<PAGE>


                   EX-10.13
                 Contract Proposal

                                                                 Serial No. 8101

                   BOARD OF EDUCATION [SEAL] CITY OF NEW YORK

                               CONTRACT PROPOSAL

Sealed bids will be received by the Director of the Bureau of Supplies of the
Board of Education of the City of New York, at his office. Room 513, 44-36
Vernon Blvd., Long Island City, New York, 11101.

Until 10:00 A.M., on MONDAY, JULY 2, 1979

Bids will be publicly opened and read at 10:00 A.M. on the date and place stated
above.

                  FOR THE TRANSPORTATION OF HANDICAPPED PUPILS

              FOR THE PERIOD FROM SEPTEMBER 1979 THROUGH JUNE 1982

--------------------------------------------------------------------------------

1.  Name of Bidder     [ILLEGIBLE] Transportation, Inc.
                       ---------------------------------------------------------
    Address of Bidder  Suite 810  1407 Broadway  N.Y.C., N.Y.  10018
                       ---------------------------------------------------------

2.  Page Number(s) Containing Bid Prices:

    ____________________________________________________________________________

    ____________________________________________________________________________

    ____________________________________________________________________________

    ____________________________________________________________________________

    ____________________________________________________________________________
<PAGE>

                                   IMPORTANT

                              NO-BID RESPONSE FORM

IT IS NOT NECESSARY FOR THE BIDDERS WHO ARE SUBMITTING BIDS ON THE PRODUCT(S)
AND/OR SERVICES SPECIFIED HEREIN TO RETURN THIS FORM.

FAILURE OF NON-BIDDERS TO COMPLETE AND RETURN THIS FORM WILL RESULT IN THEIR
AUTOMATICALLY BEING DROPPED FROM OUR BIDDERS' LIST FOR THE PRODUCT(S) AND/OR
SERVICES SPECIFIED HEREIN.

The New York City Board of Education is committed to programs and policies that
will result in the procurement of supplies, equipment and services that meet the
quality standards required by our educational institutions at the lowest
possible prices consistent with those standards.

An important aspect of achieving this goal is to promote competitive bidding
among as great a number of qualified bidders as possible.

However, the preparation and mailing of Bid Request Packages is time-consuming
and expensive. In instances where bidders fail to respond, or notify the Board
of Education of their future intentions, the preparation and mailing of the Bid
Request Package represents an unnecessary expense to the Board of Education.

All bidders who respond with a "No Bid" response, or choose not to bid, are
requested to provide the information requested below and return this form, in
the envelope provided, in time for the bid opening. FAILURE TO RETURN THIS
COMPLETED FORM WILL RESULT IN THEIR AUTOMATICALLY BEING DROPPED FROM OUR
BIDDER'S LIST FOR THE PRODUCT(S) AND/OR SERVICES SPECIFIED HEREIN. To be
reinstated on the bidder's list the bidder must forward a written request for
consideration which will be reviewed by the Board of Education.

--------------------------------------------------------------------------------

REASONS FOR NOT BIDDING AT THIS TIME:  _________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

DO YOU WISH TO RECEIVE BID REQUESTS FOR THIS PARTICULAR PRODUCT OR SERVICE IN
THE FUTURE?              ( ) YES ( ) NO

*BIDDER NAME AND ADDRESS:  _____________________________________________________

________________________________________________________________________________

SIGNED:___________________  TITLE:___________________  DATE:____________________

BID SERIAL NO.    8108                      DATE OF BID OPENING_________________

      *PLEASE CHECK HERE ( ) IF THIS ADDRESS IS A CORRECTION OF THE MAILING
       ADDRESS TO WHICH THIS BID PROPOSAL WAS ORIGINALLY MAILED.
<PAGE>

ALL PROSPECTIVE BIDDERS PLEASE NOTE THE FOLLOWING:

                            BID DEPOSIT OR BID BOND

Your attention is directed to Section _____ on Page 1 on the General
Instructions to Bidders entitled "BID DEPOSIT OR BID BOND".

In the event the Bid Deposit to be submitted with bid is in the form of a check,
said check MUST BE CERTIFIED.

Bids that are not executed in strict accordance with this section shall be
rendered informal and not read at bid opening.

                     WRITTEN AGREEMENT & ANTI-TRUST CLAUSES

The written agreement contains all the terms and conditions agreed upon by the
parties hereto, and no other agreement, oral or otherwise, regarding the subject
matter of this agreement shall be deemed to exist or to bind any of the parties
hereto, or to vary any of the terms contained herein.

The vendor (contractor) hereby assigns, sells and transfers to the City of New
York, all right, title and interest in and to any claims and causes of action
arising under the antitrust laws of New York State or of the United States
relating to the particular goods or services purchased or procured by the City
under this contract.

                   PARTICIPATION IN AN INTERNATIONAL BOYCOTT

a.   The contractor agrees that neither the contractor nor any
     substantially-owned affiliated company is participating or shall
     participate in an international boycott in violation of the provisions of
     the Export Administration Act of 1969, as amended, or the regulations of
     the Untied States Department of Commerce promulgated thereunder.

b.   Upon the final determination by the Commerce Department or any other agency
     of the United States as to, conviction of the contractor or
     substantially-owned affiliated company thereof, participation in an
     international boycott in violation of the provisions of the Export
     Administration Act of 1969, as amended, or of the regulations promulgated
     thereunder, the Comptroller may, at his option, render forfeit and void
     this contract.

c.   The contractor shall comply, in all respects, with the provisions of
     Section 343 - 10.0 of the Administrative Code of the City of New York and
     the rules and regulations issued by the Comptroller thereunder.


                                     III B
<PAGE>

                 PRICE CERTIFICATION CLAUSE (REVISED 11/13/78)

      The bidder certifies that the prices, warranties, conditions, benefits,
and terms quoted herein are at least equal or more favorable to the Board of
Education of the City School District of the City of New York than the prices,
warranties, conditions, benefits and terms currently quoted by the bidder to any
customers for the same or a substantially similar quantity and type of item(s)
or services as described herein. This certification shall not apply to prices,
warranties, conditions, benefits and terms under contracts in effect between the
bidder and other customers at the date of submission of the within bid, except
as provided herein.

      The successful bidder (hereinafter called the "Contractor") further
certifies that during the period between the bid submission date and the
completion of the term of this contract, should he offer prices, warranties,
conditions, benefits, and terms more favorable than those quoted herein, or
provide changed prices, warranties, conditions, benefits and terms more
favorable than those quoted herein under a contract in effect at the bid
submission date with any customer, for the same or a substantially similar
quantity and type of item(s) or services, then the contractor shall immediately
thereafter notify the Board of Education, Bureau of Supplies. Regardless whether
such notice is sent by the contractor or received by the Board of Education,
this contract shall be deemed amended retroactively to the effective date of
more favorable treatment, to provide the more favorable prices, warranties,
conditions, benefits, and terms.

      The Board of Education shall have the right and option to decline any such
amendment.

      If the contractor is of the opinion that an apparently more favorable
price, warranty, benefit, condition and term quoted, offered or provided to a
customer is not more favorable treatment, the contractor shall immediately
notify the Director of the Bureau of Supplies of the Board of Education in
writing setting forth in detail the reasons why it believes the apparently more
favorable treatment is not in fact more favorable treatment. The Director of the
Bureau of Supplies after consideration of the written explanation may, in his
sole discretion, decline to accept the explanation and thereupon, the contract
shall be deemed amended retroactively to the effective date of the more
favorable treatment, to provide the more favorable prices, warranties,
conditions, benefits, and terms to the Board of Education.

      The contractor further certifies that when the terms and conditions of the
within contract provide for the written submission by the contractor of a
request for revision of prices, warranties, conditions, benefits and terms,
such requested revised prices, warranties, conditions, benefits and terms will
be at least equal to or more favorable to the Board of Education of the City
School District of the City of New York than the prices, warranties, conditions,
benefits, and terms offered by the contractor to any customer for the same or
substantially similar quantity and type of item(s) and services as of the
effective date of the revision.

      The contractor hereby authorizes the inspection, review and copying of
contracts and documents that pertain or relate to the performance of this clause
of the contract.

      The contractor shall be obliged to keep the contracts and documents
referred to in the above paragraph during the effective period of this contract
and for a period of three years after the final payment of this contract.


                                     III C
<PAGE>

                                                          Revised April 30, 1979

      Form CE 8 - Standard Form of Contract Proposal, Page IX, Section 9A
Entitled "Grounds for Disqualification or Cancellation" is hereby deleted and
replaced by the following:

                                 INVESTIGATIONS

      Upon the refusal of a person, when called before a Grand Jury,
Governmental Department, a commission, agency or any other body which is
empowered to compel the attendance of witnesses and examine them under oath, to
testify concerning a transaction, contract, lease, permit or license entered
into with the City of New York (City), The State, or any political subdivision
thereof, or a public authority or with any public department, agency or official
of the State or a political subdivision thereof, upon being advised that neither
his or her statement nor any information or evidence derived from such statement
will be used against that person in any subsequent criminal proceeding;

      (A) Such person, or any firm, partnership, corporation or other entity
related to the aforesaid testimony of which he or she was at the time of the
testimony a member, partner, director, officer, fiduciary, principal or employee
may be disqualified for a period not to exceed five years after such refusal
from submitting bids for or entering into or obtaining any contract, lease,
permit or license with or from the City or submitting bids for or entering into
or obtaining any contract, lease, permit or license which will be paid in whole
or in part out of monies under the control of or collected by the City, and

      (B) Any and all such existing City contracts, leases, permits or licenses
that said refusal to testify concerned may be cancelled or terminated by the
City or the contracting agency and/or be subject to such other action
appropriate under the circumstances thereto, in the discretion of the City for
cause after a hearing, without the City incurring any penalty or damages on
account of such cancellation or termination, but any monies owing for goods
delivered, work done, rentals, permit or license fees due, prior to the
cancellation or termination, shall be paid by the City.

      (C) The term license or permit as used herein shall be defined as a
license, permit, franchise or concession not granted as a matter or right.

      (D) Any disqualification, cancellation or termination hereunder shall be
made by the City Commissioner or agency head who is or would be a party to the
contract, lease, permit or license that is the subject of the aforesaid
disqualification, cancellation and/or termination, after a hearing upon not less
than two (2) days written notice to the parties involved.


                                     III D
<PAGE>

                               TABLE OF CONTENTS

CONTRACT
TRANSPORTATION OF HANDICAPPED PUPILS
FOR THE PERIOD FROM SEPTEMBER 1979 THROUGH JUNE 1982

                                                                            Page

General Instructions for Bidders ..........................................

Form to be Used ...........................................................    1

Presentation of Bids ......................................................    1

Bid Opening ...............................................................    1

Late Bids .................................................................    1

Bid Deposit or Bid Bond ...................................................    1

Verification ..............................................................    2

Quotation .................................................................    2

Additional Information ....................................................    2

Equal Employment Opportunities ............................................    2

Withdrawal of Bids ........................................................    3

Ability to Perform ........................................................    4

Financial Statement .......................................................    4

Equipment .................................................................    4

Insurance and Performance Bond ............................................    5

Award .....................................................................    7

Notice of Award ...........................................................    7

Return of Bid Deposit .....................................................    7

Bid Certification .........................................................    8

Individual Verification ...................................................   11

Corporate Verification ....................................................   12
<PAGE>

Schedule of Items, Specifications and Bid Blank:

                                                                            Page

        I.    Intent and Scope ..........................................     13

       II.    Period of Contract ........................................     13

      III.    Number of Days of Service .................................     13

       IV.    Period of Operation .......................................     14

        V.    Payment ...................................................     14

       VI.    Items .....................................................     15

      VII.    Transportation of Pupils ..................................     15

     VIII.    Schedule of Vehicles ......................................     15

       IX.    Vehicle Specifications ....................................     16

        X.    Vehicle Safety Requirements ...............................     17

       XI.    Spare Vehicles and Vehicle Performance Monitoring .........     18

      XII.    Use of Vehicles ...........................................     19

     XIII.    Increase of Decrease in the Number of Vehicles ............     20

      XIV.    Facilities and Maintenance ................................     23

       XV.    Gasoline ..................................................     23

      XVI.    Records to be Transmitted .................................     23

     XVII.    Vehicle Operator Standards ................................     23

    XVIII.    Operational Supervision ...................................     25

      XIX.    Escorts ...................................................     26

       XX.    Audit of Invoices and Financial Records ...................     29

      XXI.    Liquidated Damages ........................................     29

     XXII.    Employee Protection Provisions ............................     33
<PAGE>

General Terms and Conditions

                                                                      Page

Definitions.........................................................   1

1.  Subject Matter..................................................   2

2.  Contract........................................................   2

3.  Interpretation..................................................   2

4.  Modifications...................................................   2

5.  Compliance With Laws............................................   3

6.  Non-Assignment of Contract......................................   3

7.  Cancellation....................................................   3-4-5

8.  Notices.........................................................   5

9.  No Estoppel ....................................................   5

10. Claims - Limitations of Action..................................   6

11. Maintenance of Records..........................................   6

12. Discrimination..................................................   6-7

13. Equal Employment Opportunity Requirement for
    Non-Construction Contractors, Vendors and Suppliers.............   8 thru 13

14. Indemnification.................................................  14

15. Workmen's Compensation..........................................  14

16. Prevention of Delay, Suspension of Strikes......................  14

17. Inspectors......................................................  14

18  Rejection of Vehicles...........................................  15

19. Payments........................................................  15

20. Acceptance of Final Payment.....................................  15

21. Reserved Rights.................................................  16
<PAGE>

                                                                      Page

22. Anti-Trust......................................................  16

23. Merger..........................................................  16

24. Venue...........................................................  16

Performance Bond....................................................  17-18
<PAGE>

                               BOARD OF EDUCATION
                                CITY OF NEW YORK

NOTICE: The attention of the bidder is particularly called to the fact that,
unless the bid is made in strict conformity with the directions given in this
proposal as provided for herein, the bid may be rejected.

