Exhibit 10.30

                   BOARD OF EDUCATION OF THE CITY OF NEW YORK

     EXTENSION AND NINTH AMENDMENT OF CONTRACT FOR TRANSPORTATION OF GENERAL
    EDUCATION PUPILS TO PUBLIC AND NONPUBLIC SCHOOLS IN THE CITY OF NEW YORK

Extension  and  Ninth  Amendment  Agreement  made and  entered  into on the date
expressed  at the end hereof by and between the BOARD OF  EDUCATION  OF THE CITY
SCHOOL  DISTRICT  OF THE CITY OF NEW YORK  (hereinafter  expressed  as "Board of
Education,"  "Board"  or  "BOE"),  with  principal  headquarters  located at 110
Livingston  Street,  Brooklyn,  NY 11201, and the Contractor whose name, address
and  authorized  signature  appear  at the  end of  this  document  (hereinafter
expressed as "Contractor").

                                   WITNESSETH

WHEREAS,   in  1979  the  BOE  publicly  solicited   competitive  bids  for  the
transportation of general education pupils in public and nonpublic schools under
Contract Serial Nos. 0065, 0075 and 8107;(1) and,

WHEREAS,  the  Contractor  tendered  a bid(s)  under one or more  aforementioned
contract  serial  numbers and was duly awarded a contract(s)  including  certain
Employee Protection Provisions (1st amendment) for the transportation of regular
education pupils attending public and nonpublic schools; and,

WHEREAS,  the original terms of all contracts under Serial Nos. 0065,  0075, and
8107 would have expired on June 30, 1983 unless  extended;  and,  Education  Law
ss.305(14)(a)  authorizes  extensions  and provides a method for annual  payment
increases linked to defined regional Consumer Price Index (hereinafter expressed
as "CPI"); and,

WHEREAS, in 1983 the BOE and various contractors agreed to amend (2nd amendment)
and extend  contracts  under  Serial Nos.  0065,  0075 and 8107 through June 30,
1986; and,

WHEREAS,  in 1986 the BOE and various contractors agreed to amend (3rd amendment
erroneously labeled as the 2nd amendment) and extend further all contracts under
Serial Nos. 0065, 0075 and 8107 through June 30, 1989; and,

WHEREAS, in 1986 the BOE publicly solicited  competitive bids for transportation
of general  education  pupils in public and  nonpublic  schools  under  Contract
Serial No. 9888 that included certain Employee Protection Provisions;(2) and,

WHEREAS,  in 1989 the BOE and various contractors agreed to amend (4th amendment
erroneously labeled as the 3rd amendment) and extend further all contracts under
Serial Nos. 0065, 0075 and 8107 through June 30, 1992; and,

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(1) By their original specifications, all contracts under Serial Nos. 0065, 0075
and 8107 provide for  ten-month  pupil  transportation  service  from  September
through June of each school or extension year.

(2) By their  original  specifications,  all  contracts  under  Serial No.  9888
provide for ten-month pupil  transportation  service from September through June
of each school or extension year.

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WHEREAS,  the original  terms of all  contracts  under Serial No. 9888 who would
have expired in June 30, 1991, unless extended; and, Education Law ss.305(14)(a)
allows  extensions and provide a method for annual payment  increases  linked to
defined regional CPI; and,

WHEREAS,  in 1991, the BOE and various  contractors agreed for the first time to
amend and extend all contracts under Serial No. 9888 through June 30, 1994; and,

WHEREAS,  in 1991, the BOE Office of Auditor General  (hereinafter  expressed as
"OAG")  started a review and audit of annual rate  increases paid to contractors
during school years 1986-87 to 1999-2000  pursuant to provisions in previous and
existing  extension  and  amendment  agreements  as  allowed  by  Education  Law
ss.305(14)(a);  and,  this OAG review and audit has  resulted in the issuance by
the BOE of preliminary  and other  findings,  which shall have caused,  or shall
cause, various adjustments to daily vehicle rates of many contractors as well as
recovery of overpayments from some contractors; and,

WHEREAS,  in 1992 the BOE and various contractors agreed to amend (6th amendment
erroneously labeled as the 5th amendment) and extend further all contracts under
Serial Nos. 0065, 0075 and 8107 through June 30, 1995; and,

WHEREAS,  in 1994 the BOE and  various  contractors  agreed to amend and  extend
further  all  contracts  under  Serial No. 9888 (2nd  amendment),  by which such
contracts have been extended through June 30, 1997; and,

WHEREAS, in 1995 the BOE publicly solicited  competitive bids for transportation
of general  education  pupils in public and  nonpublic  schools  under  Contract
Serial No. 7263;(3) and,

WHEREAS,  in 1995  the  City of New  York,  the BOE,  various  contractors,  and
delegates of the  Amalgamated  Transit  Union,  Local  Division  1181-1061,  the
Transit  Workers  Union,  Local  100,  and  various  other  labor  organizations
representing  school bus  workers  entered  into  negotiations  to deal with the
increasing  costs of school bus service in the face of markedly  diminished City
and school  district  financial  resources;  and, the City of New York, the BOE,
various contractors,  and the labor organizations reached an accord that averted
the  possibility  of  school  bus  service   interruptions   and  that  produced
significant prospective cost savings for the City and the BOE; and,

WHEREAS, the said accord among the City, the BOE, various  contractors,  and the
labor  organizations  called  for  modifications  to the terms,  conditions  and
specifications  of the then existing  extension and amendment  agreements  under
Serial Nos. 0065, 0075, 7263, 8107 and 9888 that took effect during the original
or extension terms of such contracts starting as of July 1, 1995 or September 1,
1995, depending upon the particular contract serial number, and,

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(3) By their  original  specifications,  all  contracts  under  Serial No.  7263
provide for twelve-month pupil transportation  service from July through June of
each school or extension year as compared with other serial  numbers  covered by
this  Extension  and  Amendment  Agreement  that  provide  for  ten-month  pupil
transportation  service from September  through June of each school or extension
year.

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WHEREAS,  as a result  of the said  accord  among  the  City,  the BOE,  various
contractors,   and  the  labor  organizations  in  1995,  the  BOE  and  various
contractors  agreed thereupon to amend and/or extend further all contracts under
Serial Nos. 0065, 0075, 7263, 8107 (7th amendment) and 9888 (3rd amendment),  by
which such contracts have been extended through June 30, 2000; and,

WHEREAS,  in 1996,  the BOE and various  contractors  including  the  Contractor
mutually determined that changes had occurred in the banking, financial services
and  insurance   markets   affecting  the  availability  and   affordability  of
performance  bonds,  letters of credit and other forms of performance  security;
and, the BOE and various  contractors  including the  Contractor  entered into a
Supplemental Eighth (erroneously  labeled 7th) Amendment of Contract for General
Education  Pupil  Transportation  Services  thereby  modifying  and revising the
performance  security  provisions of Contract Serial Nos. 0065, 0075, 7263, 8107
and 9888 for the remainder of the extension period through June 30, 2000; and

WHEREAS, the BOE has determined that all contracts under Serial Nos. 0065, 0075,
8107 (6th amendment of Serial Nos. 0065, 0075 and 8107),  7263 (3rd amendment of
Serial No.  7263) and 9888 (3rd  amendment  of Serial No.  9888) should be still
further  amended  and  extended,  and  the  Contractor  does  hereby  so  agree,
acknowledge and stipulate; and,

WHEREAS,  at a regular  public meeting on March 15, 2000, the Board of Education
adopted a Resolution  (Calendar No. 20) authorizing the Chancellor to enter into
further amendment and extension of contracts under Serial Nos. 0065, 0075, 7263,
8107  and  9888  (hereinafter  expressed  collectively  as  "Contract")  until a
termination  date  not  later  than  June 30,  2005,  unless  thereupon  further
extended; and,

WHEREAS,  the  parties  mutually  desire to make this  extension  agreement  and
amendment to the Contract as heretofore amended and extended;

N0W, THEREF0RE, in consideration of the heretofore-recited  stipulations and the
hereinafter-expressed  terms,  conditions  and  specifications,  the BOE and the
Contractor,  as the parties to this Extension and Ninth Amendment Agreement,  do
hereby stipulate and agree both as above and as follows:

(A) TERM OF  EXTENSION  AGREEMENT.  All  references  to the  termination  of the
Contract, by whatever  terminology,  shall be deemed hereafter to read "June 30,
2005, unless further extended."

(B) ARTICLE V-A entitled,  "PAYMENT  DURING PERIOD OF  EXTENSION,"  of contracts
under Serial  Nos.0065,  0075 and 8107,  ARTICLE 29(D) of contracts under Serial
No.  9888,  and  ARTICLE  28(C) of  contracts  under  Serial No. 7263 are hereby
further  amended to read as  follows  for the term of this  Extension  and Ninth
Amendment Agreement:

      "(1)  Any  provisions  of  ARTICLES  V,  28 or 29 (as  applicable)  to the
            contrary notwithstanding,  the daily rate(s) per vehicle during this
            Extension  Period shall be deemed to be adjusted each year according
            to  the   following   formulae   subject  to  the  Office  of  Pupil
            Transportation  (hereinafter expressed as 'OPT') Director's approval
            of  all  or  any  portion(s)  of  the  Contractor's  claims  in  the
            below-described annual Cost Justification Financial Statements:

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            "(a)  During the  Extension  Year of July 1, 2000  through  June 30,
                  2001,  the  Contractor's  daily  rate(s) per vehicle  shall be
                  deemed to be augmented by an amount not to exceed whichever of
                  the following  represents the least amount of actual increase:
                  (i) the same  percentage by which the CPI as of May 2000 shall
                  have increased over the CPI as of May 1999; (ii) eight percent
                  (8%) over the base daily  rates per  vehicle  paid  during the
                  Extension  Year of July 1, 1999  through  June 30,  2000;  or,
                  (iii) the amount in dollars expressed as a percentage by which
                  the  Contractor's  actual costs during the Extension Year from
                  July 1, 1999 through June 30, 2000 shall have  increased  over
                  the  Contractor's  actual costs during the  Extension  Year of
                  July 1,  1998  through  June 30,  1999,  plus  any  previously
                  unabsorbed   percentages  of  the  Contractor's   actual  cost
                  increases  from  Extension  Year 1998-99 over  Extension  Year
                  1997-98 and from  Extension  Year 1997-98 over  Extension Year
                  1996-97  to  the  extent  that  such  percentages  shall  have
                  exceeded the CPI increments from May 1998 to May 1999 and from
                  May  1997 to May  1998,  respectively,  and  shall  have  been
                  disallowed  as a result from the rate  increases for Extension
                  Years 1999-2000 and 1998-99, respectively.

            "(b)  During the  Extension  Year of July 1, 2001  through  June 30,
                  2002,  the  Contractor's  daily  rate(s) per vehicle  shall be
                  deemed to be augmented by an amount not to exceed whichever of
                  the following  represents the least amount of actual increase:
                  (i) the same  percentage by which the CPI as of May 2001 shall
                  have increased over the CPI as of May 2000; (ii) eight percent
                  (8%) over the base daily  rates per  vehicle  paid  during the
                  Extension  Year of July 1, 2000  through  June 30,  2001;  or,
                  (iii) the amount in dollars expressed as a percentage by which
                  the  Contractor's  actual costs during the Extension Year from
                  July 1, 2000 through June 30, 2001 shall have  increased  over
                  the  Contractor's  actual costs during the  Extension  Year of
                  July 1,  1999  through  June 30,  2000,  plus  any  previously
                  unabsorbed   percentages  of  the  Contractor's   actual  cost
                  increases  from  Extension  Year 1998-99 over  Extension  Year
                  1997-98 and from  Extension Year 1999-2000 over Extension Year
                  1998-99  to  the  extent  that  such  percentages  shall  have
                  exceeded the CPI increments from May 1998 to May 1999 and from
                  May 1999 to May 2000  and  shall  have  been  disallowed  as a
                  result from the rate increases for Extension  Years  1999-2000
                  and 2000-01, respectively.

            "(c)  During the  Extension  Year of July 1, 2002  through  June 30,
                  2003,  the  Contractor's  daily  rate(s) per vehicle  shall be
                  deemed to be augmented by an amount not to exceed whichever of
                  the following  represents the least amount of actual increase:
                  (i) the same  percentage by which the CPI as of May 2002 shall
                  have increased over the CPI as of May 2001; (ii) eight percent
                  (8%) over the base daily  rates per  vehicle  paid  during the
                  Extension  Year of July 1, 2001  through  June 30,  2002;  or,
                  (iii) the amount in dollars expressed as a percentage by which
                  the  Contractor's  actual costs during the Extension Year from
                  July 1, 2001 through June 30, 2002 shall have  increased  over
                  the  Contractor's  actual costs during the  Extension  Year of
                  July 1,  2000  through  June 30,  2001,  plus  any  previously
                  unabsorbed   percentages  of  the  Contractor's   actual  cost
                  increases

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                  from  Extension Year 1999-2000 over Extension Year 1998-99 and
                  from  Extension  Year 2000-01 over Extension Year 1999-2000 to
                  the extent that such  percentages  shall have exceeded the CPI
                  increments from May 1999 to May 2000 and May 2000 to May 2001,
                  respectively,  and shall have been disallowed as a result from
                  the rate  increases for  Extension  Years 2000-01 and 2001-02,
                  respectively.

            "(d)  During the  Extension  Year of July 1, 2003  through  June 30,
                  2004,  the  Contractor's  daily  rate(s) per vehicle  shall be
                  deemed to be augmented by an amount not to exceed whichever of
                  the following  represents the least amount of actual increase:
                  (i) the same  percentage by which the CPI as of May 2003 shall
                  have increased over the CPI as of May 2002; (ii) eight percent
                  (8%) over the base daily  rates per  vehicle  paid  during the
                  Extension  year of July 1, 2002  through  June 30,  2003;  or,
                  (iii) the amount in dollars expressed as a percentage by which
                  the  Contractor's  actual costs during the Extension Year from
                  July 1, 2002 through June 30, 2003 shall have  increased  over
                  the  Contractor's  actual costs during the  Extension  Year of
                  July 1,  2001  through  June 30,  2002,  plus  any  previously
                  unabsorbed   percentages  of  the  Contractor's   actual  cost
                  increases  from  Extension  Year 2000-01 over  Extension  Year
                  1999-2000 and from  Extension Year 2001-02 over Extension Year
                  2000-01  to  the  extent  that  such  percentages  shall  have
                  exceeded the CPI increments  from May 2000 to May 2001 and May
                  2001 to May 2002, respectively, and shall have been disallowed
                  as a result  from the rate  increase(s)  for  Extension  Years
                  2001-02 and 2002-03, respectively.

            "(e)  During the  Extension  Year of July 1, 2004  through  June 30,
                  2005,  the  Contractor's  daily  rate(s) per vehicle  shall be
                  deemed to be augmented by an amount not to exceed whichever of
                  the following  represents the least amount of actual increase:
                  (i) the same  percentage by which the CPI as of May 2004 shall
                  have increased over the CPI as of May 2003; (ii) eight percent
                  (8%) over the base daily  rates per  vehicle  paid  during the
                  Extension  year of July 1, 2003  through  June 30,  2004;  or,
                  (iii) the amount in dollars expressed as a percentage by which
                  the  Contractor's  actual costs during the Extension Year from
                  July 1, 2003 through June 30, 2004 shall have  increased  over
                  the  Contractor's  actual costs during the  Extension  Year of
                  July 1,  2002  through  June 30,  2003,  plus  any  previously
                  unabsorbed   percentages  of  the  Contractor's   actual  cost
                  increases  from  Extension  Year 2001-02 over  Extension  Year
                  2000-01 and from  Extension  Year 2002-03 over  Extension Year
                  2001-02  to  the  extent  that  such  percentages  shall  have
                  exceeded the CPI increments  from May 2001 to May 2002 and May
                  2002 to May 2003, respectively, and shall have been disallowed
                  as a result  from the rate  increase(s)  for  Extension  Years
                  2002-03 and 2003-04, respectively.

