ATLANTIC EXPRESS TRANSPORTATION CORP
EXHIBIT 10.1
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<DESCRIPTION>EXHIBIT 10.1
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit 10.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="jw9353_amendment_no._3_to_second_amen__ame02827"> </A>
<A NAME="toc_jw9353_1"> </A>
<BR></FONT><FONT SIZE=2><B>AMENDMENT NO. 3 TO SECOND AMENDED<BR>  AND RESTATED LOAN AND SECURITY AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendment
No.&nbsp;3, dated as of October&nbsp;14, 2004, by and among Congress Financial Corporation, in its capacity as agent (in such capacity, "Agent") acting for and on behalf of
Lenders (as hereinafter defined), Atlantic Express Transportation Corp. a New York corporation ("AETC"), Amboy Bus Co.,&nbsp;Inc., a New York corporation ("Amboy"), Atlantic Express
Coachways,&nbsp;Inc., a New Jersey corporation ("Coachways"), Atlantic Express of L.A.,&nbsp;Inc. a California corporation ("AELA"), Atlantic Express of Missouri Inc,. a Missouri corporation ("AE
Missouri"), Atlantic Express of New Jersey,&nbsp;Inc., a New Jersey corporation ("AENJ"), Atlantic Express of Pennsylvania,&nbsp;Inc., a Delaware corporation ("AEP"), Atlantic-Hudson,&nbsp;Inc.
a New York corporation ("AH"), Atlantic Paratrans,&nbsp;Inc. a New York corporation ("AP"), Atlantic Paratrans of NYC,&nbsp;Inc. a New York corporation ("APNY"), Atlantic Queens Bus Corp. a New
York corporation ("AQ"), Block 7932,&nbsp;Inc. a New York corporation ("Block"), Brookfield Transit&nbsp;Inc., a New York corporation ("Brookfield"), Courtesy Bus Co.,&nbsp;Inc., a New York
corporation ("Courtesy"), G.V.D. Leasing Co.,&nbsp;Inc. a New York corporation ("GVD"), 180 Jamaica Corp. a New York corporation ("Jamaica"), Merit Transportation Corp. a New York corporation
("Merit"), Metro Affiliates,&nbsp;Inc., a New York corporation ("Metro"), Metropolitan Escort Service,&nbsp;Inc. a New York corporation ("Escort"), Midway Leasing&nbsp;Inc. a New York
corporation ("Midway"), Staten Island Bus,&nbsp;Inc. a New York corporation ("SI-Bus"), Temporary Transit Service,&nbsp;Inc. a New York corporation ("TTS"), 201 West Sotello
Realty,&nbsp;Inc. a California corporation ("Sotello"), Wrightholm Bus Line,&nbsp;Inc. a Vermont corporation ("Wrightholm"), Jersey Business Land Co.,&nbsp;Inc., a New Jersey corporation
("JBL"), Atlantic Transit Corp. a New York corporation ("ATC"), Airport Services,&nbsp;Inc. a Massachusetts corporation ("Airport"), Atlantic Express New England,&nbsp;Inc. a
Massachusetts corporation ("AE-NE"), Atlantic Express of California,&nbsp;Inc. a California corporation ("AE-CA"), Atlantic Express of Illinois,&nbsp;Inc. an Illinois
corporation ("AE-I"), Atlantic Paratrans of Arizona,&nbsp;Inc. an Arizona corporation ("AP-AZ"), Fiore Bus Service,&nbsp;Inc. a Massachusetts corporation ("Fiore"), Groom
Transportation,&nbsp;Inc. a Massachusetts corporation ("Groom"), James McCarthy Limo Service,&nbsp;Inc. a Massachusetts corporation ("Limo"), K. Corr,&nbsp;Inc. a New York corporation ("Corr"),
McIntire Transportation,&nbsp;Inc. a Massachusetts corporation ("McIntire"), Mountain Transit,&nbsp;Inc. a Vermont corporation ("Mountain"), Jersey Business Land Co.,&nbsp;Inc. a New Jersey
corporation (JBL"), R. Fiore Bus Service,&nbsp;Inc. a Massachusetts corporation ("FBS"), Raybern Bus Service,&nbsp;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&nbsp;&amp; Son,&nbsp;Inc. a Massachusetts corporation ("McCarthy"), T-NT Bus
Service,&nbsp;Inc., a New York corporation ("TNT"),
Transcomm,&nbsp;Inc., a Massachusetts corporation ("Transcomm") and Winsale,&nbsp;Inc., a New Jersey corporation ("Winsale", and together with AETC, Coachways, Amboy, AELA, AE Missouri, AENJ, AEP,
AP, APNY, AQ, Block, Brookfield, Courtesy, GVD, Jamaica, Merit, Metro, Escort, Midway, SI-Bus, TTS, Sotello, Wrightholm, ATC, Airport, AE-NE, AE-CA,
AE-I, AP-AZ, Fiore, Groom, Limo, Corr, McIntire, Mountain, JBL, FBS, RBS, RBC, REC, McCarthy, TNT, and Transcomm, each individually a "Borrower" and collectively, "Borrowers"),
and Central New York Reorganization Corp. (f/k/a Central New York Coach Sales&nbsp;&amp; Service,&nbsp;Inc.), a New York corporation ("Central"), Jersey Bus Sales,&nbsp;Inc., a New Jersey
corporation ("Jersey" and together with Central, each individually a "Guarantor" and collectively, "Guarantors"). </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><I>W I T N E S S E T H</I></FONT><FONT SIZE=2>: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
