<PAGE>


                   EX-10.14
           Extension and Eighth Amendment of Contract


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

Extension and Eighth Amendment Agreement made and entered into on the date
expressed at the end of this document by and between the BOARD OF EDUCATION OF
THE CITY OF NEW YORK ("BOE"), 110 Livingston Street, Brooklyn, New York 11201,
and the Contractor whose signature appears at the end of this document (the
Contractor")

                              W I T N E S S E T H:

In consideration of the following stipulations, terms and conditions, the
parties to this Extension and Eighth Amendment Agreement agree as follows:

     W H E R E A S in 1979 the BOE publicly solicited competitive bids for the
transportation of special education pupils under Contract Serial No. 0070 and
Contract Serial No. 8108; and,

     W H E R E A S at divers times thereafter from 1982 through 1964, the BOE
publicly solicited competitive bids for similar services under Contract Serial
Nos. G8805, G8891, G8893, G9301 and G9325, which contracts have incorporated, as
of their dates, provisions which are counterparts of the provisions of contracts
under Serial Nos. 0070 and 8108 as they then read; and,

     W H E R E A S the Contractor submitted a bid(s) under one or more of the
aforementioned contract serial numbers and was duly awarded a contract(s)
including certain Employee Protection Provisions for the transportation of
special education pupils; and,

     W H E R E A S during the period of September 10, 1979 through December 21,
1979, the Contractor did not provide escort services for special education
pupils; but, under an emergency contract entered into by and with the BOE, such
escort services have been supplied since that time; and,

     W H E R E A S the New York State Legislature enacted Chapter 737 of the
Laws of 1979 ("Chapter 737") and the parties have desired to amend the Contract
to implement Chapter 737 and be subject to its terms; and,

     W H E R E A S the BOE elected fairly and reasonably on the basis of the
best interests of the school district not to extend the terms of all contracts
under Serial Nos. G8893 and G9301; and,

     W H E R E A S the original terms of all contracts under Serial Nos. 0070,
8108, G8805, G8891 and G9301 would have expired on June 30, 1982 unless
extended, and G9325 would have expired on June 30, 1984 unless extended and
Section 305, Paragraph 14 (a) of the State Education Law authorizes extensions
and provides a method for appropriate payment increases; and,


                                        1
<PAGE>

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


     W H E R E A S in 1982 the BOE and the Contractors agreed to amend and
extend all Serial Nos. 0070, 8108, G8805, G8891, G9301 and G9325 contracts
through June 30, 1984; and,

     W H E R E A S in 1984 the BOE and the Contractors agreed to amend and
extend further all Serial Nos. 0070, 8108, G8805, G8891, G9301 and G9325
contracts through June 30, 1987; and,

     W H E R E A S in 1987 the BOE and the Contractors agreed to amend and
extend further all Serial Nos. 0070, 8108, G8805, G8891, G9301 and G9325
contracts through June 30, 1990; and,

     W H E R E A S in 1990 the BOE and the Contractors agreed to amend and
extend further all Serial Nos. 0070, 8108, G8805, G8891, G9301 and G9325
contracts through June 30, 1993; and,

     W H E R E A S in 1993 the BOE and the Contractors agreed to amend and
extend further all Serial Nos. 0070, 8108, G8805, G8891, G9301 and G9325
contracts through June 30, 1996; and,

     W H E R E A S in 1994 the BOE publicly solicited competitive bids for the
transportation of special education pupils under Contract Serial Nos. 7165, 7200
and 7291 whose original terms shall expire on June 30, 1997, unless extended;
and,

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

     W H E R E A S the said accord reached among the City of New York, the BOE,
the Contractors, and delegates of the Amalgamated Transit Union, Local Division
1181-1061, the Transit Workers Union, Local 100, and various other labor
organizations calls for modification to the terms, conditions and specifications
of existing extension and amendment agreements under Serial Nos. 0070, 8108,
G8805, G8891, G9301 and G9325 and all contracts under Serial Nos. 7165, 7200 and
7291 to take effect during the current term periods of such extension and
amendment agreements and contracts starting as of July 1, 1995 or September 1,
1995,