      "(2) Anything in the foregoing payment increase provisions to the contrary
      notwithstanding,  where there is a decrease in the regional consumer price
      index for the New York,  New  York-Northeastern,  New Jersey area as based
      upon the index for all urban consumers  (hereinafter expressed as "CPI-U")
      during the preceding twelve month period, the amount to be paid to the

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      Contractor in the succeeding  extension year will reflect that decrease in
      a  manner  satisfactory  to  the  New  York  State  Education   Department
      (hereinafter expressed as 'SED').

      "(3)  Special  Costs for  Drivers  Covered  by  Statute.  Anything  in the
      foregoing payment increase provisions to the contrary notwithstanding, the
      BOE  shall  pay the  Contractor  each  extension  year  for  actual  costs
      allowable  pursuant to Education  Law  ss.305(14)(c)  under the  following
      conditions,  even if such  reimbursement  shall cause  annual  payments to
      exceed the applicable CPI increment.  To be eligible for such payment, the
      Contractor  shall  provide full and  separate  details in each annual Cost
      Justification  Financial  Statement  submitted under ARTICLE V-A, 28(C) or
      29(D) (as applicable) of this Contract of all claims for  reimbursement of
      expenses covered by Education Law ss.305(14)(c),  which shall be described
      for purposes of this Contract as 'special vehicle operator  administrative
      costs,'  and which  may not  exceed  (a) the  actual  costs of  qualifying
      criminal history and driver licensing testing fees attributable to special
      requirements  of Vehicle and Traffic Law Articles 19 and 19-A, and (b) the
      actual costs of all diagnostic tests and physical  performance  tests that
      shall be deemed necessary by an examining physician or the OPT Director to
      determine whether each applicant to drive a school bus under this Contract
      possesses  the physical and mental  ability to operate a school bus and to
      perform  satisfactorily all other  responsibilities of a school bus driver
      as required by this  Contract  and all  applicable  Federal,  State of New
      York, City of New York and BOE laws,  rules,  regulations and policies.(4)
      To the extent that any special vehicle  operator  administrative  costs as
      contained in the Contractor's Cost Justification Financial Statement for a
      given  extension  year together with the  Contractor's  other claimed cost
      increases for the prescribed comparison period shall exceed the applicable
      CPI  increment,  the BOE  shall pay the  exact  amount  of all  unabsorbed
      special  vehicle  operator   administrative  costs,  provided,   that  the
      Contractor  shall submit to OPT a separate,  fully  detailed  written cost
      reimbursement  request  for any amount of such costs not  absorbed  by the
      applicable  annual  rate  increase.(5)  (To the extent  that such  special
      vehicle  operator  administrative  costs for a given  extension year shall
      cause the Contractor's  claimed cost growth for the prescribed  comparison
      period to surpass the fixed cap of 8%, however,  the Contractor  shall not
      be entitled to any portion of such expenditures that shall exceed the said
      fixed  cap.)  In  each  such  written  cost  reimbursement   request,  the
      Contractor shall include details of (aa) the totals of all special vehicle
      operator  administrative  costs,  (bb) the portion of such special vehicle
      operator administrative costs absorbed by the applicable CPI increment, if
      any, and (cc) the portion of such special vehicle operator  administrative
      costs not absorbed by the applicable CPI  increment.  All Contractor  cost
      claims under Education Law ss.305(14)(c) shall be subject to review and/or
      audit  by the  BOE,  its  employees  and  agents.  Upon  BOE  approval  of
      Contractor cost claims under Education Law

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(4)  Allowable  diagnostic  tests and physical  performance  tests shall include
pre-employment  medical and  physical  performance  tests and  examinations  and
pre-employment  alcohol and  substance  abuse tests.  Allowable  diagnostic  and
physical  performance  tests shall not include tests and examinations  performed
during the course of a driver's  employment with the Contractor such as, but not
limited to, random substance and/or alcohol abuse tests, post-accident substance
and/or alcohol abuse tests,  reasonable suspicion substance and/or alcohol abuse
tests, and/or annual medical examinations.

(5) In the event of a given  extension year in which the  Contractor's  relevant
general  cost  increases,  i.e.,  without  the  inclusion  of costs  covered  by
Education Law ss.305(14)(c),  exceed the applicable regional CPI increment,  the
Contractor  shall be entitled to a  payment(s)  in excess of the said CPI growth
but only for such statutorily covered costs.

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      ss.305(14)(c)  that shall exceed the CPI increment  for a given  Extension
      year,  the BOE shall  pay the  Contractor  for such  excess  actual  costs
      without  interest  either  in a lump  sum (if  less  than  $10,000.00  per
      extension  year)  or  in  equal  monthly  installments  (if  greater  than
      $10,000.00 per extension year).

      "(4)  Definitions.  The  definitions  below  control  the  meanings of the
      described terms wherever they appear in this Contract.  These  definitions
      add to and supplement any  definitions  or  instructions  expressed in the
      original Contract and, as such, do not supersede,  revoke, replace, revise
      or limit any similar or analogous provisions in the original Contract.

            "(a)  For  Contracts  under  Serial  Nos.  0065,  0075  and 8107 the
                  following shall apply:

                  "(i)  'Eighteenth  (18th)  Extension  Year' means July 1, 2000
                        through June 30, 2001.

                  "(ii) 'Nineteenth  (19th)  Extension  Year' means July 1, 2001
                        through June 30, 2002.

                  "(iii)'Twentieth  (20th)  Extension  Year'  means July 1, 2002
                        through June 30, 2003.

                  "(iv) 'Twenty-first  (21st) Extension Year' means July 1, 2003
                        through June 30, 2004.

                  "(v)  'Twenty-second (22nd) Extension Year' means July 1, 2004
                        through June 30, 2005.

            "(b)  For Contracts under Serial No. 9888 the following shall apply:

                  "(i)  'Tenth (10th) Extension Year' means July 1, 2000 through
                        June 30, 2001.

                  "(ii) 'Eleventh  (11th)  Extension  Year'  means  July 1, 2001
                        through June 30, 2002.

                  "(iii)'Twelfth  (12th)  Extension  Year'  means  July 1,  2002
                        through June 30, 2003.

                  "(iv) 'Thirteenth  (13th)  Extension  Year' means July 1, 2003
                        through June 30, 2004.

                  "(v)  'Fourteenth  (14th)  Extension  Year" means July 1, 2004
                        through June 30, 2005.

            "(c)  For Contracts under Serial No. 7263 the following shall apply:

                  "(i)  'Third (3rd)  Extension Year' means July 1, 2000 through
                        June 30, 2001.

                  "(ii) 'Fourth (4th) Extension Year' means July 1, 2001 through
                        June 30, 2002.

                  "(iii)'Fifth (5th)  Extension Year' means July 1, 2002 through
                        June 30, 2003.

                  "(iv) 'Sixth (6th)  Extension Year' means July 1, 2003 through
                        June 30, 2004.

                  "(v)  'Seventh (7th)  Extension  Year' means July 1, 2004 June
                        30, 2005.

            "(d) The term 'Consumer Price Index' (expressed herein as 'CPI'), as
            of a given date,  is defined as that  statistic of the United States
            Department of Labor, or its successor agency, which the SED deems as
            the  "regional  consumer  price  index  for the New  York,  New York
            Northeastern,  New Jersey  area,  based upon the index for all urban
            consumers  (CPI-U)," according to Education Law ss.305(14)(a) as the
            same may be updated,  revised,  amended or otherwise  changed during
            the life of this Extension and Ninth Amendment Agreement. If

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            Education Law  ss.305(14)(a)  shall be amended to permit a stated or
            fixed   percentage(s)   of  annual   rate   increase(s)   for  pupil
            transportation  contract extensions,  which increases may exceed the
            applicable  CPI  increment(s),  this Contract  shall be deemed to be
            amended  automatically  and  without  the need for any action by the
            parties  by  substituting  such  stated  or fixed  percentage(s)  of
            increase in place of the actual percentage(s) of increase in the CPI
            in any  Extension  year in which  the CPI  shall  be lower  than the
            stated or fixed percentage(s).

            "(e) The term  'contractor's  average  cost per  vehicle  day' for a
            given  extension  year is  defined  as the  Contractor's  'total net
            allowable costs' for that extension year divided by the total number
            of 'vehicle  days.' The term 'total net allowable  costs' is limited
            to  those  expenses  determined  by the BOE to  relate  directly  to
            transportation services provided to the BOE under this Contract. The
            term  'vehicle  days' is defined as the total number of  'authorized
            vehicles' the Contractor  actually operates multiplied by the number
            of school days,  which number is hereby fixed at 182 school days per
            extension  year (220 school  days per  extension  year for  12-month
            contracts)(6)   for  the  term  of  this   Extension  and  Amendment
            Agreement,  except for certain  additional  vehicles  which shall be
            treated in the manner  hereinafter  provided.  The term  'authorized
            vehicles' is defined as the total number of contract and  additional
            vehicles,  but excluding spare vehicles,  that the Contractor  shall
            have been granted  expressly by the Director.  If the Director shall
            grant the Contractor  additional vehicles during any given extension
            year of this  Extension and  Amendment  Agreement,  such  additional
            vehicles shall be counted among the 'authorized vehicles' during the
            first  extension year in which they shall be awarded but only to the
            extent of the actual number of school days actually  operated not to
            exceed a maximum of 91 school  days (110  school  days for  12-month
            contracts).(7)  Only during the succeeding  extension  year(s) shall
            such additional vehicles be counted as 'authorized vehicles' for 182
            school  days  (220  school  days  for  12-month  contracts).  If the
            Contractor has a 10-month Contract(s) and the Director shall grant

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(6) The numbers 182 days (10-month  contracts) and 220 days (12-month contracts)
represent  average  numbers  of  school  days  per  extension  year for the five
extension years preceding the instant Extension and Amendment  Agreement,  i.e.,
extension years 1995-96 through  1999-2000.  The BOE shall review these averages
every  three  years  during the  preceding,  current  and any  future  extension
periods.  Whereupon  a  triennial  review  shall  find that one or both  average
numbers of school  days shall  have  changed as based upon the actual  number of
school days per annum,  the BOE shall  revise the fixed  number(s) of days up or
down  accordingly  with  written  notice to the  Contractor  by not  later  that
December 31st preceding the extension year in which the revised fixed  number(s)
shall take effect. In each triennial review, the effects of changes,  if any, in
the  numbers of school  days from the  preceding  triennial  review(s)  shall be
viewed cumulatively.

(7) This partial  exclusion of additional  vehicles  during the first  extension
year of award shall not apply to any vehicles that the  Contractor may obtain by
assignment or other transfer of contract or by acquiring the corporate shares of
another  school  bus  contractor.  For cost  justification  purposes  under this
Contract, the Contractor shall add and combine not more than fifty percent (50%)
of the  value  of the  costs  of  the  affected  additional  vehicles  into  the
Contractor's other costs for the first extension year.

<PAGE>
                                       9


            the  Contractor  summer  work  beyond  the  normal  10  months  from
            September  through  June,  the summer  vehicles only shall be exempt
            from inclusion in the cost justification process.

            "(f) The term 'Cost Justification Financial Statement' is defined as
            a written 'review report' prepared by a Certified Public  Accountant
            (herein expressed as 'CPA') or Public  Accountant  (herein expressed
            as 'PA')  licensed  by the  State of New York,  except as  otherwise
            noted herein.  Each Cost  Justification  Financial  Statement  shall
            include  all  of the  facts  and  figures  deemed  necessary  by the
            Director   and/or  the  SED  to  provide  a  complete  view  of  the
            Contractor's  cost increase  claims for the  applicable  comparative
            periods  specified in this Extension and Ninth Amendment  Agreement.
            Each such review  report  shall state that a review  shall have been
            performed  in  accordance   with   Generally   Accepted   Accounting
            Principles  (herein  expressed  as 'GAAP') as of the date of a given
            review report and that the  information  in each Cost  Justification
            Financial  Statement shall have been based upon the  representations
            of the Contractor's management.  Each such review shall describe the
            nature of a review as distinct from an audit and shall  describe the
            standard  procedures that the CPA/PA shall have performed,  e.g., an
            inquiry and an analytical review.  Each review report shall give the
            limited assurance that, based upon the review,  the CPA/PA shall not
            have been aware of any material modifications that should be made to
            the  Cost  Justification   Financial  Statement  for  it  to  be  in
            conformity  with GAAP. A  compilation  report shall not qualify as a
            Cost Justification  Financial  Statement.  The CPA/PA preparing each
            review  report  must state that he/she  shall have  studied the cost
            justification  manual  that shall be supplied by the Board and shall
            have applied the  standards  contained in the Board's  manual to the
            development of each Cost Justification  Financial Statement.  If the
            Contractor  shall  not  have  had  a  CPA-audited  financial  report
            performed for any purpose  within two (2) years before July 1, 2000,
            then the Contractor must submit a certified  audited  statement by a
            CPA for its first Cost Justification  Financial Statement under this
            Extension  and  Ninth  Amendment  Agreement.  The  CPA/PA  who shall
            prepare each Cost  Justification  Financial  Statement  must have no
            interest  in  this  Contract,   the  Contractor  and/or  any  entity
            affiliated in any manner with the  Contractor and must so certify in
            writing.  Each Cost Justification  Financial Statement shall be in a
            form prescribed by the Director as approved by the SED.

      "(5) Cost  Justification  Financial  Statements.  Education Law ss.305(14)
      requires the  Contractor to  substantiate  any cost  increases that he/she
      claims  to  justify  annual  payment  increases  during  the  term of this
      Extension and Ninth  Amendment  Agreement.  The Director  shall  determine
      whether  to  approve  all or any  portion  of the  claims  in  each of the
      Contractor's annual Cost Justification  Financial Statements in accordance
      with the following:

            "(a) To substantiate any payment  increases  received under ARTICLES
            V-A,  28(C) or 29(D)  during the  Extension  Year of July 1, 2000 to
            June 30, 2001, the Contractor must submit by September 30, 2000, (i)
            a Cost  Justification  Financial  Statement  that  details the total
            costs  incurred  by the  Contractor  for  all  its  operations  and,
            separately,  for its  operations  under this  Contract for Extension
            Years   1999-2000  and  1998-1999,   and  (ii)  an  additional  Cost
            Justification  Financial Statement that details total costs incurred
            by the Contractor for

<PAGE>
                                       10


            all its operations  and,  separately,  for its operations  under the
            Contract for Extension Years 1996-97, 1997-98 and 1998-99 to account
            for unabsorbed cost carry-forwards, if any.

            "(b) To substantiate any payment  increases  received under ARTICLES
            V-A,  28(C) or 29(D)  during the  Extension  Year of July 1, 2001 to
            June 30, 2002, the Contractor must submit by September 30, 2001, (i)
            a Cost  Justification  Financial  Statement  that  details the total
            costs  incurred  by the  Contractor  for  all  its  operations  and,
            separately,  for its  operations  under this  Contract for Extension
            Years  2000-01  and   1999-2000,   and  (ii)  an   additional   Cost
            Justification  Financial Statement that details total costs incurred
            by the Contractor for all its operations  and,  separately,  for its
            operations  under the Contract for Extension Years 1997-98,  1998-99
            and 1999-2000 to account for unabsorbed cost carry-forwards, if any.

            "(c) To substantiate any payment  increases  received under ARTICLES
            V-A,  28(C) or 29(D)  during the  Extension  Year of July 1, 2002 to
            June 30, 2003, the Contractor must submit by September 30, 2002, (i)
            a Cost  Justification  Financial  Statement  that  details the total
            costs  incurred  by the  Contractor  for  all  its  operations  and,
            separately,  for its  operations  under this  Contract for Extension
            Years 2001-02 and 2000-01, and (ii) an additional Cost Justification
            Financial  Statement  that  details  total  costs  incurred  by  the
            Contractor  for  all  its  operations  and,   separately,   for  its
            operations under the Contract for Extension Years 1998-99, 1999-2000
            and 2000-01 to account for unabsorbed cost carry-forwards, if any.