Agent, Lenders, Borrowers and Guarantors have entered into financing arrangements pursuant to which Agent and Lenders may make loans and advances and provide other financial
accommodations to Borrowers as set forth in the Second Amended and Restated Loan and Security Agreement, dated as of April&nbsp;22, 2004, by and among Agent, Borrowers, Guarantors and the financial
institutions from time to time parties thereto as lenders ("Lenders"), whether by execution thereof or of an Assignment and Acceptance, as amended by Amendment No.&nbsp;1 to Second Amended and
Restated Loan and Security Agreement, dated as of June&nbsp;14, 2004, by and among Borrowers, Guarantors, Agent and Lenders, as amended by Amendment No.&nbsp;2 to Second Amended and Restated Loan
and Security Agreement, dated as of September&nbsp;15, 2004, by and among Borrowers, Guarantors, Agent and Lenders,(as amended hereby and as the same may hereafter be further amended, modified,
supplemented, extended, renewed, restated or replaced the "Loan Agreement", and together with all agreements, documents and instruments at any time executed and/or delivered in connection therewith or
related thereto, as from time to time amended, modified, supplemented, extended, renewed, restated or replaced, collectively, the "Financing Agreements"). All capitalized terms used herein shall have
the meanings assigned thereto in the Loan Agreement and the other Financing Agreements, unless otherwise defined herein; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
Borrowers have requested that Agent and Lenders make certain amendments to the Loan Agreement and Agent and Lenders are willing to agree to such requests, subject to the terms
and conditions contained herein; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
by this Amendment No.&nbsp;3, Agent, Lenders, Borrowers and Guarantors wish and intend to evidence such amendments. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained herein, the parties hereto agree as follows: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Additional Definitions.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As used herein, the following terms shall have the respective meanings given to them
below: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;"Amendment
No.&nbsp;3" shall mean this Amendment No.&nbsp;3 to Second Amended and Restated Loan and Security Agreement, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;"Junior
Participant" shall have the meaning set forth in the Junior Participation Agreement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;"Junior
Participation" shall mean the amount of the Junior Participation purchased by Junior Participants from Lender pursuant to the Junior Participation Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;"Junior
Participation Agreement" shall mean the Junior Participation Agreement between Congress, GSCP II Holdings (AE), L.L.C. and GSC Recovery II, L.P., Junior
Participants, dated as of date hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;"Supplemental
Loan Interest Rate" shall mean, a rate equal to twelve (12%) percent per annum. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;"Supplemental
Loan Limit" shall mean an amount not to exceed $3,500,000, as such amount may be permanently reduced by payments pursuant to Section&nbsp;4(a) of
Amendment No.&nbsp;3 through and including the Supplemental Loan Termination Date and zero at all times thereafter. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;"Supplemental
Loans" shall mean the loans made by Congress to or for the benefit of Borrowers as set forth in Section&nbsp;4 of Amendment No.&nbsp;3. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;"Supplemental
Loan Termination Date" shall mean the earlier of (a)&nbsp;the date of repayment of the Supplemental Loan pursuant to the terms of Section&nbsp;4 hereof
or the Termination Date as set forth in Section&nbsp;13.1.of the Loan Agreement. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Amendment to Definitions.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All references to the term "Loans" in the Loan Agreement and the other Financing
Agreements shall be deemed and each such reference is hereby amended to include, in addition and not in limitation, the Supplemental Loans. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Interpretation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Amendment No.&nbsp;3, unless otherwise defined herein, all terms used
herein, including, but not limited to, those terms used and/or defined in the recitals above, shall have the respective meanings assigned to such terms in the Loan Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Supplemental Loans.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;In
addition to the Revolving Loans which may be made by Lenders to Borrowers pursuant to Section&nbsp;2.1 of the Loan Agreement, Congress, as Lender shall make a
supplemental loan to Borrowers in an amount equal to $3,500,000. Interest shall be payable monthly on the Supplemental Loan at the Supplemental Loan Interest Rate. Agent may, at its option, apply
payments in respect of the Loans received by Agent, to the Supplemental Loan or the Loans other than the Supplemental Loan or any of the other Obligations in such order and manner as Agent shall from
time to time determine. Notwithstanding the foregoing, Congress shall, upon one (1)&nbsp;days notice to Agent, be entitled to receive payment of any amount equal to the outstanding principal balance
of the Supplemental Loan and accrued and unpaid interest thereon at the Supplemental Loan Interest Rate, conditioned upon the following being satisfied: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;the
Borrowers average Excess Availability for the Business Days included in the thirty (30)&nbsp;day period immediately prior to the date of repayment of the
Supplemental Loan, and the Excess Availability for each of the three (3)&nbsp;Business Days immediately prior to the date of repayment of the Junior Participation or portion thereof, is not less
than $5,000,000; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;No
Event of Default exists under the Loan Agreement. </FONT></P>

</UL>

<P><FONT SIZE=2>Borrowers
authorize Agent, upon satisfaction of the foregoing conditions to make a Revolving Loan in the amount necessary to repay the Supplemental Loan without further notice to Borrowers and
authorize Agent to charge the loan account of Borrowers therefor. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Except
in Agent's discretion, Borrowers shall not have any right to request, and Lenders shall not make, any Supplemental Loans in excess of the Supplemental Loan Limit
as then in effect or at any time on or after the Supplemental Loan Termination Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;The
Supplemental Loan shall be secured by all Collateral and shall bear interest at the Supplemental Loan Interest Rate. Interest shall accrue and be due and payable in
respect of the Supplemental Loan in accordance with Section&nbsp;3.1 (d)&nbsp;of the Loan Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Unless
sooner demanded by the Agent or Lenders in accordance with terms of the Loan Agreement or the other Financing Agreements, all outstanding and unpaid Obligations
arising pursuant to the Supplemental Loan (including, but not limited to, principal, interest, fees, costs, expenses and other charges in respect thereof payable by Borrowers to Lenders) shall
automatically, without notice or demand, be absolutely and unconditionally due and payable and Borrowers shall pay to Agent for the benefit of Congress Financial Corporation and Lenders in cash or
other immediately available funds all such Obligations, on the Supplemental Loan Termination Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Borrowers
acknowledge and agree that, notwithstanding anything to the contrary contained in the Loan Agreement or the other Financing Agreements, the failure of
Borrowers to pay all of the Obligations arising pursuant to the Supplemental Loans on the Supplemental Loan Termination Date, shall constitute an Event of Default. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Conditions Precedent.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The effectiveness of Amendment No.&nbsp;3 is further conditioned upon the
satisfaction of each of the following conditions precedent in a manner satisfactory to Agent and Lenders: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;No
Event of Default, or act, condition or event which with notice or passage of time or both would constitute an Event of Default shall exist or have occurred; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Congress
shall have received an original of the Junior Participation Agreement, duly authorized, executed and delivered by the Junior Participants in form and substance
satisfactory to Congress; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Congress