                               PROPOSAL FOR BIDS

                  FOR THE TRANSPORTATION OF HANDICAPPED PUPILS
              FOR THE PERIOD FROM SEPTEMBER 1979 THROUGH JUNE 1982

                               (SERIAL NO. 8108)

                        GENERAL INSTRUCTIONS FOR BIDDERS

                                FORM TO BE USED

Bidder must submit his bid upon the blank form included herein, which set forth
the schedule of items quantities, specifications and form on Contract. The forms
provide for quotations for extended and regular service, and each bidder is
required to bid on both for each item bid upon. Partial item bids will not be
accepted.

                              PRESENTATION OF BIDS

The person, firm or corporation making a bid shall furnish such bid in a sealed
envelope of the Director of the Bureau of Supplies or his designated
representative at the place herein mentioned on or before the day and time
herein named, and the envelope shall be endorsed on the face thereof with the
name of the person, firm or corporation making such bid, the date of its
presentation and the title of the services for which such bid is made.

                                  BID OPENING

At the time and place herein stated, the bids received will be publicly opened
and read by the Director of the Bureau of Supplies or his duly designated
representative. The Board of Education reserves the right to waive any
formalities in a bid if it is deemed to be in the best interests of the Board to
do so.

                                   LATE BIDS

Bids which arrive after the time stated for the opening of bids cannot be
accepted. This includes bids sent by mail, which, if so sent, are sent at the
risk of the bidder, and will not be considered if they arrive after the time
stated for the bid opening.

                            BID DEPOSIT OR BID BOND

Every bid shall be accompanied by a bid bond or by a deposit in the amount of
two (2) times the daily rate for regular service per vehicle for each vehicle in
all items bid. Such deposit shall consist of a certified check upon a state or
national bank or trust company or a check of such bank or trust company signed
by a duly authorized officer thereof, drawn to the order of the Comptroller of
the City or New York.


                                     - 1 -
<PAGE>

The bid deposit shall be enclosed in a sealed envelope within the envelope
containing the bid. Receipt for the bid deposit will not be given, as bids will
be publicly opened and read, and the amount of bid deposits publicly announced
at the time of opening of bids.

                                  VERIFICATION

Each bid shall be verified by the oath in writing of the party or parties making
it, that the several matters stated therein are in all respects true. If the
bidder is a corporation, the verification shall be made by an officer of such
corporation with knowledge of the facts and having authority to make such a
sworn statement.

                                   QUOTATION

The bidder shall insert the prices he proposes to furnish for each item in the
schedules herein contained or annexed, as well as all other information required
on the bid blank.

                             ADDITIONAL INFORMATION

Further information, interpretation or clarification relative to the terms or
conditions of the Contract should be requested in writing prior to the
submission of the bid from the Director or duly designated representative of the
Bureau of Pupil Transportation at 28-11 Queens Plaza North, Long Island City,
New York, 11101.

                         EQUAL EMPLOYMENT OPPORTUNITIES

The particular attention of bidders is called to the section entitled "Equal
Employment Opportunities and Practices" on Pages 8 through 13 of the General
Terms and Conditions. The provisions and terms therein will be strictly enforced
by the Board of Education. It is recommended that you contact the Director of
the Office of Equal Opportunity Room 641, 110 Livingston St., Brooklyn, N. Y.
11201 for forms and other information that his office would require in the event
of possible consideration of award to your company.


                                     - 2 -
<PAGE>

                               WITHDRAWAL OF BIDS

A.    After the opening of bids, a request by a bidder to the Board of Education
      for consent to the withdrawal of his bid because of error made by said
      bidder, will be considered only under the following terms and conditions:-

      1.    Request to withdraw bid must be in writing, addressed to the
            Director of Bureau of Supplies and must give reasons for the
            request.

      2.    Request must be sent by registered mail and must be post-marked not
            later than 48 hours following the opening of bids.

      3.    All requests will be referred to the Board of Review.

      4.    Contractors requesting consent to the withdrawal of bids shall
            appear and testify before the Board of Review and shall make
            available to the Board of Review all work sheets, summary sheets
            and other data requested by the Board of Review as pertinent to
            its inquiry. Failure to appear or to make available data as
            requested by the Board of Review will result in refusal to
            consent to the withdrawal of bids.

      5.    After the Board of Review has considered a request by a bidder to
            withdraw its bid after an award has been made by the Board of
            Education, the Board of Education may grant such request in any case
            which it deems just and proper, but such request shall be made and
            such consent to withdraw shall be accepted by the bidder upon the
            express conditions that said bidder shall be excluded from bidding
            again on the readvertisement of bids for the same item or proposal.
            Should any bidder request the withdrawal of more than one bid in any
            twelve month period, he shall be disqualified from bidding on Board
            of Education work for a period of one (1) year from the date of the
            second request.

B.    If the Contract award is not made within forty-five days after the date of
      the bid opening, a bidder has the right to withdraw his bid, provided such
      withdrawal is made prior to Contract award. Such withdrawal must be in
      writing and shall be filed with the Secretary of the Board of Education
      and the Director of the Bureau of Supplies.

      A withdrawal of bid pursuant to this paragraph is not subject to the
      provisions stated in paragraph "A" above.


                                     - 3 -
<PAGE>

                               ABILITY TO PERFORM

Upon demand of the Director of the Bureau of Pupil Transportation, any bidder
for this Contract shall furnish testimonials or evidence in such form as the
Director may indicate, as to his financial ability, prior experience, past
performance, ability to perform (which includes permitting investigation and
evaluation by the Board of bidder's facilities, equipment, personnel), etc. No
award will be made to a bidder who shall fail to submit testimonials, setting
forth the facts required to be set forth, or to a bidder whose statements set
forth in such testimonials are found to be untrue. Any statement or declaration
made by the bidder which shall be found be untrue will be sufficient cause for
rejecting his bid and forfeiting his bid deposit to the Board. The Director will
determine whether the evidence of ability to perform is satisfactory and will
recommend awards only when such evidence is deemed satisfactory, and reserves
the right to reject bids where evidence is submitted, or investigation and
evaluation is determined by the Director, to indicate inability of the bidder to
perform.

                              FINANCIAL STATEMENT

The bidder must submit with its bid a balance sheet and profit and loss
statement of its operations for the past three annual tax periods or for the
number of tax years which the bidder has been in business, with a certification
by an independent Certified Public Accountant licensed by the State of New York.
The individual, firm, or corporation employed to prepare the financial statement
will have no interests in the bid and must so certify. Each bidder shall submit
a statement under oath disclosing and clearly identifying all its stockholders
owning 5% or more of the outstanding equity, its officers, partners, creditors,
and every person, firm or corporation who has any interest directly or
indirectly in the bid or the bidder at the time the bid is submitted; and shall
report to the Director any change in control or ownership during the period of
this Contract within 5 days. If the bidder has not been in business within the
past three (3) years, the bidder shall submit a satisfactory certified financial
statement outlining its qualifications to perform satisfactorily.

                                   EQUIPMENT

The bidder must submit with his bid the following data if such information is
available at the time of bid, in the connection with each vehicle intended to be
used for transportation of pupils:

      1.    Make, year of manufacture and identification number of each vehicle.

      2.    Pupil seating capacity.

      3.    Name of owner of each vehicle.

The bidder shall supply satisfactory evidence that he will have the required
number of vehicles prior to the beginning or the Contract period or beginning of
service. Such evidence may be a signed statement from an acceptable vehicle
manufacturer, dealer, or rental corporation to the effect that he will furnish
the required number of vehicles. If the vehicles are leased or rented, the
vehicle operator (driver) cannot be owner.


                                     - 4 -
<PAGE>

A successful bidder must furnish this date with reference to each vehicle being
furnished and used for the transportation of pupils under the Contract both at
the inception of the Contract and for any additional vehicle acquired
thereafter. The successful bidder must also inform the Board of Education of any
vehicle withdrawn from service or replaced during the life of the Contract.

                         INSURANCE AND PERFORMANCE BOND

The bidder must submit, with his bid, certifications from acceptable insurors to
the effect that said insurors will furnish to the bidder public liability
insurance, property damage coverage and a performance bond as follows:

      1.    Public Liability for bodily injury, including death shall be in the
            amount of $500,000.00 for each person and $5,000,000.00 for each
            accident. Property damage coverage shall be in the amount of
            $50,000.00 to cover the claim of one person and $100,000.00 to cover
            the claim of two or more people for each accident. These policies
            shall be endorsed to include the Board of Education and City of New
            York, as named insureds. A copy of said policies shall be supplied
            to the Director of the Bureau of Pupil Transportation upon request.
            This written proof must be issued by a company licensed by the
            Superintendent of Insurance of the State of New York to do business
            in New York.

      2.    Performance Bond to cover the faithful performance of the Contract
            in the amount of the Contract where required. This written proof
            must be issued by a company licensed by the Superintendent of
            Insurance of the State of New York to do business in New York.

            The amount of the initial performance bond to be provided, when
            required, by the successful bidder for the first year of the
            Contract shall be one hundred and eighty times the daily rate for
            regular service per vehicle for all vehicles for which the Contract
            is awarded. This performance bond shall guarantee the full and
            faithful performance for the initial first year period of such
            Contract as may be awarded to bidder. The initial performance bond
            shall be filed with the Secretary of the Board of Education with the
            acknowledgement of the notice of award. Thereafter, the contractor
            shall provide an equal and identical bond guaranteeing performance
            for each additional year beyond the operation of the first year of
            said Contract by April 1, 1980, 1981, and 1982 respectively.

            Inability or failure on the part of the contractor to obtain the
            bond guaranteeing performance as required herein on or before April
            1, as state above, shall be deemed sufficient cause for cancellation
            of the balance of the Contract.


                                     - 5 -
<PAGE>

      3.    Waiver of Performance Bond.

            (a)   Any bidder who initially receives an award of Contract for
                  fifteen (15) or fewer vehicles is not required to furnish a
                  performance bond, nor shall there be any retainage withheld by
                  the Board of Education.

            (b)   Any bidder who initially receives an award of Contract for
                  sixteen (16) to twenty-five (25) may elect between the
                  following alternatives:

                    1.   File a performance bond as stated herein; or

                    2.   Authorize the Board of Education to retain 10% of each
                         payment made to the contractor from the first five (5)
                         months payments of each year of the contract in an
                         interest bearing account to assure full and faithful
                         performance of this Contract. This retainer shall be
                         paid to the contractor with interest at the conclusion
                         of each one (1) year period of full and faithful
                         performance under this Contract.

      4.    During the period of the Contract, if there is a increase in the
            total number of vehicles furnished by one contractor to more than
            fifteen (15), but less than twenty-six (26), then the contractor
            shall comply with the terms and conditions outlined in 3(b) above.

            During the period of the Contract, if there is a increase in the
            total number of vehicles furnished by one contractor to more than
            twenty-five (25), then the contractor shall immediately notify the
            Director and shall furnish a performance bond as required herein for
            those vehicles in excess of twenty five (25) within twenty (20) days
            and must furnish such performance bond for the remaining portion of
            the Contract period for those vehicles in excess of twenty-five (25)
            in accordance with the conditions stated herein.

      5.    For the purposes of 3 and 4 above, corporate bidders who are subject
            to common control as determined by the Board based upon an analysis
            of:

            (a)   ownership of the corporations' 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.


                                     - 6 -
<PAGE>

                                     AWARD

The award of Contract, if made, will be made according to law, as soon after the
opening of bids as practicable, by item, to the lowest reponsible bidder
offering the lowest weighted average daily rate per vehicle for extended and
regular service as specified in each item.

The Board of Education reserves the right to reject any or all bids. No award of
Contract shall be binding until the Contract had been duly approved by the New
York State Department of Education and the Financial Control Board.

                                NOTICE OF AWARD

The mailing by the Board of Education of the City of New York to the undersigned
bidder at the address herein specified of the NOTICE OF AWARD OR ACCEPTANCE OF
BID for any of the items for which this bid is submitted shall constitute a
Contract between the Board of Education and the undersigned to furnish and
deliver the items set forth in said NOTICE OF AWARD OR ACCEPTANCE OF BID. The
successful bidder will acknowledge receipt by him of the notice of award or
acceptance of bid within five days after receipt on the form to be provided to
him, and shall submit with said acknowledgement an executed copy of the
participation agreement (as set forth in XXII 4.) and the performance bond 
where required. Purchase orders will be issued when and as required.

                             RETURN OF BID DEPOSIT

After the award of Contract, the Comptroller shall reimburse the amount of bid
deposits received to the persons, firms, or corporation submitting the same,
except the bid deposit made by the bidder whose bid has been accepted. The
amount of the bid deposit of the successful bidder will be reimbursed to him
after acknowledgement from him of receipt of notice of award of Contract, and
submission of the participation agreement and performance bond where required.


                                     - 7 -
<PAGE>

             BID TO THE BOARD OF EDUCATION OF THE CITY OF NEW YORK

                                    Made by

Name of Bidder _________________________________________________________________
                       (Individual, firm or corporation)

Place of Business of Bidder ____________________________________________________

Date of Bid _________________________________  Telephone No.____________________

If Bidder is an individual or partnership, state here:

Name of Individual or Partners               Residence of Individual or Partners

1.______________________________________________________________________________

2.______________________________________________________________________________

3.______________________________________________________________________________

If Bidder is a corporation, fill in the following blanks:

Organized under the laws of the State of _______________________________________

Name and Residence of President ________________________________________________

________________________________________________________________________________

Name and Residence of Secretary_________________________________________________

________________________________________________________________________________

Name and Residence of Treasurer_________________________________________________

________________________________________________________________________________

The bidder above mentioned declares and certifies:

First: That the said bidder is of lawful age and the only one interested in this
bid, and that no one other than hereinabove named has any interested in this
bid, or in the contract proposed to be entered into.

Second: By submitting of this bid, each bidder and each person signing on behalf
of any bidder certifies, and in the case of a joint bid each party thereto
certifies as to its own organization, under penalty of perjury, that to the best
of its knowledge and belief -

      (1)   The prices in this bid have been arrived at independently without
            collusion, consultation, communication, or agreement for the purpose
            of restricting competition, as to any matter relating to such prices
            with any other bidder or with any competitor;

      (2)   Unless otherwise required by law, the prices which have been quoted
            in this bid have not been knowingly disclosed by the bidder and will
            not knowingly be disclosed by the bidder prior to opening, directly
            or indirectly, to any other bidder or to any competitor; and


                                     - 8 -
<PAGE>

      (3)   No attempt has been made or will be made by the bidder to induce any
            other person, partnership or corporation to submit or not to submit
            a bid for the purpose of restricting competition.

Third: That no Councilman of the City of New York, member of the Board of
Education of the City of New York, or any officer or employee or person whose
salary is payable in whole or in part from the treasury of the City of New York
is directly or indirectly interested in this bid or in the supplies, materials,
equipment, work or labor to which it relates, or in any portion of the profits.

Fourth: That said bidder is not in arrears to the City of New York or the Board
of Education of the City of New York upon debt, contract, or taxes and is not a
defaulter as surety or otherwise, upon any obligations to the City of New York,
and has not been declared not responsible, or disqualified, by any agency of the
City of New York, or State of New York, nor is there any proceeding pending
relating to the responsibility or qualification of the bidder to receive public
contract, except

________________________________________________________________________________

________________________________________________________________________________

(if none, bidder will insert "none")

Fifth: That said bidder has carefully examined the standard form of contract
proposal, including the instructions to bidders, specifications, and the
schedule of bid items, and will, if successful, perform all its terms, covenants
and conditions, and will furnish and deliver at the prices bid, within the time
stated, all the materials, supplies, apparatus, goods, wares, merchandise,
services, or labor named and described therein for which bid is made.

Sixth: The bidder expressly undertakes and agrees, if successful, to comply
fully with any and all applicable laws, orders, or regulations, of any federal,
state or municipal authority or agency.

The undersigned, if an individual bidder, or if the bidder be a firm,
partnership or corporation, the undersigned executing this document as a member,
partner, director or officer and on behalf of such firm, partnership or
corporation, expressly warrants and represents that neither he, nor any member,
partner, director or officer of said firm, partnership or corporation has, prior
to the date of execution of this bid, been called before a grand jury, head of a
state department, temporary state commission or other state agency, head of a
city department, or other city agency, to testify in an investigation concerning
any transaction or contract had with the State of New York, any political
subdivision thereof, a public authority or with any public department, agency or
official of the State of New York or of any political subdivision thereof, or of
a public authority or any fire district, and refused to sign a waiver of
immunity against subsequent criminal prosecution or to answer any relevant
question concerning such transaction or contract. If there has been a refusal to
sign a wavier or to answer, the bidder must state the time and place of such
refusal on the bid form submitted.


                                     - 9 -
<PAGE>

      The amount of the bid deposit or bid bond furnished with this bid is the
sum of _______________________________Dollars ($________________________________

Signature_______________________________________________________________________
                    (Individual, firm or corporation)
By______________________________________________________________________________
                       (Where bidder is corporation add:)

                                                       Attest:

____________________________________
               Secretary              (Seal)

(Please note that affidavit of verification on following pages must be executed)

      Notes: 1. Where bidder is a firm, the bid must be signed in the name of
the firm by a member thereof, who must sign his own name immediately thereunder,
as A. & B. Co., By C.A., Partner.

            2. Where the bidder is a corporation, each bid must be signed in the
name of the corporation by some duly authorized officer or agent thereof having
knowledge of the matters stated in the bid, and such officer or agent shall also
subscribe his own name, as: A. B. Company, by C. D., President. The seal of the
corporation should also be affixed.

            3. An individual doing business under a trade name must present the
bid in such individual's correct name. The style "Thomas Jonas, doing business
as (d/b/a) Celestial Bus Co." may be used.

            4. Each bid must be verified by the bidder submitting same by
execution of one of the follower proper forms.


                                     - 10 -
<PAGE>

                            INDIVIDUAL VERIFICATION

County of           )
State of New York   )  ss:

______________________, being duly sworn, deposes and says; he is the person who
executed the foregoing bid, that deponent has read the declarations contained in
said bid and knows the contents thereof; that the same are true to deponent's
own knowledge.


                                            ____________________________________
                                            (Signature of person verifying bid)

Subscribed and sworn to before me this

               day of

___________________________________________

                                   -----0-----

                            BY A FIRM OR PARTNERSHIP

County              )
State of New York   )  ss:

______________________________, being duly sworn, says:

      I am a member of ________________________________________________________,
the firm described in and which executed the foregoing bid. I subscribed the
name of the said firm thereto on behalf of the firm and several matters therein
stated are in all respects true.


                                            ____________________________________
                                            (Signature of person verifying bid)

Subscribed and sworn to before me this

               day of

________________________________________


                                     - 11 -
<PAGE>

                             CORPORATE VERIFICATION

County of              )
State of New York      ) ss:

_________________________________, being duly sworn, says:

      I am the ____________________ of _________________________________________
the corporation whose name is subscribed to and which executed the foregoing
bid.

I reside at ____________________________________________________________________

I have knowledge of the several matters therein stated and they are in all
respects true.


                                            ____________________________________
                                            (Signature of person verifying bid)

Subscribed and sworn to before me this

               day of

___________________________________________

                                   -----0-----

      The officer taking the acknowledgement shall enter his title, the date of
expiration of his commission, etc.

IMPORTANT NOTE:

Those found making intentionally false or misleading statements are liable for
prosecution for perjury.


                                     - 12 -
<PAGE>

                SCHEDULE OF ITEMS, SPECIFICATIONS AND BID BLANK

                  FOR THE TRANSPORTATION OF HANDICAPPED PUPILS

                 FOR THE PERIOD OF SEPTEMBER 1979 TO JUNE 1982

                              I. INTENT AND SCOPE

This Contract is intended to cover requirements for the transportation of
handicapped pupils whose transportation is provided by the Board of Education of
the City of New York, and for such other uses as provided for herein.

                             II. PERIOD OF CONTRACT

The time for the performance of the work herein scheduled is for the period of
three (3) years beginning with the first official scheduled public school day in
September, 1979 and ending with the last official scheduled public school day in
June, 1982. Thereafter, the Contract may be extended for one or more additional
years in conformance with the requirements of the State Education Law and the
regulations of the Commissioner of Education of the State of New York.

                         III. NUMBER OF DAYS OF SERVICE

The contractor must conform to the public school calendar and time schedules of
all the different schools involved in the item(s) bid upon, including daily time
schedules. The public school calendar shall be furnished prior to the opening of
each school year. It is the responsibility of the contractor to adhere to this
calendar at all times unless notified otherwise by the Director of the Bureau of
Pupil Transportation (hereinafter the "Director"). This shall include
responsibility for adhering to any special schedules or shortened schedules. The
Board reserves the right to change the school hours or days of attendance of any
or all grades, or of any or all schools any time prior to the letting of the
Contract and at any time thereafter. No change in compensation will be made for
such adjustments, unless they necessitate the use of additional vehicles by the
bidder.


                                     - 13 -
<PAGE>

                            IV. PERIOD OF OPERATION

Extended and regular service shall be provided pursuant to the terms and
conditions of this Contract. Extended service shall be defined as being provided
by those vehicles that are available for the transportation of pupils beginning
with the initial pick-up time of 7:00 A.M. and concluding with the delivery of
the last pupil to his or her home on the return trip.

Regular service shall be defined as being provided by those vehicles that are
available for the transportation of pupils beginning with the initial pick-up
time of 7:00 A.M., and delivery to school for the morning session which will
commence no later than 9:00 A.M. In addition, a regular vehicle shall pick up
pupils for the homeward trip no earlier than 2:00 P.M. and no later than 3:30
P.M., and shall complete its service with the delivery of the last pupil to his
or her home. Vehicles providing regular service shall be assigned runs not
exceeding two (2) hours for intraborough operation, of two and one half (2 1/2)
hours for interborough operation and runs extending beyond New York City limits,
from the time of the initial pick-up for the homeward trip.

                                   V. PAYMENT

Payment will be made based upon the daily rate per vehicle quoted by the
contractor for the number of vehicles and the number of days for the type of
service provided by the contractor for each vehicle. The Board reserves the
right to adjust the number extended and regular vehicles required to be provided
within any item upon five (5) days notice to the contractor. However, in no
event will the Board adjust the use of vehicles so as to reduce the extended use
of vehicles other than buses below ten percent (10%) of the total number of
such vehicles originally awarded to any contractor, or the extended use of buses
below twenty-five percent (25%) of the total number of buses orignally awarded
to any contractor. In no event will the contractor be paid for days on which the
vehicles are not operating pursuant to this Contract except for those days upon
which the contractor was scheduled to provide service and schools were ordered
closed by the Chancellor or Community Superintendents due to weather conditions
or other emergency situations. Invoices shall be submitted at the end of each
calendar month for the number of vehicles and the number of days on which
services were rendered during the preceding month. No adjustment in compensation
will be made other than for: (1) assessment of liquidated damages, (2)
assessment of expenses arising from default pursuant to paragraph7(c) of the
General Terms and Conditions of this Contract, (3) charges for additional use of
the vehicle, (4) charges for escort service when the contractor provides such,
and (5) increases or decreases in the number of vehicles or extended service.

Charges for additional use of the vehicle shall be defined as the requirement
that the contractor pick up its first pupil prior to 7:00 A.M. or any pupil
after 3:30 P.M. for the homeward trip. Such a requirement may result from the
scheduling by the Bureau of Pupil Transportation. Additional charges for use of
extended service vehicles shall be at an hourly rate equal to ten percent (10%)
of the daily rate for extended service vehicles. Charges for less than one hour
in additional service will be pro-rated.

The Board of Education reserves the right to deduct two per cent (2%) from the
prices quoted herein if payment is made within thirty days from the date the


                                     - 14 -
<PAGE>

The discount herein provided for shall not be a consideration in determination
of award.

                                   VI. ITEMS

The contractor shall complete the item(s) bid upon first. At the discretion of
the Director the vehicle may be assigned for a secondary use outside of the item
bid upon in accordance with the provisions of Section XII entitled, Use of
Vehicles, but within the hours contracted for the specific vehicle.

                         VII. TRANSPORTATION OF PUPILS

The pupils who will require transportation under this Contract are to be
provided with curb-to-curb service and/or additional service in accordance with
the provisions of Section XII. On the trip to school each child will be picked
up at the curb at a point as close to the front entrance to his home as
possible. In the unusual case where, because the child lives on a dead-end
street or because of traffic regulations, it is impossible for the vehicle to
pick up at the curb in front of the pupil's home, the pick-up and drop-off point
will be at the nearest intersecting street to the street on which the child
resides. On the homeward trip, the pupil will be discharged from the vehicle at
the same point from which the child was picked up unless instructed otherwise by
the Director. Vehicles will load and unload at the school at the point
designated by the Principal of the school.

Except in an emergency, no pupil will be required to transfer from one vehicle
to another vehicle either on the trip to school or on the homeward trip.

                           VIII. SCHEDULE OF VEHICLES

The Bureau of Pupil Transportation will prepare the vehicle schedules to be
operated by each vehicle to be used under this Contract. The schedule will show
the name, address, and the time of the initial pick up, name, address, sequence
of pick up for each additional pupil on the route, the school and its address,
and the scheduled arrival at each school. On the return trip the schedule will
indicate the departure time from the school and the sequence in which the
children will be delivered to their homes. These schedules will be subject to
frequent changes as the school schedule or session is altered, or as schools or
pupils' names and addresses are added to or deleted from the transportation
lists. The contractor will be required to comply with the changes in the
schedule within the time frame stipulated by the Bureau of Pupil Transportation.
The contractor shall not alter the schedule or the vehicle servicing such
schedule without prior approval of the Director.

A copy of such schedule shall be furnished to the Principal of each school.
Vehicles must not leave a pick-up point until the scheduled time and shall not
wait past the scheduled time unless the operator sees a pupil approaching to
board the vehicle for the trip to school. No vehicle shall leave the school at
dismissal time until all students are aboard. Contractors are not to permit
their employees to make stops at unauthorized locations.

If a toll is involved it will be the responsibility of the contractor to pay
such toll at his own expense.


                                     - 15 -
<PAGE>

                           IX. VEHICLE SPECIFICATIONS

All vehicles to be used and all transportation operations must comply with the
regulations of the New York State Department of Education, the New York State
Department of Transportation, the New York State Department of Motor Vehicles,
as well as with all applicable laws and regulations of any agency of the federal
government, State of New York and the City of New York.