            "(d) To substantiate any payment  increases  received under ARTICLES
            V-A,  28(C) or 29(D)  during the  Extension  Year of July 1, 2003 to
            June 30, 2004, the  Contractor  must submit by September 30, 2003, a
            Cost Justification  Financial Statement that details the total costs
            incurred by the Contractor for all its operations  and,  separately,
            for its  operations  under this  Contract  for the  Extension  Years
            2002-03  and  2001-02,  and (ii) an  additional  Cost  Justification
            Financial  Statement  that  details  total  costs  incurred  by  the
            Contractor  for  all  its  operations  and,   separately,   for  its
            operations under the Contract for Extension Years 1999-2000, 2000-01
            and 2001-02 to account for unabsorbed cost carry-forwards, if any.

            "(e) To substantiate any payment  increases  received under ARTICLES
            V-A,  28(C) or 29(D)  during the  Extension  Year of July 1, 2004 to
            June 30, 2005, the  Contractor  must submit by September 30, 2004, a
            Cost Justification  Financial Statement that details the total costs
            incurred by the Contractor for all its operations  and,  separately,
            for its  operations  under this  Contract  for the  Extension  Years
            2003-04  and  2002-03,  and (ii) an  additional  Cost  Justification
            Financial  Statement  that  details  total  costs  incurred  by  the
            Contractor  for  all  its  operations  and,   separately,   for  its
            operations  under the Contract for Extension Years 2000-01,  2001-02
            and 2002-03 to account for unabsorbed cost carry-forwards, if any.

            "(f) Until six (6) years after completion of its services  hereunder
            or six (6) years after the  termination  date of this  Extension and
            Amendment  Agreement,  whichever  shall occur later,  the Contractor
            shall maintain complete and correct books and records related to all
            aspects of the Contractor's  obligations hereunder.  Records must be
            maintained separately so as to

<PAGE>
                                       11


            identify  clearly the  expenses  applicable  to this  Contract,  all
            previous extension and amendment agreements,  and this Extension and
            Amendment  Agreement and must be distinguishable  from all costs not
            incurred under this Contract,  all previous  extension and amendment
            agreements,  and this Extension and Amendment  Agreement.  Except as
            provided  in  this  subparagraph,   all  other  provisions  of  this
            Contract,  as  amended,  that relate to the  maintenance  of records
            shall remain in full force and effect.

            "(g) The  Contractor  will supply in each annual Cost  Justification
            Financial  Statement  all  data  required  by  the  New  York  State
            Education  Department  related to this  Contract,  and the submittal
            shall  include,  without  limitation  to, New York  State  Education
            Department  approved cost  justification  forms. The Contractor must
            supply  promptly any and all additional cost data as required by the
            BOE or the SED.

      "(6) Required  Analysis of Costs.  To determine the allowable  increase in
      costs for a given extension year, as specified in ARTICLE V-A(1), 28(C)(1)
      or  29(D)(1)  of  this  Contract,  the  following  analysis  of  the  Cost
      Justification Financial Statement must be undertaken:

            "Step 1:    Divide the total  applicable  annual  operating costs by
                        the  number of  vehicle  days for both the base year and
                        the year  previous  to the base  year to  determine  the
                        average  daily cost per vehicle for each of those years.
                        The  base  year  is  the  year  immediately  before  the
                        extension  year  to  which  a  rate  increase  is  to be
                        applied.

            "Step 2:    Subtract the average daily cost per vehicle for the year
                        previous  to the base year from the  average  daily cost
                        per vehicle for the base year to determine  the increase
                        in the average daily cost per vehicle.

            "Step 3:    Divide  the  increase  in the  average  daily  cost  per
                        vehicle by the  average  daily cost per  vehicle for the
                        year  previous to the base year to determine the percent
                        increase in the average daily cost per vehicle.

            "Step 4:    Compare the  percent of  increase  in the average  daily
                        cost per vehicle to the  percentage  by which the CPI as
                        of May of the base year  shall have  increased  over the
                        CPI as of May of the year  previous to the base year and
                        to the appropriate fixed annual increase  percentage cap
                        for each extension year as expressed in ARTICLE  V-A(1),
                        28(C)(1) or 29(D)(1) of this Contract.  Whichever is the
                        least of the  three  percentages  will be the  allowable
                        increase  applied  to the  daily  rate for the  affected
                        extension year.

            "Step 5:    For Extension  Years  2000-01  through  2004-05,  repeat
                        Steps 1-4. For each such Extension  Year,  determine the
                        percent  of  increase  in the  average  daily  cost  per
                        vehicle. If the percent of increase in the average daily
                        cost  per   vehicle   resulting   in  Step  3  shall  be
                        insufficient  to justify fully the CPI increment in Step
                        4 or the fixed cap,  whichever  shall be lower,  add any
                        previously unabsorbed percent of

<PAGE>
                                       12


                        increase from the applicable Extension Year(s) expressed
                        heretofore  at  Paragraphs  (1)(a)-(e)  of ARTICLE  V-A,
                        28(C) or 29(D) of the Contract.

      "(7) Allowable  Cost  Increases.  Only increases in 'net allowable  costs'
      will justify  augmentation  of the daily  vehicle rate from one  extension
      year to the next.  'Allowable  costs' are limited by the following:  costs
      not attributable to the Contractor's operations under this Contract, costs
      that are not ordinary  and/or  reasonable,  costs that are not documented,
      and costs  disallowed  by the SED and/or BOE auditors are not permitted to
      justify  increases of the daily  rate(s) per vehicle.  The Director  shall
      have the right to prescribe miscellaneous standardized cost categories for
      all contractors including the Contractor.

      "(8)  Access  to  Subcontractors.  If with  the  Director's  approval  the
      Contractor  subcontracts  any portion of the services under this Contract,
      the  Contractor  must  include in any such  subcontract  a provision  that
      allows full and  unimpeded  access by the BOE, the SED and/or the New York
      City Office of the Comptroller to the books and records of a subcontractor
      for  inspection,  audit and copying  purposes.  The Contractor does hereby
      agree and  warrant  to  render  all  necessary  assistance  to obtain  any
      requested  documents from  subcontractors.  The Contractor's  inability to
      obtain requested  documentation from any subcontractors shall not excuse a
      failure  to  provide  the  documentation  as a means  to  justify  payment
      increases.

      "(9) Absence of Cost Justification  Financial Statement.  The Contractor's
      failure to submit an annual Cost Justification  Financial Statement by the
      deadline  date as above  expressed  will result in the  forfeiture  of any
      increase later justified for the period from the service start date to the
      day the statement is received at OPT, unless the Director  determines that
      reasonable circumstances exist to excuse the Contractor's late submittal.

      "(10)  Adjustments  to Later  Payments.  Based on the  BOE's  audit of the
      Contractor's annual statements and financial records, the BOE may make any
      necessary  adjustments  in any later payments that become due and owing to
      the  Contractor  during  a  given  Extension  year to  compensate  for any
      excesses of payments over cost increases.

      "(11) Refund of Overpayment.  The Contractor does hereby agree and warrant
      further to refund all additional  monies due to the BOE within thirty (30)
      days of BOE's  final  findings  regarding  any  given  Cost  Justification
      Financial  Statement,  if the amount of a given  extension  year's payment
      excess over  allowable  cost increase is greater than any payments due and
      owing for the balance of a given extension year.

      "(12) Unabsorbed Cost Carry-Forward Provision. If the Contractor shall not
      be able to justify the maximum allowable  rate(s)  increase(s) for any one
      or more of Extension  Years 2000-01 to 2004-05,  the  Contractor  shall be
      entitled to use an "unabsorbed  cost  carry-forward(s)"  as a supplemental
      device to achieve a greater allowable rate(s) increase(s).  To be eligible
      for an 'unabsorbed cost  carry-forward(s),'  the Contractor must detail in
      writing  all total net  allowable  costs  from each set of two  comparison
      years from which any unabsorbed costs shall be derived as well

<PAGE>
                                       13


      as the  total  percentage  of  actual  cost  increase  and the  unabsorbed
      percentage  of  cost  increase.  The  Director  may  prescribe  additional
      conditions of  eligibility  as reasonably  appropriate.  When eligible and
      entitled hereunder,  the Contractor may carry forward 'below-the-line' any
      previously  unabsorbed actual costs from any sets of comparison periods as
      heretofore  expressed at Paragraphs  (1)(a)-(e)  of ARTICLE V-A,  28(C) or
      29(D) of the Contract to supplement  those cost increases that are used to
      justify  augmentations  of the daily  rate(s)  per vehicle for the 2000-01
      through  2004-05  Extension  Years.  The term  'below-the-line'  is hereby
      defined  to mean that  previously  unabsorbed  cost  increases,  which are
      carried  forward,  are deemed as  allocated  to the  extension  year(s) of
      accrual  and not to the  subsequent  extension  year(s)  to which they are
      carried forward and applied both  supplementally and  'below-the-line'  as
      prior cost increase that have not as yet been absorbed by the lesser of an
      annual CPI  increment or a fixed annual rate increase cap. Once an item of
      previously  unabsorbed  cost increase shall have been carried  forward and
      applied  'below-the-line'  to a give base year,  that item may not be used
      again in any later base year.

      "(13) In the  event of any  apparent  inconsistencies  between  any  other
      provisions  of the Contract and ARTICLES  V-A,  28(C) and/or 29(D) hereof,
      the  provisions  of ARTICLES  V-A,  28(C) and/or  29(D) shall  prevail and
      govern in every case and for all intents and purposes."

(C)  MISALLOCATION  AND DUPLICATION OF COSTS.  To prevent unjust  enrichment via
misrepresentation  or  falsification  of cost increase  claims,  the  Contractor
hereby  agrees,  consents and warrants to abide in all respects by the following
rules for the treatment of fixed,  variable or other costs utilized to establish
increased expenses from one given Extension year to the next:

      (1) Allocation of Costs. If the Contractor  misallocates any cost item(s),
      the  allocation  will  be  disallowed.  "Misallocation"  is  defined  as a
      transgression of one or more of the following precepts:

            (a) Only those of the  Contractor's  fixed,  variable or other costs
            which  are  directly   attributable   to  the   performance   and/or
            administration  of BOE pupil  transportation  contract  work will be
            considered   allowable  expense  items.   Costs  attributable  to  a
            contractor's  other  operations,  whether  in the  public or private
            sector, will not be allowed to justify payment increases.

            (b)  Costs  must be  attributable  solely to the  specific  group of
            contracts covered by this Extension Agreement, i.e., Contract Serial
            Nos. 0065,  0075,  7263,  8107 and 9888.  Expenses  allocable to BOE
            pupil transportation  contracts other than these serial numbers must
            not appear in any materials  presented to justify payment  increases
            under this Extension Agreement.

            (c) Costs must be attributable solely to the corporate, partnership,
            sole proprietorship or other entity that constitutes the Contractor.
            Expenses  allocable to a parent or other affiliated  entity must not
            appear on the Contractor's cost justification  financial  statement.
            Where  employees,  offices,  storage and  maintenance  facilities or
            other cost items are shared by several  affiliated  or  unaffiliated
            entities,  all or some of which  hold  separate  BOE  transportation
            contracts,  assertions of expense  increases must reflect only those
            percentages  of  utilization  directly  allocable  to  the  claimant
            Contractor.

<PAGE>
                                       14


            (d)  Allocation of costs must be based on the number of vehicle days
            and not merely the number of vehicles under contract.

            (e) Such other forms of  misallocation of costs as may be determined
            by the BOE, the New York City Office of the  Comptroller  or the New
            York State Education Department (hereinafter expressed as "SED"), in
            accordance with the terms and conditions of this Contract.

      (2)  Duplication of Costs and Cost  Increases.  The  Contractor  shall not
      cause and/or allow any duplication or multiplication of costs and/or items
      of cost increase in any manner or to extent.

(D) AMENDMENTS TO INSURANCE PROVISIONS.

      (1) The insurance provisions of the Contract are hereby amended to provide
      as follows:

            (a) The Contractor  must obtain and maintain  throughout the life of
            this Extension and Ninth Amendment  Agreement the following types of
            coverage  in  strict  compliance  with the  terms,  conditions,  and
            minimum  amounts  stated in this Contract:  motor vehicle  liability
            insurance,    property   damage   liability   insurance,    Worker's
            Compensation  Insurance,  Comprehensive  General Liability Insurance
            and Subcontractor's Insurance.

            (b) The  Contractor  shall  arrange with its  carrier(s) to have the
            Board and the City  appear as  additional  insured  parties on every
            policy and  certificate  of insurance  for all  coverage  under this
            Contract.  The  Contractor  shall not  obtain  or use any  insurance
            policy(ies)  or  contract(s)  for  purposes  of this  Contract  that
            contains  any  endorsement  exclusions  relating  to  an  additional
            insured's negligence, relating to the maintenance, use and operation
            of an additional insured's realty or personalty,  or relating to any
            other  activities by the  additional  insured that arise from, or in
            the context of, this Contract.

            (c) The  Contractor  must obtain the  foregoing  certifications  and
            policies from an insurance company(ies) both acceptable to the Board
            of Education.

            (d) The Contractor must maintain all required coverage in full force
            and  effect   throughout  the  life  of  this  Extension  and  Ninth
            Amendment.  The Contractor  must file renewals with the OPT Director
            at least thirty (30) days before the expiration of any policy.

            (e) The  Contractor  shall obtain,  maintain,  and tender  insurance
            policies  for the  following  types  of  coverage  in the  following
            minimum  coverage  limits,  and the Contractor shall comply with the
            following  terms and  conditions  with respect to all such insurance
            coverage:

                  (i) The  Contractor  shall obtain both  comprehensive  general
                  liability   insurance   coverage  and   automobile   liability
                  insurance  coverage for personal  injury  (including,  but not
                  limited  to  death,  sickness,  disease  and  disability)  and
                  property  damage,  caused directly or indirectly by any act(s)
                  of  commission  or  omission  of  the  Contractor  and/or  the
                  Contractor's agents, servants, employees, partners (including,
                  without limitation, general,

<PAGE>
                                       15


                  limited, silent and apparent partners),  directors,  officers,
                  subcontractors, subcontractor employees, volunteers, invitees,
                  licensees,  designees, assignees or any other representatives.
                  For each type of coverage,  the liability  limits for personal
                  injury (including, but not limited to death, sickness, disease
                  and  disability)  shall be not less than (a)  combined  single
                  limit  coverage of Five Million  Dollars  ($5,000,000.00)  per
                  occurrence,  or (b)  split  limit  coverage  of  Five  Hundred
                  Thousand  Dollars  ($500,000.00)  per person and Five  Million
                  Dollars  ($5,000,000.00)  per  occurrence.  For  each  type of
                  coverage,  the liability  limits for property  damage shall be
                  not less than (aa) combined  single limit coverage One Hundred
                  Thousand Dollars  ($100,000.00) per occurrence,  or (bb) split
                  limit  coverage of Fifty  Thousand  Dollars  ($50,000.00)  per
                  person and One  Hundred  Thousand  Dollars  ($100,000.00)  per
                  occurrence.

                  (ii)  Not  later  than  thirty  (30)  days  after  the date of
                  execution  and  before  the  start  of  any  work  under  this
                  Contract,  the Contractor  shall submit to the BOE evidence of
                  the insurance  specified  herein  together with all supporting
                  documentation reasonably deemed necessary by the Director. The
                  Contractor  shall  transmit  one  (1)  copy  of  each  of  all
                  insurance  policies and certificates of insurance to the Board
                  of  Education  of  the  City  of New  York,  Office  of  Pupil
                  Transportation,  33-00  Northern  Boulevard,  Room  223,  Long
                  Island  City,  New  York  11101,   Attention:   Contractual  &
                  Regulatory  Affairs Unit. The Board's receipt of such policies
                  and certificate shall be a condition  precedent to any payment
                  by  the  Board  to  the   Contractor   under   the   Contract.
                  Furthermore,  the Contractor  shall transmit an  informational
                  copy of this  Agreement to its insurance  carrier(s)  together
                  with a cover letter(s)--the cover letter(s) shall identify the
                  Contractor's     insurance    policy(ies)    and/or    account
                  number(s)--that  alerts  and  informs  the  carrier(s)  of the
                  existence  of  this   Agreement   and   particular   insurance
                  provisions contained herein.