shall have received the amount of the Junior Participation purchased by the Junior Participants pursuant to the Junior Participation Agreement; and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Agent
shall have received an original of this Amendment No.&nbsp;3 duly authorized, executed and delivered by the parties hereto. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Additional Representations, Warranties and Covenants.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Borrowers represent, warrants and covenant with and to
Agent and Lenders as follows, which representations, warranties and covenants are continuing and shall survive the execution and delivery hereof, and the truth and accuracy of, or compliance with
each, together with the representations, warranties and covenants in the other Financing Agreements, being a continuing condition of the making of Loans by Agent to Borrowers: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;No
Event of Default or act, condition or event which with notice or passage of time or both would constitute an Event of Default exists or has occurred as of the date of
this Amendment No.&nbsp;3 (after giving effect to the amendments to the Financing Agreements made by this Amendment No.&nbsp;3); and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;This
Amendment No.&nbsp;3 has been duly executed and delivered by Borrowers and is in full force and effect as of the date hereof and the agreements and obligations
of Borrowers contained herein constitute legal, valid and binding obligations of such Borrower enforceable against such Borrower in accordance with their respective terms. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Miscellaneous.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement; Ratification and Confirmation of the Financing Agreements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Amendment No.&nbsp;3
contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous term sheets, proposals, discussions, negotiations, correspondence,
commitments and communications between or among the parties concerning the subject matter hereof. This Amendment No.&nbsp;3 may not be modified or any provision waived, except in writing signed by
the party against whom such modification or waiver is sought to be enforced. Except for those provisions specifically modified or waived pursuant hereto,, the Financing Agreements are hereby ratified,
restated and confirmed by the parties hereto as of the effective date hereof. To the extent of conflict between the terms of this Amendment No.&nbsp;3 and the Financing Agreements, the terms of this
Amendment No.&nbsp;3 shall control. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Governing Law.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Amendment No.&nbsp;3 and the rights and obligations hereunder of each of the parties
hereto shall be governed by and interpreted and determined in accordance with the internal laws of the State of New York, without regard to principles of conflicts of law. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Binding Effect.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Amendment No.&nbsp;3 shall be binding upon and inure to the benefit of each of the
parties hereto and their respective successors and assigns. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Counterparts.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Amendment No.&nbsp;3 may be executed in any number of counterparts, but all of such
counterparts shall together constitute but one and the same agreement. In making proof of this Amendment No.&nbsp;3 it shall not be necessary to produce or account for more than one counterpart
thereof signed by each of the parties hereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Headings.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The headings listed herein are for convenience only and do not constitute matters to be construed
in interpreting this Amendment No.&nbsp;3. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK] </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, Agent, Lenders, Borrowers and Guarantors have caused these presents to be duly executed as of the day and year first above written. </FONT></P>

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<TD WIDTH="49%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><I>BORROWERS</I></FONT></TD>
</TR>
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<TD WIDTH="49%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2><BR>
Atlantic Express Transportation Corp.<BR>
Amboy Bus Co.,&nbsp;Inc.<BR>
Atlantic Express Coachways,&nbsp;Inc.<BR>
Atlantic Express of L.A.&nbsp;Inc.<BR>
Atlantic Express of Missouri&nbsp;Inc.<BR>
Atlantic Express of New Jersey,&nbsp;Inc.<BR>
Atlantic Express of Pennsylvania,&nbsp;Inc.<BR>
Atlantic-Hudson,&nbsp;Inc.<BR>
Atlantic Paratrans,&nbsp;Inc.<BR>
Atlantic Paratrans of NYC,&nbsp;Inc.<BR>
Atlantic Queens Bus Corp.<BR>
Block 7932,&nbsp;Inc.<BR>
Brookfield Transit&nbsp;Inc.<BR>
Courtesy Bus Co.,&nbsp;Inc.<BR>
Jersey Business Land Co.,&nbsp;Inc.<BR>
G.V.D. Leasing Co.,&nbsp;Inc.<BR>
180 Jamaica Corp.<BR>
Merit Transportation Corp.<BR>
Metro Affiliates,&nbsp;Inc.<BR>
Metropolitan Escort Service,&nbsp;Inc.<BR>
Midway Leasing&nbsp;Inc.<BR>
Staten Island Bus,&nbsp;Inc.<BR>
Temporary Transit Service,&nbsp;Inc.<BR>
201 West Sotello Realty,&nbsp;Inc.<BR>
Wrightholm Bus Line,&nbsp;Inc.<BR>
Atlantic Transit Corp.<BR>
Airport Services,&nbsp;Inc.<BR>
Atlantic Express New England,&nbsp;Inc.<BR>
Atlantic Express of California,&nbsp;Inc.<BR>
Atlantic Express of Illinois,&nbsp;Inc.<BR>
Atlantic Paratrans of Arizona,&nbsp;Inc.<BR>
Fiore Bus Service,&nbsp;Inc.<BR>
Groom Transportation,&nbsp;Inc.<BR>
James McCarty Limo Service,&nbsp;Inc.<BR>
K. Corr,&nbsp;Inc.<BR>
McIntire Transportation,&nbsp;Inc.<BR>
Mountain Transit,&nbsp;Inc.<BR>
R. Fiore Bus Service,&nbsp;Inc.<BR>
Raybern Bus Service,&nbsp;Inc.</FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Raybern Capital Corp.<BR>
Raybern Equity Corp.<BR>
Robert L. McCarthy&nbsp;&amp; Son,&nbsp;Inc.<BR>
T-NT Bus Service,&nbsp;Inc.<BR>
Transcomm,&nbsp;Inc.<BR>
Winsale,&nbsp;Inc.</FONT></TD>
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&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
/s/ Domenic Gatto</FONT><HR NOSHADE></TD>
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<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2><BR>
Title:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
President</FONT><HR NOSHADE></TD>
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<TD COLSPAN=4><FONT SIZE=2><I>GUARANTORS</I></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
JERSEY BUS SALES,&nbsp;INC.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="6%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2><BR>
/s/ Domenic Gatto</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="52%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="6%"><FONT SIZE=2><BR>
Title:</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2><BR>
President</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="52%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
CENTRAL NEW YORK REORGANIZATION CORP.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="6%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2><BR>
/s/ Domenic Gatto</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="52%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="6%"><FONT SIZE=2><BR>
Title:</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2><BR>
President</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="52%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><BR><FONT SIZE=2><I>AGENT</I></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
CONGRESS FINANCIAL CORPORATION</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="6%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2><BR>
/s/ Herb Korn</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="52%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="6%"><FONT SIZE=2><BR>
Title:</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2><BR>
Vice President</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="52%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><BR><FONT SIZE=2><I>LENDER</I></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
CONGRESS FINANCIAL CORPORATION</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="6%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2><BR>
/s/ Herb Korn</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="52%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="6%"><FONT SIZE=2><BR>
Title:</FONT></TD>
<TD WIDTH="39%"><FONT SIZE=2><BR>
Vice President</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="52%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<P style='page-break-before:always'></p>
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<P><br><A NAME="04NYC9353_2">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_jw9353_1">AMENDMENT NO. 3 TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT</A></FONT><BR>
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