                                        2
<PAGE>

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


depending upon the particular contract or agreement serial number; and,

     W H E R E A S the BOE now determines that all contracts under Serial Nos.
0070, 8108, G8805, G8891 and G9325 should be still further amended and extended
through June 30, 2000, and that all contracts under 7165, 7200, and 7291 should
be initially amended and extended through June 30, 2000, and the Contract does
hereby so agree, acknowledge and stipulate; and,

     W H E R E A S in 1991, the BOE Office of Auditor General ("OAG") commenced
a currently continuing review and audit of annual rate increases paid to
contractors during the school years 1986-87 through 1994-95 pursuant to
provisions in previous and existing Extension and Amendment Agreements as
allowed by State Education Law ss.305, Sub-division 14(a); and this audit has
resulted in the release of preliminary findings which proposed various
adjustments to the daily rates per vehicle of many Contractors as well as the
recovery of alleged overpayments from some of the Contracts; and,

     W H E R E A S some of the contractors have instigated litigation in the
Supreme Court of the State of New York in New York County under the Index No.
20841/92 (IAS Part 17, Justice Goodman) to prevent the BOE from acting upon the
OAG's findings to adjust daily vehicles rates prospectively and to recover
alleged overpayments, which litigation is still pending either judicial
resolution or settlement, and which the Contractor does hereby agree, confess,
acknowledge and stipulate that he/she/it has been apprised fully of such
litigation; and,

     W H E R E A S the parties mutually desire to make this extension agreement
and amendment to the aforesaid contracts as heretofore amended and extended
("the Contract");

     N 0 W  T H E R E F 0 R E, the parties whose names and signatures appear at
the end of this document do hereby further agree and covenant as follows:

(A) (1) TERM OF EXTENSION AGREEMENT. All references to the termination of the
Contract, by whatever terminology, shall be deemed hereafter to read "June 30,
2000, unless further extended;" provided however, that if, prior to 5:00 P.M. on
December 19, 1995, the Contractor shall have exercised an option to terminate
the Contract as of June 30, 1996, the Contract shall so terminate; and, provided
further, that if the Contractor has not, in December 1995, exercised the option
to terminate, then if prior to 5:00 PM on December 19, 1996, the Contractor
shall have exercised an option to


                                        3
<PAGE>

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


terminate the Contract as of June 30, 1997, the Contract shall so terminate; and
provided further that if the Contractor shall not have exercised an option to
terminate, then if prior to 5:00 PM on December 19, 1997, the Contractor shall
have exercised an option to terminate the Contract as of June 30, 1998, the
Contractor shall so terminate; and provided further that if the Contractor shall
not have exercised an option to terminate, then if prior to 5:00 PM on December
19, 1998, the Contractor shall have exercised an option to terminate the
Contract as of June 30, 1999, the Contractor shall so terminate; and, provided
still further, that the Contractor's aforementioned December option to terminate
effective June 30th next succeeding may be exercised by a Contractor only if the
Contractor demonstrates that its insurance premiums including any Automobile
Insurance Plan (AIP) surcharges and excess pass-along costs for the minimum
liability coverage required by the Contract will have increased as of January 1,
1995 more than six-percent (6%) over the January 1, 1994 premiums, and as of
January 1, 1996 more than seven percent (7%) over the January 1, 1995 premiums
and as of January 1, 1997, more than (7%) over the January 1, 1996, premiums and
as of January 1, 1998, more than (7%) over the January 1, 1997 premiums.

     (2) To be effective the Contractor's Notice of Exercise of the Option to
Terminate must be received at the Office of the Director of the Office of Pupil
Transportation, in writing signed by the Contractor, by the date and time
specified.

     (3) If the Contractor fails to comply strictly with the above requirements
the Contract shall continue without interruption.

(B) ARTICLE V - A entitled, "PAYMENT DURING PERIOD OF EXTENSION," is hereby
amended to read as follows for the period of this Extension and Amendment
Agreement:

                    V - A. PAYMENT DURING PERIOD OF EXTENSION

     (1) Notwithstanding the provisions of Article V, during this Extension
     Period the daily rate per vehicle will be deemed to be augmented each year
     according to the following formulae subject to the Director's approval of
     all or any portion(s) of the Contractor's claims in the below described
     annual Cost Justification Financial Statements:

          (a)  (1) For Contracts under Serial Nos. 0070, 8108, G8805, G8891 and
               G9325, during the Fourteenth Extension Year of July 1, 1995
               through June 30, 1996, each Contractor's daily rates per vehicle


                                        4
<PAGE>

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


               shall be equal to ninety-eight-and-one-half per cent (98.5%) of
               the daily rates per vehicle provided in extension and amendment
               agreements of the Contracts which are in effect for the Extension
               Year of July 1, 1994 through June 30, 1995.

               (2) For Contracts under Serial Nos. 7165, 7200, and 7291, during
               the Second Contract Year of July 1, 1995 through June 30, 1996,
               each Contractor's daily rates per vehicle and per escort shall be
               equal to ninety-eight and one-half percent (98.5%) of the daily
               rates per vehicle and per escort as originally quoted by the
               Contractor in 1994.

          (b)  (1) For Contracts under Serial Nos. 0070, 8108, G8805, G8891 and
               G9325, during the Fifteenth Extension Year of July 1, 1996
               through June 30, 1997, each Contractor's daily rates per vehicle
               shall be deemed to be augmented by an amount not to exceed
               whichever of the following represents the least amount of actual
               increase: (i) the same percentage by which the Consumer Price
               Index as of May 1996 shall have increased over the Consumer Price
               Index as of May 1995; (ii) two-and-two-tenths per cent (2.2%)
               over the base daily rates per vehicle paid during the Extension
               Year of July 1, 1995 through June 30, 1996; or, (iii) the amount
               in dollars expressed as a percentage by which each Contractor's
               actual costs during the Extension Year of July 1, 1995 through
               June 30, 1996 shall have increased over each Contractor's actual
               costs during the Extension Years of July 1, 1993 through June 30,
               1994.

               (2) For Contracts under Serial Nos. 7165, 7200, and 7291, during
               the Third Contract Year of July 1, 1996 through June 30, 1997,
               each Contractor's daily rates per vehicle and per escort shall
               resume equality to one hundred percent (100%) of the daily rates
               per vehicle and per escort as originally quoted by each such
               Contractor in 1994.

          (c)  (1) For Contracts under Serial Nos. 0070, 8108, G8805, G8891 and
               G9325, during the Sixteenth Extension Year of July 1, 1997
               through June 30, 1998, each Contractor's daily rates per vehicle
               shall be deemed to be augmented by an amount not to exceed
               whichever of the following represents the least amount of actual
               increase: (i) the same percentage


                                        5
<PAGE>

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


               by which the Consumer Price Index as of May 1997 shall have
               increased over the Consumer Price Index as of May 1996; (ii)
               two-and-six-tenths percent (2.6%) over the base daily rates per
               vehicle paid during the Extension Year of July 1, 1996 through
               June 30, 1997; or (iii) the amount in dollars expressed as a
               percentage by which each Contractor's actual costs during the
               Extension Year of July 1, 1996 through June 30, 1997 shall have
               increased over each Contractor's actual costs during the
               Extension Year of July 1, 1995 through June 30, 1996, plus the
               percentage of each Contractor's actual cost increases from the
               Extension Year of July 1, 1995 through June 30, 1996 over the
               Extension Year of July 1, 1993 through June 30, 1994 to the
               extent that such percentage exceeded two-and-two-tenths percent
               (2.2%) and was consequently disallowed for the Extension Year of
               July 1, 1996 through June 30, 1997. (1)

               (2) For Contracts under Serial Nos. 7165, 7200, and 7291, during
               the First Extension Year of July 1, 1997 through June 30, 1998,
               each Contractor's daily rates per vehicle and per escort shall be
               deemed to be augmented by an amount not to exceed whichever of
               the following represents the least amount of actual increase: (i)
               the same percentage by which the Consumer Price Index as of May
               1997 shall have increased over the Consumer Price Index as of May
               1996; (ii) two-and-six-tenths percent (2.6%) over the base daily
               rates per vehicle paid during the Contract Year of July 1, 1996
               through June 30, 1997; or (iii) the amount in dollars expressed
               as a percentage by which each Contractor's actual costs during
               the Contract Year of July 1, 1996 through June 30, 1997 shall
               have increased over each Contractor's actual costs during the
               Contract Year of July 1, 1995 through June 30, 1996.

