AMENDMENT NO. 3 TO THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Exhibit 10.16

AMENDMENT NO. 3 TO

THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Amendment No. 3 to Third Amended and Restated Loan and Security Agreement, dated as of September 25, 2008 (this “Amendment”), by and among Wachovia Bank, National Association, successor by merger to Congress Financial Corporation, in its capacity as agent (in such capacity, “Agent”), acting for and on behalf of Lenders (as hereinafter defined), the financial institutions from time to time parties to the Loan Agreement (as hereinafter defined) as lenders (“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 Transit Corp., a New York corporation (“ATC”), 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”), 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 McCarthy 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, ATC, AH, AP, APNY, AQ, 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”) and the parties hereto from time to time as guarantors (each individually a “Guarantor” and collectively, “Guarantors”, as defined in the Loan Agreement).

WITNESSETH :

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 Third Amended and Restated Loan and Security Agreement, dated as of May 15, 2007, as amended by Amendment No. 1 to Third Amended and Restated Loan and Security Agreement, dated as of January 1, 2008, and Amendment No. 2 to Third Amended and Restated Loan and Security Agreement, dated as of August 28, 2008, by and among Agent, Borrowers, Guarantors and Lenders (as 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;

WHEREAS, Borrowers and Guarantors have requested that Agent and Lenders make certain amendments to the Loan Agreement, and Agent and Lenders are willing to agree to such request, and make certain other amendments to the Loan Agreement, subject to the terms and conditions set forth herein; and

WHEREAS, by this Amendment, Agent, Lenders, Borrowers and Guarantors wish and intend to evidence such amendments.

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained herein, the parties hereto agree as follows: