Exhibit 10.31

                   BOARD OF EDUCATION OF THE CITY OF NEW YORK

                  EXTENSION AND ELEVENTH AMENDMENT OF CONTRACT
               FOR SPECIAL EDUCATION PUPIL TRANSPORTATION SERVICES

Extension  and Eleventh  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 hereof  (hereinafter  expressed as
"Contractor").

                                   WITNESSETH

WHEREAS, in 1979 the BOE publicly solicited  competitive bids for transportation
of special education pupils under Contract Serial Nos. 0070 and 8108;(1) and,

WHEREAS,  at divers times  thereafter  from 1982 through 1984,  the BOE publicly
solicited  competitive  bids for similar  services  under  Contract  Serial Nos.
G8805, G8891,  G8893, G9301 and G9325,(2) which contracts have incorporated,  as
of their dates, provisions which are counterparts of the provisions of contracts
under Serial Nos. 0070 and 8108 as they then read; 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 special
education pupils; and,

WHEREAS,  from September 10, 1979 through  December 21, 1979, the Contractor did
not  provide  escort  services  for  special  education  pupils;  but,  under an
emergency contract entered into with the BOE (2nd amendment), the Contractor has
supplied such escort services since that time; and,

WHEREAS,  the New York State Legislature enacted Chapter 737 of the Laws of 1979
and the parties have desired to amend the Contract to implement  Chapter 737 and
be subject to its terms; and,

WHEREAS,  the original  terms of all  contracts  under Serial Nos.  0070,  8108,
G8805, G8891 and G8893 would have expired on June 30, 1982 unless extended,  and
all contracts  under Serial Nos.  G9301 and G9325 would have expired on June 30,
1984 unless extended; and, Education Law ss.305(14)(a) authorizes extensions and
provides a method for appropriate payment increases linked to a defined regional
Consumer  Price Index  (hereinafter  expressed  as "CPI");  and, the BOE elected
fairly and  reasonably  on the basis of the best  interests of the New York City
School  District to refrain  from the  extension  of the terms of all  contracts
under Serial Nos. G8893 and G9301; and,

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(1) By their original  specifications,  all contracts under Serial Nos. 0070 and
8108 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 Nos.  G8805,
G8891,   G8893,  G9301  and  G9325  provide  or  provided  for  ten-month  pupil
transportation  service from September  through June of each school or extension
year.

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WHEREAS, in 1982 the BOE and various contractors agreed to amend (3rd amendment)
and extend all contracts  under Serial Nos.  0070,  8108,  G8805 and G8891 until
June 30, 1984; and,

FWHEREAS,  in  1984  the  BOE and  various  contractors  agreed  to  amend  (4th
amendment) and extend further all contracts under Serial Nos. 0070, 8108, G8805,
G8891 and G9325 until June 30, 1987; and,

WHEREAS, in 1987 the BOE and various contractors agreed to amend (5th amendment)
and extend further all contracts under Serial Nos. 0070, 8108, G8805,  G8891 and
G9325 until June 30, 1990; and,

WHEREAS, in 1990 the BOE and various contractors agreed to amend (6th amendment)
and extend further all contracts under Serial Nos. 0070, 8108, G8805,  G8891 and
G9325 until June 30, 1993; 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 the daily vehicle rates of many  contractors as well as
the recovery of overpayments from some contractors; and,

WHEREAS, in 1993 the BOE and various contractors agreed to amend (7th amendment)
and extend further all contracts under Serial Nos. 0070, 8108, G8805,  G8891 and
G9325 until June 30, 1996; and,

WHEREAS, in 1994 the BOE publicly solicited  competitive bids for transportation
of special  education  pupils under Contract  Serial No. 7165,(3) whose original
term would have expired on June 30, 1997, unless extended; 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. 0070,  8108,  G8805,  G8891 and G9325 and all contracts under Serial
No.  7165 that took  effect  during  the  original  or  extension  terms of such
contracts  starting  as of  July 1 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.  7165
provide for twelve-month pupil transportation  service from July through June of
each school or  extension  year as compared to other serial  numbers  covered by
this Extension and Eleventh 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  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 extend,  either initially or further,
all contracts under Serial Nos. 0070,  7165, 8108,  G8805,  G8891 and G9325 (8th
amendment),  by which all such contracts have been extended until June 30, 2000;
and,

WHEREAS,  in 1996 the BOE and various  contractors,  including  the  Contractor,
mutually determined that changes had occurred in 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
Ninth Amendment of Contract for Special Education Pupil Transportation  Services
thereby modifying and revising the performance  security  provisions of Contract
Serial Nos. 0070,  7165, 8108,  G8805,  G8891 and G9325 for the remainder of the
period of the extension period through June 30, 2000; and,

WHEREAS,  in 1998 the Chancellor  inaugurated  "Project  Read," an  after-school
extended  day  program  to  improve  pupil   literacy;   and,  BOE  and  various
contractors,  including the Contractor,  mutually  determined  that  contractual
revisions  would be needed to allow overtime wage rates to be paid to school bus
escorts  if the  transportation  aspect of  Project  Read  were to be  feasible;
whereupon,  the BOE and various contractors,  including the Contractor,  entered
into a  Supplemental  Tenth  Amendment of Contract for Special  Education  Pupil
Transportation  Services thereby modifying and revising applicable provisions of
Contract Serial Nos. 0070, 8108, G8805, G8891 and G9325 (but not Contract Serial
No. 7165) for the remainder of the extension period through June 30, 2000; and,

WHEREAS, the BOE has determined that all contracts under Serial Nos. 0070, 7165,
8108, G8805,  G8891 and G9325 should be still further amended and extended,  and
the Contractor agrees; and,