          (d)  (1) For Contracts under Serial Nos. 0070, 8108, G8805, G8891 and
               G9325, during the Seventeenth Extension Year of July 1, 1998
               through June 30,

----------
     (1) This "cost carry-forward" is allowed only for that percentage of the
Contractor's cost increases from the Fourteenth over the Twelfth Extension Years
that exceeded two-and-two-tenths percent (2.2%) and it is allowed due to such a
low fixed rate hike cap.


                                        6
<PAGE>

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


               1999, each Contractor's daily rates per vehicle shall be deemed
               to be augmented by an amount not to exceed whichever of the
               following represents the lesser amount of actual increase: (i)
               the same percentage by which the Consumer Price Index as of May
               1998 shall have increased over the Consumer Price Index as of May
               1997; or, (ii) the amount in dollars expressed as a percentage by
               which each Contractor's actual costs during the Extension Year of
               July 1, 1997 through June 30, 1998 shall have increased over each
               Contractor's actual costs during the Extension Year of July 1,
               1996 through June 30, 1997, plus each of the percentages of each
               Contractor's actual cost increases from (a) the Fifteenth
               Extension Year (July 1, 1996 through June 30, 1997) over the
               Fourteenth Extension Year (July 1, 1995 through June 30, 1996) to
               the extent that such exceeds two-and-six tenths percent (2.6%)(2)
               and (b) the Fourteenth Extension Year (July 1, 1995 through June
               30, 1996) over the Twelfth Extension Year (July 1, 1993 through
               June 30, 1994) to the extent that such exceeds two-and-two-tenths
               percent (2.2%)(3).

               (2) For Contracts under Serial Nos. 7165, 7200 and 7291, during
               the Second Extension Year from July 1, 1998 through June 30,
               1999, each Contractor's daily rates per vehicle and per escort
               shall be deemed to be augmented by an amount not to exceed
               whichever of the following represents the lesser amount of actual
               increase: (i) the same percentage by which the Consumer Price
               Index as of May 1998 shall have increased over the Consumer Price
               Index as of May 1997; or, (ii) the amount in dollars expressed as
               a percentage by which each

----------
     (2) This "cost carry-forward" is allowed only for that percentage of the
Contractor's cost increases from the Fifteenth over the Fourteenth Extension
Years that exceed two-and-six-tenths percent (2.6%), and it is allowed due to
such a low fixed rate hike cap.

     (3) As in Note 1, the second "cost carry-forward" is allowed due to such a
low fixed rate hike cap but only to the extent that the Contractor's cost
increases beyond two-and-two tenths percent (2.2%) shall not as yet have been
absorbed by the rate augmentation for the Sixteenth Extension Year.


                                        7
<PAGE>

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


               Contractor's actual costs during the Extension Year from July 1,
               1997 through June 30, 1998 shall have increased over each
               Contractor's actual costs during the Contract Year from July 1,
               1996 through June 30, 1997.

          (e)  (1) For Contracts under Serial Nos. 0070, 8108, G8805, G8891 and
               G9325, during the Eighteenth Extension Year of July 1, 1999
               through June 30, 2000, each Contractor's daily rates per vehicle
               shall be deemed to be augmented by an amount not to exceed
               whichever of the following represents the lesser amount of actual
               increase: (i) the same percentage by which the Consumer Price
               Index as of May 1999 shall have increased over the Consumer Price
               Index as of May 1998; or, (ii) the amount in dollars expressed as
               a percentage by which each Contractor's actual costs during the
               Extension Year from July 1, 1998 through June 30, 1999 shall have
               increased over each Contractor's actual costs during the
               Extension Year of July 1, 1997 through June 30, 1998.