      (2)  Worker's  Compensation  Insurance.   The  Contractor  shall  maintain
      Worker's Compensation  insurance in the manner and amount(s) prescribed by
      law. The Contractor  must maintain such  insurance  throughout the life of
      this Contract and up to the completion of required  services or work to be
      performed.

      (3)  Subcontractors.  Before the  Director  may approve  the  Contractor's
      utilization  of any  subcontractor(s)--where  such use is permitted  under
      this   Contract--the   Contractor   must  submit  an  acceptable   written
      certification(s) that such subcontractor(s) complies fully with (a) all of
      insurance requirements of this Contract including, but not limited to, the
      specification of the BOE and the City as additional insured parties in all
      of  each  subcontractor's   insurance  policies,   and  (b)  the  Worker's
      Compensation Law including appropriate insurance coverage.

      (4) Required  Rider  Provisions.  The  Contractor  shall ensure that every
      policy for all of the  insurance  coverage  required  under this  Contract
      shall contain the following  provision via a rider  attached to every such
      policy:

<PAGE>
                                       16


            (a) Any and all notices  that the  insurer(s)  shall  provide to the
            Board shall be  addressed  to the Director at "Board of Education of
            the City of New York, Office of Pupil Transportation, 33-00 Northern
            Boulevard,  Room 223, Long Island City,  New York 11101,  Attention:
            Contractual & Regulatory Affairs Unit."

            (b) The Contractor  shall  transmit  prompt notice of each coverable
            accident or  occurrence  to the  Contractor's  insurer(s)  with such
            notice  transmittal  to occur  not  later  than  required  under the
            Contractor's insurance policy(ies) or contract(s).

            (c) The Contractor's  insurance policy(ies) or contract(s) shall not
            be  terminated,  revised,  modified or otherwise  changed unless the
            affected  insurer(s)  shall have  provided at least thirty (30) days
            advance written notice to the Director  regarding such  termination,
            revision,  modification or other change.  If an insurer(s)  notifies
            the BOE of the termination of any required coverage,  the Contractor
            shall  provide  written   evidence,   e.g.,  a  new  certificate  of
            insurance,  before the effective  date  contained in such  notice(s)
            that the affected insurance coverage has been fully replaced.  If an
            insurer(s)  notifies  the  BOE  of  any  non-termination   revision,
            modification or other change that causes the Contractor's  insurance
            to be out of compliance with the requirements of this Contract,  the
            Contractor shall cure such non-compliance  before the effective date
            contained in such notice(s).

      (5) The minimum  coverage  limit  amounts and types of insurance  coverage
      expressed  in  this  Agreement  shall  not  be  construed  in  any  manner
      whatsoever  to  limit  the  nature  and/or  extent  of  the   Contractor's
      responsibility and liability under this Agreement to defend, indemnify and
      hold harmless the Board and the City as hereinafter provided.

      (6) The Contractor must obtain, maintain, and renew throughout the life of
      this Contract such additional  insurance policies necessary to comply with
      all applicable laws, rules,  and/or regulations  governing the performance
      of this Contract.  Moreover,  the Contractor  must obtain,  maintain,  and
      renew throughout the life of this Contract all required types of insurance
      coverage  in  amounts  not  less  than  those  specified  above  for  each
      additional  vehicle,  transportation  service or other service that may be
      required during the term of the Contract.  Whereupon the Director  assigns
      to the Contractor  additional vehicles,  transportation  service, or other
      service,  the latter must submit a certification that additional insurance
      has been obtained prior to the start of the additional work.

      (7) The BOE reserves  the right to alter,  either by increase or decrease,
      the minimum  limits of  coverage  required  under this  Contract by a duly
      approved  Resolution of the Board. Should the minimum limits of any or all
      types of insurance coverage be increased,  the Board of Education will not
      provide,   nor  will  the   Contractor  be  entitled  to,  any  additional
      compensation.  Should the minimum limits of insurance coverage be reduced,
      the Board will be entitled to a credit from the Contractor for any savings
      in premiums.

      (8) If any or all  vehicles to be used to perform  this  Contract  are not
      owned directly by the Contractor,  the insurance certificates and policies
      must be endorsed to include the Contractor as well as

<PAGE>
                                       17


      the  Board  and the City as  additional  insured  parties.  Any  insurance
      certificates  and/or policies that reflect coverage only for an owner, who
      is not the Contractor, are not acceptable.

      (9) The Contractor does hereby agree and warrant to defend,  hold harmless
      and  indemnify  the Board and the City from and for all  claims,  actions,
      damages, judgment, expenses, attorney's fees and/or compensation,  whether
      in contract or tort,  arising out of personal injury  (including,  but not
      limited to, death,  sickness,  disease and/or  disability) and/or property
      damage  sustained or alleged to have been sustained in whole or in part as
      a result of, or arising out of, any act or omission of the Contractor, its
      agents,  employees and/or subcontractors,  or caused or resulting from any
      deleterious  substance  in any  products  supplied,  or  while  equipment,
      supplies,  etc., are being delivered,  or the service-work performed under
      this Contract, whichever instance is applicable.

(E)  Paragraph E of the  Extension  and Sixth  Amendment  Agreement  of Contract
Serial  Nos.  0065,  0075 and 8107,  Paragraph  E of the  Extension  and  Fourth
Amendment  of Contract  Serial No. 9888,  and Article 45 of Contract  Serial No.
7263 (as  amended)  are hereby  amended to read as follows for the period of the
instant Extension and Amendment Agreement:

      "1. Priority in Hiring and Master Seniority Lists.

      "There shall be established two industry-wide  Master Seniority Lists. One
      list  shall  be  composed  of  all  operators  (drivers),  mechanics,  and
      dispatchers   and  the  other   list   shall  be   composed   of   escorts
      (matrons-attendants)  who  were  employed  as of June  30,  2000,  under a
      contract between their employers and the Board for the  transportation  of
      school  children  in the City of New York,  who are  furloughed  or become
      unemployed  as a result of loss of contract  or any part  thereof by their
      employers,  or as the result of a  reduction  in service  directed  by the
      Board during the term of the contract,  in  accordance  with their date of
      entry into the industry. All operators (drivers),  mechanics,  dispatchers
      and  escorts  (matrons-attendants)  on  the  Master  Seniority  Lists  who
      participated in the Division 1181  A.T.U.-New York Employees  Pension Fund
      and Plan as of June 30,  2000,  and who do not  exercise  their  option to
      withdraw  from the Fund and Plan shall  continue  to  participate  in such
      Pension Plan.

      "Any existing  contractor or individual  who conducted  business as a sole
      proprietor,  or as a member  of a  partnership  or who held a  controlling
      interest in a  corporation  that  performed  service  pursuant to contract
      expiring in June, 2000  (contractor)  shall give priority in employment on
      September,  2000 or  thereafter  on the basis of  position  on the  Master
      Seniority List of any additional or replacement  operators,  mechanics and
      dispatchers beyond those performing service as of June 30, 2000 consistent
      with  the  number  of  employees  required  by the  specifications  of the
      contract expiring June, 2000 for the number of vehicles  providing service
      to the Board as of June 30, 2000 to individuals  from the Master Seniority
      List until such list is exhausted.

      "Any new  contractors,  i.e. those who did not provide service pursuant to
      contract  expiring  June,  2000 (new  contractor),  shall give priority in
      employment in  September,  2000 or thereafter on the basis of seniority to
      every operator (driver), mechanic and dispatcher performing service pursu-

<PAGE>
                                       18


      ant to such  contract  starting  from the first  employee  from the Master
      Seniority List until such list is exhausted.

      "Should the Board  determine to require the  contractor to provide  escort
      service in  addition  to the  operator,  and in the event that all escorts
      (matrons-attendants) on the Master Seniority List, who were employed as of
      June  30,  2000,  are not  employed  as  escorts  by  contractors  for the
      beginning  of service in September  of 2000,  then said  escorts  shall be
      employed in order of their position on the Master Seniority List.

      "2. Compensation.

      "All   operators   (drivers),    mechanics,    dispatchers   and   escorts
      (matrons-attendants)  on the industry-wide Master Seniority Lists shall be
      employed and paid on a full-time  basis based upon the wage scale received
      from prior employer under pupil transportation contracts.

      "The  contractor  shall  compensate  operators  (drivers),  mechanics  and
      dispatchers  and  escorts  (matrons-attendants)  who  appear on the Master
      Seniority  Lists and who are employed  pursuant to contracts to be awarded
      as follows for the term of the contract:

            "(a)  Operators  (drivers) and  dispatchers  at a daily rate of pay,
                  including  any COLA,  for each day of  service,  not less than
                  that  paid  pursuant  to  any  applicable   labor   collective
                  bargaining agreement.

            "(b)  Mechanics at a daily rate of pay, including any COLA, for each
                  day of  service,  not less  than  that  paid  pursuant  to any
                  applicable labor collective bargaining agreement.

            "(c)  Escorts (matrons-attendants) at a daily rate of pay, including
                  any  COLA,  for each day of  service,  not less than that paid
                  pursuant  to  any  applicable  labor   collective   bargaining
                  agreement.

      "Such  operators  (drivers)  and  escorts  (matrons-attendants)  shall  be
      available for extended service,  without  additional  compensation,  which
      shall be defined as performance within the particular job category,  i.e.,
      drivers  as   drivers,   and  escorts   (matrons-attendants)   as  escorts
      (matrons-attendants), within the eight (8) hour work day within the spread
      (8 within 10 hours)  provided for in the collective  bargaining  agreement
      covering said employees, if any.

<PAGE>
                                       19


      "3. Welfare.

      "Contributions  by  the  contractor  for  providing  welfare  benefits  to
      operators     (drivers),     mechanics,     dispatchers     and    escorts
      (matrons-attendants),  in the event the contractor  employs  escorts,  who
      appear  on the  Master  Seniority  List  shall  be no less  than  $410 per
      employee  per  month on a  twelve  month  basis  during  each  year of the
      contract.

      "4. Pensions.

      "The contractor shall sign an agreement with Division 1181 A.T.U.-New York
      Employees  Pension Fund and Plan to  participate in such plan on behalf of
      all   operators    (drivers),    mechanics,    dispatchers   and   escorts
      (matrons-attendants),  in the event the  contractor  employs  escorts  who
      appear on the Master  Seniority Lists and who participated in the Fund and
      Plan as of June 30, 2000.  This  requirement  shall not be  interpreted to
      require a contractor to enter into a collective  bargaining agreement with
      the  union nor shall it  prohibit  the  contractor  from  entering  into a
      collective  bargaining agreement with the union. The contractor shall file
      a copy of the executed agreement with the Trustees of the Fund and Plan to
      participate in said Fund and Plan and with the Secretary of the Board with
      the acknowledgment of the Notice of Award.

      "The contractor  shall contribute  $48.15 per week per operator  (driver),
      mechanic and dispatcher on the Master Seniority List, and participating in
      the Plan and Fund as of June 30,  2000,  for forty weeks each year for the
      term of the contract, or such greater amount as may be required,  based on
      contributions  by  contractors  on behalf  of the  majority  of  employees
      participating  in the Fund and Plan  pursuant to a  collective  bargaining
      agreement with Local  1181-1061.  The contractor  shall withhold  $23.00 a
      week from each  operator,  mechanic and dispatcher  participating  in said
      Fund and Plan for forty weeks each year for the term of the  contract,  or
      such  greater  amount  as may be  required  based  on  contributions  of a
      majority of the operators (drivers), mechanics or dispatchers contributing
      to the Fund and Plan.

      "Such contractors who provide escort service,  shall contribute $44.15 per
      week per escort  (matron-attendant) for forty weeks each year for the term
      of the  contract,  or such  greater  amount  as may be  required  based on
      contributions  by  contractors  on behalf  of the  majority  of  employees
      participating  in the Fund and Plan  pursuant to a  collective  bargaining
      agreement with Local  1181-1061.  The contractor shall withhold $18.00 per
      week from each escort,  (matron-attendant)  participating in said Fund and
      Plan and Fund for forty weeks each year for the term of the  contract,  or
      such  greater  amount as may be  required  based on  contributions  of the
      majority of the escorts contributing to the Fund and Plan.

      "In connection with employees who are on the Master Seniority List and who
      do not participate in the Local 1181-1061 Fund and Plan, they shall not be
      required  to  participate  in  the  Plan  but  shall  participate  in  the
      collective bargaining agreement, if any, of their employer.

      "The  contractor  shall pay all such  amounts to the Fund and Plan  within
      seven days after the end of each payroll period.

<PAGE>
                                       20


      "5. Enforcement.

      "In addition to any other  remedies  provided in the contract  between the
      Board and the  contractor,  such as  default  and/or  termination,  if the
      contractor  is  found  to  be  in  violation  of  the  foregoing  employee
      protection  provisions  regarding  the payment of wages,  welfare  benefit
      contributions,  pension contributions, or other aspects of compensation or
      benefits,  then the OPT  Director,  within  thirty  (30)  days of  written
      notice,  shall withhold the  appropriate  amounts from any payments due to
      the  contractor  and pay them  directly  to the  applicable  union for the
      benefit of the employees  affected,  to the Division 1181  A.T.U.-New York
      Employees  Pension  Fund or other  applicable  union  pension fund for the
      benefit of the employees  affected or to the appropriate  Welfare Fund for
      the benefit of the employees  affected.  If the affected employees are not
      affiliated  with any  union,  then the Board  shall  investigate  on their
      behalf allegations of employee protection  provision  violations regarding
      the payment of wages,  welfare benefit or health insurance  contributions,
      pension  or  similar  savings  plan  contributions,  or other  aspects  of
      compensation or benefits. Upon a finding of any such violation(s), the OPT
      Director shall withhold the  appropriate  amounts from any payments due to
      the  Contractor  and pay them  directly to the employees or to such health
      insurance companies or other institutions as appropriate.

      "In the event  any  contractor  willfully  fails to  comply,  the Board of
      Education  shall  act to  cancel  such  contractor's  contract;  provided,
      however,  that the  Board  shall not be  required  to act so as to cause a
      disruption of service.

      "6. Contractors providing a total of five vehicles or less pursuant to all
      contracts  with the Board for the  transportation  of pupils  shall not be
      subject to the foregoing  provisions with respect to operators  (drivers),
      mechanics and dispatchers.

      "Escorts  (matron-attendants)  shall  not be  included  in  the  exclusion
      provided in this paragraph 6.

      "7. For the purposes of this section, corporate bidders who are subject to
      common  control as  determined  by the Board  based upon  analysis  of (a)
      ownership  of the  corporations'  assets,  (b)  coincidence  of  corporate
      officers and  directors,  and (c) such other factors as the Board deems to
      be relevant, are deemed to be one bidder.

      "8. The Board may in its sole and  unfettered  discretion  change any date
      which determines  employee protected status,  employer status or any other
      status,  which is contained in any employee  protection  provisions of the
      Contract.  The Master  Seniority Lists will be updated to June 30, 2000 as
      permitted in accordance with pre-existing collective bargaining agreements
      executed prior to the date of execution of this Contract. Furthermore, the
      rates  quoted  herein  may not be  reflective  of current  labor  rates in
      effect.  The contractor should pay special attention to the fact that many
      employees on the Master Seniority Lists have been in the industry for many
      years and  therefore  may be entitled to  substantial  wages,  pension and
      welfare benefits and wage accruals.

<PAGE>
                                       21


      "The date for inclusion on the Master  Seniority List is hereby updated to
      the  last  school  day in  June,  2000 as  permitted  in  accordance  with
      pre-existing collective bargaining agreement executed prior to the date of
      this Extension Agreement and Amendment Agreement."

(F)  MISCELLANEOUS  AMENDMENTS  AFFECTING  VEHICLES.  All  else to the  contrary
notwithstanding, the Contract is hereby amended as follows:

      (1) List of Vehicles.  Before  September of each  Extension year or at any
      other time stated by the Director,  the Contractor  must provide a list of
      all vehicles,  including  spare and maintenance  vehicles,  to be operated
      during  each  Extension  year.  Such list must show for every  vehicle the
      year, make,  type,  seating  capacity,  registration  number,  bus number,
      license plate number,  owner,  lessee (if applicable),  and the expiration
      date of the New York State Department of Transportation  approval sticker.
      The  information  must be provided on forms  approved  and supplied by the
      BOE, and the Contractor  must supply a copy of the title or certificate of
      registration  for each listed  vehicle.  Whenever any changes occur in the
      list of  vehicles,  the  Contractor  must  update the list within ten (10)
      business days. In addition,  the Contractor  must provide at the same time
      written assurance that all vehicles are equipped with two-way radios.

      (2) Age and Condition of Vehicles. The vehicles affected by this provision
      include all originally  contracted vehicles,  (i.e.,  "contract vehicles")
      and all  additional  and spare  vehicles.  Except for the age of vehicles,
      nothing contained in this Paragraph (F)(2) and/or any of its subparagraphs
      shall be construed in any manner or to any extent whatsoever to act and/or
      operate in abrogation or derogation of any other  individual or cumulative
      provisions of the Contract as otherwise amended and extended.

            (a) The Contractor  shall provide  service,  maintenance and repairs
            for all vehicles used to perform this  Contract in  compliance  with
            (i) all  manufacturer's  guidelines  for  maintenance,  service  and
            repairs,   (ii)  all  Federal  and  State  of  New  York   statutes,
            regulations,  rules,  guidelines and policies applicable to service,
            maintenance  and repair of school bus  vehicles,  (iii) all New York
            State Department of Transportation  and New York State Department of
            Motor Vehicles  policies,  rules and  regulations;  (iv) Federal and
            State of New York  regulations  applicable to maintenance and repair
            of  school  bus  vehicles,  and,  (v) all New York  State  Education
            Department,  policies,  rules and regulations applicable to service,
            maintenance and repair of school bus vehicles.  The Contractor shall
            maintain  and,  upon demand,  supply the Director  contemporaneously
            kept,  accurate and full written records of the vehicle  maintenance
            and repair activities performed in accordance with the foregoing.

            (b) The Director may disapprove  any vehicle(s)  under this Contract
            and  require the  Contractor  to furnish an  acceptable  replacement
            vehicle(s)  in the event  that the  Director  determines  in his/her
            reasonable judgement any such vehicle(s) to be unfit for service.

            (c) During the life of this Extension  Agreement,  all vehicles must
            comply with the following:

<PAGE>
                                       22


                  (i) By July 1,  2000 no more  than 30% of the  number  of runs
                  operated  by the  Contractor  as of June 30,  2000  under this
                  Contract may use vehicles manufactured before 1987;

                  (ii) By July 1,  2001 no more  than 25% of the  number of runs
                  operated  by the  Contractor  as of June 30,  2000  under this
                  Contract may use vehicles manufactured before 1987;

                  (iii) By July 1, 2002 no more  than 20% of the  number of runs
                  operated  by the  Contractor  as of June 30,  2000  under this
                  Contract may use vehicles manufactured before 1987;

                  (iv) By July 1,  2003 no more  than 15% of the  number of runs
                  operated  by the  Contractor  as of June 30,  2000  under this
                  contract may use vehicles manufactured before 1987;

                  (v) By July 1,  2004 no more  than 10% of the  number  of runs
                  operated  by the  Contractor  as of June 30,  2000  under this
                  Contract may use vehicles manufactured before 1987.

            (d) The  Contractor  may  continue to use the  vehicles  that are in
            service  as of the  date  of the  execution  of this  Extension  and
            Amendment  Agreement  throughout  the  term  of said  Extension  and
            Amendment  Agreement,  provided,  each such vehicle is in compliance
            with Paragraphs  (F)(2)(a)-(c),  et seq.  hereof.  However,  any new
            vehicles  that shall be placed into service  during the term of this
            Extension and Amendment  Agreement shall be not more than five years
            old at the time  such  vehicle  is  placed  into  service.  Vehicles
            transferred  among  contractors  that are subject to common  control
            shall  not  be  considered  as  new  vehicles  under  the  preceding
            sentence. In his/her reasonable  discretion,  the Director may allow
            the  continued  use of any given  contractor's  vehicles that are in
            service  as of the  date  of the  execution  of this  Extension  and
            Amendment  Agreement  upon an assignment of the Contract,  if and to
            the extent any such assignment  shall be approved in accordance with
            the terms and conditions of the Contract,  as heretofore amended and
            extended.

      (3) Use of Vehicles.  Article XII entitled, "Use of Vehicles," in Contract
      Serial  Nos.  0065,  0075  and  8107  and  Article  36  entitled,  "Use of
      Vehicles," in Contract  Serial No. 9888 are hereby amended by the addition
      of sixth and seventh unnumbered  paragraphs,  respectively,  at the end of
      each such Article to read as follows:

            "In  addition  to all other  uses of  vehicles  prescribed  in pupil
            transportation  contracts,  the Director shall have the right, power
            and authority to require the Contractor to provide  vehicles  during
            the hours  between  the  transportation  of pupils to school for the
            morning  sessions and the pick-up of pupils for homeward bound trips
            for service to other  mayoral  and/or  non-mayoral  City of New York
            agencies  and  to  any  other   public   agencies   and/or   private
            organizations,  as determined by the Director.  While not previously
            invoked to any great extent during the period of the  Contract,  the
            provisions  of the  third  unnumbered  paragraph  contained  in this
            Article XII are still in full force and effect as stated herein. The
            Contractor shall be entitled to payment for

<PAGE>
                                       23


            such services as stipulated in this contract.  At no time shall such
            service  interfere with the timely  transportation  of pupils to and
            from school."

      (4) New Laws,  Rules,  Regulations,  Bylaws or School Bus Safety Features.
      Whereupon any Federal,  State,  local or BOE laws,  rules,  regulations or
      bylaws are enacted,  updated, revised, amended or otherwise changed in any
      manner  which  require  the  Contractor  to  undertake  any new or revised
      procedures  affecting school bus personnel or operations (i.e., school bus
      personnel  drug  or  alcohol   testing,   driver   licensing  or  training
      procedures, etc.) or the introduction onto vehicles of new safety features
      or  any  other  equipment  (e.g.,  increased  seat-back  padding,  back-up
      beepers, stop arms, safety sensors, seat belts, etc.), the Contractor must
      comply  promptly.  The Contractor  must assume the full cost of compliance
      with any new or revised driver and/or  operational  procedures  and/or for
      the  purchase  and  installation  of  new  safety  features  and/or  other
      equipment in compliance with any such legal and/or regulatory  changes and
      shall not be entitled to any additional  remuneration  from the BOE except
      as expressly  permitted by law,  i.e.,  if the BOE is able to obtain State
      aid or other Federal, State of New York and/or City of New York funding to
      pay for all or any portion of the Contractor's  compliance with such legal
      and/or  regulatory  changes,  the BOE  shall pay the  Contractor  for such
      compliance but only to the extent of the Board's receipt of such funding.

      (5) Railroad Crossings.  Each driver must make a full stop at all railroad
      crossings, except that no stop is necessary at any railroad crossing where
      a police  officer,  New York City  Department  of  Transportation  traffic
      control officer, or a traffic control signal directs traffic to proceed.

      (6) EZ Pass.  Every  vehicle  used under this  Contract  (including  spare
      vehicles  but not  maintenance  vehicles)  that  crosses  one or more toll
      bridges as part of the performance of its regularly  scheduled run(s) must
      be  equipped  with an EZ Pass that meets all  applicable  laws,  rules and
      regulations.  In addition,  the  Contractor  shall purchase and maintain a
      sufficient  number of EZ Passes  to ensure  that all buses  used for field
      trips  shall be able to have EZ Passes to speed their  passage  across any
      affected toll bridges.

      (7)  Back-Up  Warning  Alarms.  Every  vehicle  used under  this  Contract
      (including  spare  and  maintenance  vehicles)  must be  equipped  with an
      automatic  audible alarm system  installed  behind the rear axle. The said
      alarm  system  on each  vehicle  must  comply  in every  respect  with the
      official  published  standards  of the  Society  of  Automotive  Engineers
      (hereinafter expressed as "SAE") entitled, "Back-up Alarm Standards," (SAE
      No. 994b)  specifying  97+/-4dBA for rubber tired  vehicles as well as all
      applicable  Federal,  State of New York, City of New York and/or BOE laws,
      bylaws, rules, regulations and policies as the same currently exist or may
      be created,  added,  deleted,  updated,  recodified,  revised,  amended or
      otherwise  changed  during  the  term  of  this  Extension  and  Amendment
      Agreement.

(G)   MISCELLANEOUS   FINANCIAL   AMENDMENTS.   All   else   to   the   contrary
notwithstanding, the Contract is hereby amended as follows:

<PAGE>
                                       24


      (1) Chapter 902 Service.  On days when public  schools are not in session,
      the Contractor is required  nevertheless  to provide  service  pursuant to
      Chapter  902 of the Laws of 1985.  The  Contractor  must  comply  with the
      Director's  instructions  concerning  the  numbers  of  vehicles  and  the
      vehicular routes to maximize efficient utilization. The Contractor will be
      paid only for those  vehicles  that  operate  on those  days as  expressly
      authorized by the Director.

      (2) Further  Amendments.  The  Contractor  hereby  agrees and covenants to
      execute  any further  amendment  to the  Contract  that the New York State
      Education Department requires to secure the Department's  approval of this
      Extension and Sixth Amendment  Agreement and to maintain the continuity of
      funding.

      (3) Cancellation.

            (a) General Terms and Conditions Section 7 entitled, "Cancellation,"
            is  amended  so that the  Director  may seek to have the  Contractor
            declared by the Chancellor's Board of Review to be in default of the
            Contract  either as a whole or merely in one or more  "items" of the
            Contract,  i.e., the Contract is divisible into its several "items."
            Upon a finding  of  default,  the  Chancellor's  Board of Review may
            terminate  the  whole  Contract  or merely  one or more  contractual
            "items."

            (b) General Terms and Conditions Section 7 entitled, "Cancellation,"
            is  amended  by the  addition  of a new  paragraph  "D" to  read  as
            follows:

                  "In the event of significant or repeated safety violations due
                  to acts of commission and/or omission by the Contractor or its
                  employees  that result from the  Contractor's  failure  and/or
                  refusal  to conduct  its  operations  according  to good pupil
                  transportation  industry practices,  the BOE may terminate the
                  Contract   upon  thirty  (30)  days  written   notice  to  the
                  Contractor,   unless  the  Contractor  can  establish  to  the
                  Director's  reasonable   satisfaction  that  the  Contractor's
                  record of safety will thereafter be satisfactory  according to
                  good industry practices.  For purposes of this provision,  the
                  term  "safety   violations"  shall  mean  significant   and/or
                  repeated  violation of safety laws and/or  regulations  of the
                  U.S.   Department  of  Transportation,   the  New  York  State
                  Department of Transportation,  the New York City Department of
                  Transportation   and/or  the  BOE,   provided,   that   before
                  terminating  this agreement for  significant  and/or  repeated
                  safety  violations,  OPT shall  provide  the  Contractor  with
                  notice and an opportunity to cure."

            (c) General Terms and Conditions Section 7 entitled, "Cancellation,"
            is  amended  by the  addition  of a new  paragraph  "E" to  read  as
            follows:

                  "In  the  event  of  an  indictment  of  the  Contractor,  its
                  principals,  officers, or management employees on the basis of
                  acts of  commission  or omission  involving or  affecting  the
                  provision of pupil transportation services under any BOE pupil
                  transportation contract(s) including, but not limited to, acts
                  of commission or

<PAGE>
                                       25


                  omission  that   excessively   increase  BOE  costs  of  doing
                  business,  the BOE may, at the Director's  discretion,  either
                  terminate the Contract upon thirty (30) days written notice to
                  the  Contractor  or  require  the  Contractor  to  obtain  the
                  employment  termination  and/or  ownership  divestiture of the
                  indicted  party(ies).   Before  a  final  decision  on  either
                  disposition,  the  Director  shall  afford  the  Contractor  a
                  personal  meeting  to allow  for a full,  open  discussion  of
                  relevant issues."

            (d) General Terms and Conditions Section 7 entitled, "Cancellation,"
            is  amended  by  adding  a new  paragraph  "F" to read  as  follows:
            "Nothing herein shall otherwise limit the rights and remedies of the
            Director  and/or  the  Board  of  Education  as set  forth  in  this
            Contract."

      (4)  Increase  or Decrease in the Number of  Vehicles.  Article  XIII-A of
      contracts  under Serial Nos. 0065,  0075 AND 8107  entitled,  "INCREASE OR
      DECREASE IN THE NUMBER OF VEHICLES  DURING PERIODS OF EXTENSION," as added
      by the  1992  Extension  and  Amendment  Agreement,  shall be  amended  at
      Paragraph (h) to read as follows:

            "1.  Notwithstanding  the  provisions  of Article  XIII, at any time
            during the period of extension the number of vehicles required in an
            item may be increased or decreased and the schedules may be adjusted
            due to changes in pupil population,  default or voluntary  surrender
            of a  contract  or changes  in policy or  directives  adopted by the
            Board  of  Education,  the City of New  York,  the  State  Education
            Department,  and/or the Financial Control Board; provided,  however,
            that in no event  shall the  total  number  of  vehicles  originally
            awarded to a contractor  be reduced by more than forty percent (40%)
            of the total number of vehicles originally awarded.  Compensation to
            the contractor shall be adjusted to the number of vehicles  actually
            used in the performance of this Contract, and the Board of Education
            shall not be liable for payments for any vehicles  eliminated to the
            extent provided  above.  This provision does not apply to the summer
            months when  vehicles  may be decreased  as much as  necessary.  For
            Summer School  Transportation  services  vehicles will be offered by
            item beginning with the contractor that quoted the lowest daily rate
            per vehicle under Contract  Serial Nos. 0065,  0075,  8107, 9888 and
            7263.

            "2.  If the  Director  eliminates  any  vehicle(s)  from the  number
            originally  awarded  to the  Contractor  and  later  offers  again a
            vehicle(s) of the same type(s) and geographical  service area(s) due
            to any resumed need, the Contractor shall be entitled to restoration
            up to and  including  the number of vehicles of the same type(s) and
            geographical  service  area(s)  originally  awarded  pursuant to the
            procedures specified above in Paragraph B.

            "The Director shall offer any  "additional"  vehicle(s) first to the
            contractor with the lowest "current" weighted average daily rate per
            vehicle  in the  relevant  contractual  item,  under the  procedures
            specified above in Paragraph B. Additional  vehicles will be offered
            first to the  Contractor  will the  lowest  current  daily  weighted
            average.  The ranking will include  both those  contractors  who are
            under an extension agreement and those contractors who are under the
            terms  of  Contracts  for  similar  work.  If all  contractors  in a
            particular item refuse an

<PAGE>
                                       26


            offer of additional  vehicles,  the additional vehicles will then be
            offered to  contractors  providing  service under this  extension in
            order of the lowest current daily rate in all items.

            "The term 'lowest  weighted average daily rate per vehicle,' as used
            to determine the order in which contractors are affected by both the
            decrease  provisions  of Paragraph A and the increase  provisions of
            Paragraph B concerning  both  original  vehicles and all  additional
            vehicles,  shall  reflect the current rates paid by the Board at the
            time of an offer.

            "If the Director shall  eliminate any  'additional'  vehicles at the
            outset of  service  in any  given  September  and  shall  thereafter
            restore  such  vehicles by not later than  October  15th of the same
            school  year,  the  Director  shall award such  restored  additional
            vehicles to the contractor(s) from whom they were previously taken.

