA Amendment and the Second Amendment (collectively, the DIP Documents ) are available free of charge on the Debtors website at 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the DIP Motion. 2

3 Pg 3 of 10 for a fee on the Court s website at (login and password required); or in person at the Office of the Clerk of the Bankruptcy Court, One Bowling Green, Room 511, New York, New York New York, NY Dated: November 26, 2013 /s/ Lisa G. Beckerman AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York, New York Tel: (212) Fax: (212) Lisa G. Beckerman Rachel Ehrlich Albanese AKIN GUMP STRAUSS HAUER & FELD LLP 1333 New Hampshire Avenue, N.W. Washington, DC Tel: (202) Fax: (202) Scott L. Alberino Proposed Counsel to the Debtors and Debtors in Possession 3

4 Pg 4 of 10 EXHIBIT A Form of Second RA Amendment

5 Pg 5 of 10 EXECUTION VERSION AMENDMENT NO. 2 TO RATIFICATION AND AMENDMENT AGREEMENT This AMENDMENT NO. 2 TO RATIFICATION AND AMENDMENT AGREEMENT (the Amendment No. 2 ) dated as of November 29, 2013, is by and among Wells Fargo Bank, National Association, ( Wells Fargo ), in its capacity as agent for the Lenders (in such capacity, "Agent") acting for and on behalf of the financial institutions from time to time party to the Credit Agreement as lenders (collectively with Agent, the "Lenders"), Atlantic Express Transportation Corp., a New York corporation ( Parent ), Amboy Bus Co., Inc., a New York corporation ( Amboy ), Atlantic Escorts Inc., a New York corporation ( Atlantic Escorts ), Atlantic Express Coachways, Inc., a New Jersey corporation ( Coachways ), Atlantic Express New England, Inc., a Massachusetts corporation ( AE-NE ), Atlantic Express of California, Inc., a California corporation ( AE-CA ), Atlantic Express of Illinois, Inc., an Illinois corporation ( AE- I ), Atlantic Express of L.A., Inc., a California corporation ( AELA ), Atlantic Express of Missouri Inc., a Missouri corporation ( AE Missouri ), Atlantic Express of New Jersey, Inc., a New Jersey corporation ( AENJ ), Atlantic Express of Pennsylvania, Inc., a Delaware corporation ( AEP ), Atlantic Express of Upstate New York, Inc., formerly known as TNT Bus Service, Inc., a New York corporation ( AE Upstate ), Atlantic- Hudson, Inc., a New York corporation ( AH ), Atlantic Paratrans, Inc., a New York corporation ( AP ), Atlantic Paratrans of NYC, Inc., a New York corporation ( APNY ), Atlantic Queens Bus Corp., a New York corporation ( AQ ), Atlantic Transit, Corp., a New York corporation ( ATC ), Block 7932, Inc., a New York corporation ( Block ), Brookfield Transit Inc., a New York corporation ( Brookfield ), Courtesy Bus Co., Inc., a New York corporation ( Courtesy ), Fiore Bus Service, Inc., a Massachusetts corporation ( Fiore ), Groom Transportation, Inc., a Massachusetts corporation ( Groom ), G.V.D. Leasing Co., Inc., a New York corporation ( GVD ), James McCarty Limo Service, Inc., a Massachusetts corporation ( Limo ), Jersey Business Land Co., Inc., a New Jersey corporation ( JBL ), K. Corr, Inc., a New York corporation ( Corr ), Merit Transportation Corp., a New York corporation ( Merit ), Metro Affiliates, Inc., a New York corporation ( Metro ), Metropolitan Escort Service, Inc., a New York corporation ( Metropolitan Escort ), Midway Leasing Inc., a New York corporation ( Midway ), 180 Jamaica Corp., a New York corporation ( Jamaica ), R. Fiore Bus Service, Inc., a Massachusetts corporation ( FBS ), Raybern Bus Service, Inc., a New York corporation ( RBS ), Raybern Capital Corp., a New York corporation ( RBC ), Raybern Equity Corp., a New York corporation ( REC ), Robert L. McCarthy & Son, Inc., a Massachusetts corporation ( McCarthy ), Staten Island Bus, Inc., a New York corporation ( SI-Bus ), Temporary Transit Service, Inc., a New York corporation ( TTS ), Transcomm, Inc., a Massachusetts corporation ( Transcomm ), Winsale, Inc., a New Jersey corporation ( Winsale and together with Parent, Amboy, Atlantic Escorts, Coachways, AE-NE, AE-CA, AE-I, AELA, AE Missouri, AENJ, AEP, AE Upstate, AH, AP, APNY, AQ, ATC, Block, Brookfield, Courtesy, Fiore, Groom, GVD, Limo, JBL, Corr, Merit, Metro, Metropolitan Escort, Midway, Jamaica, FBS, RBS, RBC, REC, McCarthy, SI-Bus, TTS and Transcomm, each individually a Borrower and collectively, Borrowers ).

6 Pg 6 of 10 W I T N E S S E T H: WHEREAS, each Borrower has commenced a case under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York, and each Borrower has retained possession of its assets and is authorized under the Bankruptcy Code to continue the operation of its businesses as a debtor-inpossession; WHEREAS, prior to the commencement of the Chapter 11 Cases, Agent and Lenders made loans and advances and provided other financial or credit accommodations to Borrowers secured by substantially all assets and properties of Borrowers as set forth in the Existing Financing Agreements; WHEREAS, the Bankruptcy Court has entered a Financing Order pursuant to which Agent and Lenders may make post-petition loans and advances, and provide other financial accommodations, to Borrowers on an interim basis secured by substantially all the assets and properties of Borrowers as set forth in the Financing Order and the Financing Agreements; WHEREAS, pursuant to the Financing Order, as a condition to the making of such post-petition loans, advances and other financial accommodations, Borrowers have executed and delivered that certain Ratification and Amendment Agreement, dated as of November 6, 2013, by and among Agent, Lenders, and Borrowers (the Ratification Agreement ); WHEREAS, Borrowers have requested that Agent and Lenders agree to certain amendments to the Ratification Agreement, and Agent and Lenders are willing to agree to such amendments subject to the terms and conditions contained herein. NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Agent, Lenders, and Borrowers mutually covenant, warrant and agree as follows: 1. Interpretation. For purposes of this Amendment No. 2, unless otherwise defined herein, all capitalized terms used herein shall have the meanings assigned thereto in the Ratification Agreement. 2. Amendments. 2.1 Ratification of Blocked Account Agreements. The last sentence of Section 5.4 of the Ratification Agreement is hereby amended by deleting such sentence in its entirety and replacing it with the following: In addition to the foregoing, Borrowers shall arrange to have a fully executed deposit account control agreement, in form and substance satisfactory to Agent, delivered to Agent with respect to the HSBC Reserve Account on or prior to December 6,

7 Pg 7 of Conditions Precedent. 3.1 The effectiveness of this Amendment No. 2 shall be subject to the receipt by Agent and Lenders of an original (or faxed or electronic copy) of this Amendment No. 2, duly authorized, executed and delivered by Borrowers. 4. Representations and Warranties. Borrowers represent and warrant with and to Agent and Lenders as follows, which, representations and warranties shall survive the execution and delivery hereof, the truth and accuracy of, or compliance with each, together with the representations, warranties and covenants in the other Financing Agreements, being a continuing condition of the making of any Loans by Agent and Lenders (or Agent on behalf of Lenders) to Borrowers: (a) no Default or Event of Default exists or has occurred and is continuing as of the date of this Amendment No. 2; (b) this Amendment No. 2 has been duly authorized by all necessary action on the part of each Borrower. The agreements and obligations of each of the Borrowers contained herein and therein constitute legal, valid and binding obligations of each of the Borrowers, enforceable against them in accordance with their terms; (c) this Amendment No. 2 does not constitute a material amendment to the Financing Agreements as provided for in Section of the Interim Financing Order, and is fully effective, enforceable and binding on the Borrowers in accordance with Section of the Interim Financing Order; (d) the execution, delivery and performance of Amendment No. 2 are all within each Borrower s corporate or limited liability company powers; and (e) all of the representations and warranties (other than those set forth in and Section 8.7(a) (solely with respect to any default arising from the failure to deliver financial statements, reports, other analysis and other documents with respect to the fiscal year ended June 30, 2013 under any purchase money mortgage financing agreement, capital lease or operating lease with GE Capital Commercial Inc., People s Capital and Leasing Corp., Merchants Automotive Group, Allegiance Capital, LLC, Wells Fargo Equipment Finance, Inc., Fleet Financing Resources, LLC, A-Z Resources, LLC, Signature Financial LLC, All Points Equipment Leasing, L.L.C. and Nations Fund I, Inc.) and Section 8.12(d) of the Credit Agreement) set forth in the Credit Agreement and the other Financing Agreements, each as amended hereby, are true and correct in all respects on and as of the date hereof, as if made on the date hereof, except to the extent any such representation or warranty is made as of a specified date, in which case such representation or warranty shall have been true and correct as of such date. 5. Miscellaneous. 5.1 Further Assurances. Each Borrower shall, at its expense, at any time or times duly execute and deliver, or shall use its best efforts to cause to be duly executed and delivered, such further agreements, instruments and documents, including, 3