WHEREAS,  at a regular  public  meeting  on March 15,  2000,  the BOE  adopted a
Resolution  (Calendar No. 20)  authorizing  the Chancellor to enter into further
amendment and extension of contracts under Serial Nos. 0070, 7165, 8108,  G8805,
G8891 and G9325  (hereinafter  expressed  collectively  as  "Contract")  until a
termination date not later than June 30, 2005, unless further extended; and,

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

NOW, THEREFORE, 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 Eleventh 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 28(C) of contracts  under Serial No. 7165 entitled,  "PAYMENT DURING
PERIOD OF EXTENSION," is hereby added, and ARTICLE V-A of contracts under Serial
Nos. 0070,  8108,  08805,  G8891 and 09325  entitled,  "PAYMENT DURING PERIOD OF
EXTENSION," is hereby further

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amended,  both of which to read as follows  for the term of this  Extension  and
Eleventh Amendment Agreement:

      "(1) Any  provisions  of ARTICLE V or 28 (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:

            "(a)  During the  Extension  Year of July 1, 2000  through  June 30,
                  2001,  the  Contractor's  daily  rate(s) per vehicle  shall 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  Consumer  Price  Index
                  (hereinafter  expressed  as '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
                  each Contractor's  actual costs during the Extension Year from
                  July 1, 1999 through June 30, 2000 shall have  increased  over
                  each  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 1997-98 over  Extension  Year
                  1996-97 and from  Extension  Year 1998-99 over  Extension Year
                  1997-98  to  the  extent  that  such  percentages  shall  have
                  exceeded the CPI increments from May 1997 to May 1998 and from
                  May  1998 to May  1999,  respectively,  and  shall  have  been
                  disallowed as a result from the rate increase(s) for Extension
                  Years 1998-99 and 1999-2000, respectively.

            "(b)  During the  Extension  Year of July 1, 2001  through  June 30,
                  2002,  the  Contractor's  daily  rate(s) per vehicle  shall 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 of
                  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 percentage 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.

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            "(c)  During the  Extension  Year of July 1, 2002  through  June 30,
                  2003,  the  Contractor's  daily  rate(s) per vehicle  shall 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 of
                  July 1, 2001 through June 30, 2002 shall have  increased  over
                  each  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  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
                  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 of
                  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 increases for Extension Year 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
                  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 of
                  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 Exten-

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                  sion  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  increases 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
      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 relevant CPI  increment.  To be eligible for such payment,  the
      Contractor  shall provide full,  separate,  written details in each annual
      Cost  Justification  Financial  Statement  submitted  under ARTICLE V-A or
      28(C) (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 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

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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  examination  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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      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 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. 0070,  8108,  G8805,  G8891 and
            G9325, the following shall apply:

                  "(i)  'Nineteenth  (19th)  Extension  Year' means July 1, 2000
                        until June 30, 2001;

                  "(ii) 'Twentieth  (20th)  Extension  Year'  means July 1, 2001
                        until June 30, 2002;

                  "(iii)'Twenty-first  (21st) Extension Year' means July 1, 2002
                        until June 30, 2003;

                  "(iv) 'Twenty-second (22nd) Extension Year' means July 1, 2003
                        until June 30, 2004;

                  "(v)  'Twenty-third  (23rd)  Extension Year' means July 1,2004
                        until June 30, 2005.

            "(b) For Contracts under Serial No. 7165, the following shall apply:

                  "(i)'Fourth  (4th)  Extension  Year'  means July 1, 2000 until
                        June 30, 2001;

                  "(ii) 'Fifth  (5th)  Extension  Year' means July 1, 2001 until
                        June 30, 2002;

                  "(iii)'Sixth  (6th)  Extension  Year' means July 1, 2002 until
                        June 30, 2003;

                  "(iv) 'Seventh (7th)  Extension Year' means July 1, 2003 until
                        June 30, 2004;

                  "(v)  'Eighth (8th)  Extension  Year' means July 1, 2004 until
                        June 30, 2005.

            "(c) The term 'Consumer Price Index' (herein expressed 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 New York
            State Education  Department (herein expressed as '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

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            ss.305(14)(a)  as the  same may be  updated,  revised  or  otherwise
            changed  during the life of this  Extension  and Eleventh  Amendment
            Agreement.  If  Education  Law  ss.305(14)(a)  shall be amended to a
            permit stated or fixed  percentage(s) of annual rate increase(s) for
            pupil  transportation  contract  extensions,  which  increase(s) 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 that the stated or fixed percentage(s).

            "(d) The term 'contractor's  average cost per vehicle per 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 be related  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 the 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
            the

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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  than
December 31 St preceding the extension year in which the revised fixed number(s)
shall take  effect.  In each  triennial  review,  the  effects of changes 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


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

            "(e) The term 'Cost Justification Financial Statement' is defined as
            a written 'review report' prepared by a Certified Public  Accountant
            (hereinafter  expressed as 'CPA') or Public Accountant  (hereinafter
            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  Eleventh   Amendment
            Agreement.  Each such review  report shall state that a review shall
            have been performed in accordance with Generally Accepted Accounting
            Principles  (hereinafter  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  is
            insufficient  to  qualify  as a  Cost  Justification  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 Cost
            Justification  Financial Statement. If the Contractor shall not have
            had a CPA-audited  financial report performed for any purpose within
            two(2) years prior to 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 Eleventh
            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 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 Eleventh Amendment  Agreement.  The Director shall determine
      whether  to  approve  all or any  portion(s)  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 ARTICLE
            V-A or 28(C) 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 total costs incurred
            by the Contractor for all of its operations and, separately, for its
            operations under this Contract for the Extension Years 1999-2000 and
            for 1998-1999, and (ii) an additional Cost Justifica-

<PAGE>
                                       10


            tion  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 1996-97,  1997-98
            and 1998-99 to account for unabsorbed cost carry-forwards, if any.

