EXH-10.37

                                 FIFTH AMENDMENT
                                     TO THE
                   SECURITY AND PLEDGE AGREEMENT, WITH ADDENDA

            Fifth Amendment, dated as of August 15, 2001 (the "Fifth 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,  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 December  22,  2000,  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 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.  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.

      2. 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.

      3. 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.

      4. 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).
<PAGE>

      5. 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.

            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/ Domenic Gatto                          By: /s/ Domenic Gatto
    ----------------------------                   ----------------------------
Name: Domenic Gatto                                Name: Domenic Gatto
Title: President                                   Title: President
<PAGE>

                                   GUARANTORS

AIRPORT SERVICES, INC.                      COURTESY BUS CO., INC.
AMBOY BUS CO., INC.                         FIORE BUS SERVICE, INC.
ATLANTIC-CHITTENANGO REAL                   GROOM TRANSPORTATION, INC.
   PROPERTY CORP.                           G.V.D. LEASING CO., INC.
ATLANTIC-CONN TRANSIT, INC.                 JAMES MCCARTY LIMO SERVICE, INC.
ATLANTIC EXPRESS COACHWAYS, INC.            JERSEY BUS SALES, INC.
ATLANTIC EXPRESS NEW ENGLAND, INC.          JERSEY BUSINESS LAND CO., INC.
ATLANTIC EXPRESS OF CALIFORNIA, INC.        K. CORR, INC.
ATLANTIC EXPRESS OF ILLINOIS, INC.          MCINTIRE TRANSPORTATION, INC.
ATLANTIC EXPRESS OF L.A., INC.              METRO AFFILIATES, INC.
ATLANTIC EXPRESS OF MISSOURI, INC.          METROPOLITAN ESCORT SERVICE, INC.
ATLANTIC EXPRESS OF NEW JERSEY, INC.        MERIT TRANSPORTATION CORP.
ATLANTIC EXPRESS OF                         MIDWAY LEASING INC.
   PENNSYLVANIA, INC.                       MOUNTAIN TRANSIT, INC.
ATLANTIC EXPRESS OF SOUTH                   RAYBERN BUS SERVICE, INC.
   CAROLINA, INC.                           RAYBERN CAPITAL CORP.
ATLANTIC-HUDSON, INC.                       RAYBERN EQUITY CORP.
ATLANTIC MEDFORD, INC.                      R. FIORE BUS SERVICE, INC.
ATLANTIC PARATRANS, INC.                    ROBERT L. MCCARTHY & SON, INC.
ATLANTIC PARATRANS OF ARIZONA, INC.         STATEN ISLAND BUS, INC.
ATLANTIC PARATRANS OF COLORADO, INC.        TEMPORARY TRANSIT SERVICE, INC.
ATLANTIC PARATRANS OF KENTUCKY, INC.        T-NT BUS SERVICE, INC.
ATLANTIC PARATRANS OF                       TRANSCOMM, INC.
   PENNSYLVANIA, INC.                       WINSALE, INC.
ATLANTIC TRANSIT, CORP.                     WRIGHTHOLM BUS LINE, INC.
BLOCK 7932, INC.                            180 JAMAICA CORP.
BROOKFIELD TRANSIT INC.                     201 WEST SOTELLO REALTY, INC.
CENTRAL NEW YORK COACH SALES &
   SERVICE, INC.

                                  By: /s/ Domenic Gatto
                                      -------------------------------
                                      Name: Domenic Gatto
                                      Title: President

THE BANK OF NEW YORK, as
  Trustee and Secured Party

By: /s/ Julie Salovitch-Miller
    -------------------------------
Name: Julie Salovitch-Miller
Title: Vice President
<PAGE>

                                   Schedule I

        Pledged Securities Owned By Atlantic Express Transportation Corp.

<TABLE>
<CAPTION>
                                           Stock                               Percentage of
         Stock               Class of   Certificate                 Number      Outstanding
        Issuer                Stock       Number      Par Value    of Shares      Shares
       --------               ------      ------      ---------    ---------      ------
<S>                           <C>           <C>         <C>           <C>          <C>
Wrightholm Bus Line, Inc.     Common        5           $1.00         200          100%
</TABLE>
<PAGE>

                                   Schedule II

                                 Filing Offices

      Debtor Name                          Jurisdictions Where UCC-1s Filed
      -----------                          --------------------------------
Wrightholm Bus Line, Inc.                  Secretary of State, New York
                                           Richmond County, New York
                                           Secretary of State, Vermont
                                           Enosburg County, Vermont
<PAGE>

                                  Schedule III

                             Location of Collateral

Wrightholm Bus Line, Inc.
3421 West Enosburg Road
Enosburg, Vermont 05450