Four different type vehicles are required to perform the services under this
Contract. In addition to complying with all governmental laws and regulations
the vehicles must also comply with the following standards:

      1.    "Standard school buses" must have a minimum seating capacity for
            thirty-six handicapped students with seat belts, excluding the
            driver and escort. Any vehicle with the capacity of more than
            sixteen pupils is deemed to be a bus.

      2.    "Hydraulic lift buses" shall be designed so that an escort can
            assist the pupil in a wheelchair into and out of the vehicle by use
            of the lift without discomfort or danger to the pupil and so that
            the escort can securely anchor the wheelchair to the vehicle. The
            contractor must be able safely to accommodate various types of
            wheelchairs. The minimum capacity with seat belts must be eight
            wheelchair passengers and eight ambulatory passengers. These seating
            configurations are subject to adjustment by removal or addition of
            seats as required by the Director of the Bureau of Pupil
            Transportation.

      3.    "Mini-bus station wagons" must have a minimum seating capacity of
            fourteen (14) for vehicles acquired prior to January 1, 1979 and a
            seating capacity of fifteen (15) for vehicles acquired after January
            1, 1979.

      4.    "Mini-bus or station wagons equipped with ramps to accommodate
            wheelchairs" must have a minimum capacity for four wheelchair
            passengers and minimum seating capacity for four ambulatory
            passengers and must be so equipped so that the escort can securely
            anchor the wheelchairs to the vehicles. The contractor must be
            able to accommodate safely various types of wheelchairs. These
            seating configurations are subject to adjustment by the removal or
            addition of seats as required by the Director.

            No standees will be permitted at any time on any vehicle used in the
            performance of this Contract.


                                     - 16 -
<PAGE>

All vehicles being used in performance of this Contract that were manufactured
more than five years prior to the date of execution of this Contract shall be
equipped with two-way radios.

Vehicles shall be given a number suitable for identification purposes. Such
numbers shall be not less than four inches high displayed on both sides, front
and rear of the vehicles. Also displayed on each vehicle shall be the name and
address of the contractor providing the service in letters not less than three
inches high. Numbers and letters shall be applied with black paint. The run
number, which will be supplied to the contractor by the Bureau of Pupil
Transportation, shall be placed inside the side front window of the vehicle and
shall be sufficiently large so that it can be clearly seen from a distance of
not less than fifteen feet. The run number shall not obscure the driver's
vision. The color of all vehicles used in the performance of this Contract shall
be National School Bus chrome yellow.

                         X. VEHICLE SAFETY REQUIREMENTS

The interior of each vehicle shall be cleaned and swept or vacuumed at least
once a day. The exterior shall be washed weekly and kept as clean as possible,
weather and conditions permitting.

All vehicles shall be equipped with individual safety belts for each passenger
carried. Such safety belts shall conform to the motor vehicle code of the State
of New York. All vehicles shall be equipped with an all purpose fire
extinguisher, dry chemical or CO 2 type, rated at least 10-B:c, equipped with a
calibrated or marked gauge. The fire extinguisher shall be mounted in automotive
bracket located in the driver's front compartment in full view and easily
accessible.

All vehicles shall be equipped with a first aid kit in a dust proof medical
container easily removable, located in the driver's front compartment which
shall contain the following items:

2 bandages (1" by 10 yards)
6 sterile gauze pads (3" by 3")
1 adhesive tape (1" by 25 yards)
12 plastic bandaid strips
1 pair scissors
2 triangular bandages with 2 safety pins
    (approximately 40" by 30" by 54")
3 single units of sterile eye pads (one per unit)

When a vehicle operator is not in his seat and pupils are in the vehicle, the
motor must be shut off, ignition key removed, the brakes set and the front
wheels turned against the curb. If the vehicle is parked and the motor shut off
for any reason, the ignition key must be removed and the brakes set with the
wheels turned towards the curb.


                                     - 17 -
<PAGE>

To protect against carbon monoxide concentration or buildup, no idling of the
motor is permitted while: (1) awaiting school dismissal : (2) loading or
unloading pupils at school; (3) parked or not moving for an excessive length of
time.

              XI. SPARE VEHICLES AND VEHICLE PERFORMANCE MONITORING

The contractor will provide all of the vehicles necessary to do all of the work
as contracted for in the item(s) contained in his Contract. The contractor must
have available sufficient approved vehicles and qualified personnel to enable
him to dispatch and place spare vehicles into operation promptly if, when and
where necessary to ensure continuous uninterrupted service in the event one or
more of the vehicles in regular use cannot function.

The contractor shall provide one spare vehicle for every twenty (20) vehicles of
a specific type contracted for. If a contractor provides between sixteen (16)
and twenty (20) vehicles of a specific type, then it must provide one spare
vehicle for each type. In the event a contractor provides less than fifteen (15)
vehicles of any specific type, then the contractor shall document to the
satisfaction of the Director that it has access to one spare vehicle for each
type. For these purposes, corporate bidders who are subject to common control as
determined by the Board based on an analysis of:

      (a)   ownership of the corporations' 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 contractor.

            The maximum number of spare vehicles required to be available and
            provided by one contractor shall not exceed ten vehicles for any
            specific type of vehicle.

Vehicles must be staffed with personnel qualified to handle emergency service.
Spare vehicles must be located at strategic points during the hours that
pupils are being transported under this Contract.

The person on the spare vehicle shall also act as expeditor, whose
responsibilities, beside performing emergency service shall include, but not be
limited to the following:

      1.    Dispatching or expediting vehicles to ensure a smooth operating
            fleet.

      2.    Prompt dispatching of spare vehicles in the event of breakdown of
            vehicles.

      3.    Maintaining a log in a form approved by the Director, in which he
            will enter reports of disruptions of service or delays. A transcript
            of such log shall be furnished to the Director at the end of each
            school week.


                                     - 18 -
<PAGE>

The maintenance of spare vehicles of a contractor providing 20 or more vehicles
shall be equipped with two-way radios and shall have continually open contact
with contractor's garage. In addition, the contractor shall assign its other
vehicles equipped with two-way radios among its routes so that the contractor
can dispatch the vehicles expeditiously to replace vehicles with breakdowns,
after these vehicles have completed their regular run. All equipment and
personnel referred to herein shall be supplied by the contractor and maintained
by the contractor at his own expense. A list of equipment and personnel used for
this service shall be submitted to the Director.

The contractor shall ensure direct telephone access to the contractor's garage
during the hours of operation. Answering services shall not qualify as direct
telephone access. The Bureau of Pupil Transportation will supply the contractor
with parent telephone numbers of each pupil. As a vehicle varies from its
schedule at any time for more than one hour, the contractor shall telephone
parents of the pupils involved in the delay. The contractor shall have available
sufficient telephone accessibility to handle problems and inquiries properly.

The contractor is responsible for monitoring operator and escort performance in
the field and to resolve problems with parents.

Field supervision shall include but is not limited to the following:

1.    Spot checking operator and escort performance at specific pick-up points
      and at schools.

2.    Riding a specific run where problems have occurred.

3.    Providing on-the-job training to operators and escorts.

4.    Resolving problems between the contractor's personnel and school officials
      or parents.

5.    Assisting expediting vehicles and continuing service where bus breakdowns
      occur.

                              XII. USE OF VEHICLES

Passengers other than pupils assigned by the Bureau of Pupils Transportation
shall not be carried in the vehicles used under this Contract while they are
being used to transport pupils except as otherwise stated or as authorized in in
writing by the Director.

In the event that a school principal requests permission for parents or other
adults to ride on the vehicle to maintain order, such permission may be granted
by the Director only, and the contractor will be notified accordingly.

The vehicles contracted for extended service are subject to use for field trips,
special events, emergency situations, or any other use as prescribed by the
Director. The use of the vehicles for such purposes may only be for hours that
will not interfere with the schedules established for the pupils transported to
and from school under the Contract. Use of these vehicles shall not be
restricted to physically handicapped, mentally retarded, emotionally disturbed
or other classifications of pupils, nor shall use of the vehicles for such
purposes be limited to schools specified herein. The vehicles under Contract for
extended service


                                     - 19 -
<PAGE>

shall provide transportation services to any other public agency or private
organization upon instruction of the Director.

In the case of field trips and other special trips where the routes are not
provided by the Director, these routes shall be established by the contractor in
advance, using the most efficient routing for the vehicle.

When vehicles are used for field trips, the pupil groups will be accompanied by
one or more adults. At least one of these adults will be a teacher. If the route
requested by a teacher in charge requires that a toll be paid, or if the teacher
should request the operator to park the vehicle in an area where a parking fee
is charged, it will be the responsibility of the teacher to pay such toll or
parking fee. Operators are not to be reimbursed by the teacher for any other
reason. Operator will not solicit tips or gratuities.

              XIII. INCREASE OR DECREASE IN THE NUMBER OF VEHICLES

A. Decrease. At any time during the period of the Contract the number of
vehicles required may be reduced and the schedules may be adjusted due to change
in pupil population, or change in policy or directive adopted by the Board of
Education, the City of New York, the State Education Department, and/or the
Financial Control Board, or other factors; provided, however, that in no event
shall the total number of any type of vehicle originally awarded to a contractor
be reduced: (1) by more than ten percent (10%) of the total number of any type
of vehicle originally awarded in the first year of this Contract; (2) in the
second year of this Contract, by more than twenty percent (20%) of the total
number of any type of vehicle originally awarded; and (3) in the third year of
this Contract by more than thirty percent (30%) of the total amount of any type
of vehicle originally awarded. Compensation to the contractor shall be reduced
to the number of vehicles actually used in the performance of this Contract, and
the Board of Education shall not be liable for payments for any vehicles
eliminated to the extent provided above.

Upon determination by the Director that there is a decrease in the number of
vehicles required for a specific type of service (service area and type of
vehicle) during the period of this Contract, the Board of Education reserves the
right to reduce the number vehicles for a specific type of service as follows:

      (1)   If the total number of vehicles at the time of decrease does not
            exceed the total number of vehicles originally contracted for, such
            reduction shall apply to the contract who quoted the highest
            weighted average daily rate per vehicle and shall apply subsequently
            to the contractors who quoted the next highest weighted average
            daily rates per vehicle until all necessary reductions are made.


                                     - 20 -
<PAGE>

      (2)   If the total number vehicles at the time of decrease exceeds the
            number of vehicles originally contracted for, such reduction shall
            first be made from the additional vehicles contracted for during the
            performance of this Contract and shall apply first to the highest
            weighted average daily rate per vehicle, and subsequently to the
            contractors who quoted the next highest weighted average daily rates
            per vehicle until all necessary reductions are made. After the
            reduction of these additional vehicles is exhausted, the Director
            may reduce the number of vehicles originally contracted for in
            accordance with XIII.A(1) above.

B. Increase. If at any time during the period of the Contract the number of
vehicles required for a specific type of service increase, the Board of
Education reserves the right to increase the number of vehicles for a specific
type of service as follows:

      (1)   If the total number of vehicles at the time of the increase is the
            total number or in excess of the total number of vehicles originally
            contracted for, the increase shall first be offered to that
            contractor who quoted the lowest weighted average daily rate per
            vehicle. Opportunity to furnish such vehicles as the initial offeree
            cannot furnish may then be offered to the next contractor with the
            next lowest weighted average daily per vehicle. If no contractors
            providing a specific type of service are found willing to supply
            additional service of the same type, then the Board may offer the
            opportunity to provide the additional vehicles to a contractor in
            any adjacent borough in the manner set forth. The initial offer will
            be made to that contractor with the lowest weighted average daily
            rate for that type of vehicle for which none of the successful
            bidders for that type of service were willing to provide additional
            vehicles as provided above.

      (2)   If the total number of vehicles at the time of the increase is less
            than the total number of vehicles originally contracted for, and
            there is a subsequent need for these vehicles, the contractors who
            had their number of vehicles reduced shall be afforded the right of
            right refusal for reinstatement of the use of these vehicles in
            inverse order to that by which they were reduced pursuant to XIII.A
            above.

            All additional vehicles provided throughout the entire period of the
            Contract must comply with all the terms, conditions, and
            specifications of the Contract set forth herein. The contractor will
            be compensated for such additional vehicles provided for herein.


                                     - 21 -
<PAGE>

C. Notice and Liability. The contractor shall be notified at least five (5)
school days in advance of the date the above changes are effective. If the
contractor is willing to furnish the required additional vehicles, he shall
confirm such agreement in writing to the Director within five (5) business days
of receipt of the offer.

If the above changes, when effective, terminate the need for any part of the
services rendered by a particular contractor, the Board of Education and the
City of New York (or any political or governmental subdivision thereof) shall
not be liable for any damages or cost of the contractor as a consequence
thereof.


                                     - 22 -
<PAGE>

                        XIV. FACILITIES AND MAINTENANCE

The bidder shall have sufficient storage and access to maintenance facilities
with sufficient equipment and trained personnel to satisfy New York State
Department of Transportation requirements. The facilities shall be subject to
periodic inspection and approval by the Board of Education during the period of
the Contract.

The contractor shall provide a program of preventive maintenance which meets the
approval of the Director and shall maintain records as evidence that the
vehicles are receiving acceptable periodic maintenance.

The Board of Education reserves the right to demand withdrawal from service of
any vehicle which in the opinion of the inspectors of the Bureau of Pupil
Transportation presents a hazard to the safe transportation of pupils.

                                  XV. GASOLINE

All gasoline required will be provided by the contractor at his own expesense.

                         XVI. RECORDS TO BE TRANSMITTED

The contractor shall submit, on Tuesday of each week, a list of the names and
addresses of pupils to be transported on the contractor's vehicles, but who have
not appeared for transportation for the entire preceding week. A record of
vehicles incorporating a Daily Record of Crews (operators and escorts) used each
day for the transportation of pupils under this Contract shall be maintained in
duplicate on forms to be prescribed by the Director, and the contractor shall
furnish to the Director the duplicate copies by Wednesday of each week. The
contractor shall supply such other information or documentation as may be
requested by the Director.

                        XVII. VEHICLE OPERATOR STANDARDS

To protect the safety and welfare of pupils, the contractor shall only employ
persons of good moral character to serve as vehicle operators. The contractor
shall send all applications for employment to the Director, and follow
procedures established by the Director for submission of the fingerprint record
and medical certificate for each applicant. The contractor shall certify to the
Director that he has checked the references of the applicant and that to the
best of his knowledge and belief the applicant is a person of good moral
character. No operator shall be employed on Board of Education work until his
references and fingerprint record have been approved by the Director, and his
medical certificate has been approved by both the Director and Medical Director.


                                     - 23 -
<PAGE>

Vehicle operators shall have valid appropriate operator's licenses for the
vehicles they operate, and must be competent, reliable and between the age of 21
and 65. Operators shall be physically fit and properly qualified by experience,
driving record and training to perform their duties. The contractor shall
certify to the Director that he reviewed New York State Department of Motor
Vehicles driver abstract records to determine the fitness and driving record of
its operators.

All vehicle operators shall be examined by a licensed physician. The results of
the physical examination shall be immediately reported to the Director and
Medical Director of the Board of Education on forms approved by the New York
State Department of Education and provided by the Director. These forms shall
constitute the medical certificate. The written report of the physician shall be
considered by the Medical Director in determining the fitness of the driver.
Each operator who is to be initially employed shall be examined within the four
weeks prior to the beginning of service.

Each operator shall receive an annual physical examination which shall include a
tubercular test. The results of this examination and the tubercular test shall
be recorded on forms approved by the New York State Department of Education and
provided by the Director.

These examinations shall be at no cost to the Board of Education.

Section 156.13(d)(2) of the Regulations of the New York State Commissioner of
Education shall be complied with in full and states: "Each school bus driver
initially employed by a Board of Education or transportation contractor
subsequent to July 1, 1973, shall have received at least two hours of
instruction on school bus safety practices. Each driver of a vehicle
transporting handicapped pupils exclusively who was initially employed
subsequent to January, 1, 1976, shall have received an additional hour of
instruction concerning the special needs of a handicapped pupil. During the
first year of employment, each driver shall complete a course of instruction in
school bus safety practices approved by the Commissioner, which shall include
two hours of instruction concerning the special needs of a handicapped pupil.
All school bus drivers shall receive a minimum of two hours of refresher
instruction in school bus safety at least two times a year, at sessions
conducted prior to the first day of school and prior to February 1st of each
year. Refresher courses for drivers of vehicles transporting handicapped pupils
exclusively shall also include instructions relating to the special needs of a
handicapped pupil."

Each contractor must utilize instructors approved by the New York State
Education Department for conducting the training sessions for drivers. All
training programs must be approved by the New York State Education Department
and the Bureau of Pupil Transportation before the program


                                     - 24 -


<PAGE>

is offered. In addition, all new vehicle operators must have a total of twenty
hours of classroom instruction prior to driving on any Board of Education
business. All vehicle operators having two or more accidents while driving on
Board of Education business must also attend an accident repeater course
conducted by a defensive driving specialist. Certification will be required from
the contractor stating that each operator has received appropriate training as
specified in this Contract.

If the Director determines that an operator's competency falls below acceptable
standards, or that any operator has made an unauthorized stop or an unauthorized
change in established route for which the operator may or may not have accepted
additional remuneration from other than his employer, or that the driver has a
previous record of careless or unsafe driving, the contractor, upon receiving
written notice from the Director to that effect, shall not again employ this
operator on any part of the work to be performed hereunder, or on any part of
any work the contractor may perform for the Board of Education under any other
contract.

Vehicle operators must be dressed in uniform attire provided by the contractor
and wear a photo identification badge which clearly shows the operator's name,
company's name, and operator's identification number assigned by the contractor.
The identification badge should be visible from a distance of ten feet.

                         XVIII. OPERATIONAL SUPERVISION

The requirements entitled "Contract Carrier and Driver Responsibility" contained
in Bureau of Pupil Transportation Handbook No. 3, Policy and Procedures Manual
Common Carrier and School Bus Information for Pupils in Grades K through 6,"
dated August, 1978 and drafted by the Bureau of Pupil Transportation is
incorporated herein by reference and is made part of this Contract as if fully
set forth herein in its entirety.

In addition to the requirements set forth in Pupil Transportation Handbook No.
3, operators must drive the scheduled route assigned to them at least one time
prior to start of school. If at any time during the school year a new operator
is assigned to a scheduled route, that operator must drive the schedule before
being permitted to transport students on that schedule.

All operators employed in the transportation of pupils shall be given permanent
route assignments at the commencement of each school year, except that, there
shall be one job "pick" for all operators (drivers), mechanics, dispatchers (who
may be employed as drivers or dispatches) and escorts (matrons-attendants)
appearing on the industry-wide Master Seniority Lists, to be held in the month
of October each year.

All accidents involving vehicles operating under this Contract shall be reported
to the Director immediately.

The emergency drills required by the State Education Law shall include practice
and instruction in the location, use and operation of the emergency door, fire
extinguisher, first aid equipment, and use of the windows as a means of escape
in case of fire or accident. Drills shell include situations which might result
from both fire and accidents. Such instruction


                                      -25-

<PAGE>

and the conduct of drills shall be given by a member or members of the teaching
staff as arranged between the contractor and the principal of each school. No
emergency drills shall be conducted when vehicles are on routes. The Director
shall be notified of arrangements for, and execution of, emergency drills. The
contractor and operator shall make arrangements for emergency drills so as to
minimize disruptions in service.

                                  XIX. ESCORTS

The contractor shall provide escort service in addition to the operator to the
extent required by the Board.

A.   The Board may determine to: (1) employ escorts directly, (2) contract
     separately for the employment of escorts with the contractor herein or with
     a separate contractor, or (3) require the contractor to provide escort
     service in addition to the operator. Should the Board determine to employ
     escorts directly, or contract separately with the contractor or with a
     separate contractor to provide escort service, the Board and/or the
     contractor providing the escort service, as the case may be, shall assume
     sole responsibility for any claims made for acts of negligence,
     carelessness or incompetence perpetrated by the escorts or by the employer
     of the escorts in connection with performance or failure to perform of such
     escorts or employers of escorts; and shall indemnify and hold harmless the
     contractor herein, if a separate contractor, from the contractor providing
     the escort service from all suits, actions, damages or costs of every kind
     and description, as may arise under the terms of this contract or
     otherwise, to which the contractor herein may be subjected because of such
     negligence, carelessness or incompetence. In addition, should the Board
     determine to employ escorts directly, or contract separately for the
     provision of escort service with a contractor other than the contractor
     herein, the provisions of B. through E. herein, references to escort
     service in Paragraph XXI of the Specifications, and any other reference to
     escort service in this contract other than as provided in Paragraph XIX
     (A), shall be deemed to be of no force and effect with respect to the
     contractor herein.

     Should the Board determine to require the contractor to provide escort
     service in addition to the operator, (1) the contractor shall be
     compensated in the manner provided herein in the amount of forty dollars
     ($40) per day per escort providing service on a vehicle in regular service
     and sixty dollars ($60) per day per escort providing service on a vehicle
     in extended service, with the daily rate per escort increased by ten (10%)
     percent in each of the second and third years of this Contract,
     (establishing the rate as forty-four dollars and sixty-six dollars in the
     second year, and forty-eight dollars and seventy-two dollars in the third
     year), which amount shall be in addition to any and all other compensation
     to which the contractor is entitled under the terms of this Contract, and
     (2) all references to escort service in provisions B. through E. below,


                                      -26-

<PAGE>

     Paragraph XXI of the Specifications, and any other reference to escort
     service in this contract other than the first two options described above,
     shall be of full force and effect with respect to the contractor herein.

B.   Standards. To provide for the safety and welfare of children, the
     contractor shall only employ persons of good moral character to serve as
     escorts. Escorts must be competent, reliable, over twenty-one years of age,
     physically fit and properly qualified to perform their duties. The
     contractor shall send all applications for employment to the Director and
     follow procedures established by the Director for submission of the
     fingerprint record and medical certificate for each applicant before the
     date the escort services are to be provided; allowing sufficient time for
     review and approval by the Director and Medical Director. The contractor
     will certify that he has checked the references of the applicant and to the
     best of his knowledge and belief the applicant is a person of good moral
     character. No escort shall be employed on Board of Education work until the
     references and fingerprint record have been approved by the Director, and
     the medical certificate has been approved by the Medical Director and the
     Director.

     Each regular or substitute escort shall be examined by a licensed
     physician. A report concerning the physical examination shall be submitted
     immediately on the forms prescribed to the Director and the Medical
     Director of the Board of Education. The physical examination shall include,
     as a minimum, those requirements specified on the prescribed physical
     examination report. The written report of the physician shall be considered
     by the Medical Director to determine the fitness of the escort to perform
     the duties set forth herein. Each escort who is to be initially employed
     shall be examined within the four weeks prior to the beginning of service.
     Each escort shall receive an annual physical examination. In no case shall
     the interval between physical examinations exceed a twelve month period.
     This examination will be at no additional cost to the Board of Education.
     The result of this examination and of an annual tubercular test shall be
     recorded on forms approved by the Director. These forms shall constitute
     the medical certificate.

     The Board of Education specifically reserves the right to reject any person
     who fails to meet the minimum physical requirements as specified on the
     medical certificate. If the Director determines that an escort's
     performance is unsatisfactory, the contractor, upon receiving written
     notice from the Director of such unsatisfactory performance shall not
     employ this escort on any work performed for the Board of Education.


                                      -27-

<PAGE>

C.   Training and Instruction. All escorts shall attend five one and one-half
     hour training sessions for a total of seven and one-half hours each year
     concerning the transportation of handicapped pupils. The training sessions
     shall be scheduled by the contractor with the approval of the Director, and
     are to be held at an hour and location convenient to the contractor and the
     escorts. The contractor shall furnish the premises required at his own cost
     and expense, and shall not be entitled to any additional compensation from
     the Board for these training sessions. All training programs must be
     approved by the Director before being offered.

D.   Identification. Escorts shall wear uniform attire supplied by the
     contractor. Escort shall wear a photo identification badge on the outside
     of his or her uniform which shows clearly the name, escort identification
     number assigned by the contractor, and the name of the contractor which
     employs the escort. The identification badge should be visible from a
     distance of ten feet.

E.   Responsibilities. The section entitled "Escort Responsibilities" contained
     in Pupil Transportation Handbook No. 1, entitled "School Bus Information
     for Drivers, Escorts, Schools and Parents of Handicapped Children," dated
     April, 1977 is incorporated herein by reference as if it is set forth
     herein in its entirety. Pupil Transportation Handbook No. 1 is available
     upon request from the Director of Pupil Transportation.


                                      -28-

<PAGE>

                    XX. AUDIT OF INVOICES & FINANCIAL RECORDS

Invoices will be audited for payment after each month in which the services are
rendered.

The contractor hereby consents to an audit of any and all financial records
relating to this Contract by the Department of Audit and Control. During the
period of the Contract and upon the request of the Department of Audit and
Control, the Office of Auditor General of the New York City Board of Education,
the Comptroller of the City of New York or the Department of Investigation of
the City of New York, the contractor shall furnish information and documents as
specified by any of these agencies, including but not limited to the
contractor's income tax forms filed with the City, State and Federal government
for the term of this Contract.

                             XXI. LIQUIDATED DAMAGES

In view of the difficulty of ascertaining the loss which the Board or City will
suffer by reason of these defaults on the part of the contractor, the following
sums are hereby agreed upon, fixed and determined by the parties hereto as the
liquidated damages the Board or City will suffer by reason of said delay and
default, and not by way of penalty, and such liquidated damages may be imposed
in the amounts provided below upon the following findings of the Director or his
or her designee:

A. One and one-half times the appropriate daily rate per vehicle paid to the
contractor shall be deducted from the subsequent month's payment due the
contractor for the following:

          1.   Each failure to provide the number of vehicles required each day
               to convey to and from the school the number of pupils specified.

          2.   Each vehicle providing extended service which does not service a
               field trip or provide the services required by Section XII (Use
               of Vehicles), on the schedule established in advance either by
               the Director or a school or the community school district office.


                                      -29-

<PAGE>

B. The appropriate daily rate per vehicle shall be deducted from the subsequent
month's payment due the contractor for the following:

     1.   Each day that the contractor permits an employee to service a route
          for whom the required medical certificate, fingerprint record and
          applications for employment were not submitted to and approved by the
          Bureau of Pupil Transportation.

     2.   Each time an escort is not provided on a vehicle, if required.

     3.   Each time it is found that the contractor did not provide telephone
          access from the time the first vehicle is scheduled to leave the
          garage until the last vehicle returns to the garage at the end of the
          day.

     4.   Each time a vehicle has an expired or null Public Service Commission
          sticker.

     5.   Each time an accident is not reported to the Director within
          twenty-four (24) hours.

     6.   Each time an operator is found guilty of commiting a moving violation
          of the New York State Vehicle and Traffic Law while transporting
          pupils under this Contract.

C. One half the appropriate daily rate per vehicle paid to the contractor shall
be deducted from the subsequent month's payment due the contractor for the
following:

     1.   Each vehicle transporting a greater number of pupils than the
          vehicle's permissible pupil seating capacity.

     2.   Each vehicle furnished that has a pupil seating capacity less than
          required by the Contract terms.

     3.   Each vehicle each day a child has been unilaterally excluded from
          transportation by a contractor, operator or escort without the consent
          of the Director.

     4.   Each vehicle failing to hold an emergency drill as required.

     5.   Each time the operator requires a school to dismiss pupils prior to
          the normal close of the school session except where required by
          special circumstances specified by the Director.

     6.   Each vehicle which does not comply with structural and safety
          provisions for the vehicle, including but not limited to seat belts,
          padded seats, high back seats, and operable wheel chair brackets.


                                      -30-
<PAGE>

D. One third the appropriate daily rate per vehicle paid to the contractor shall
be deducted from the subsequent month's payment due the contractor because of
the following:

     1.   Each operator or escort who has not received the proper training,
          instruction, and/or refresher courses as specified herein within the
          time period agreed upon by the Director and contractor.

     2.   Each vehicle which arrives after the time a session is due to start.

     3.   Each vehicle that arrives at the school more than thirty minutes prior
          to the start of the session.

     4.   Each vehicle operator who does not have on his or her person an
          appropriate operator's license.

     5.   Each time the contractor fails to notify a parent that the vehicle is
          more than on hour behind schedule, unless no telephone number has been
          provided or the Bureau of Pupil Transportation is contracted before
          the hourly limit has expired and agrees that the contractor need not
          call every parent.

E. One sixth of the appropriate daily rate per vehicle paid to the contractor
shall be deducted from the subsequent month's payment due the contractor for the
following:

     1.   Each time the contractor, operator or escort does not notify the
          parents of pupils on the vehicle of changes in schedules or pick-up or
          drop-off locations.

     2.   Each vehicle that makes an unauthorized stop or an unauthorized change
          in an established route or schedule.

     3.   Each vehicle failing to have a fire extinguisher.

     4.   Each vehicle failing to have a first aid kit.

     5.   Each time an operator fails to remove ignition keys, turns wheels to
          curb, and set brakes when and as required while pupils are on the
          vehicle.

     6.   Each vehicle for each scheduled stop not served.


                                      -31-
<PAGE>

     7.   Each vehicle with an operator or escort not wearing uniform attire or
          visibly displaying an identification badge with the required
          information.

     8.   Each day the contractor fails to provide the information on forms
          required as set forth herein.

     9.   Each vehicle that arrives at the school or departs from the school
          after the time scheduled, unless required to do so by the Bureau of
          Pupil Transportation.

     10.  Each vehicle the contractor changes on a run, where it is not a change
          resulting from a breakdown or a scheduled maintenance.

     11.  Each operator who fails to assist in the conduct of an emergency
          drill.

     12.  Each operator who fails to make available a vehicle providing extended
          service to a scheduled class in transportation safety.

     13.  Each time a vehicle is not in compliance with the identification
          requirement of Section IX, Vehicle Specifications.

     14.  Each time a vehicle over five (5) years old is not equipped with a
          two-way radio.

     15.  Each failure to perform any other duties as set forth in the Bureau of
          Pupil Transportation Handbook No. 1.


                                      -32-
<PAGE>

                      XXII. EMPLOYEE PROTECTION PROVISIONS

     1. Priority in Hiring and Master Seniority Lists:

     There shall be established two industry-wide Master Senority 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 February 9, 1979 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 February
9, 1979 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,
1979 (contractor) shall give priority in employment in September, 1979 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 February 9, 1979 consistent with the number of
employees required by the specifications of the contract expiring June, 1979 for
the number of vehicles providing service to the Board as of February 9, 1979 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, 1979 (new contractor), shall give priority in employment
in September, 1979 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 members of Local
1181-1061 as of February 9, 1979, are not employed as escorts by contractors for
the beginning of service in September of 1979, than said escorts shall be
employed in order of their position on the Master Seniority List, and escorts
who are not members of Local 1181-1061 and who were employed as of February 9,
1979 shall be replaced by members of Local 1181-1061 in inverse order of
seniority and shall be added to the Master Seniority List in order of seniority
following the members of Local 1181-1061, if any, who remain on the List.


                                      -33-
<PAGE>

     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 by the NYCTA on July 5, 1979 to its surface drivers (bus)
               operators.

          (b)  mechanics at a daily rate of pay, including any COLA, for each
               day of service, not less than that paid by the NYCTA on July 5,
               1979 to its bus maintenance personnel performing similar duties.

          (c)  escorts (matrons-attendants) at a daily rate of pay not less than
               $37.085 for each day of service plus that percentage of the COLA
               paid to operators effective July of 1979 that reflects the
               proportion of the escorts' pay to that of operators, should the
               Board require the contractor to provide escort service.

     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 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 $82 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 February 9, 1979. This
requirement shall not be interpreted to require a contractor to enter into a
collective


                                      -34-

<PAGE>

      bargaining agreement with the union nor shall it prohibit the contractor
      from entering into a collective bargaining agreement with the union. The
      contractor shall file a copy of the executed agreement with the Trustees
      of the Fund and Plan to participate in said Fund and Plan and with the
      Secretary of the Board with the acknowledgement of the Notice of Award.

          The contractor shall contribute $27.15 per week per operator (driver),
     mechanic and dispatcher on the Master Seniority List, and participating in
     the Plan and Fund as of February 9, 1979, 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 $10 a week
     from each operator, mechanic and dispatcher 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.

          Should the Board require the contractor to provide escort service,
     then the contractor shall contribute $23.15 per week per escort
     (matrons-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 $8 a week from each 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 of the
     majority of the escorts contributing to the Fund and Plan.

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

          5.   In addition to any other remedies provided in the contract
               between the Board and the contractor, such a default and/or
               termination, if the contractor is found to be in violation of the
               foregoing employee protection provisions, then the Director of
               the Bureau of the Pupil Transportation, within thirty (30) days
               of written notice, shall withhold the appropriate amounts from
               the first payment thereafter due to the contractor and pay it
               directly to the Division 1181 A.T.U.-New York Employees Pension
               Fund for the benefit of the employees affected and to the
               appropriate Welfare Fund for the benefit of the employees
               affected.

          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.


                                      -35-
<PAGE>

          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 (matrons-attendants) shall not be included in the exclusion
     provided in this paragraph six (6).

          7.   For the purpose of XXII. corporate bidders who are subject to
               common control as determined by the Board upon an analysis of:

               (a)  ownership of the corporations' 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.


                                      -36-
<PAGE>

                          GENERAL TERMS AND CONDITIONS

                                   WITNESSETH

That pursuant to all applicable State and Local Laws and all By-Laws,
resolutions, rules and regulations of the Board of Education and the City of New
York and its various departments, and in consideration of the agreements
hereinafter undertaken by each of the parties hereto with the other, the parties
hereto do hereby covenant and agree for themselves and for their respective
successors and legal representatives as follows:

                                   DEFINITIONS

     Wherever the following words, names or titles appear in this Contract, they
shall have the following meanings:

     (a)  "THE BOARD" means the Board of Education (BOE) of the City of New York
          and the party of the first part of this Contract.

     (b)  "THE CONTRACTOR" means the party of the second part to this Contract.

     (c)  "THE DIRECTOR" means the Director of the Bureau of Pupil
          Transportation delegated by the Board to supervise the work of this
          Contract.

     (d)  "THE CITY" means the City of New York.

     (e)  "THE COMPTROLLER" and "THE TREASURER" means the Comptroller and the
          Treasurer of the City of New York respectively.

     (f)  "THE SECRETARY", "ASSISTANT SECRETARY" and "EXECUTIVE DIRECTOR" mean
          the following officers and employees of the Board of Education
          respectively: the Secretary, Assistant Secretary of the Board of
          Education and Executive Director of the Division of Business and
          Administration.

     (g)  "APPROVED", "REQUIRED", "DIRECTED", "SPECIFIED", "DESIGNATED" or
          "DEEMED NECESSARY", unless otherwise expressed, means approved,
          required, directed, specified, designated, or deemed necessary, as the
          case may be, by the Director.

     (h)  "WORK" or "SERVICES" means all services to be furnished or done by or
          on the part of the contractor.

     (i)  "COMPLETION" means full and complete compliance with every requirement
          of the Contract as attested by the Director.

     (j)  "SPECIFICATIONS" shall mean the combined proposal for bids and
          specifications, and amendments thereto, and all of the directions and
          requirements applying to the service as hereinbefore detailed and
          designated under specifications.

     (k)  The term "ITEM", as used herein, shall be defined as each separate
          unit or group of vehicles upon which a contractor may bid.


                                       -1-
<PAGE>

1.   SUBJECT MATTER

The contractor shall provide at its own cost and expense sufficient plant,
equipment and working capital to provide for the transportation of pupils in
accordance with the terms, conditions, and specifications set forth herein. The
contractor shall accept as full compensation for its faithful performance of
this Contract the sums certified by the Director in accordance with the
provisions of the Contract, and said sums shall be the amount at which the
Contract was awarded to the Contractor at the public bidding.

2.   CONTRACT

The Proposal for Bids, Instructions to Bidders, Bid, Schedules and
Specifications are and shall be a part of this Contract. In case of variance
between the specifications, bid and Contract, if any, the specifications shall
be controlling.

3.   INTERPRETATION

Any doubt as to the meaning of the terms of the Contract or any obscurity as to
the wording of the terms will be explained in writing, upon request, by the
Director and all directions and explanations required, alluded to, or necessary
to complete any of the provisions of the Contract and to give them due effect
will be given by the Director in writing upon request. The interpretation of the
Director shall be final and binding upon all parties.

To prevent all disputes and litigations, the Director shall, in all cases,
determine the quality of the services which are to be delivered and paid for
under this Contract, and shall determine all questions in relation to said
services, their quality, delivery and condition, and shall in all cases decide
every question which may arise relative to the execution of this Contract on the
part of the contractor, and the Director's estimate or decision shall be final
and conclusive upon the contractor.

4.   MODIFICATIONS

The Board may, from time to time, request changes in the scope of the services
to be performed by the contractor hereunder. However, no term, provision or
condition of this Contract shall be deemed waived by the Board unless such
waiver shall be in writing with the approval of an authorized representative of
the Board subscribed thereon.

5.   COMPLIANCE WITH LAWS

The contractor shall comply with all applicable laws, ordinances, and codes of
Federal, State and Local governments.

It is the intent and understanding of the parties hereto that each and every
provision of law required by law to be inserted in this Contract shall be deemed
to be inserted herein. It is further agreed that if, through mistake or
otherwise, any such provision is not inserted, or is not inserted in correct
form, that this Contract shall forthwith be amended upon notice to the
Contractor by such insertion so as to comply strictly with the law.


                                       -2-
<PAGE>

6.   NON-ASSIGNMENT OF CONTRACT

The contractor will give personal attention to the faithful performance of this
Contract. The contractor will not assign, transfer, convey, sublet or otherwise
dispose of this Contract or its right, title or interest in or to the same or
any part thereof without the previous consent of the Director or the Director's
designee endorsed thereon; and the contractor will not assign by power of
attorney or otherwise, any of the monies to become due and payable under this
Contract unless by and with the previous consent in writing of the Board or its
designee endorsed thereon. If the contractor shall, without such previous
written consent, assign, transfer, convey , sublet or otherwise dispose of this
Contract or of its right, title or interest therein, or any of the monies to
become due under this Contract, to any other person, firm or corporation, this
Contract may, at the option of the said Board, be cancelled and terminated, and
the Board and the City shall thereupon be relieved and discharged from any and
all liabilities and obligations to the contractor arising from such Contract,
and to its assignee or transferee; provided that nothing herein contained shall
be construed to hinder, prevent or affect an assignment by the contractor for
the benefit of its creditors made pursuant to the statutes of the State of New
York, and no right under this Contract, or to any monies to become due
hereunder, shall be asserted against the Board or the City in a law or in
equity, by reason of any so-called assignment of this Contract, or any part
thereof, or of any monies to become due hereunder, unless authorized as
aforesaid.

7.   CANCELLATION

A. If the contractor engages in repetitive or persistent violations of the
conditions or covenants of this Contract, the Director may seek to have the
contractor declared in default by the Board of Review pursuant to Article 8 of
the Board's By-laws. In the event the Board of Review shall determine the
contractor to be in default, the Director shall notify the contractor that its
Contract is terminated. Such action by the Director may be based upon any of the
following:

     (1)  Failure of the contractor to provide any portion of the services
          specified herein;

     (2)  Action by the Contractor to subcontract, encumber, assign, or transfer
          this Contract, either in whole or in part, otherwise than as specified
          herein;

     (3)  Failure to notify the Director of increases in the total number of
          vehicles as required by the "Insurance and Performance Bond"
          provisions of the Proposal for Bids; or

     (4)  Violation by the Contractor of any of the conditions or covenants of
          this covenants of this Contract or execution of this Contract in bad
          faith.


                                       -3-

<PAGE>

B. Upon the refusal of a person, when called before a grand jury, governmental
department, commission, agency, or any other body which is empowered to compel
the attendance of witnesses and examine them under oath, to testify in an
investigation or to answer any relevant questions concerning any transaction or
contract entered into with the State, or any political subdivision thereof, or a
public authority or with any public department, agency or official of the State
or a political subdivision thereof, when immunity has been granted to the
witness against subsequent use of such testimony, or any evidence derived
therefrom, in any subsequent criminal proceeding:

     (1)  such person, or any firm, partner, director, or corporation of which
          he is a member, partner, director or officer shall be disqualified for
          a period of five (5) years after such refusal from submitting bids for
          or entering into or obtaining any contracts, leases, permits or
          licenses with the City or submitting bids for or entering into or
          obtaining any contracts, leases, permits, or licenses which will be
          paid out of any monies under the control of or collected by the City,
          and/or shall be subject to such other action appropriate under the
          circumstances, and

     (2)  any and all such existing contracts, leases, permits or licenses made
          with or obtained by any such person or firm, partnership, or
          corporation of which he is a member, partner, director or officer may
          be cancelled or terminated by the City or the Board or be subject to
          such action appropriate under the circumstances, without incurring any
          penalty or damages on account of such cancellation or termination, but
          any monies owing for goods delivered, work done, or rentals, permits
          or license fees due, prior to the cancellation or termination shall be
          paid.

C. In the event of termination of this Contract by reason of default of the
contractor, the Director shall have the power in the manner prescribed by law to
obtain the undelivered services, or such part thereof as it may deem advisable,
and to change the expense thereof to the contractor. The expense so charged and
the liquidated damages for delay herein provided for shall be deducted and paid
by the BOE out of such monies that may then be due or may thereafter become due
to the contractor under or by virtue of this Contract or any part thereof. In
case such expense and liquidated damages hereunder shall exceed the sum owing
for services rendered at the time of termination of this Contract, then the
contractor shall pay the amount of such excess to the BOE on notice from the BOE
of the amount of such excess and in case such expense and liquidated damages
shall be less than the sum which would have been payable under this Contract if
the same had been completed by the contractor, then the contractor shall forfeit
all claims to the difference to the BOE. In the event of the BOE undertaking to
secure the services or any part thereof under this section of the Contract, the
certificate of the Director as to the amount of services secured, the cost, and
the excess cost, if any, of completing this Contract, and the amount of
liquidated damages hereunder, shall be binding and conclusive upon the
contractor, his assignee, and all other claimants.


                                      -4-
<PAGE>

8. NOTICES

The residence or place of business given in the Contract is hereby designated as
the place where all notices, letters or other communications addressed to the
contractor shall be served, mailed or delivered. Any notice letter or other
communication addressed to the contractor and delivered at the above-named
place, or sealed in a post-paid wrapper and deposited in any post office box
regularly maintained by the post-office, shall be deemed sufficient service
thereof upon the contractor. The place named may be changed at any time by an
instrument in writing, executed and acknowledged by the contractor, and
delivered to the Director. Nothing herein contained shall be deemed to preclude
or render inoperative service of any notice, letter or other communication upon
the contractor personally. Whenever in the trial of any action growing out of
this Contract it shall be necessary or required to prove the service of a notice
as herein prescribed, an affidavit executed at the time of service showing the
service in the manner herein required to have been made by the person making the
affidavit shall be presumptive evidence of such service upon first proving that
the affiant is dead or insane, or that with due diligence, his attendance cannot
be compelled.

9. NO ESTOPPEL

Neither the BOE nor the City, nor any department or officer thereof, shall be
precluded or estopped by any return or certificate made or given by the
Director, or other officer, inspector, assignee or appointee of the BOE or the
City, under any provision of this Contract, from at any time (either before or
after the final completion and acceptance of the work or services and payment
therefore, pursuant to any such return or certificate) showing the true and
correct amount and character of the work done and supplies furnished by the
contractor, or any other person under this Contract, or from showing at any time
that any such return or certificate is untrue or incorrect, or improperly made
in any particular, or that the work or services or any part thereof do not in
fact conform to the specifications; and neither the BOE nor the City shall be
precluded or estopped notwithstanding any such return or certificate and payment
in accordance therewith, from demanding and recovering from the contractor such
damages or other loss as it may sustain by reason of its failure to comply with
the specifications.

10. CLAIMS - LIMITATION OF ACTION

No action shall be maintained by the contractor, his successors or assignees,
against the Board on any claim based upon or arising out of this Contract or out
of anything done in connection with this Contract unless such action shall be
commenced within six (6) months after the date of filing of the voucher for
final payment hereunder in the appropriate office of the Board, or within six
(6) months of the termination of this Contract, or within six (6) months of the
required completion date for the services performed hereunder, whichever is
sooner. None of the provisions of Article 2 of the Civil Practice Law and Rules
shall apply to any action against the Board arising out of this Contract.


                                      -5-
<PAGE>

11. MAINTENANCE OF RECORDS

The contractor shall, until six (6) years after completion of its services
hereunder or six (6) years after date of termination of this Contract, maintain
and retain complete and correct books and records relating to all aspects of the
contractor's obligations hereunder, including, without limitation, accurate cost
and accounting records specifically identifying the costs incurred by the
contractor in performing such obligations (such as payroll expense, and all
other related records necessary to assure a proper accounting of funds,
including property, personnel records, cash receipts and disbursements, journals
and ledgers). Records must be maintained as a separate set of books so as to
identify clearly the expenses applicable to the specific Contract and be
distinguishable from all other costs not incurred under this Contract. The
contractor shall make available to the Office of the Auditor General of the BOE
or such agencies as the BOE may designate for review and audit, all books,
records or materials deemed necessary by the BOE to substantiate the validity of
claims made under the Contract at all reasonable times that the BOE shall from
time-to-time request. They shall be maintained in such a fashion as to permit
clear identification of costs incurred under this Contract or any amendment
thereto.

12. DISCRIMINATION

In connection with the performance of work under this Contract, the contractor
agrees as follows:

     a)   The contractor will not discriminate against any employee or applicant
          for employment because of race, creed, color, age, sex, national
          origin, handicap, marital status, religion or political beliefs or
          affiliations. The contractor will take action to ensure that
          applicants are employed, and that employees are treated during
          employment, without regard to the foregoing categories. Such action
          shall include but not be limited to the following: employment;
          upgrading; demotions or transfer; recruitment or recruitment
          advertising; layoff or termination; rates of pay or other forms of
          compensation; and selection for training, including apprenticeship.
          The contractor agrees to post in conspicuous places, available to
          employees and applicants for employment, notices to be provided by the
          Board setting forth the provisions of this nondiscrimination clause.

     b)   The contractor shall not discriminate against any employee or
          applicant for employment on the basis of sex pursuant to Title IX of
          the Education Amendments of 1972 (20 United States Code Annotated,
          Section 1681 et seq.).


                                      -6-
<PAGE>

     c)   The contractor will, in all solicitations or advertisement for
          employees placed by or on behalf of the contractor, state that all
          qualified applicants will receive consideration for employment without
          regard to race, creed, color, age, sex, or national origin.

     d)   The contractor will send to each labor union or representative of
          workers with which it has a collective bargaining agreement or other
          contract or understanding, a notice to be provided by the Board
          advising the said labor union or workers' representatives of the
          contractor's commitments under this section, and shall post copies of
          the notice in conspicuous places available to employees and applicants
          for employment.

     e)   The contractor will comply with all provisions of law prohibiting
          discrimination because of race, creed, color, age, sex, or national
          origin.

     f)   The contractor will comply with all provisions of Executive Order No.
          11246 of September 24, 1965, and of the rules, regulations, and
          relevant orders of the Secretaries of Labor and Health, Education and
          Welfare created thereby. The contractor will furnish all information
          and reports required by Executive Order No. 11246 of September 24,
          1965, and by the rules, regulations, and orders of said Secretaries
          issued pursuant thereto, and will permit access to its books, records,
          and accounts by the Board and the Secretaries for purposes of
          investigation to ascertain compliance with such rules, regulations and
          orders. In the event of the contractor's compliance with the
          nondiscrimination clause of this Contract, or with any of the said
          rules, regulations or orders, this Contract may be cancelled in whole
          or in part and the contractor may be declared ineligible for further
          Government contracts in accordance with procedures authorized in
          Executive Order No. 11246 of September 24, 1965, and such other
          sanctions may be imposed and remedies invoked as provided in the said
          Executive Order or by rule, regulation or order of the Secretaries of
          Labor and Health, Education, and Welfare, or as otherwise provided by
          law.


                                      -7-
<PAGE>

13.        EQUAL EMPLOYMENT OPPORTUNITY REQUIREMENTS FOR
           NON-CONSTRUCTION CONTRACTORS, VENDORS AND SUPPLIERS

     The attention of all bidders is particularly directed to the various 
orders, rules, regulations and procedures set forth in the contract documents 
with respect to identifying and eliminating both overt and convert 
discriminatory employment practices.

     I.   Policy

          It is the policy of the Board of Education, City of New York, in
          accordance with the Labor Law of the State of New York and other
          applicable laws, to provide equal opportunity for all qualified
          persons, to prohibit discrimination in employment because of race,
          creed, color, age, sex, national origin, handicap, marital status,
          religion or political beliefs or affiliations and to promote the full
          realization of equal opportunity through an affirmative, continuing
          program of compliance by all contractors, suppliers and vendors doing
          business with the Board of Education and their subcontractors.

     II.  Implementation

          The Director of the Office of Equal Opportunity shall be responsible
          for the implementation and administration of this policy. He or she
          shall be directly responsible to the Deputy Chancellor of the Board of
          Education and shall be responsible for issuing all orders, rules,
          regulations and procedures as may be deemed necessary or convenient
          for carrying out and implementing the policy set forth in Section 1.

     III. Definition of terms for the purpose of these Orders, Rules and
          Procedures

          A.  Non-Construction Contract

              Any Agreement, or commitment by the Board of Education, to
              purchase or lease supplies, equipment or services. The term
              "Non-Construction Contract" excludes contracts of the Board of
              Education related to the erection, contruction, reconstruction,
              rehabilitation, alteration, conversion, extension, repair or
              demolition of buildings or improvements to real property, with
              the exception of supplies, equipment and materials therefore, and
              work, labor or services relating to architectural, engineering or
              consultant services.

          B.  Contractor

          C.  Employee of Non-Construction Contractor

              Any Person or entity employing workers, who bids for, or who is
              awarded a non-construction contract.


                                      -8-
<PAGE>

          D.   Minority Group Members

               Blacks, Hispanics (non-European), Asian-Americans and American
               Indians.

          E.   Program of Affirmative Action

               A detailed, result-oriented set of written procedures which when
               implemented with conscientious effort results in compliance with
               the equal opportunity policy herein, through full utilization and
               equal treatment of minority group members and women at all levels
               in all segments of contractor's workforce. An effective program
               of affirmative action shall include, but not necessarily be
               limited to, the following ingredients:

          1.   Development or reaffirmation of the contractor's equal employment
               opportunity policy;

          2.   Dissemination of the policy;

          3.   Responsibility for implementation;

          4.   A survey and analysis of employment at all levels and in all
               categories and aspects the contractor or subcontractor is
               deficient in the utilization of minority group members and women;

          5.   Establishment of goals and timetables toward the attainment of
               which the contractor's or subcontractor's good faith effort must
               be directed to remedy any identifiable underutilization of
               minority group members and women;

          6.   An analysis of employment policies and practices, including but
               not limited to seniority systems, recruitment training,
               promotion, insurance, and job benefits, and their effects upon
               minority group members and women;

          7.   Corrective actions taken, or to be taken, toward the elimination
               of any employment policy or practice having a discriminatory
               effect on minority group members and women.

     F.   Goals and Timetables

          Projected levels of achievement resulting from an analysis by the
          contractor or subcontractor of its deficiencies, and of what it can
          reasonably do to remedy them within a specified time frame.


                                     - 9 -
<PAGE>

     G.   Having fewer minority group members and women in a particular job
          classification than would reasonably be expected by their availability
          in the appropriate labor force.

IV.  Bidding and Awarding of Contracts

     A.   Pre-Award Conference

          Prior to the award of contract to the apparent low bidder and if
          requested in writing by the Director of the Office of Equal
          Opportunity (hereinafter referred to as the "Director"), such bidder
          shall attend a pre-award conference to be held in the Office of Equal
          Opportunity of the Board of Education for the purpose of acquainting
          him or her with the statutory and contractual requirements and what
          specific measures shall constitute an acceptable program of
          affirmative action.

     B.   Program of Affirmative Action

          Prior to the award of contract to the lowest responsible bidder and
          upon demand, the low bidder must submit to the Director a detailed
          written Program of Affirmative Action (hereinafter referred to as
          "P.A.A."). In the event the low bidder fails to submit an acceptable
          P.A.A. within the allotted time stipulated in the demand, the Director
          may recommend that the low bid be rejected, the amount of the bid
          deposit, if any, be forfeited, and that the low bidder be disqualified
          from bidding on Board of Education work for a period of one year. The
          P.A.A. shall:

          1.   Apply to all Board of Education non-construction contracts except
               that, with regard to contracts, sub-contracts or purchase orders
               under $25,000, the Director is authorized to make such
               modifications as may be appropriate in the individual case;

          2.   Encompass all phases of the employment process, including
               evaluation of job classifications to ensure job relatedness,
               recruitment, selection, validity of examinations, retention,
               layoffs, seniority, assignments, training, promotion, salary and
               benefits;

          3.   Be considered by the Board of Education in its determination as
               to whether a numerical low bidder will be judged the lowest
               responsible bidder entitled to award thereof. The Director shall
               be the sole judge of the program's acceptability;


                                     - 10 -
<PAGE>

          4.   In addition to the above, fulfill the requirements of
               subdivisions (a) through (g) of this section:

          (a)  The P.A.A. shall include measurable goals, reasonable timetables
               and specific programs to be implemented by the contractor to
               identity and eliminate deficiencies in employment practices with
               respect to the underutilization of minority group members and
               women in the contractor's workforce and a projection of the
               minority utilization in the contractor's workforce for the life
               of the contract and for at least a one-year period succeeding its
               completion. This statement and projection shall include present
               and projected (1) rates of hiring and promotion of minority group
               members and women in specific job categories at each wage rate
               within each level of employment and according to major
               organizational unit, and (2) percentages of minority group and
               women utilization in specific job categories at each wage rate
               within each level of employment and according to major
               organizational units, within the contractor's workforce.

          (b)  The P.A.A. shall include all of the contractor's facilities
               within New York City as well as those facilities located
               elsewhere within the continental limits of the United States.

          (c)  The P.A.A. shall specify the union(s) or other employee
               organizations to which the contractor's employees belong and
               shall include commitments to good faith efforts to effect equal
               employment opportunity changes directly or indirectly, in
               programs by such unions or organizations to recruit, train,
               qualify or otherwise select members if such changes are deemed
               necessary. The P.A.A. shall also include a copy of any agreement
               with an employee association which affects employment policies
               and practices.

          (d)  The P.A.A., or portion thereof, shall be submitted in such format
               as shall be specified by the Director of the Office of Equal
               Opportunity.

          (e)  The P.A.A. shall include a commitment to submit to the Director a
               separate P.A.A., of the form and substance specified in
               subdivisions (a) through (g) hereof, for each subcontractor prior
               to its approval by the Board of Education. Every subcontract made
               by a non-construction contractor shall also contain these rules,
               regulations and orders in their entirety or their incorporation
               by reference.


                                     - 11 -
<PAGE>

          (f)  The P.A.A. shall include written evidence or other proof which
               shows that minority entrepreneurs have been solicited and given
               an equal opportunity to submit proposals and that such proposals
               have been given equal consideration for award.

          (g)  Unless exempted by the Board of Education, no specific
               commitment, including goals for minority group employment and
               adoption of equal employment practices, contained in the P.A.A.,
               if any, of the contractor or subcontractor.

V.   Compliance Inspection Report

     A.   Prior to the award of contract to the lowest responsible bidder and
          upon demand, the low bidder must submit to the Director of Equal
          Opportunity, a Compliance Inspection Report. The completed Compliance
          Inspection Report must be returned to the Office of Equal Opportunity
          within twelve (12) calendar days from the effective date stated on the
          Requisition for Information accompanying the Report form.

          Failure to submit the Compliance Inspection Report within the period
          of time specified above may result in a rejection of the bid and the
          disqualification of the bidder from bidding on Board of Education work
          for a period of one year.

     B.   The Compliance Inspection Report shall be submitted in a form provided
          by or approved by the Director, and shall indicate and furnish
          explanations for any current or anticipated departures from the total
          labor force projections, or minority group labor force projections in
          the contractor's or subcontractor's P.A.A., or from planned corrective
          action relating to employment policies as stated in the P.A.A.

VI.  Contractor's Implementation

          Good faith efforts must be made to implement these affirmative action
          steps during the performance of the contract. The effectiveness of the
          affirmative action program shall be measured by the extent of progress
          made toward an equitable participation which reflects the appropriate
          available minority and female workforce and the lack of such progress
          shall be a factor considered in determining whether there have been
          good faith efforts to implement the program.

VII. Sanctions and Remedies

     A.   It is agreed that if the contractor does not comply with the equal
          opportunity provisions herein stated, as solely determined by the
          Board of Education, the said contract may be cancelled,


                                     - 12 -
<PAGE>

          terminated, or suspended in whole or in part and the contractor may be
          declared ineligible for further Board of Education contracts and/or
          subject to such other sanctions as may be imposed and remedies
          involved by the Board of Education in its discretion.

     B.   Prime contractors shall be responsible for the compliance of their
          subcontractors. Failure of its subcontractor to comply with the
          provisions hereof or with affirmative action contractual provisions,
          shall be grounds for the imposition of sanctions and remedies against
          a prime contractor. Such sanctions and remedies include the authority
          of the Director to halt scheduled payments to contractors who
          consistently fail to comply with the provisions hereof.

     C.   No sanctions or remedies shall be imposed on a bidder, contractor or
          subcontractor without affording such bidder, contractor or
          subcontractor an opportunity for a compliance review. The purpose of
          the compliance review is to enable the Board of Education's Policy of
          Equal Employment Opportunity. The bidder, contractor or subcontractor
          shall be allowed at least twelve (12) calendar days to present such
          evidence. If at the end of such period compliance is not reached, and
          the Director maintains his or her position of non-compliance, the
          bidder, contractor or subcontractor may appeal to the Board of Review
          of the Board of Education. Conformity to technical rules of evidence
          at the Board of Review hearing shall not be required. The
          determination of such Board of Review appeal shall be final and
          conclusive, subject only to judicial review.

     D.   Each of the foregoing sections or subdivisions hereof shall be
          construed to be independent of all other sections and subdivisions
          unless the contrary is clearly indicated by the text.

     For further information concerning these rules, regulations or procedures
contractors may consult with the Office of Equal Opportunity of the Board of
Education.


                                     - 13 -

<PAGE>

14.  INDEMNIFICATION

The contractor shall be responsible for any claims made against the Board of
Education for acts of negligence, carelessness or incompetence perpetrated by
the contractor, or anyone employed by the contractor, in connection with
providing or failing to provide the services described herein, and the
contractor shall protect, indemnify and hold harmless the Board from all suits,
actions, damages or costs of every kind and description to which it shall be
subjected by reason of injury to person, or property, or wrongful death because
of such negligence, carelessness, or incompetence.

15.  WORKMEN'S COMPENSATION

If this Contract be of such a character that the employees engaged thereon are
required to be insured by the provisions of Chapter 615 of the Laws of 1922,
known as the Workmen's Compensation Law, as it has been or may be amended, the
person, firm or corporation making or performing the same shall secure
compensation for the benefit of, and keep insured during the life of this
Contract, such employees, in compliance with the provisions of said law. Prior
to starting service under this Contract, the contractor shall file with the
Director a certificate showing compliance with the provisions of said law. Such
insurance shall be kept during the life of said Contract.

16.  PREVENTION OF DELAY, SUSPENSION OR STRIKES

Because of the public nature of the services involved, and because of the
essential public services performed, the contractor shall not act in any manner,
nor employ labor or means, nor do anything by way of omission or commission that
would in any way cause or result in a suspension, or delay of or strike
affecting the work or any services to be performed hereunder. Any violation by
the contractor of this requirement may, upon certification of the Director that
the contractor's act or failure to act demonstrated a lack of good faith, effort
to assure the performance of the conditions or covenants of this Contract, be
considered as proper and sufficient cause for finding the contractor to be in
default in the manner set forth in this Contract.

17.  INSPECTORS

The Director may assign inspectors to inspect vehicles furnished under this
Contract, and such inspector or inspectors shall have the right at any and all
times to inspect the vehicles used or proposed to be used under this Contract;
to inspect the driver's license, vehicle registration, and proof of insurance;
and to require drivers and escorts to produce proper identification. Such
inspectors are authorized and empowered to reject and forbid the use of all
vehicles or any part thereof offered under or in fulfillment of this Contract
for the reason that the same do not comply with the specifications.


                                     - 14 -
<PAGE>

18.  REJECTION OF VEHICLES

Any vehicle furnished or offered to be furnished under this Contract for the
transportation of pupils which is rejected by an inspector as not conforming to
the specifications, the rules and regulations of the New York State Department
of Transportation or to the rules and regulations of the New York State
Education Department, shall be immediately removed, and vehicles for the
transportation of pupils which do conform shall be furnished in place thereof.

19.  PAYMENTS

If the contractor shall well and faithfully perform and fulfill this Contract
and keep every covenant on its part herein contained, the Board shall then pay
or cause to be paid to the contractor, subject to the provisions of the
specifications, the amounts due the contractor as the services are provided. The
Board and the Comptroller may at all times reserve and retain out of said
payments, all sums as by the terms hereof, or of any law of the State of New
York, or of any local law of the City of New York, now in effect or hereafter
enacted, the Board or the City may be authorized to collect, reserve or retain.

The contractor shall not be entitled to demand or receive payment for the
services rendered, or any portion thereof, except in the manner set forth in
this Contract, upon certification by the Director of compliance by the
contractor with each and every one of the stipulations herein mentioned provided
that nothing herein contained be construed to affect the right hereby reserved
by the Board and the Comptroller to refuse to pay any part or all of the amount
certified should the said certificate be found or known to be inconsistent with
the terms of this Contract, or otherwise improperly given.

The contractor will not ask, demand, sue for or recover any sum whatsoever for
any services delivered under this Contract, either as extra compensation or
otherwise, beyond the amount payable for the services which shall be actually
supplied at the price herein agreed upon and fixed.

20.  ACCEPTANCE OF FINAL PAYMENT

The acceptance by the contractor or by any person claiming under the Contract of
the final payment as audited by the Comptroller, whether such payment be made
pursuant to any judgment or order of any court or otherwise, shall operate and
shall be a release of the Board from all claims of and liability to the
contractor and to the contractor's representatives and assigns for anything
done, furnished for or relating to the work or vehicles furnished, or for any
neglect of the Board or of any person relating to or affecting the work done or
vehicles furnished hereunder.


                                     - 15 -
<PAGE>

21.  RESERVED RIGHTS

The rights, powers, privileges and remedies reserved to the Board and to the
City by this Contract are cumulative and shall be in addition to and not in
derogation of any other rights or remedies which the City and the Board may have
at law or in equity with respect to the subject matter of this Contract, and a
waiver thereof at any time or in any instance shall not affect any other time or
instance.

22.  ANTI-TRUST

The contractor hereby assigns, sells and transfers to the board and the City all
right, title and interest in and to any claims and causes of actions arising
under the anti-trust laws of New York State or of the United States relating to
the particular goods or services purchased or procured by the City or Board
under this contract.

23.  MERGER

This Contract contains all the terms and conditions agreed upon by the parties
hereto, and no other Contract, oral or otherwise, regarding the subject matter
of this Contract shall be deemed to exist or to bind any of the parties hereto,
or to vary any of the terms contained herein.

24.  VENUE

All actions or special proceedings involving disputes relating to this contract
shall be brought in New York County.


                                     - 16 -
<PAGE>

                                PERFORMANCE BOND

     KNOW ALL MEN BY THESE PRESENTS, THAT we,___________________________________
________________________________________________________________________________
hereinafter referred to as the 'Principal', and ________________________________
________________________________________________________________________________
hereinafter referred to as the 'Surety' are held and firmly bound to the BOARD
OF EDUCATION OF THE CITY OF NEW YORK, hereinafter referred to as the 'Board', or
to its successors and assigns, in the penal sum of __________ Dollars, lawful
money of the United States, for the payment of which said sum of money well and
truly to be made, we, and each of us, bind ourselves, our heirs, executors,
administrators, successors and assigns, jointly and severally, firmly by these
presents.

     WHEREAS, the Principal is about to enter, or has entered, into a Contract
in writing with the Board for transportation of pupils, a copy of which Contract
is annexed to and hereby made a part of this bond as though herein set forth in
full;

     NOW, THEREFORE, the conditions of this obligation are such that if the
principal, his or its representatives or assigns, during the period beginning on
the first day of September 197_ and ending on the 30th day of June 197_ shall
well and faithfully perform the conditions of said Contract and all
modifications, amendments, additions and alterations therein with respect to
performance by the Principal during said period and shall indemnify and save
harmless the Board from all cost and damages which it may suffer by reason of
failure so to do and shall fully reimburse and repay the Board for all outlay
and expense which the Board may incur in making good any such default with
respect to performance by Principal during the period of this bond, then this
obligation shall be void; otherwise the same to remain in full force and effect.

     The Surety, for value received, hereby stipulates and agrees, if requested
to do so by the Board, to fully perform and complete the work to be performed
under the Contract pursuant to the terms, conditions and covenants thereof,
during the period of this bond if for any cause the Principal fails or neglects
to fully perform and complete such work, except for a work stoppage by its
employees or a strike of its employees authorized by the collective bargaining
unit representing such employees. The Surety further agrees to commence such
work within twenty (20) days after written notice thereof from the Board.

     The Surety, for value received, for itself and its Successors and assigns,
hereby stipulates and agrees that the obligation of said Surety and its bond
shall in no way be impaired or affected by any modification, omission, addition
or change in or to the Contract or the work to be performed during the period of
this bond, or by any payment thereunder, before the time required therein, or by
any waiver or any provisions thereof, or by any assignment, subletting other
transfer thereof of any work to be performed or any moneys due to or to become
due thereunder, and said Surety does hereby waive notice of any and all such
extensions, modifications, omissions, additions, changes, payments, waivers,
assignments, subcontracts and transfers, and hereby expressly stipulates and
agrees that any and all things done and omitted to be done by and in relation to
assignees, subcontractors, and other transferees shall have the same affect as
to said Surety as though done or omitted to be done by or in relation to said
Principal.


                                     - 17 -
<PAGE>

     IN WITNESS WHEREOF, the Principal and the Surety have hereunto set their
hand and seals, and such of them as are corporations have caused their corporate
seals to be hereunto affixed and these presents to be signed by their proper
officers.

this       day of         , 19

(Seal)                                       ___________________________________
                                                       Principal

(Seal)                                  By   ___________________________________

                                             ___________________________________
                                                       Surety


(Seal)                                  By   ___________________________________

                                             ___________________________________
                                                       Surety


                                        By   ___________________________________


                                     - 18 -