            "(b) To substantiate  any payment  increases  received under ARTICLE
            V-A or 28(C) 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  of  its  operations   and,
            separately, for its operations under this Contract for the Extension
            Years   2000-2001  and  1999-2000,   and  (ii)  an  additional  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 1997-98,
            1998-99 and 1999-2000 to account for unabsorbed cost carry-forwards,
            if any.

            "(c) To substantiate  any payment  increases  received under ARTICLE
            V-A or 28(C) 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  of  its  operations   and,
            separately,   for  its  operations  under  this  Contract,  for  the
            Extension Years 2001-2002 and 2000-2001, and (ii) an additional 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 1998-99,
            1999-2000 and 2000-01 to account for unabsorbed cost carry-forwards,
            if any.

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

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

            "(f) In each  annual Cost  Justification  Financial  Statement,  the
            Contractor  must treat costs for escorts  separately  from all other
            costs. The Contractor shall supply in each annual Cost Justification
            Financial  Statement  all  data  required  by SED  related  to  this
            Contract, and the

<PAGE>
                                       11


            submittal shall include, but shall not limited to, SED-approved cost
            justification   forms.  The  Contractor  must  supply  promptly  all
            additional cost data as required by the BOE or SED.

            "(g) 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  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  other  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.

      "(6) Required  Analysis of Costs.  To determine the allowable  increase in
      costs for a given  extension  year,  as  specified  in  ARTICLE  V-A(1) or
      28(C)(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 caps
                        as  expressed  in  ARTICLE   V-A(1)  or  28(C)  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(1) or
                        28(C) of this 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  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 the 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.  For any extension year in
      which 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

<PAGE>
                                       13


      be derived as well 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  Paragraph  1(a)-(e)  of
      ARTICLE V-A or 28(C) of the Contract to  supplement  those cost  increases
      that are used to justify  augmentations  of the daily  rate(s) per vehicle
      for Extension Years 2000-01 through 2004-05. 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  increases  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 extension  year, that item may not be
      used again in any later extension year.

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

(C) For Contracts  under Serial No. 7165,  there are no separate daily rates for
escort service.  Throughout this Extension Period of July 1, 2000 until June 30,
2005,  therefore,  contracts  under Serial Nos.  7165 shall not be permitted any
special or separate increases in any payment or allowance for escorts other than
the general  rate  increase  expressed  heretofore  at  Paragraph  B.  Regarding
contracts under Serial Nos. 0070, 8108, G8805, G8891 and G9325 only, Article XIX
entitled,  "ESCORTS," as amended  previously,  is hereby amended further so that
subparagraph A(2), as numbered by the First Amendment  Agreement,  shall read as
follows for the balance of the Contract term:

      "(2) However,  the parties agree that, for only so long as and only to the
      extent that the New York City Administrative Code and Charter requires the
      BOE  to  utilize  escorts  on  special  education  school  bus  runs,  the
      Contractor  shall continue to provide such escorts and substitute  escorts
      in addition to the vehicle operators, as hereinafter allowed, through June
      30, 2005, and that:

            "(a)  Escort  Compensation.  Except  for  overtime,  the  BOE  shall
            compensate  the  Contractor  for each full day for each  escort  who
            shall provide  actual service under this Contract in an amount to be
            calculated  in  the  following  manner  subject  to  the  Director's
            approval of all or any portion(s) of the Contractor's claims in each
            of the  below-described  annual Escort Cost Justification  Financial
            Statements:

                  "(i) During the 19th  Extension  Year,  the BOE shall increase
                  the 'Base Escort Daily  Compensation  Rate' in an amount to be
                  derived by applying Paragraph(A)(2)(b)  hereinafter,  or such
                  lesser  amount  that   represents  the  audited  and  approved
                  increase over the Base Escort Daily  Compensation Rate paid to
                  the contractor  during the 18th Extension Year.  Also, the BOE
                  shall pay 'Wage Accrual  Compensation' in the exact amount the
                  Contractor  actually paid either to or for escorts  during the
                  19th Extension

<PAGE>
                                       14


                  Year,  if any, and only when known after a BOE audit and which
                  was  required  to be  paid.  With  respect  to  the  preceding
                  sentence,   the   Contractor   may  receive  as  Wage  Accrual
                  Compensation  for the 19th Extension Year an amount per escort
                  that is more than ten percent (10%) per escort above the total
                  reimbursed  costs for wage  accruals  as of June 30,  2000 but
                  only to the extent  that such excess  amounts  shall have been
                  required  by an  express  provision  of a  written  collective
                  bargaining  agreement  that  shall  have  been  concluded  and
                  executed  before  the  start of this  Extension  and  Eleventh
                  Amendment Agreement.(8)

                  "(ii) During the 20th  Extension  Year, the BOE shall increase
                  the 'Base Escort Daily  Compensation  Rate' in an amount to be
                  derived by applying  Paragraph(A)(2)(b)  hereinafter,  or such
                  lesser  amount  that   represents  the  audited  and  approved
                  increase over the Base Escort Daily  Compensation Rate paid to
                  the contractor  during the 19th Extension Year.  Also, the BOE
                  shall pay 'Wage Accrual  Compensation' in the exact amount the
                  Contractor  actually paid either to or for escorts  during the
                  20th  Extension  Year, if any, and only when known after a BOE
                  audit and which was  required to be paid.  With respect to the
                  preceding sentence, the Contractor may receive as Wage Accrual
                  Compensation  for the 20th Extension Year an amount per escort
                  that is more than ten percent (10%) per escort above the total
                  reimbursed  costs for wage  accruals  as of June 30,  2001 but
                  only to the extent  that such excess  amounts  shall have been
                  required  by an  express  provision  of a  written  collective
                  bargaining  agreement  that  shall  have  been  concluded  and
                  executed  before  the  start of this  Extension  and  Eleventh
                  Amendment Agreement.(9)

                  "(iii) During the 21St Extension  Year, the BOE shall increase
                  the 'Base Escort Daily  Compensation  Rate' in an amount to be
                  derived by  applying  Paragraph(A)(2)(b)  hereinafter  or such
                  lesser  amount  that   represents  the  audited  and  approved
                  increase over the Base Escort Daily  Compensation Rate paid to
                  the contractor  during the 20th Extension Year.  Also, the BOE
                  shall pay 'Wage Accrual  Compensation' in the exact amount the
                  Contractor  actually paid either to or for escorts  during the
                  21st  Extension  Year, if any, and only when known after a BOE
                  audit and which was  required to be paid.  No  contractor  may
                  receive  as  Wage  Accrual   Compensation  an  amount  in  the
                  aggregate  that is more than ten percent (10%) above the total
                  reimbursed costs for wage accruals as of June 30, 2002.

                  "(iv) During the 22nd  Extension  Year, the BOE shall increase
                  the 'Base Escort Daily  Compensation  Rate' in an amount to be
                  derived by  applying  Paragraph(A)(2)(b)  hereinafter  or such
                  lesser  amount  that   represents  the  audited  and  approved
                  increase

----------

(8) The  provision in this  sentence  permitting  an increase in the Base Escort
Daily Compensation beyond ten percent (10%) during the l9th Extension Year shall
be subject to approval by a resolution of the Board of Education.

(9) The  provision in this  sentence  permitting  an increase in the Base Escort
Daily Compensation beyond ten percent (10%) during the 20th Extension Year shall
be subject to approval by a resolution of the Board of Education.

<PAGE>
                                       15


                  over the  Base  Escort  Daily  Compensation  Rate  paid to the
                  contractor during the 21st Extension Year. Also, the BOE shall
                  pay  'Wage  Accrual  Compensation'  in the  exact  amount  the
                  Contractor  actually paid either to or for escorts  during the
                  22nd  Extension  Year, if any, and only when known after a BOE
                  audit and which was  required to be paid.  No  contractor  may
                  receive  as  Wage  Accrual   Compensation  an  amount  in  the
                  aggregate  that is more than ten percent (10%) above the total
                  reimbursed costs for wage accruals as of June 30, 2003.

                  "(v) During the 23rd  Extension  Year,  the BOE shall increase
                  the 'Base Escort Daily  Compensation  Rate' in an amount to be
                  derived by  applying  Paragraph(A)(2)(b)  hereinafter  or such
                  lesser  amount  that   represents  the  audited  and  approved
                  increase over the Base Escort Daily  Compensation Rate paid to
                  the contractor  during the 22nd Extension Year.  Also, the BOE
                  shall pay 'Wage Accrual  Compensation' in the exact amount the
                  Contractor  actually paid either to or for escorts  during the
                  23rd  Extension  Year, if any, and only when known after a BOE
                  audit and which was  required to be paid.  No  contractor  may
                  receive  as  Wage  Accrual   Compensation  an  amount  in  the
                  aggregate  that is more than ten percent (10%) above the total
                  reimbursed costs for wage accruals as of June 30, 2004.

            "(b) Annual  Increase of the Base Escort  Daily  Compensation  Rate.
            Each  extension  year the BOE will  augment  the  amount of the Base
            Escort Daily  Compensation  Rate  according to the payment  increase
            limits  expressed herein at ARTICLE V-A(1),  i.e.,  Paragraph(B)(1)
            above, provided, the Contractor shall justify each such increase, if
            any, by  submitting a separate,  annual  'Escort Cost  Justification
            Financial  Statement'  according to the same terms,  conditions  and
            deadlines expressed in ARTICLE V-A(2)--(13), i.e., Paragraphs (B)(2)
            to  (B)(13)  above.  This  provision  does not  affect  payment  for
            overtime escort  services,  which is governed  separately at Article
            XIX, Paragraph(A)(2)(c), i.e., Paragraph(C)(2)(c) below.

            "(c) Payment for Overtime.  Where the Contractor  actually  supplies
            scheduled  overtime escort services  pursuant to BOE  authorization,
            the BOE shall  reimburse  the  Contractor  for such  services in the
            exact amount of the costs for overtime  wages and  statutory  fringe
            benefits.  No  reimbursement  will be permitted  for  occasional  or
            episodic  overtime.  'Overtime'  is defined as service  that exceeds
            eight(8) hours within any ten(10) hour daily period. The hourly rate
            for overtime escort services will not exceed  one-and-one-half times
            the  regular  hourly  wage  rate.  (As  heretofore  and  hereinafter
            expressed,  this  paragraph  is  subject to the  Supplemental  Tenth
            Amendment of Contract  for Special  Education  Pupil  Transportation
            Services for purposes of 'Project Read' only.)

            "(d) Monthly  Advance Payment for Escort  Services.  On or about the
            first  school  day of  each  calendar  month,  the BOE  will  pay an
            eligible  contractor  in advance an amount equal to the  anticipated
            usage of escort service for that month, excluding overtime. For each
            month's overtime claims,  the BOE will pay the Contractor only after
            receipt and approval of a

<PAGE>
                                       16


            voucher on a BOE form, which will contain such detail as the BOE may
            require to confirm the Vendor's  claims and which will be subject to
            BOE audit.

                  "(i) Fidelity Bond.  Before he/she may receive advance monthly
                  payments, the Contractor must file with OPT a fidelity bond in
                  the amount of the  anticipated  use of escort  service for one
                  (1) month.  The coverage period for each fidelity bond must be
                  from September 1st to August 31st of each prospective year. To
                  calculate  the bond  amount  for one year,  use the  following
                  formula: twenty(20) school days multiplied by the total number
                  vehicles  (excluding  spares)  multiplied  again  by the  Base
                  Escort Daily  Compensation  Rate for a given  extension  year.
                  Each  fidelity bond must list the BOE and the City of New York
                  as the named insureds.  Each fidelity bond must insure against
                  any and all acts of commission or omission by the  Contractor,
                  any subcontractors, subsidiaries, parent or affiliate entities
                  or  any  officers,  owners,  directors,  employees,  servants,
                  agents,  independent  contractors  or any other  parties which
                  cause the  failure  of  proper  disbursement  to the  intended
                  escort  beneficiaries,  whether  any such party acts within or
                  outside the scope of employment or contractual performance.  A
                  company  licensed by the  Superintendent  of  Insurance  to do
                  business in New York State must issue every fidelity bond.

                  "(ii) Where the BOE makes payments to the Contractor in excess
                  of what is properly  due and owing  under  Paragraph(A)(2)(b),
                  the BOE may recoup such  amounts  from future  payments to the
                  Contractor,  request the Contractor to refund such amounts, or
                  take   whatever   other  actions  are  necessary  to  retrieve
                  excessive  payments.  Where the BOE requests the Contractor to
                  make a refund, the Contractor will remit payment within thirty
                  (30) days of the Contractor's receipt of BOE audit findings.

                  "(iii) Where the Contractor elects to delegate escort services
                  to a subcontractor,  the Contractor may direct the BOE to make
                  payments in the full amounts or any portions  thereof directly
                  to the  subcontractor.  The Contractor  must make such payment
                  directions in writing on a form approved by the BOE.

<PAGE>
                                       17


            "(e) The  Contractor  must  provide  all the  escorts  necessary  to
            perform all of the work covered by the Contract including additional
            and spare vehicles.  The Contractor must have sufficient,  qualified
            and  approved   personnel  to  enable  the  Contractor  to  dispatch
            substitute  escorts  promptly if, when and where necessary to ensure
            continuous,  uninterrupted  and  punctual  service in each and every
            instance.   The  Contractor  must  operate  every  vehicle  for  the
            transportation  of handicapped  children in strict  adherence to the
            provisions of New York City Administrative Code ss.19-603(a)-(b). If
            the law  shall be  amended  during  the term of this  Extension  and
            Eleventh  Amendment   Agreement  to  eliminate  the  requirement  of
            escorts,  the Contractor  must cease to provide escorts upon five(5)
            days notice from the BOE to that effect. After the effective date of
            the notice,  the BOE and the City of New York shall not be obligated
            to the  Contractor  or any other party for the  provision  of escort
            services.

            "(f) Basic,  Refresher and Additional Training for Special Education
            Escorts.  The Contractor shall arrange for BOE approved basic escort
            training  courses.  Each escort must complete the American Red Cross
            Multi-Media  Starter  Course in First Aid. This course shall provide
            the knowledge and skills  called for in situations  where  emergency
            first aid care is required and medical assistance is not excessively
            delayed.  The  Multi-Media  Starter in First Aid also  instructs  on
            personal  safety an accident  prevention  so that a person can learn
            the  causes of  accidents  and act to  eliminate  or  minimize  such
            causes.

                  "(i)   The   escorts   (attendants/matrons)   must   meet  the
                  requirements  for course  completion,  which includes taking a
                  written examination,  receiving a satisfactory grade and being
                  issued  a  certificate.  Each  escort  must  submit  to  OPT a
                  certificate  as  proof  of  course  completion.  Every  escort
                  (attendant/matron)  shall take the refresher course once every
                  three(3)  years and furnish to OPT evidence of  completion  of
                  the course.

                  "(ii) The Contractor understands and agrees that the costs for
                  such  course  required  by the Board  will not be borne by the
                  Board Of Education.

            "(g) Escort  Subcontractor.  The Contractor may delegate performance
            of escort  services to an  acceptable  subcontractor;  however,  the
            Contractor  will remain  responsible  for all pertinent  contractual
            obligations.  The Director  will have sole and final  discretion  to
            approve or disapprove at any time the Contractor's particular choice
            of an initial or replacement escort subcontractor. Whereupon the BOE
            requests  new,   updated  or  revised   information   regarding  any
            subcontractor,  the  Contractor  must  supply  the data  immediately
            and/or secure the cooperation of the affected  subcontractor to make
            full and prompt disclosure of any information.

            "(h)  Annual  List  of  Escorts.  At any  time  as  required  by the
            Director,  the  Contractor  must  provide a list of all  escorts and
            substitute  escorts to be utilized for special  education school bus
            service  during the  prospective  school year. The list must be on a
            form to be supplied by OPT and will include,  but not be limited to,
            the following information: the name, social security number and date
            of original hire of each escort. Whenever a change occurs in the es-

<PAGE>
                                       18


            cort list, the Contractor  will provide  updated  information on the
            OPT  form(s) not later than the end of the month in which any change
            occurs."

(D) No  DUPLICATION OR  MISALLOCATION  OF COSTS.  To prevent  unjust  enrichment
through   misrepresentation  or  falsification  of  cost  increase  claims,  the
Contractor hereby agrees, consents and covenants 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)  Duplication  of Costs.  Regarding  contracts  under Serial Nos. 0070,
      8108,  G8805,  G8891 and G9325 only in the establishment of allowable cost
      increases  under ARTICLE V-A (see Paragraph B, supra) and ARTICLE XIX (see
      Paragraph C, supra), the Contractor must not commingle,  combine, merge or
      duplicate  costs in any manner or to any extent  between the two Articles,
      i.e.,  costs used to justify  increased  payments for vehicles and drivers
      under  ARTICLE V-A may not be used again to justify  increases in the Base
      Escort  Daily  Compensation  Rate,  and  vice  versa.  In  addition,   the
      Contractor  shall not cause  and/or  allow any other forms of  duplication
      and/or multiplication of costs and/or items of cost increase in any manner
      or to any extent.

      (2) Allocation of Costs. If the Contractor  misallocates any cost item(s),
      the allocation will be disallowed.  Improper allocation or "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
            that  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. 0070, 7165, 8108, G8805, G8891 and G9325. Expenses allocable to
            BOE pupil  transportation  contracts  other than these eight  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.

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

<PAGE>
                                       19


            (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,  in accordance with the terms and
            conditions of this Contract.

(E) AMENDMENTS TO INSURANCE PROVISIONS.

      (1) The Extension and Eighth  Amendment of Contract for Special  Education
      Pupil Transportation Services and the original Contract are hereby amended
      to provide as follows:

            (a) The Contractor  must obtain and maintain  throughout the life of
            this  extension  and  Eleventh  Amendment  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. To the extent commercially available, 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)  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  Eleventh
            Amendment  Agreement.  The  Contractor  must file  renewals with the
            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,  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)

<PAGE>
                                       20


                  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 of the 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) as 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:

            (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."

<PAGE>
                                       21


            (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 which 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 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  hereby agrees to defend,  hold harmless and indemnify
      the  Board  and  the  City  from  and for all  claims,  actions,  damages,
      judgment, expenses, attorney's fees and compensation,

<PAGE>
                                       22


      whether in contract or tort,  arising out of personal  injury  (including,
      but not limited  to,  death,  sickness,  disease  and  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.

(F) Paragraph E of the Extension & Eighth Amendment Agreement of Contract Serial
Nos.  0070,  8107,  8108,  G8805,  G8891 and G9325 is hereby  amended to read as
follows:

      "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
      pursuant 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

<PAGE>
                                       23


      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.

      "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

<PAGE>
                                       24


      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.

      "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 Director of the Office of Pupil Transportation,  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

<PAGE>
                                       25


      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  in
      this paragraph six(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  corporation's  assets,  (b)  coincidence  of  corporate
      officers and directors, and (c) such other factors as the Board determines
      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.

      "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."

(G) MISCELLANEOUS VEHICLE SPECIFICATIONS AND OPERATIONAL AMENDMENTS. Any terms,
conditions and specifications to the contrary  notwithstanding,  the Contract is
hereby amended as follows:

      (1) Federal Safety  Standards.  All vehicles used to perform this Contract
      must meet all of the 1977 Federal Safety Standards,  as reflected in Title
      49 of the  Code  of  Federal  Regulations,  Part  571,  and  particularly,
      Standard Nos.  105,  111,  220, 221, 222, and 301 (the "1977  Standards").
      Violation  of  this  provision  to  any  extent  will  be  grounds  for  a
      determination of contractual default.

<PAGE>
                                       26


      (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 (2) and/or any of its  subparagraphs
      shall be deemed or 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 heretofore amended and extended.

            (a) The Contractor shall furnish service, maintenance and repairs of
            all vehicles used in the  performance of 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 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,  shall  present  to  the  Director  contemporaneously  kept,
            accurate,  complete,  orderly and written  records of the school bus
            vehicle,  maintenance and repair activities  performed in accordance
            with the foregoing.

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

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

                  (i) By July 1, 2000 no more than 30% of the number of vehicles
                  operated by a Contractor  as of June 30, 2000 pursuant to this
                  contract may be manufactured prior to 1987;

                  (ii) By  July  1,  2001 no  more  than  25% of the  number  of
                  vehicles operated by a Contractor as of June 30, 2000 pursuant
                  to this contract may be manufactured prior to 1987;

                  (iii)  By July  1,  2002 no more  than  20% of the  number  of
                  vehicles operated by a Contractor as of June 30, 2000 pursuant
                  to this contract may be manufactured prior to 1987;

                  (iv) By  July  1,  2003 no  more  than  15% of the  number  of
                  vehicles operated by a Contractor as of June 30, 2000 pursuant
                  to this contract may be manufactured prior to 1987;

                  (v) By July 1, 2004 no more than 10% of the number of vehicles
                  operated by a Contractor  as of June 30, 2000 pursuant to this
                  contract may be manufactured prior to 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  Exten-

<PAGE>
                                       27


            sion and  Amendment  Agreement,  provided  each such  vehicle  is in
            compliance with sub-paragraphs a, b and c 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) List of Vehicles.  At any 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. Each 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.

      (4)  Air  Conditioning/Climate  Control  Systems.  Each  vehicle  that  is
      required  to  have  an Air  Conditioning/Climate  Control  System  must be
      equipped  with an air  conditioning  system with  sufficient  power-train,
      electrical,  and engine cooling  support  systems to maintain  comfortable
      conditions  throughout the entire  interior of the vehicle during any warm
      weather  periods  at  ambient  temperatures  not  higher  nor  lower  than
      necessary to meet the medical and comfort needs of each passenger.

            (a) By July 1, 2000,  five  percent  (5%) of all mini  wagons,  ramp
            wagons and hydraulic  lifts operated by the  contractor  pursuant to
            this   contract   will  be  required   to  be   equipped   with  air
            conditioning/climate control systems.

            (b) By July 1, 2001,  ten  percent  (10%) of all mini  wagons,  ramp
            wagons and hydraulic  lifts operated by the  contractor  pursuant to
            this   contract   will  be  required   to  be   equipped   with  air
            conditioning/climate control systems.

            (c) By July 1, 2002, fifteen percent (15%) of all mini wagons,  ramp
            wagons and hydraulic  lifts operated by the  contractor  pursuant to
            this   contract   will  be  required   to  be   equipped   with  air
            conditioning/climate control systems.

<PAGE>
                                       28


            (d) By July 1, 2003,  twenty percent (20%) of all mini wagons,  ramp
            wagons and hydraulic  lifts operated by the  contractor  pursuant to
            this   contract   will  be  required   to  be   equipped   with  air
            conditioning/climate control systems.

            (e) By July 1, 2004,  twenty-five  percent (25%) of all mini wagons,
            ramp wagons and hydraulic lifts operated by the contractor  pursuant
            to  this   contract  will  be  required  to  be  equipped  with  air
            conditioning/climate control systems.

      (5)  Fax  Machines.  All  contractors  must  provide  to the  Director  an
      available number where documents pertaining to pupil transportation may be
      faxed.

      (6)  Computer  Systems.  The  Contractor  will be  required  to maintain a
      computer system sufficient to run applications  developed by the Office of
      Pupil Transportation. Currently the minimum computer system required is as
      follows:  Pentium II  Computer,  4  megabytes  RAM, 6 gigabyte  hard disk,
      Windows 95 or Windows 98, and 56k Modem. During the life of this Extension
      Agreement,  the contractor  will be required to update the computer system
      as required by the Director.

      (7) 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.

      (8) 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.

      (9) 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.

<PAGE>
                                       29


      (10)  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.

      (11) Use of Vehicles. ARTICLE XII entitled, "Use of Vehicles," in Contract
      Serial Nos. 0070,  8108,  G8805,  G8891 and G9325 and Article 35 entitled,
      "Use of Vehicles," in Contract  Serial No. 7165, 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 such  services  as
            stipulated in this contract. At no time shall such service interfere
            with the timely transportation of pupils to and from school."

(H)  MISCELLANEOUS  FINANCIAL  AMENDMENTS.  Any express  terms,  conditions  and
specifications to the contrary  notwithstanding,  the Contract is hereby amended
as follows:

      (1) SED State Aid and Other Forms.  The Contractor does hereby warrant and
      agree to complete  and duly  execute any and all New York State  Education
      Department  (herein  expressed  as  "SED")  forms  for State aid and other
      purposes  that shall be needed to maintain the  continuity  of funding for
      this Extension and Amendment Agreement.

      (2) 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."

<PAGE>
                                       30


            (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 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."

      (3) 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,  regula-

<PAGE>
                                       31


      tions,   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  the   Contractor   may  elect  to  use   professional
      subcontractors.  The  Contractor  shall  submit to the BOE for advance and
      continuing'(11)  approval by the OPT Director  full and  detailed  written
      information" 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 ofjudicial, 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.

      (4) Sales,  Excise and Use Taxes.  The  Contractor  does hereby  agree and
      warrant to cooperate  fully with the BOE to eliminate of 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,

-----------------------
(10) 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.

(11) 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>
                                       32

      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 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  affecting  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  re  fused  to  have   sought  any   affected
      exemption(s),  credit(s) and/or refund(s). Whereupon the BOE 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, upon request, shall instead furnish the BOE with a full written
      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 to confirm that the
      Contractor's  Cost  Justification   Financial  Statements  and  any  other
      financial  reports do not  include any tax  expenses  that shall have been
      exempted, credited and/or refunded.

<PAGE>
                                       33


      (5)  Limitation on Payments for Days When  Vehicles Are Not Operated.  All
      provisions of contracts under Serial No. 7165  prescribing no payments for
      when days when  vehicles  are not  operated  shall  remain  unchanged  for
      Extension Year 2000-01 but are hereby amended for Extension  Years 2001-02
      through 2004-05 to reflect the changes hereinafter expressed for contracts
      under  Serial  Numbers  0070,  8108,  G8801,  G8891 and  G9325.  The first
      unnumbered  paragraph  of ARTICLE V of contracts  under Serial Nos.  0070,
      8108, G8801, G8891 and G9325 entitled, "PAYMENT," is hereby amended by the
      addition of the following  language  between the existing fourth and fifth
      sentences:

                  "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  is 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 the 2000-01  Extension
                  Year  when  the  Chancellor  or his  designee(s)  shall  order
                  students not to be in attendance and vehicles not to run; and,
                  for a second regularly scheduled school day during the 2000-01
                  Extension  Year when the Chancellor or his  designee(s)  shall
                  order  students  not to be in  attendance  and vehicles not to
                  run,  the Board shall be entitled to 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
                  actually occur.  The term 'regularly  scheduled school day' is
                  defined as any day on which  schools are  scheduled to be open
                  in  accordance  with the official  BOE Calendar as  originally
                  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 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  about  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)."

      (6) 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

<PAGE>
                                       34


            other  liabilities on its own part  concerning  anything  whatsoever
            directly or indirectly 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.

(I) 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,

<PAGE>
                                       35


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 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.  0070,  7165,  8108,  G8805,  G8891 and G9325 and only to the
      extent  of  the  Contractor's  monthly  and/or  annual  written  proof  of
      eligibility  as  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(I)(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 through 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 15th of each
      Extension  Year. The extent of the discount  suspension,  if any, shall be
      governed by the provisions  hereinafter  expressed at Paragraph (I)(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  (I)(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

<PAGE>
                                       36


      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 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(12) 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  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.