            "3. All vehicles  awarded under this  provision  shall be treated as
            'additional' and not as 'contract' vehicles.

            "4.  Anything  in the  foregoing  ARTICLES  XIII and  XIII-A  and/or
            elsewhere in the Contract to the contrary notwithstanding, the Board
            of Education  shall not reduce the number of  'additional'  vehicles
            held by the  Contractor as of June 30th each  extension  year during
            the period of this Extension and Ninth Amendment  Agreement,  except
            in  instances  of  decreases  of student  population  affecting  the
            Contractor's   geographical   service   area(s)  and/or  type(s)  of
            vehicle(s).  With  respect  to this  ARTICLE  XIII-A  and all  other
            applicable aspects of the Contract,  the BOE shall have the sole and
            absolute  discretion  to fix and determine  which  schools  students
            shall  attend  throughout  the New York  City  School  District,  to
            determine  what types of vehicle shall be  appropriate  to transport
            individual  pupils,  and to make findings and decisions with respect
            to increases  and  decreases of student  populations  in the various
            geographical areas of the New York City School District."

      (5) BOE Procedural Due Process  Arising from Controlled  Substance  and/or
      Alcohol  Consumption and Abuse.  The Contractor does hereby  stipulate and
      agree that  Federal  and State of New York  courts and the SED have issued
      judicial decisions requiring the BOE to administer forms of procedural due
      process under certain circumstances in cases where any of the Contractor's
      employees or  subcontractor  employees  have their BOE  certifications  of
      approval suspended and/or permanently revoked as a consequence of positive
      test results for the presence of a controlled substance(s) and/or alcohol.
      The  Contractor  does hereby  further  stipulate and agree to comply fully
      with all  Federal,  State  of New  York,  City of New  York and BOE  laws,
      bylaws,  rules,  regulations,  procedures  and policies  applicable to the
      prohibition of consumption of, and testing for, controlled  substances and
      alcohol with respect to its employees  and  subcontractor  employees  that
      affect the safe  operation  of school bus  vehicles as the same  currently
      exist or shall be added, deleted,  updated,  amended, revised or otherwise
      changed  during the Term of this  Contract.  The  Contractor  does  hereby
      further  stipulate and agree that compliance  with the preceding  sentence
      shall  require  the  Contractor  to  administer  effectively  a program of
      controlled substance and alcohol abuse prevention,  training,  testing and
      other services, for portions of which

<PAGE>
                                       27


      the  Contractor  may  elect  to  use  professional   subcontractors.   The
      Contractor shall submit to the BOE for advance and continuing(8)  approval
      by the OPT Director full and detailed written  information(9)  about every
      subcontractor that the Contractor shall elect to use to provide controlled
      substance  and  alcohol  abuse  prevention,  training,  testing  and other
      services under this Contract. The Contractor does hereby further stipulate
      and agree that, if the OPT Director  shall  reasonably  determine that the
      reversal, disqualification or other nullification by the BOE, a Federal or
      State court,  the SED and/or any other tribunal of competent  jurisdiction
      of a positive  test result for a controlled  substance(s)  and/or  alcohol
      shall have been caused and/or permitted by the Contractor's failure and/or
      refusal to administer  effectively  a program of controlled  substance and
      alcohol  abuse  prevention,  training,  testing  and other  services,  the
      Contractor   shall  pay  all  BOE  and/or  City  of  New  York  costs  for
      disciplinary  conferences,  other forms of procedural  due process and the
      defense  of  judicial,   administrative  and/or  other  claims,   actions,
      proceedings,  special  proceedings  and/or  appeals.  Such BOE and/or City
      costs may  include,  but  shall  not be  limited  to,  BOE  administrative
      personnel  hourly rates,  BOE  facilities  use fees,  expert witness fees,
      subcontractor and other document  production fees, back pay for Contractor
      employees,  and reasonable  attorney  fees.  Reasons for an OPT Director's
      determination that a reversal,  disqualification or other nullification by
      the BOE, a Federal or State  court,  the SED and/or any other  tribunal of
      competent  jurisdiction  of  a  positive  test  result  for  a  controlled
      substance(s) and/or alcohol shall have been caused and/or permitted by the
      Contractor's failure and/or refusal to administer effectively a program of
      controlled substance and alcohol abuse prevention,  training,  testing and
      other  services  may  include,  but shall not be  limited  to,  failure to
      maintain  adequate  records,  failure to produce  evidence  and/or  expert
      testimony  from a  subcontractor(s),  failure  to  safeguard  the chain of
      custody of a test  sample(s),  and failure to use adequate and/or approved
      scientific testing methods.

      (6) Sales,  Excise and Use Taxes.  The  Contractor  does hereby  agree and
      warrant to  cooperate  fully with the BOE to  eliminate  the  Contractor's
      payment  of  Federal,  State  and  local  sales,  excise  and use taxes on
      purchases,  leases and other transfers that the Contractor makes, effects,
      causes or allows in the  performance of the Contract.  The Contractor does
      hereby  further  consent and agree to cooperate  fully with BOE efforts to
      eliminate Federal,  State and local sales,  excise and use taxes through a
      program(s) of BOE purchases of gasoline,  diesel fuel,  automotive  parts,
      safety equipment and other goods, materials,  commodities and/or services,
      which the BOE may supply to the Contractor and which the Contractor  shall
      use to perform the Contract with the cost of that same being deducted from
      any  and  all BOE  payments  to the  Contractor.  The  BOE  may  elect  to
      promulgate  particular  rules and procedures  regarding the elimination of
      such taxes, a

-------------
(8) In the event that the OPT Director shall inquire into any allegation(s) that
any  previously  approved  subcontractor  shall  have  provided   unsatisfactory
performance of its controlled  substance and alcohol abuse prevention,  training
and/or testing responsibilities,  the Contractor shall furnish full and detailed
written information about the affected subcontractor and shall otherwise provide
all reasonable assistance in the conduct of any such BOE inquiry.  Whereupon the
OPT Director shall determine after such an inquiry that any previously  approved
subcontractor shall have provided  unsatisfactory  performance of its controlled
substance   and   alcohol   abuse    prevention,    training    and/or   testing
responsibilities,  the  Contractor  shall  cease and desist from any use of such
subcontractor  immediately  upon receipt of written notice from the OPT Director
to that effect.

(9) The OPT Director may prescribe  the types of  information  of  subcontractor
information  to be supplied,  in which case the BOE shall supply without cost to
the Contractor a form(s) for the provision of such information.

<PAGE>
                                       28


      draft  copy of which the  Board  shall  circulate  to the  Contractor  for
      comment before final promulgation.  Such rules and procedures may include,
      but are not necessarily  limited to, the following:  (a) the  Contractor's
      use of the Board's tax exempt  status when making,  effecting,  causing or
      allowing  purchases,  leases and other transfers in the performance of the
      Contract (the Board shall furnish the Contractor  with  appropriate  forms
      and procedures),  provided, that the Contractor shall remain the purchaser
      or lessee of its vehicles, goods, commodities,  supplies, equipment and so
      forth;  (b) the Contractor's  use of BOE-supplied  gasoline,  diesel fuel,
      automotive parts, safety equipment and other goods, materials, commodities
      and/or  services,  the cost of which the BOE shall deduct from any and all
      payments to the Contractor;  and, (c) the Contractor's cooperation through
      the  production  of  documentary  and other  evidence  and  testimony,  as
      specified  by the Board,  with any and all attempts by the BOE to seek and
      obtain refunds of any and all Federal,  State and local excise,  sales and
      use taxes that the  Contractor  has paid during any  applicable  statutory
      period of limitation for goods, fuel, commodities,  services, leases, etc.
      in the  performance of the Contract.  The Board does hereby  stipulate and
      agree  that it will not  seek any  refunds  or other  remedies  affectings
      sales,  excise and/or use taxes,  regarding which the Contractor  shall be
      entitled to, or shall have obtained,  an  exemption(s),  credit(s)  and/or
      refund(s), except where the Contractor shall have failed and/or refused to
      have sought any affected exemption(s), credit(s) and/or refunds. Whereupon
      the Board shall require the  Contractor to produce  documentary  and other
      evidence  and  testimony in the course of any attempt by the Board to seek
      and obtain refunds of any such taxes,  the Board shall pay the Contractor,
      as consideration for such cooperation,  twenty percent (20%) of any refund
      amount  attributable  to the  Contractor's  purchases,  leases  and  other
      transfers,  but only when and  after  such  refund  amounts  are  actually
      received  by  the  Board.  If  the  Contractor   shall  have  obtained  an
      exemption(s)  or  refund(s)  or  shall  have  taken  a  credit(s)   and/or
      deduction(s) from income or other taxes with respect to all or any portion
      of Federal, State and/or local sales, excise and/or compensating use taxes
      applicable to vehicles,  goods,  commodities,  supplies,  equipment and so
      forth under this Contract,  then the  Contractor  shall not be required to
      furnish  documentation  in support of a tax refund in connection  with the
      affected  sales,  excise and/or  compensating  use taxes but shall instead
      furnish the BOE with a written,  signed and notarized statement describing
      the  exemption(s),  credit(s)  and/or  deduction(s)  regarding  all or any
      portion of Federal,  State and/or local sales,  excise and/or compensating
      use taxes applicable to vehicles, goods, commodities,  supplies, equipment
      and so forth under this Contract and attesting that the  Contractor  shall
      have  passed on to the BOE the  savings  achieved  from the  exemption(s),
      credit(s) and/or deduction(s).

      (7)  Limitation on Payments for Days When  Vehicles Are Not Operated.  All
      provisions of contracts under Serial No. 7263  prescribing no payments for
      days when  vehicles are not operated  shall remain  unchanged  and in full
      force and effect. The first unnumbered paragraph of ARTICLE V of contracts
      under Serial Nos. 0065,  0075 and 8107 entitled,  "PAYMENT," and the first
      unnumbered  subparagraph  of Paragraph A of ARTICLE 29 of contracts  under
      Serial No. 9888 entitled, "PAYMENT," are hereby amended by the addition of
      the following  language between the existing fourth and fifth sentences in
      contracts  under Serial Nos. 0065,  0075 and 8107 and between the existing
      third and fourth sentences in contracts under Serial No. 9888:

<PAGE>
                                       29


            "The  preceding  sentence  to  the  contrary  notwithstanding,   the
            Contractor shall be entitled to receive eighty-five percent (85%) of
            its daily rate(s) per vehicle for 'regularly  scheduled school days'
            on which the Chancellor or his designee(s) shall order schools to be
            closed and/or pupils not to be in attendance  for any reason,  which
            percentage  shall be deemed to represent  costs that the  Contractor
            shall be unable to avoid  even when  service is not  furnished.  The
            preceding sentence to the contrary  notwithstanding,  the Contractor
            shall not seek,  nor be  entitled  to  receive,  payment for one (1)
            regularly  scheduled  school day during  Extension Year 2000-01 when
            the  Chancellor or his  designee(s)  shall order pupils not to be in
            attendance  and  vehicles not to run;  and,  for a second  regularly
            scheduled   school  day  during  Extension  Year  2000-01  when  the
            Chancellor  or  his  designee(s)  shall  order  pupils  not to be in
            attendance and vehicles not to run, the Board shall pay  eighty-five
            percent (85%) of the Contractor's daily rate(s) per vehicle in equal
            monthly  installments  over a period of thirty-six (36) months after
            the month in which the day of  non-operation  shall occur.  The term
            'regularly  scheduled  school  days'  is  defined  as days on  which
            schools are scheduled to be open in accordance with the official BOE
            Calendar as original  adopted and  published  annually  and prior to
            amendment  thereof.  Moreover,  the Contractor does hereby stipulate
            and agree on behalf of itself  and its  successors  and  assigns  to
            discontinue  with  prejudice  any and all pending  claims,  actions,
            proceedings  and/or  special  proceedings  against  the  BOE  and to
            refrain  from  bringing  any and all  claims,  actions,  proceedings
            and/or special  proceedings  against the BOE that shall have accrued
            on or before  the  execution  date of this  Extension  and  Eleventh
            Amendment  Agreement  concerning  any  days on  which  schools  were
            scheduled  to have been  opened  but were  closed  for any reason by
            order of the Chancellor or his designee(s)."

(H) INSURANCE AND FUEL COST INFLATION RELIEF PROVISIONS.  Whereupon the New York
State Legislature shall amend the Education Law to allow the BOE to obtain State
funding to reimburse the Contractor for any amount of demonstrated  and approved
increases in the costs of automotive liability insurance,  comprehensive general
liability  insurance,  employee health care insurance,  unemployment  insurance,
Worker's Compensation Insurance,  and/or vehicle fuel costs, this Contract shall
be deemed amended  automatically  and without any need for action by the parties
to allow such  reimbursement  according to the exact  language of such statutory
provisions. Furthermore, all else to the contrary notwithstanding,  the Contract
is hereby amended to provide as follows:

      (1) Interim Excessive Insurance and Fuel Cost Inflation Relief Provisions.
      For only so long as the  Education Law does not provide  reimbursement  by
      the State of New York for automotive  liability  insurance,  comprehensive
      general liability insurance, employee health care insurance,  unemployment
      insurance,  Worker's  Compensation  Insurance  and/or  vehicle  fuel  cost
      increases,  the Board  does  hereby  agree for a limited  time to  suspend
      partially  or totally  the  application  of the two  percent  (2%)  prompt
      payment discount to which the BOE is otherwise entitled under the Contract
      but only for contracts under Serial Nos. 0065,  0075,  8107, 7263 and 9888
      and only to the extent of the  Contractor's  monthly and/or annual written
      proof of eligibility as

<PAGE>
                                       30


      hereinafter   specified.   The   preceding   sentence   to  the   contrary
      notwithstanding,  the extent of the  Contractor's  eligibility  to use its
      vehicle fuel cost  increases to justify a suspension of the discount shall
      be reduced in the manner  hereinafter  specified at Paragraph  (H)(7),  et
      seq.,  by an amount  equal to  thirty  percent  (30%) of the  Contractor's
      liability to the BOE, if any, for  overpayments  by the BOE to Contractors
      from  Extension  Years  1986-87 to  1999-2000  (hereinafter  expressed  as
      "Deductible  Amount")  that was the  subject  of  consolidated  litigation
      entitled,  A. C.  Transportation,  Inc.,  et al., v. Board of Education of
      City of New York, et al., 253 A.D.2d 330, 687 N.Y.S.2d 1 (App.Div. 1 Dept.
      1999),  leave to appeal denied 93 N.Y.2d 808, 691 N.Y.S.2d 382, 713 N.E.2d
      417 (1999).

      (2)  Eligibility  for  Insurance  Rate  Increase  Relief.  The  BOE  shall
      determine annually whether the Contractor shall be eligible  prospectively
      for partial or total  suspension  of the two percent  (2%) prompt  payment
      discount on the basis of the  Contractor's  submittal of written  proof of
      sufficient  insurance  cost  increases  per vehicle and per  employee,  as
      applicable.  The Contractor  must submit an "Insurance Rate Increase Claim
      Statement," as hereinafter defined, by not later than October 1 SO of each
      Extension  Year. The extent of the discount  suspension,  if any, shall be
      governed by the provisions  hereinafter  expressed at Paragraph (H)(4), et
      seq.

      (3) The term  "Insurance  Rate Increase  Claim  Statement" is defined as a
      written "review  report"  prepared by a CPA or PA licensed by the State of
      New York,  except as otherwise noted herein.  Each Insurance Rate Increase
      Claim  Statement  shall  include  all  of the  facts  and  figures  deemed
      necessary  by the  Director  to  provide a full  view of the  Contractor's
      insurance  cost increase  claims for the  applicable  comparative  periods
      hereinafter  stated at Paragraph  (H)(4),  et seq. Each such review report
      shall state that a review  shall have been  performed in  accordance  with
      GAAP as of the date of a given review report and that the  information  in
      each Insurance Rate Increase  Claim  Statement  shall have been based upon
      the representations of the Contractor's management. Each such review shall
      describe  the  nature  of a review  as  distinct  from an audit  and shall
      describe the  standard  procedures  that the CPA/PA shall have  performed,
      e.g., an inquiry and an analytical  review.  Each review report shall give
      the limited  assurance that,  based upon the review,  the CPA/PA shall not
      have been aware of any material  modifications  that should be made to the
      Insurance  Rate Increase Claim  Statement for it to be in conformity  with
      GAAP. A compilation report shall not qualify as an Insurance Rate Increase
      Claim Statement. In addition, the CPA/PA preparing each review report must
      state that he/she  shall have studied the cost  justification  manual that
      shall be  supplied  by the Board  and shall  have  applied  the  standards
      contained in the Board's manual to the  development of each Insurance Rate
      Increase  Claim  Statement.  If  the  Contractor  shall  not  have  had  a
      CPA-audited  financial  report  performed  for any purpose  before July 1,
      2000, then the Contractor shall be required to submit a certified  audited
      statement by a CPA for its first  Insurance Rate Increase Claim  Statement
      hereunder.  In addition,  the CPA/PA who shall prepare each Insurance Rate
      Increase  Claim  Statement  must have no  interest in this  Contract,  the
      Contractor  and/or any entity affiliated in any manner with the Contractor
      and

<PAGE>
                                       31


      must so certify in writing.  Each Insurance Rate Increase Claim  Statement
      shall utilize a form prescribed by the Director.

      (4) Documentation of Insurance  Premium Rate Increases.  To show increases
      in the premiums rates for automobile  liability  insurance,  comprehensive
      general liability insurance, employee health care insurance,  unemployment
      insurance  and/or  Worker's  Compensation  Insurance the  Contractor  must
      submit with its annual  Insurance  Premium Rate Increase  Claim  Statement
      copies of the full insurance  policies and copies of all invoices from the
      insurance  carriers,  governmental  agencies and/or  health/welfare  funds
      noting the full amounts of premiums and other costs on per vehicle and per
      employee  bases, as applicable,  that are the subject of the  Contractor's
      claims.  To be eligible for partial or total suspension of the two percent
      (2%) prompt payment  discount,  the Contractor must be able to demonstrate
      the following:

            (a) For a suspension  of the discount  during the 2000-01  Extension
            Year,  the  Contractor  must show on per  vehicle  and per  employee
            bases, as applicable,  the differences between all premiums paid for
            automobile  liability  insurance,  comprehensive  general  liability
            insurance and employee health care insurance only(10) for the period
            from July 1,  1999 to June 30,  2000 and the  amounts  paid for such
            coverage  for the  period  from July 1, 1998 to June 30,  1999.  The
            percentage of difference for all such costs shall be calculated as a
            weighted  average of the  percentages of difference for each type of
            cost in relation to the total amount that the Contractor  shall have
            paid for each category of insurance. For a total discount suspension
            during  Extension  Year  2000-01,  the weighted  average  difference
            between  the  two(2)  years  must at least  equal  the  value of the
            discount itself for the 1999-2000  Extension Year as adjusted by the
            annual  percentage  of  increase  for  the  2000-01  Extension  Year
            provided  at  ARTICLE  VNA,  28(C) or 29(D) (as  applicable)  of the
            Contract.  To the extent that the  weighted  average  difference  is
            between  zero  percent  (0%) and two percent  (2%),  there will be a
            proportionate   reduction  in  the  discount  suspension,   i.e.,  a
            "partial" suspension.

            (b) For a suspension  of the discount  during the 2001-02  Extension
            Year,  the  Contractor  must show on per  vehicle  and per  employee
            bases, as applicable,  the differences between all premiums paid for
            automobile  liability  insurance,  comprehensive  general  liability
            insurance  and employee  health care  insurance  only for the period
            from July 1,  2000 to June 30,  2001 and the  amounts  paid for such
            coverage  for the  period  from  July 1, 1998 to June 30,  1999.  In
            addition,  the Contractor  must show on per vehicle and per employee
            bases, as applicable,  the differences between all premiums paid for
            unemployment  insurance and Worker's Compensation  Insurance for the
            period from July 1, 2000 to June 30,  2001 and the amounts  paid for
            such coverage for the period from July 1, 1999 to June 30, 2000. The
            percentage of difference for all such costs shall be calculated as a
            weighted  average of the  percentages of difference for each type of
            cost in relation to the total amount that the Contractor  shall have
            paid for each category of insurance.  For a total  suspension of the
            dis-

-------------
(10)  Cost  increases  for  unemployment  insurance  and  Worker's  Compensation
Insurance  shall not be included  for  purposes of  suspension  of the  discount
during the 2000-01 Extension Year.

<PAGE>
                                       32


            count  during the  2001-02  Extension  Year,  the  weighted  average
            difference between the two(2) years must at lease equal the value of
            the discount  itself for the 2000-01  Extension  Year as adjusted by
            the annual  percentage  of increase for the 2001-02  Extension  Year
            provided  at  ARTICLE  V-A,  28(C) or 29(D) (as  applicable)  of the
            Contract.  To the extent that the  weighted  average  difference  is
            between  zero  percent  (0%) and two percent  (2%),  there will be a
            proportionate   reduction  in  the  discount  suspension,   i.e.,  a
            "partial" suspension.

            (c) For a suspension  of the discount  during the 2002-03  Extension
            Year,  the  Contractor  must show on per  vehicle  and per  employee
            bases, as applicable,  the differences between all premiums paid for
            automobile  liability  insurance,  comprehensive  general  liability
            insurance  and employee  health care  insurance  only for the period
            from July 1,  2001 to June 30,  2002 and the  amounts  paid for such
            coverage  for the  period  from  July 1, 1998 to June 30,  1999.  In
            addition,  the Contractor  must show on per vehicle and per employee
            bases, as applicable,  the differences between all premiums paid for
            unemployment  insurance and Worker's Compensation  Insurance for the
            period from July 1, 2001 to June 30,  2002 and the amounts  paid for
            such coverage for the period from July 1, 1999 to June 30, 2000. The
            percentage of difference for all such costs shall be calculated as a
            weighted  average of the  percentages of difference for each type of
            cost in relation to the total amount that the Contractor  shall have
            paid for each category of insurance.  For a total  suspension of the
            discount  during the 2002-03  Extension  Year, the weighted  average
            difference between the two(2) years must at least equal the value of
            the discount  itself for the 2001-02  Extension  Year as adjusted by
            the annual  percentage  of increase for the 2002-03  Extension  Year
            provided  at  ARTICLE  V-A,  28(C) or 29(D) (as  applicable)  of the
            Contract.  To the extent that the  weighted  average  difference  is
            between  zero  percent  (0%) and two percent  (2%),  there will be a
            proportionate   reduction  in  the  discount  suspension,   i.e.,  a
            "partial" suspension.

            (d) For a suspension  of the discount  during the 2003-04  Extension
            Year,  the  Contractor  must show on per  vehicle  and per  employee
            bases, as applicable,  the differences between all premiums paid for
            automobile  liability  insurance,  comprehensive  general  liability
            insurance  and employee  health care  insurance  only for the period
            from July 1,  2002 to June 30,  2003 and the  amounts  paid for such
            coverage  for the  period  from  July 1, 1998 to June 30,  1999.  In
            addition,  the Contractor  must show on per vehicle and per employee
            bases, as applicable,  the differences between all premiums paid for
            unemployment  insurance and Worker's Compensation  Insurance for the
            period from July 1, 2002 to June 30,  2003 and the amounts  paid for
            such coverage for the period from July 1, 1999 to June 30, 2000. The
            percentage of difference for all such costs shall be calculated as a
            weighted  average of the  percentages of difference for each type of
            cost in relation to the total amount that the Contractor  shall have
            paid for each category of insurance.  For a total  suspension of the
            discount  during the 2003-04  Extension  Year, the weighted  average
            difference between the two(2) years must at least equal the value of
            the discount  itself for the 2002-03  Extension  Year as adjusted by
            the annual  percentage  of increase for the 2003-04  Extension  Year
            provided  at  ARTICLE  V-A,  28(C) or 29(D) (as  applicable)  of the
            Contract. To the extent that the

<PAGE>
                                       33


            weighted  average  difference  is between  zero percent (0%) and two
            percent  (2%),  there  will  be a  proportionate  reduction  in  the
            discount suspension, i.e., a "partial" suspension.

            (e) For a suspension  of the discount  during the 2004-05  Extension
            Year,  the  Contractor  must show on per  vehicle  and per  employee
            bases, as applicable,  the differences between all premiums paid for
            automobile  liability  insurance,  comprehensive  general  liability
            insurance  and employee  health care  insurance  only for the period
            from July 1,  2003 to June 30,  2004 and the  amounts  paid for such
            coverage  for the  period  from  July 1, 1998 to June 30,  1999.  In
            addition,  the Contractor  must show on per vehicle and per employee
            bases, as applicable,  the differences between all premiums paid for
            unemployment  insurance and Worker's Compensation  Insurance for the
            period from July 1, 2003 to June 30,  2004 and the amounts  paid for
            such coverage for the period from July 1, 1999 to June 30, 2000. The
            percentage of difference for all such costs shall be calculated as a
            weighted  average of the  percentages of difference for each type of
            cost in relation to the total amount that the Contractor  shall have
            paid for each category of insurance.  For a total  suspension of the
            discount  during the 2004-05  Extension  Year, the weighted  average
            difference between the two(2) years must at least equal the value of
            the discount  itself for the 2003-04  Extension  Year as adjusted by
            the annual  percentage  of increase for the 2002-03  Extension  Year
            provided  at  ARTICLE  V-A,  28(C) or 29(D) (as  applicable)  of the
            Contract.  To the extent that the  weighted  average  difference  is
            between  zero  percent  (0%) and two percent  (2%),  there will be a
            proportionate   reduction  in  the  discount  suspension,   i.e.,  a
            "partial" suspension.

      (5)  Eligibility  for Fuel Cost Increase  Relief.  The BOE shall determine
      monthly   and   annually   whether  the   Contractor   shall  be  eligible
      prospectively  for partial or total  suspension  of the two  percent  (2%)
      prompt  payment  discount on the basis of the  Contractor's  submittal  of
      written proof of sufficient  vehicle gasoline and vehicle diesel fuel cost
      increases  per  gallon.  The  Contractor  must submit to the BOE with each
      regular  monthly  invoice a  "Monthly  Vehicle  Fuel Cost  Increase  Claim
      Statement,"  as hereinafter  defined.  In addition,  the  Contractor  must
      submit to the BOE an "Annual Vehicle Cost Increase Summary  Statement," as
      hereinafter  defined,  by August 15th following  each Extension  Year. The
      extent  of the  discount  suspension,  if any,  shall be  governed  by the
      provisions hereinafter expressed at Paragraph (H)(7), et seq.

      (6) The term  "Monthly  Vehicle Fuel Cost  Increase  Claim  Statement"  is
      defined as a written and attested  certification  by the  Contractor  that
      shall state (a) the Contractor's total monthly usage in gallons of vehicle
      gasoline and total monthly  usage in gallons of vehicle  diesel fuel under
      this  Contract,  (b) the average RACK  Rates(11) for vehicle  gasoline and
      vehicle  diesel  fuel for the base  period of  January 1, 1999 to June 30,
      2000,  (c) the  sums of the  foregoing  average  RACK  Rates  for  vehicle
      gasoline and vehicle diesel fuel plus the respective  products of the said
      average

-------------
(11) The term "RACK Rates" is hereby defined as the "average  petroleum  product
manufacturer  gross dock rates for  vehicle  gasoline  and  vehicle  diesel fuel
without  sales,  excise  or  compensating  use  taxes,  discounts  or any  other
adjustments," as published  regularly by the Oil Price  Information  Service,  a
division of United Communications Group, Inc., or its successor.

<PAGE>
                                       34


      RACK Rates  multiplied  by the CPI increase  percentage(12)  for the month
      preceding  the  month  of  the  affected   Contractor's   service  invoice
      (hereinafter  expressed  as "Base  RACK  Rates"),  (d) the RACK  Rates for
      vehicle gasoline and vehicle diesel fuel for the month preceding the month
      of  the  affected   Contractor's   service  invoice,  (e)  the  unit  cost
      differences  of the monthly RACK Rates  expressed  heretofore at Paragraph
      (H)(6)(d)  minus the Base RACK Rates  expressed  heretofore  at  Paragraph
      (H)(6)(c)  (f) the  remainders  resulting  from  each  application  of the
      calculations expressed heretofore at Paragraph (H)(6)(e) multiplied by the
      respective  monthly  total  gallons of  gasoline  and diesel fuel that the
      Contractor consumes under this Contract (hereinafter  expressed as "Excess
      Vehicle  Fuel  Cost"),   and  (g)  all  other  information   required  for
      eligibility as expressed hereinafter at Paragraph (H)(7), et seq. The term
      "Annual  Vehicle Fuel Cost  Increase  Summary  Statement"  is defined as a
      written "review  report"  prepared by a CPA or PA licensed by the State of
      New York, except as otherwise noted herein.  Each Annual Vehicle Fuel Cost
      Increase  Summary  Statement  shall  include  all of the facts and figures
      deemed  necessary  by the  Director  to provide a full  annually  adjusted
      summary of the  Contractor's  vehicle  fuel cost  increase  claims for the
      applicable comparison periods heretofore expressed in the requirements for
      Monthly  Vehicle  Fuel Cost  Increase  Claim  Statements  and  hereinafter
      expressed at Paragraph (H)(7), et seq. Each such review report shall state
      that a review shall have been performed in accordance  with GAAP as of the
      date of a given  review  report and that the  information  in each  Annual
      Vehicle Fuel Cost Increase  Summary  Statement  shall have been based upon
      the representations of the Contractor's management. Each such review shall
      describe  the  nature  of a review  as  distinct  from an audit  and shall
      describe the  standard  procedures  that the CPA/PA shall have  performed,
      e.g., an inquiry and an analytical  review.  Each review report shall give
      the limited  assurance that,  based upon the review,  the CPA/PA shall not
      have been aware of any material  modifications  that should be made to the
      Annual  Vehicle  Fuel  Cost  Increase  Summary  Statement  for it to be in
      conformity with GAAP. A compilation  report shall not qualify as an Annual
      Vehicle Fuel Cost  Increase  Summary  Statement.  In addition,  the CPA/PA
      preparing each review report must state that he/she shall have studied the
      cost  justification  manual  that shall be supplied by the Board and shall
      have  applied  the  standards  contained  in  the  Board's  manual  to the
      development of each Annual Vehicle Fuel Cost Increase  Summary  Statement.
      If the  Contractor  shall  not have  had a  CPA-audited  financial  report
      performed for any purpose before July 1, 2000,  then the Contractor  shall
      be required to submit a certified audited statement by a CPA for its first
      Annual  Vehicle  Fuel  Cost  Increase  Summary  Statement  hereunder.   In
      addition,  the CPA/PA who shall  prepare  each  Annual  Vehicle  Fuel Cost
      Increase  Summary  Statement must have no interest in this  Contract,  the
      Contractor  and/or any entity affiliated in any manner with the Contractor
      and must so certify in writing.  Each Annual  Vehicle  Fuel Cost  Increase
      Summary Statement shall utilize a form prescribed by the Director.

      (7)  Documentation  of Vehicle  Fuel Cost  Increases.  To be eligible  for
      partial  or  total  suspension  of the two  percent  (2%)  prompt  payment
      discount, the Contractor must show the following:

-------------
(12) For this purpose, the "CPI increase" is defined as the consumer price index
increase for the New York, New  York-Northeastern,  New Jersey area,  based upon
the  index  for  all  urban  consumers   (CPI-U)  as  stated  in  Education  Law
ss.305(14(a).