8 Pg 8 of 10 without limitation, additional security agreements, collateral assignments, UCC financing statements or amendments or continuations thereof, landlord's or mortgagee's waivers of liens and consents to the exercise by Agent and Lenders of all the rights and remedies hereunder, under any of the other Financing Agreements, any Financing Order or applicable law with respect to the Collateral, and do or use its best efforts to cause to be done such further acts as may be reasonably necessary or proper in Agent's opinion to evidence, perfect, maintain and enforce the security interests of Agent and Lenders, and the priority thereof, in the Collateral and to otherwise effectuate the provisions or purposes of this Amendment No. 2, the Ratification Agreement, any of the other Financing Agreements or the Financing Order. Upon the request of Agent, at any time and from time to time, each Borrower shall, at its cost and expense, do, make, execute, deliver and record, register or file updates to the filings of Agent and Lenders with respect to the Intellectual Property with the United States Patent and Trademark Office, the financing statements, mortgages, deeds of trust, deeds to secure debt, and other instruments, acts, pledges, assignments and transfers (or use its best efforts to cause the same to be done) and will deliver to Agent and Lenders such instruments evidencing items of Collateral as may be requested by Agent. 5.2 Headings. The headings used herein are for convenience only and do not constitute matters to be considered in interpreting this Amendment No Counterparts. This Amendment No. 2 may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which shall together constitute one and the same agreement. In making proof of this Amendment No. 2, it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the parties hereto. Delivery of an executed counterpart of this Amendment No. 2 by telefacsimile or other electronic method of transmission shall have the same force and effect as delivery of an original executed counterpart of this Amendment No. 2. Any party delivering an executed counterpart of this Amendment No. 2 by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Amendment No. 2, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment No. 2 as to such party or any other party. 5.4 Additional Events of Default. The parties hereto acknowledge, confirm and agree that the failure of any Borrower to comply with any of the covenants, conditions and agreements contained herein or in any other agreement, document or instrument at any time executed by such Borrower in connection herewith shall constitute an immediate Event of Default under the Financing Agreements. 5.5 Costs and Expenses. Borrowers shall pay to Agent and Lenders on demand all costs and expenses that Agent or Lenders pay or incurs in connection with the negotiation, preparation, consummation, administration, enforcement, defense (whether in connection with any adversary proceeding or otherwise) and termination of this Amendment No. 2 and the other Financing Agreements and the Financing Order, all in accordance with Section 10.6 of the Ratification Agreement. The foregoing shall not be construed to limit any other provisions of the Financing Agreements regarding costs and 4

9 Pg 9 of 10 expenses to be paid by Borrowers. All sums provided for in this Section 5.5 shall be part of the Obligations, shall be payable on demand, and shall accrue interest after demand for payment thereof at the highest rate of interest then payable under the Financing Agreements. Agent is hereby irrevocably authorized to charge any amounts payable hereunder directly to any of the account(s) maintained by Agent with respect to any Borrower. 5.6 Effectiveness. This Amendment No.2 shall become effective upon (a) the execution hereof by Agent, Lenders and Borrowers and (b) compliance with the procedure set forth in Section of the Interim Financing Order. 5.7 Binding Agreement. This Amendment No. 2 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. 5.8 Effect of this Agreement. Except as modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and in all other respects the Financing Agreements are hereby specifically ratified, restated and confirmed by all parties hereto as of the date hereof. To the extent of conflict between the terms of this Amendment No. 2 and the other Financing Agreements, the terms of this Amendment No. 2 shall control. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 5

10 Pg 10 of 10 IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be duly executed as of the day and year first above written. AGENT WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent and a Lender By: Title: BORROWERS: ATLANTIC EXPRESS TRANSPORTATION CORP. AMBOY BUS CO., INC. ATLANTIC ESCORTS INC. ATLANTIC EXPRESS COACHWAYS, INC. ATLANTIC EXPRESS NEW ENGLAND, INC. ATLANTIC EXPRESS OF CALIFORNIA, INC. ATLANTIC EXPRESS OF ILLINOIS, INC. ATLANTIC EXPRESS OF L.A., INC. ATLANTIC EXPRESS OF MISSOURI INC. ATLANTIC EXPRESS OF NEW JERSEY, INC. ATLANTIC EXPRESS OF PENNSYLVANIA, INC. ATLANTIC EXPRESS OF UPSTATE NEW YORK, INC. ATLANTIC-HUDSON, INC. ATLANTIC PARATRANS, INC. ATLANTIC PARATRANS OF NYC, INC. ATLANTIC QUEENS BUS CORP. ATLANTIC TRANSIT, CORP. BLOCK 7932, INC. BROOKFIELD TRANSIT INC. COURTESY BUS CO., INC. FIORE BUS SERVICE, INC. GROOM TRANSPORTATION, INC. G.V.D. LEASING CO., INC. JAMES MCCARTY LIMO SERVICE, INC. JERSEY BUSINESS LAND CO., INC. K. CORR, INC. MERIT TRANSPORTATION CORP. METRO AFFILIATES, INC. METROPOLITAN ESCORT SERVICE, INC. MIDWAY LEASING INC. 180 JAMAICA CORP. R. FIORE BUS SERVICE, INC. RAYBERN BUS SERVICE, INC. RAYBERN CAPITAL CORP. RAYBERN EQUITY CORP. ROBERT L. MCCARTHY & SON, INC. STATEN ISLAND BUS, INC. TEMPORARY TRANSIT SERVICE, INC. TRANSCOMM, INC. WINSALE, INC. as Debtors and Debtors-in-Possession By: Title: