Fourth Amendment to Security and Pledge Agreement among Atlantic Express Transportation Group Inc., Subsidiaries, and The Bank of New York

Summary

This amendment updates the Security and Pledge Agreement originally made between Atlantic Express Transportation Group Inc., its subsidiaries, and The Bank of New York as trustee for noteholders. The amendment expands the definitions of collateral to include additional types of equipment and real property, clarifies the scope of the security interest, and updates references to related loan agreements. The parties agree to these changes to ensure the security interests remain current and enforceable under the terms of their financing arrangements.

EX-10.34 3 0003.txt FOURTH AMENDMENT TO THE PLEDGE AGREEMENT Exhibit 10.34 FOURTH AMENDMENT TO THE SECURITY AND PLEDGE AGREEMENT, WITH ADDENDA Fourth Amendment, dated as of December 22, 2000 (the "Fourth Amendment") to the Security and Pledge Agreement (the "Security Agreement"), dated as of February 4, 1997, among Atlantic Express Transportation Group Inc., a New York corporation (together with its successors and assigns, "AETG"), Atlantic Express Transportation Corp., a New York corporation and a subsidiary of AETG (together with its successors and assigns, the "Company"), the subsidiaries of the Company that are party thereto and The Bank of New York, as the trustee under the Indenture (as defined below) for the benefit of the holders of the Notes (as defined below)(together with its successors and assigns, the "Secured Party"), as amended by the First Amendment to the Security and Pledge Agreement, dated as of August 14, 1997, the Second Amendment to the Security and Pledge Agreement, dated as of December 12, 1997, and the Third Amendment to the Security and Pledge Agreement, dated as of April 28, 1999, each among AETG, the Company, the subsidiaries of the Company that are party thereto and the Secured Party. Capitalized terms not defined herein shall have the respective meaning set forth for such terms in the Security Agreement. WHEREAS, the parties to the Security Agreement desire to amend the Security Agreement as set forth below. NOW, THEREFORE, in consideration of the agreements set forth herein and for other and good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. New definitions are added to Section 1.1 of the Security Agreement to read as follows: "Equipment" shall mean all of the Company's and each Restricted Subsidiary's now owned or hereafter acquired equipment, machinery, computers and computer hardware and software (whether owned or licensed), vehicles, tools, furniture, fixtures, all attachments, accessions and property now or hereafter affixed thereto or used in connection therewith, and substitutions and replacements thereof, wherever located. "Real Property" shall mean all now owned or hereafter acquired real property of the Company or any Restricted Subsidiary, together with all buildings, structures, and other improvements located thereon and all licenses, easements and appurtenances relating thereto, wherever located. 2. The term "Loan Agreement" as defined in Section 1.1 of the Security Agreement is hereby amended and restated in its entirety, as follows: "Loan Agreement" shall mean the Loan and Security Agreement, dated December 22, 2000, among the Lender, certain subsidiaries of the Company, as borrowers and the Company, as guarantor. 3. Section 2.1 of the Security Agreement is hereby amended and restated in its entirety, as follows: 2.1 Security Interest. As security for the prompt and complete payment and performance in full of all the Obligations, the Company and each Restricted Subsidiary hereby grants to the Secured Party, for the benefit of itself and the Holders, a security interest in and continuing lien on, all of its right, title and interest in, to and under the following, in each case, whether now owned or existing or hereafter acquired or arising, and wherever located (all of which being the "NonSecurity Collateral"): (i) Accounts; (ii) subject to the final paragraph of this Section 2.1, all present and future contract rights (including, without limitation, all rights under service contracts pursuant to which the Company or any Restricted Subsidiary renders to its customers, which rights shall include any and all rights to all retainages which may arise thereunder), general intangibles (including but not limited to, tax and duty refunds, patents, trade secrets, trademarks, service marks, copyrights, trade names, applications and registrations for the foregoing, goodwill, processes, drawings, blueprints, customer lists, licenses, whether as licensor or licensee, choses in action and other claims and existing and future leasehold interests in Equipment, Real Property and fixtures), chattel paper, documents, instruments, letters of credit, bankers' acceptances and guaranties; (iii) all present and future monies, securities, credit balances, deposits, deposit accounts and other property of the Company or any Restricted Subsidiary now or hereafter held or received by or in transit to Lender or its Affiliates or at any other depository or other institution from or for the account of the Company or any Restricted Subsidiary, whether for safekeeping, pledge, custody, transmission, collection or otherwise, and all present and future liens, security interests, rights, remedies, title and interest in, to and in respect of Accounts and other Non-Security Collateral, including, without limitation, (a) rights and remedies under or relating to guaranties, contracts or suretyship, letters of credit and credit and other insurance related to the NonSecurity Collateral, (b) rights of stoppage in transit, replevin, repossession, reclamation and other rights and remedies of an unpaid vendor, lienor or secured party, (c) goods described in invoices, documents, contracts or instruments with respect to, or otherwise representing or evidencing, Accounts or other NonSecurity Collateral, including, without limitation, returned, repossessed and reclaimed goods, and (d) deposits by and property of account debtors or other persons securing the obligations of account debtors; (iv) Inventory; (v) Equipment, including without limitation, all buses and other vehicles, all attachments, accessions and property now or hereafter affixed thereto or used in connection therewith, and substitutions and replacements thereof, wherever located; (vi) Real Property (vii) Records; and (viii) all products and proceeds of the foregoing, in any form, including, without limitation, insurance proceeds and all claims against third parties for loss or damage to or destruction of any or all of the foregoing. In no event shall the Secured Party's security interest in a contract or agreement of the Company or any Restricted Subsidiary be deemed to be a present assignment, transfer, conveyance, subletting or other disposition (an "Assignment") of such contract or agreement prohibiting, or requiring any consent or establishing any other condition for, an assignment thereof by the Company or any Restricted Subsidiary. The Secured Party acknowledges that any sale, transfer or Assignment of any such contract or agreement upon the enforcement of the Secured Party's security interest therein would be subject to the terms of such contract or agreement governing Assignment, except as otherwise provided in Section 9-318 of the UCC. The Securing Party's security interest in each contract or agreement of the Company or any Restricted Subsidiary shall attach from the date hereof to all of the following, whether now existing or hereafter arising or acquired: (i) all of the Company's and each Restricted Subsidiary's Accounts and general intangibles for money due or to become due arising under such contract or agreement; (ii) all proceeds paid or payable to the Company or any Restricted Subsidiary from any sale, transfer or assignment of such contract or agreement and all rights to receive such proceeds; and (iii) all other rights and interests of the Company and any Restricted Subsidiary in, to and under such contract or agreement to the fullest extent that attachment thereto would not be a violation of such contract or agreement directly or indirectly entitling a party thereto (other than the Company or any Restricted Subsidiary or Affiliate thereof) to a legally enforceable right to terminate such contract or agreement. 4. Subsection (b) of Section 3.1 of the Security Agreement is hereby amended and restated in its entirety, as follows: (b) The security interests in the Collateral granted to the Secured Party hereunder will constitute perfected security interests therein, to the extent that such security interests may be perfected by the actions described in subsections (i), (ii), (iii), (iv) and (v) hereof, superior and prior to all Liens and rights or claims of all other Persons, subject only to the terms of (x) the Intercreditor Agreement and (y) the $2.2 million aggregate principal amount notes and mortgages (the "Central Notes and Mortgages") relating to certain Real Property ("Central Real Properties") acquired in the acquisition of Central New York Coach Sales & Service, Inc., a New York corporation, and Jersey Bus Sales, Inc., a New Jersey corporation, upon (i) the filing of financing statements naming the Company or any Restricted Subsidiary as "debtor" and the Secured Party as "secured party" and describing the Non-Security Collateral in the filing offices set forth on Schedule II hereto, (ii) to the extent not subject to Article 9 of the Uniform Commercial Code in any applicable jurisdiction, the recordation of the security interests granted hereunder in patents, trademarks and copyrights in the applicable patent, trademark and copyright registries and the registration of all copyrights, (iii) the delivery of certificates and instruments evidencing all of the Securities identified on Schedule I hereto to the Secured Party, indorsed in blank or accompanied by undated Stock Powers duly executed in blank, as the case may be, with respect thereto (iv) naming the Secured Party as a "lienholder" on any Certificates of Titles issued by the appropriate state agency on a motor vehicle constituting Equipment which is less than eight years old (a "Qualified Vehicle"), and (v) recordation of a mortgage, deed or trust for any Real Property, other than Central Real Properties, with the real estate records of the jurisdiction where such Real Property is located, as the case may be, with respect thereto. 5. Section 3.2 of the Security Agreement is hereby amended and restated in its entirety, as follows: 3.2 No Liens; Other Financing Statements. (a) Except for (i) the Lien granted to the Secured Party hereunder, (ii) the Lien granted to the Lender under the Loan Agreement and (iii) the Lien granted under the Central Notes and Mortgages, the Company and each Restricted Subsidiary owns and, as to all Collateral whether now existing or hereafter acquired will continue to own, each item of the Collateral free and clear of all Liens, rights and claims, and the Company and each Restricted Subsidiary shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Secured Party on the Collateral entitled to priority therein under applicable law. (b) No financing statement or other evidence of Lien covering or purporting to cover any of the Collateral is on file and is effective in any public office other than (i) financing statements filed or to be filed in connection with the security interests granted to the Secured Party hereunder, (ii) financing statements filed in connection with the Loan Agreement, (iii) financing statements and mortgages filed in connection with the Central Notes and Mortgages, and (iv) financing statements or liens on vehicles, in each case, for which proper, executed termination statements have been delivered to the Secured Party for filing. 6. Section 3.4 of the Security Agreement is hereby amended and restated in its entirety, as follows: 3.4 Location of Inventory and Equipment, Legal Description of Real Property. The Inventory and Equipment is kept only at (or shall be in transit to) the locations listed on Schedule III hereto. None of such Inventory or Equipment is in the possession of an issuer of a negotiable document (as defined in Section 7-104 of the UCC) therefor or otherwise in the possession of a bailee or other Person. The legal description of all Real Property is set forth on Schedule III hereto. 7. Section 4.1 of the Security Agreement is hereby amended and restated by adding the following Subsections (iii) and (iv), as follows: (iii) submitting certificates of title on Qualified Vehicles to the appropriate state authority for notation thereon of the liens and security interests granted hereby; and (iv) recording mortgages, deeds or trusts for Real Property, except the Central Real Properties, with the real estate records of the jurisdiction where such Real Property is located with respect to the liens and security interests granted hereby. 8. Section 4.6 of the Security Agreement is hereby amended and restated in its entirety, as follows: 4.6 Negative Pledge. None of AETG, the Company nor any Restricted Subsidiary will create, incur or permit to exist, and each of them will defend the Collateral against, and will take such other action as is necessary to remove, any Lien or claim on or to the Collateral, other than the Liens created hereby, Liens in favor of the Lender under the Loan Agreement, Permitted Liens and the Central Notes and Mortgages. 9. Schedules I, II and III shall hereby be amended to include the information set forth on such corresponding Schedules I, II and III attached hereto. 10. Except as herein amended, all terms, provisions and conditions of the Security Agreement, all Annexes and Schedules thereto and all documents executed in connection therewith shall continue in full force and effect and shall remain enforceable and binding in accordance with their terms. 11. This Amendment may be executed in any number of counterparts, each of which shall for all purposes be deemed an original and all of which constitute, collectively, one agreement. 12. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS). 13. In the event of a conflict between the terms and conditions of the Security Agreement and the terms and conditions of this Amendment, then the terms and conditions of this Amendment shall prevail. 14. The recitals contained herein shall be taken as the statements of AETG, the Company and the Guarantors, and the Trustee assumes no responsibility for the correctness. The Trustee makes no representation as to the validity or sufficiency of this Fourth Amendment to the Security and Pledge Agreement. IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered as of the date first above written. ATLANTIC EXPRESS TRANSPORTATION ATLANTIC EXPRESS GROUP INC. TRANSPORTATION CORP. By: /s/ Nathan Schlenker By: /s/ Domenic Gatto --------------------------- ----------------- Name: Nathan Schlenker Name: Domenic Gatto Title: Chief Financial Officer Title: President GUARANTORS AMBOY BUS CO., INC. ATLANTIC-CHITTENANGO REAL METRO AFFILIATES, INC. PROPERTY CORP. METROPOLITAN ESCORT SERVICE, INC. ATLANTIC-CONN TRANSIT, INC. MIDWAY LEASING, INC. ATLANTIC EXPRESS COACHWAYS, INC. RAYBERN BUS SERVICE, INC. ATLANTIC EXPRESS OF LA, INC. RAYBERN CAPITAL CORP. ATLANTIC EXPRESS OF MISSOURI, INC. RAYBERN EQUITY CORP. ATLANTIC EXPRESS OF NEW JERSEY, INC. STATEN ISLAND BUS, INC. ATLANTIC EXPRESS OF PENNSYLVANIA, INC. TEMPORARY TRANSIT SERVICE, INC. ATLANTIC-HUDSON, INC. 201 WEST SOTELLO REALTY, INC. ATLANTIC MEDFORD INC. ATLANTIC TRANSIT, CORP. ATLANTIC PARATRANS, INC. AIRPORT SERVICES, INC. ATLANTIC PARATRANS OF COLORADO, INC. ATLANTIC EXPRESS NEW ENGLAND, INC. ATLANTIC PARATRANS OF KENTUCKY, INC. ATLANTIC EXPRESS OF CALIFORNIA, INC. ATLANTIC PARATRANS OF ATLANTIC EXPRESS OF ILLINOIS, INC. PENNSYLVANIA, INC. ATLANTIC EXPRESS OF SOUTH BLOCK 7932, INC. CAROLINA, INC. BROOKFIELD TRANSIT, INC. ATLANTIC PARATRANS OF ARIZONA, INC. CENTRAL NEW YORK COACH SALES FIORE BUS SERVICE, INC. & SERVICE, INC. GROOM TRANSPORTATION, INC. COURTESY BUS CO., INC. JAMES MCCARTY LIMO SERVICE, INC. GVD LEASING, INC. MCINTIRE TRANSPORTATION, INC. 180 JAMAICA CORP. MOUNTAIN TRANSIT, INC. JERSEY BUS SALES, INC. R. FIORE BUS SERVICE, INC. JERSEY BUSINESS LAND CO., INC. ROBERT L. MCCARTHY & SON, INC. K. CORR, INC. T-NT BUS SERVICE, INC. MERIT TRANSPORTATION CORP. TRANSCOMM, INC. WINSALE, INC. By: /s/ Nathan Schlenker ----------------------- Name: Nathan Schlenker Title: CFO THE BANK OF NEW YORK, as Trustee and Secured Party By: /s/ Julie Salovitch-Miller -------------------------- Name: Julie Salovitch-Miller Title: Vice President Schedule I Pledged Securities Owned By Atlantic Express Transportation Corp. -----------------------------------------------------------------

Schedule II Filing Offices Debtor Name Jurisdictions Where UCC-1s Filed - ----------- -------------------------------- Atlantic Transit, Corp. New York, SOS Richmond, County Airport Services, Inc. Massachusetts SOS Leominster, City New York SOS Richmond, County Atlantic Express New England, Inc. Massachusetts SOS Woburn, City Billerica, Town New York SOS Richmond, County Atlantic Express of California, Inc. California SOS New York SOS Richmond, County Atlantic Express of Illinois, Inc. Illinois SOS New York SOS Richmond, County Atlantic Express of South Carolina, Inc. South Carolina SOS New York SOS Richmond, County Atlantic Paratrans of Arizona, Inc. Arizona SOS New York SOS Richmond, County Fiore Bus Service, Inc. Massachusetts SOS Woburn, City Saugus, Town New York SOS Richmond, County Groom Transportation, Inc. Massachusetts SOS Billerica, Town Woburn, City New York SOS Richmond, County James McCarty Limo Service, Inc. Massachusetts SOS Leominster City Millbury Town Townsend Town Gardner City New York SOS Richmond, County K. Corr, Inc. New York SOS Suffolk, County Richmond, County McIntire Transportation, Inc. Massachusetts SOS Woburn, City New York SOS Richmond, County Mountain Transit, Inc. Vermont SOS New York SOS Richmond, County R. Fiore Bus Service, Inc. Massachusetts SOS Woburn, City New York SOS Richmond, County Raybern Bus Service, Inc. New York SOS Suffolk, County Richmond, County Raybern Capital Corp. New York SOS Suffolk, County Richmond, County Raybern Equity Corp. New York SOS Suffolk, County Richmond, County Robert L. McCarthy & Son, Inc. Massachusetts SOS Brookfied, Town Hubbardston, Town Hardwick, Town Princeton, Town Paxton, Town New York SOS Richmond, County T-NT Bus Service, Inc. New York SOS Niagara, County Onondaga, County Erie, County Richmond, County Transcomm, Inc. Massachusetts SOS Brockton, City Gloucester, City Lowell, City Somerville, City Woburn, City New York SOS Richmond, County Winsale, Inc. New Jersey SOS New York SOS Richmond, County SOS= Secretary of State Schedule III Location of Collateral ---------------------- New York - -------------------------------------------------------------------------------- All Companies 7 North Street, Staten Island - -------------------------------------------------------------------------------- Atlantic Express Coachways, Inc. 141 E. Service Road Staten Island - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 2123A Richmond Terrace Staten Island - -------------------------------------------------------------------------------- Staten Island Bus, Inc. 52 Bayview Avenue Staten Island - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 107-110 180th Street Queens, NY - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 180th Street 180 Jamica Corp. Queens (Parking Lot) - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 46-81 Metropolitan Avenue Atlantic Paratrans, Inc. Queens Brookfield Transit, Inc. Merit Transportation, Inc. Metro Affiliates, Inc. - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. Metropolitan Avenue Queens (Parking Lot) - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 1386 Ralph Avenue Block 7932, Inc. Brooklyn - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 1752 Shore Parkway Atlantic Paratrans Brooklyn - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 399 Exterior Street Atlantic-Hudson, Inc. Bronx Metro Affiliates, Inc. - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 335 Major Deegan Blvd. Bronx, NY - -------------------------------------------------------------------------------- Courtesy Bus Co., Inc. 107 Lawson Blvd Metro Affiliates, Inc. Oceanside - -------------------------------------------------------------------------------- Courtesy Bus Co., Inc. 396 & 460 Brown Court Oceanside - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 44 North Dunton Avenue Atlantic Medford, Inc. Medford - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 220 Old Town Road Metro Affiliates, Inc. Setauket - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 48-05 Grand Avenue Mespath - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. 31 Werman Court Plainview - -------------------------------------------------------------------------------- K. Corr, Inc. 1620 New Highway Farmingdale - -------------------------------------------------------------------------------- Raybern Bus Service, Inc. 91 Baiting Place Road Raybern Capital Corp. Farmingdale Raybern Equity Corp. - -------------------------------------------------------------------------------- Amboy Bus Co., Inc. Route 202 Somers - -------------------------------------------------------------------------------- Atlantic-Chittenango Real Property Corp. 7765 Lakeport Road Central New York Bus Sales & Service, Inc. Chittenango - -------------------------------------------------------------------------------- Central New York Bus Sales & Service, Inc. 7730 Wheeler Road Chittenango - -------------------------------------------------------------------------------- Central New York Bus Sales & Service, Inc. 2926 Lakeville Road Avon - -------------------------------------------------------------------------------- T-NT Bus Service, Inc. 655 Walck Road North Tonawanda - -------------------------------------------------------------------------------- T-NT Bus Service, Inc. 300 Spencer Street Syracuse - -------------------------------------------------------------------------------- T-NT Bus Service, Inc. 330 Spencer Street Syracuse - -------------------------------------------------------------------------------- T-NT Bus Service, Inc. 721 Clinton Street Syracuse - -------------------------------------------------------------------------------- T-NT Bus Service, Inc. 63 Industrial Drive North Tonawanda - -------------------------------------------------------------------------------- T-NT Bus Service, Inc. 2210 Old Union Road Cheektowaga - -------------------------------------------------------------------------------- * Vehicles owned by Midway Leasing, Inc. are held in various locations throughout New York. Missouri - -------------------------------------------------------------------------------- Atlantic Express of Missouri, Inc. 5411 Brown Avenue St. Louis - -------------------------------------------------------------------------------- Atlantic Express of Missouri, Inc. 3675 Chouteau Street St. Louis - -------------------------------------------------------------------------------- Atlantic Express of Missouri, Inc. 4550 Gustine Street St. Louis - -------------------------------------------------------------------------------- Atlantic Express of Missouri, Inc. 200 Sidney Street St. Louis - -------------------------------------------------------------------------------- Atlantic Express of Missouri, Inc. 1808 S. 3rd Street St. Louis - -------------------------------------------------------------------------------- Massachusetts - -------------------------------------------------------------------------------- Atlantic Express New England, Inc. 210A New Boston Street Fiore Bus Service, Inc. Woburn Groom Transportation, Inc. McIntire Transportation, Inc. R. Fiore Bus Service, Inc. Transcomm, Inc. - -------------------------------------------------------------------------------- Airport Services, Inc. 700 Mechanic Street James McCarty Limo Service, Inc. Leominster - -------------------------------------------------------------------------------- Atlantic Express New England, Inc. 3 Plank Street Groom Transportation, Inc. Billerica - -------------------------------------------------------------------------------- Fiore Bus Service, Inc. 24R Bennett Highway Saugus - -------------------------------------------------------------------------------- James McCarty Limo Service, Inc. 115 Southwest Cutoff Millbury - -------------------------------------------------------------------------------- James McCarty Limo Service, Inc. 368 Main Street Townsend - -------------------------------------------------------------------------------- James McCarty Limo Service, Inc. 150 Linus Allain Avenue Gardner - -------------------------------------------------------------------------------- Robert L. McCarthy & Son, Inc. Rte 9 and West Brookfield Road Brookfield - -------------------------------------------------------------------------------- Robert L. McCarthy & Son, Inc. 57 Gardner Road Hubbardston - -------------------------------------------------------------------------------- Robert L. McCarthy & Son, Inc. Route 32 Hardwick - -------------------------------------------------------------------------------- Robert L. McCarthy & Son, Inc. Route 68 Hubbardston - -------------------------------------------------------------------------------- Robert L. McCarthy & Son, Inc. Meriam Road Princeton - -------------------------------------------------------------------------------- Robert L. McCarthy & Son, Inc. Route 122 Paxton - -------------------------------------------------------------------------------- Transcomm, Inc. 772 N. Main Street Brockton - -------------------------------------------------------------------------------- Transcomm, Inc. 2 Pond Street Glochester - -------------------------------------------------------------------------------- Transcomm, Inc. 3 Pevey Street Lowell - -------------------------------------------------------------------------------- Transcomm, Inc. 21 South Street Somerville - -------------------------------------------------------------------------------- New Jersey - -------------------------------------------------------------------------------- Atlantic Express of New Jersey, Inc. 107 How Lane New Brunswick - -------------------------------------------------------------------------------- Atlantic Express of New Jersey, Inc. 230 Red Lion Road Jersey Business Land Co., Inc. Southampton - -------------------------------------------------------------------------------- Atlantic Paratrans, Inc. 80 Milltown Road Union - -------------------------------------------------------------------------------- Atlantic Paratrans, Inc. 605 West California Ave Pleasantville - -------------------------------------------------------------------------------- Jersey Bus Sales, Inc. 2015 Route 206 Jersey Business Land Co., Inc. Bordentown - -------------------------------------------------------------------------------- Jersey Bus Sales, Inc. Old York Rd & Rising Sun Rd Bordentown - -------------------------------------------------------------------------------- Winsale, Inc. 62 Woolesly Street Irvington - -------------------------------------------------------------------------------- Winsale, Inc. Van Winkle Howell - -------------------------------------------------------------------------------- Winsale, Inc. 976 Newark Avenue Jersey City - -------------------------------------------------------------------------------- Winsale, Inc. 972 Newark Avenue Jersey City - -------------------------------------------------------------------------------- Pennsylvania - -------------------------------------------------------------------------------- Atlantic Express of Pennsylvania, Inc. 3740 E. Thompson Street Philadelphia - -------------------------------------------------------------------------------- Atlantic Express of Pennsylvania, Inc. 6940 Norwitch Drive Philadelphia - -------------------------------------------------------------------------------- Atlantic Express of Pennsylvania, Inc. 6971 Norwitch Drive Philadelphia - -------------------------------------------------------------------------------- Atlantic Paratrans of Pennsylvania, Inc. 2600 E. Butler Street Philadelphia - -------------------------------------------------------------------------------- Illinois - -------------------------------------------------------------------------------- Atlantic Express of Illinois, Inc. 2541 N. Keeler Drive - -------------------------------------------------------------------------------- South Carolina - -------------------------------------------------------------------------------- Atlantic Paratrans of South Carolina, Inc. 1409 Huger Street - -------------------------------------------------------------------------------- California - -------------------------------------------------------------------------------- Atlantic Express of LA, Inc. 201 West Sotello Street Los Angeles - -------------------------------------------------------------------------------- Atlantic Express of LA, Inc. 1081 Vignes Street Los Angeles - -------------------------------------------------------------------------------- Atlantic Express of California, Inc. 2450 Long Beach Blvd. Long Beach - -------------------------------------------------------------------------------- Atlantic Express of California, Inc. 2400 Long Beach Blvd. Long Beach - -------------------------------------------------------------------------------- Connecticut - -------------------------------------------------------------------------------- Atlantic-Conn Transit, Inc. 57 South Street Ridgefield - -------------------------------------------------------------------------------- Vermont - -------------------------------------------------------------------------------- Mountain Transit, Inc. Blakely Road Colchester - -------------------------------------------------------------------------------- Mountain Transit, Inc. 222 Railroad Street Milton - -------------------------------------------------------------------------------- Mountain Transit, Inc. Landfill Road Milton - -------------------------------------------------------------------------------- Arizona - -------------------------------------------------------------------------------- Atlantic Paratrans of Arizona, Inc. 45 North Sunway Drive Gilbert - -------------------------------------------------------------------------------- Atlantic Paratrans of Arizona, Inc. 303-305 S. Extension Road Mesa - -------------------------------------------------------------------------------- ADDENDUM TO SECURITY AND PLEDGE AGREEMENT The undersigned: (i) agrees to all of the provisions of the Security and Pledge Agreement, dated as of February 4, 1997, among AETG, the Company and the Restricted Subsidiaries (each as defined therein), in favor of The Bank of New York (the "Secured Party"), as amended by the First Amendment to the Security and Pledge Agreement, dated as of August 14, 1997, the Second Amendment to the Security and Pledge Agreement, dated as of December 12, 1997, the Third Amendment to the Security and Pledge Agreement, dated as of April 28,1999, and the Fourth Amendment to the Security and Pledge Agreement, dated as of the date hereof, each among AETG, the Company and the Restricted Subsidiaries (each as defined therein), in favor of the Secured Party (the "Security Agreement"), pursuant to the Indenture, dated as of February 4, 1997, among the Company, the Restricted Subsidiaries (each as defined therein) and the Secured Party, as amended by the First Supplemental Indenture, dated as of August 14, 1997, the Second Supplemental Indenture, dated as of December 12, 1997, the Third Supplemental Indenture dated as of October 28, 1998, the Fourth Supplemental Indenture, dated as of April 28, 1999, and the Fifth Supplemental Indenture, dated as of December 20, 2000, each among the Company, Restricted Subsidiaries (each as defined therein) and the Secured Party (the "Indenture"), and (ii) effective on the date hereof becomes a party to the Security Agreement, as a Restricted Subsidiary, with the same effect as if the undersigned were an original signatory to the Security Agreement (with the representations and warranties contained therein) being deemed to be made by the undersigned Restricted Subsidiary as of the date hereof. Terms defined in the Security Agreement and the Indenture shall have such defined meanings when used herein. By its acceptance hereof, each undersigned Restricted Subsidiary hereby ratifies and confirms its respective obligations under the Guaranty, as supplemented hereby. ATLANTIC TRANSIT, CORP. K. CORR, INC. AIRPORT SERVICES, INC. MCINTIRE TRANSPORTATION, INC. ATLANTIC EXPRESS NEW ENGLAND, INC. MOUNTAIN TRANSIT, INC. ATLANTIC EXPRESS OF CALIFORNIA, INC. R. FIORE BUS SERVICE, INC. ATLANTIC EXPRESS OF ILLINOIS, INC. RAYBERN BUS SERVICE, INC. ATLANTIC EXPRESS OF SOUTH RAYBERN CAPITAL CORP. CAROLINA, INC. RAYBERN EQUITY CORP. ATLANTIC PARATRANS OF ARIZONA, INC. ROBERT L. MCCARTHY & SON, INC. FIORE BUS SERVICE, INC. T-NT BUS SERVICE, INC. GROOM TRANSPORTATION, INC. TRANSCOMM, INC. JAMES MCCARTY LIMO SERVICE, INC. WINSALE, INC. By: /s/ Nathan Schlenker ------------------------ Name: Nathan Schlenker Title: CFO Dated: December 22, 2000