---------------------
(12)  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>
                                       37


            (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
            discount  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,

<PAGE>
                                       38


            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 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

<PAGE>
                                       39


      15th following each Extension Year. The extent of the discount suspension,
      if any,  shall be  governed by the  provisions  hereinafter  expressed  at
      Paragraph (I)(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(13) 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 RACK Rates  multiplied  by the CPI increase  percentage 14 for the
      month  preceding the month of the  Contractor's  affected  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
      (I)(6)(d)  minus the Base RACK Rates  expressed  heretofore  at  Paragraph
      (I)(6)(b4  (f) the  remainders  resulting  from  each  application  of the
      calculations expressed heretofore at Paragraph (I)(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 (I)(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 (I)(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

-------------------
(13) 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.

(14) For this  purpose,  the "CPI  increase" is hereby  defined as the aggregate
percentage  increase  in  the  consumer  price  index  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>
                                       40


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:

            (a)  For  a  total  or  partial  suspension  of  the  discount,  the
            Contractor  must  show  each  month  on a  total  dollar  basis  the
            differences  between  the  Excess  Vehicle  Fuel  Costs for  vehicle
            gasoline  and vehicle  diesel  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  in the CPI shall  occur,  the
            Contractor shall use the preceding formula on an adjusted annualized
            basis and demonstrate it and the 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  payment(s)  that shall  become due and
      payable to the Contractor or by a refund  payment by the  Contractor  upon
      written request from the BOE.

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                                       41


      (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  (I)  of  this
      Extension and Eleventh 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  other  form of  further
      appeal. If the 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.

(J) 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. 0070, 8108,  G8801,  G8891
      and  G9325  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.

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                                       42


      (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 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,  (f) 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 Direc-

<PAGE>
                                       43


      tor 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)  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  Contractor'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.

      (10) Unlawful or Unenforceable  Provisions Void.  Whereupon this Extension
      and  Amendment  Agreement  shall be  found  to  contain  any  unlawful  or
      unenforceable provision(s), 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.

      (11) 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, (f) 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.

      (12)  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.

      (13) 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.

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                                       44


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

      (15)  Fingerprint  Processing and  Identification  Badges.  The Contractor
      hereby  agrees,  consents and  convenants  that at the  discretion  of the
      Director,  all  employees of the  Contractor  including but not limited to
      principals,  shareholders,  stockholders,  managers,  dispatchers,  office
      personnel,  and  mechanics,  will be subject to a fingerprint  check.  The
      Contractor also,  hereby agrees,  consents and covenants that the costs to
      process fingerprints,  criminal background research,  other documents, and
      indentification badges for any of the above mentioned will not be borne by
      the Board of  Education.  Whereupon  OPT  assumes  the  responsibility  to
      process  fingerprints,  criminal background research,  other documents and
      identification badges, the Contractor agrees and convenants to be bound by
      rules and  procedures  prescribed  by the  Director  whereby  the BOE will
      defray the associated administrative costs.

      (16)  Vacillation  in the Number of Contract  and/or  Additional  Vehicles
      during Extension Periods. Article XIII entitled,  "INCREASE OR DECREASE IN
      THE NUMBER OF VEHICLES," is henceforth amended as follows:

            (a) The current Paragraph C is henceforth  redesignated as Paragraph
            D.  A  new  Paragraph  C is  added  immediately  below  the  current
            Paragraph B. The new paragraph shall reads as follows:

                  "C. Increases and/or Decrease in the Number of Vehicles during
                  Extension  Periods.  The  Board and the  Contractor  do hereby
                  stipulate  and agree that the number of  vehicles  required to
                  serve pupil population  transportation  needs may change often
                  during each  school  year due to changes in pupil  population,
                  default or  voluntary  surrender  of a Contract  or changes in
                  policy or directives adopted by the BOE, the City of New York,
                  the State Education Department and/or Financial Control Board,
                  over the term of an Extension  Agreement.  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.  4515,  4516,  4894,  4952 and 7164.  If
                  additional  vehicles are then needed  vehicles will be offered
                  by item  beginning  with the  contractor who quoted the lowest
                  daily rate per vehicle under Contract Serial Nos. 0070,  8108,
                  8805, 8891, 9325 and 7165.

                  "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

<PAGE>
                                       45


                  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  and the daily rate per escort in the
                  relevant   contractual   item,   pursuant  to  the  procedures
                  specified  above in Paragraph B.  Additional  vehicles will be
                  offered first to the Contractor  will the lowest current daily
                  weighted  average plus the daily rate per escort.  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.

                  "The term 'lowest  weighted  average  daily rate per vehicle,'
                  plus the daily rate per escort, which is 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 of Education at the time of an offer.

                  "If the Director shall eliminate any 'additional'  vehicles at
                  the outset of service in any given  September  and  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.

                  "Anything in the previous ARTICLE XIII 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  Eleventh  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 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
                  vehicles 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."

      (17) All other provisions of the Contract as amended by the 1984 Extension
      and Fourth Amendment Agreement,  by the 1987 Extension and Fifth Amendment
      Agreement,  by the 1990 Extension and Sixth  Amendment  Agreement,  by the
      1993 Extension and Seventh Amendment Agreement,  by the 1995 Extension and
      Eighth Amendment, by the 1996 Supplemental Ninth Amendment Agreement,  and
      by  the  1998  Supplemental  Tenth  Amendment   Agreement,   except  those
      provisions  herein  noted and  revised,  shall  remain  in full  force and
      effect.

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