<PAGE>
                                       35


            (a) For a suspension of the discount during each extension year, the
            Contractor must show on dollar, percentage, per gallon, subtotal and
            total  bases each month the Excess  Vehicle  Fuel Costs for  vehicle
            gasoline and vehicle  diesel fuel minus one  thirty-sixth  (1/36) of
            the  Contractor's  Deductible  Amount.  If the  remainder  from  the
            formula in the preceding  sentence shall at least equal the value of
            the discount itself for the affected month,  the Contractor shall be
            entitled to a total  suspension  of the discount for that month.  To
            the  extent  that the  remainder  shall  fall below the value of the
            discount on a monthly basis, there will be a proportionate reduction
            in the discount  suspension,  i.e., a "partial"  suspension.  To the
            extent that any seasonal  adjustments  to the CPI shall  occur,  the
            Contractor shall use the preceding formula on an adjusted annualized
            basis and demonstrate it and its results in each Annual Vehicle Fuel
            Cost Increase Summary Statement.

      (8) BOE Payment Deadline for Application of Prompt Payment  Discount.  The
      contractor  does  hereby  stipulate  and agree that the two  percent  (2%)
      prompt  payment  discount  shall be  deemed to apply to  payments  for all
      services  rendered  under the Contract  that the BOE makes  within  six(6)
      business days after  thirty(30)  Calendar days shall have elapsed from the
      date of the BOE's receipt of the Contractor's monthly invoice.

      (9) Audit and Recovery of Overpayment.  Each Insurance Rate Increase Claim
      Statement,  Monthly  Vehicle Fuel Cost Increase Claim Statement and Annual
      Vehicle Fuel Cost Increase  Summary  Statement shall be subject to review,
      audit and approval by the BOE. The BOE shall have the right to recover any
      amounts paid to the  Contractor  including,  but not limited to,  seasonal
      adjustments that the BOE shall determine to have been  unjustified  either
      be a  deduction(s)  from any later  payments(s)  that shall become due and
      payable to the Contractor or by a refund  payment by the  Contractor  upon
      written request from the BOE.

      (10) Limitation on Actions.  If the Contractor  shall dispute any finding,
      determination or other action by the OPT Director or any other BOE unit or
      official  arising  from  anything  contained  in  Paragraph  (H)  of  this
      Extension and Ninth  Amendment  Agreement  pertaining to the suspension of
      the prompt payment discount, the Contractor's sole remedy and legal action
      shall be an appeal to the Chancellor's Board of Review pursuant to Section
      8.3 of the Bylaws of the Board of  Education,  the decision of which board
      shall be final, binding upon the Contractor, and not subject to any claim,
      action,  proceeding,  special proceeding and/or form of further appeal. If
      the

<PAGE>
                                       36


      Contractor  shall  institute  any  claim,  action,   proceeding,   special
      proceeding  and/or  other  form of appeal  after a final  decision  by the
      Chancellor's Board of Review,  the Contractor shall consent,  upon request
      by the BOE and/or the City of New York, to a dismissal  with  prejudice of
      such claim,  action,  proceeding,  special proceeding and/or other form of
      appeal.

(I) GENERAL MISCELLANEOUS AMENDMENTS.  All else to the contrary notwithstanding,
the Contract is hereby amended as follows:

      (1) Standardization of Contracts. The Contractor does hereby stipulate and
      agree that contracts  awarded under Serial Nos. 0065, 0075, 8107 and 9888,
      all form an interwoven  system for the  provision of pupil  transportation
      services as fully and  completely as if they were awarded  simultaneously,
      and,  therefore,  constitute  one contract.  This includes  contracts that
      successor  vendors  obtain  through  assignments,  mergers,  acquisitions,
      management agency agreements or any other means. Therefore, any individual
      contractor  with more than one contract will be deemed for all intents and
      purposes  to  possess  one  contract.  Furthermore,  any  group of  vendor
      entities  subject to common  ownership or control that holds more than one
      contract will be deemed for all intents and purposes to be one  contractor
      with one contract, namely, the Contract.

      (2) Changes Affecting the Contractor. The Contractor shall provide written
      notice  to the BOE on forms  prescribed  by the  Director  of each  change
      affecting the following:  partners, sole proprietors,  management control,
      Chief Executive Officer, Chief Financial Officer, Chief Operating Officer,
      or the organization of ownership of the contractor, i.e., the corporation,
      partnership or sole proprietorship. Changes in the contractor include, but
      are not limited to, the  following:  corporate  or partner  voting  power;
      sale,  transfer or other  alienation  of  corporate,  partnership  or sole
      proprietorship  assets; sale or transfer of corporate stock or partnership
      interest over five percent (5%);  or, any other action that may affect BOE
      interests.

      (3) Office of Pupil Transportation. All references in the Contract and any
      previous  extension  and  amendment  agreements  to the  "Bureau  of Pupil
      Transportation"   are   hereby   amended   to  read,   "Office   of  Pupil
      Transportation."

      (4) NYSDOT Bus Inspection  System.  The Contractor shall not allow its New
      York State Department of Transportation "Out of Service Rate" to exceed an
      average  of twenty  percent  (20%)  over any three  consecutive  six-month
      inspection  periods  during  the  Term of  this  Extension  and  Amendment
      Agreement.

      (5) School Bus  Contractor's  Manual of Procedures and  Requirements.  The
      Office  of  Pupil  Transportation's  School  Bus  Contractor's  Manual  of
      Procedures  and  Requirements   (hereinafter  expressed  as  "Contractor's
      Manual"), issued on June 1, 1982, is hereby incorporated by this reference
      into,  and made a part of, this Contract as if the  "Contractor's  Manual"
      were set forth  herein in its  entirety.  Contractors  and its  employees,
      agents, successors, assigns, subcontractors

<PAGE>
                                       37


      and subcontractor  employees must observe and comply fully with all rules,
      requirements and procedures as expressed in the "Contractor's Manual." The
      Director  shall  have the right,  authority  and sole  discretion  to add,
      delete,  revise,  update,  reissue or otherwise  change any and all rules,
      procedures and/or  requirements in the  "Contractor's  Manual" at any time
      without prior notice to any party. Any and all provisions of the Contract,
      including  but not limited to the Article  regarding  Liquidated  Damages,
      which  refer to Pupil  Transportation  Handbook  Nos.  1, 2 and/or  3, are
      hereby amended to refer solely to the "Contractor's Manual."

      (6) Standards of  Professional  Conduct and  Performance.  If the Director
      promulgates new standards of professional conduct and/or minimum levels of
      competency or performance  for drivers and escorts,  the  Contractor  must
      ensure  that all  affected  employees  are made fully aware of, and act in
      full compliance with, such new standards. In addition, the Contractor must
      certify  in the  manner  prescribed  by the  Director  that each and every
      driver,   escort  and  other  affected   employee  has  received   written
      notification of such new standards.

      (7) Computer  Systems.  The Contractor  shall  maintain a computer  system
      sufficient  to run  applications  developed  by  OPT.  As of  the  2000-01
      Extension Year, the minimum computer system for the Contractor to maintain
      must  include  the  following  elements:  (a) Pentium II  Computer;  (b) 4
      megabytes RAM; (c) 6 gigabyte hard disk; (d) Windows 95 or Windows 98; (e)
      Word for  Windows 95 or 98;  and,  (1) 56k Modem.  During the life of this
      Extension  Agreement,  the Contractor  shall update its computer system as
      required by the Director.

      (8) Uniform  Attire of  Transportation  Crews.  Unnumbered  Paragraph 9 of
      Article XVII entitled,  "Vehicle Operator Standards," is hereby amended to
      add the following provisions: (a) on August 15th prior to the start of the
      2000-01 Extension Year, the Contractor shall submit one(1) complete sample
      each of the  current or new  uniforms  to be worn by  drivers;  (b) within
      five(5)  business days of the submittal,  the Director shall have the sole
      discretion  whether to approve or disapprove  the  Contractor's  choice of
      uniform attire for any class of employees,  i.e.,  this provision  affects
      current choices of uniforms as well as prospective  choices; (c) whereupon
      the Director disapproves any choice of uniform attire, the Contractor must
      replace,  at no expense to the BOE, the affected  uniform items with those
      acceptable  to the  Director;  and,  (d) the  Contractor  must  submit for
      approval to the Director any proposed  change(s) in any item(s) of uniform
      attire before such change(s) becomes effective.

      (9) Advertising on Vehicles.

            (a) The Contractor  shall  cooperate  fully and completely  with the
            Board of Education  regarding the placement of advertisements on the
            two(2) exterior sides of all standard size vehicles, including spare
            vehicles.  The Contractor  shall not be  responsible  for any costs,
            labor or  other  work  associated  with  the  installation,  repair,
            maintenance,  replacement  and/or removal of  advertisements  or the
            repair  and/or  maintenance  of  school  bus  vehicles  in  relation
            thereto. In addition,  the Contractor must not cause, incur or allow
            any costs,  expenses or other liabilities on its own part concerning
            anything whatsoever directly or indi-

<PAGE>
                                       38


            rectly related to the placement,  repair, maintenance and/or removal
            of   advertisements   on  school  bus  vehicles  or  the  repair  or
            maintenance   of  school  bus  vehicles  in  connection   with  such
            advertisements, and the Contractor shall not demand, nor be entitled
            to, any compensation from the Board of Education for any such costs,
            expenses or other liabilities.

            (b) The Contractor shall allow the BOE and/or BOE agents, employees,
            contractors,  subcontractors or other  representatives  to affix any
            and all such  advertisements  to the  Contractor's  vehicles  by any
            means the Board selects including,  but not limited to, metal and/or
            plastic frames and/or direct-application  adhesive decals, provided,
            that the BOE and/or its agent, employee,  contractor,  subcontractor
            and/or other  representative  shall be  responsible  for the cost to
            restore the vehicle  bodies with respect to any damage upon removal.
            The Contractor shall cooperate fully to provide access to all of its
            vehicles under the Contract, including spare vehicles, at such times
            when they are not in use for BOE  transportation  service  including
            the early morning,  midday and evening hours,  as the BOE and/or the
            BOE  agents,   employees,   contractors,   subcontractors  or  other
            representatives shall schedule with at least three (3) business days
            advance notice.  Whereupon any  advertisement  or any component part
            thereof becomes  damaged to any extent or destroyed,  for any reason
            whatsoever, and/or whereupon any vehicle sustains damage or requires
            repairs or maintenance  due to any  advertisements  or any component
            part thereof,  the  Contractor  shall notify the Board's  designated
            agents,    employees,    contractors,    subcontractors   or   other
            representatives  within  twenty-four(24)  hours by  calling a "212",
            "718" or other local New York City telephone  number which the Board
            shall  supply  to  the  Contractor.   If  the  Contractor  shall  be
            dissatisfied  for any reason with any vehicle repairs or maintenance
            supplied by the BOE or the  Board's  designated  agents,  employees,
            contractors, subcontractors or other representatives, the Contractor
            shall  submit  any  such  claim or  dispute  in  writing  to the OPT
            Director for  resolution,  whose decision shall be final and binding
            upon  the  Contractor,  except  for  administrative  appeal  to  the
            Chancellor's  Board of  Review  pursuant  to  ss.8.3 of the Board of
            Education's Bylaws.

            (c) The Contractor does hereby stipulate and agree that all revenues
            or other consideration  derived from the placement of advertisements
            on the  Contractor's  vehicles  shall be and remain forever the sole
            and  exclusive  property  of the  Board  of  Education  and  not the
            Contractor. The Contractor further agrees to follow in every respect
            any and all  rules,  regulations,  requirements,  specifications  or
            procedures  concerning school bus advertisements that the Board may,
            in its  sole  discretion,  promulgate  in the  Board's  "SCHOOL  BUS
            CONTRACTOR'S MANUAL OF PROCEDURES AND REQUIREMENTS," as currently or
            hereafter updated, revised or otherwise changed.

      (10)  Access  to  Premises.  The  Contractor  and its  employees,  agents,
      successors, assigns, subcontractors and subcontractor employees must grant
      to  OPT  inspectors,  BOE  administrative  personnel,  City  of  New  York
      administrative  personnel,  and State of New York administrative personnel
      full cooperation and access to all premises,  vehicles,  books and records
      for the purpose of vehicle and garage inspections and related functions as
      well as the review and audit of the Con-

<PAGE>
                                       39


      tractor's  records to ascertain  compliance  with the Contract  and/or any
      Federal,  State, local and/or Board of Education laws, rules,  regulations
      and/or bylaws.

      (11) Unlawful or Unenforceable  Provisions Void.  Whereupon this Extension
      and  Amendment  Agreement  shall be  found  to  contain  any  unlawful  or
      unenforceable  provision(s)  that  shall  not be  essential  to  continued
      performance  or that shall not be material to the intent and inducement of
      the parties, such provision(s) shall be deemed of no effect and will, upon
      application  of either  party,  be  stricken  from this  document  without
      thereafter  affecting the binding force of the remainder of this Extension
      and Amendment Agreement.

      (12) Approval and Execution.  This Extension and Amendment  Agreement will
      not become  binding or  effective  upon the Board of  Education  until the
      following series of events will have transpired:  (a) approval as to legal
      sufficiency by the BOE Office of Legal Services;  (b)  authorization  by a
      resolution duly adopted by a vote of the Board of Education; (c) execution
      on behalf of the Board of Education by the Chancellor or his/her designee;
      (d) approval by the New York State Commissioner of Education;  (e) initial
      registration  with  Comptroller and  re-registration  with the Comptroller
      each year  thereafter;  and, (I) initial  approval and  subsequent  annual
      re-approval by the New York State Financial  Control Board pursuant to the
      New York  State  Emergency  Act for the City of New  York,  the  rules and
      regulations of said Board so require.

      (13)  Implementation  of the  State  Education  Law.  This  Extension  and
      Amendment  Agreement is intended to implement  the  provisions of New York
      State  Education Law ss.305(14)  and the attendant  regulations of the New
      York State  Commissioner  of  Education.  Whereupon  there shall exist any
      inconsistency  between  the  BOE and the  SED  concerning  this  statutory
      provision,  the attendant  regulations  of the  Commissioner  of Education
      and/or any  formula(e)  for  reimbursement  of funds,  this  Extension and
      Amendment  Agreement shall be deemed amended  automatically  to conform to
      the interpretation of the SED but only for the protection of BOE interests
      and only at the Board of Education's option.

      (14) The Comptroller shall endorse hereon during the term of this Contract
      his/her  certificates  that there are  appropriations  or funds applicable
      thereto  sufficient  to pay the  estimated  expense to execute and operate
      this Contract during the respective fiscal periods.

      (15) As used herein, the singular shall include the plural and vice versa.
      As used herein,  all  masculine,  feminine  and neuter  pronouns and other
      gender descriptions shall be deemed synonymous and interchangeable.

      (16) All other  provisions of Contract Serial Nos. 0065, 0075 and 8107, as
      amended by the 1979 Employee Protection  Provisions  amendment  agreement,
      the 1983 Extension and First Amendment  Agreement,  the 1986 Extension and
      Second  Amendment  Agreement as amended further on June 24, 1986, the 1989
      Extension and Third  Amendment  Agreement,  the 1992  Extension and Fourth
      Amendment Agreement, the 1995 Extension and Sixth Amendment Agreement, and
      the

<PAGE>
                                       40


      1996  Supplemental  Seventh Amendment  Agreement,  except those provisions
      herein noted and revised, shall remain in full force and effect.

      (17) All other  provisions  of Contract  Serial No. 9888 as amended by the
      1991 Extension Agreement and First Amendment, the 1994 Extension Agreement
      and Second Amendment,  the 1995 Extension and Sixth Amendment, by the 1996
      Supplemental Seventh Amendment as amended,  except those provisions herein
      noted and revised, shall remain in full force and effect.

      (18) All other provisions of the Contract under Serial No. 7263 as amended
      by the 1998 Extension  Agreement and First Amendment,  as amended,  except
      those provisions herein noted and revised,  shall remain in full force and
      effect.

                     [NO FURTHER TEXT APPEARS ON THIS PAGE.]