               (2) For Contracts under Serial Nos. 7165, 7200, and 7291, during
               the Third Extension Year from July 1, 1999 through June 30, 2000,
               each Contractor's daily rates per vehicle and per escort shall be
               deemed to be augmented by an amount not to exceed whichever of
               the following represents the lesser amount of actual increase:
               (i) the same percentage by which the Consumer Price Index as of
               May 1999 shall have increased over the Consumer Price Index as of
               May 1998; or, (ii) the amount in dollars expressed as a
               percentage by which each Contractor's actual costs during the
               Extension Year from July 1, 1998 through June 30, 1999 shall have
               increased over each Contractor's actual costs during the
               Extension Year from July 1, 1997 through June 30, 1998.

     (2) Notwithstanding the foregoing payment increase provisions, where there
     is a decrease in the regional consumer price index for the New York, New
     York-Northeastern, New Jersey area as based upon the index for all urban
     consumers (CPI-U) during the preceding twelve month period, the amount to
     be paid to the Contractor in the succeeding extension year


                                        8
<PAGE>

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


     will reflect that decrease in a manner satisfactory to the New York State
     Commissioner of Education.

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

          (a) For Contracts under Serial Nos. 0070, 8108, G8805, G8891 and
          G9325, the following Extension Year definitions shall apply:

               (i) "Fourteenth Extension Year" means July 1, 1995 through June
               30, 1996.

               (ii) "Fifteenth Extension Year" means July 1, 1996 through June
               30, 1997.

               (iii) "Sixteenth Extension Year" means July 1, 1997 through June
               30, 1998.

               (iv) "Seventeenth Extension Year" means July 1, 1998 through June
               30, 1999.

               (v) "Eighteenth Extension Year" means July 1, 1999 through June
               30, 2000.

          (b) For Contracts under Serial Nos. 7165, 7200, and 7291, the
          following Contract Year and Extension Year definitions shall apply:

               (i) The term "Contract Year" means each annual period during the
               original term of the Contract from July lst of a given year
               through June 30th of the next year, i.e., "Second Contract Year"
               means July 1, 1995 through June 30, 1996 and "Third Contract
               Year" means July 1, 1996 through June 30, 1997.

               (ii) "First Extension Year" means July 1, 1997 through June 30,
               1998.

               (iii) "Second Extension Year" means July 1, 1998 through June 30,
               1999.


                                        9
<PAGE>

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


               (iv) "Third Extension Year" means July 1, 1999 through June 30,
               2000.

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

          (d) The term "contractor's average cost per vehicle per day" for a
          given extension year is defined as a Contractor's "total net allowable
          costs" for that extension year divided by the total number of "vehicle
          days". The term "total net allowable costs" is limited to those
          expenses determined by the BOE to be related directly to
          transportation services provided to the BOE pursuant to this Contract.
          The term "vehicle days" is defined as the total number of "authorized
          vehicles" the Contractor actually operates multiplied by the number of
          school days, which number is hereby fixed at 183 school days per
          extension year (220 school days per extension year for 12 month
          contracts) for the term of this Extension and Amendment Agreement.(4)
          The term "authorized vehicles" is defined as the total number of
          contract and additional vehicles, but

----------
     (4) The numbers 183 (ten month contracts) and 220 (twelve month contracts)
represent average numbers of school days per extension year for the three
extension years preceding the instant Extension and Amendment Agreement, i.e.,
1992-93, 1993-94 and 1994-95 Extension Years. These averages shall be reviewed
every three (3) years during this Extension and Amendment Agreement and such
further extension and amendment agreements thereafter, if any. Whereupon a
triennial review finds that one or both average numbers of school days per
extension year have changed as based upon the fluctuation of actual school days
per annum, the affected fixed number(s) of school days shall be revised up or
down accordingly for the next extension year(s), but only if the change in the
affected average number(s) at least equals two (2) school days. In each
subsequent triennial review, if any, the effects of changes in the numbers of
school days from the preceding triennial review(s) shall be viewed cumulatively.


                                       10
<PAGE>

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


          excluding spare vehicles, that the Contractor has been granted
          expressly by the Director. If the Director grants the Contractor
          additional vehicles after December 15 of a given extension year, such
          additional vehicles shall not be counted among the "authorized
          vehicles" until the start of the succeeding extension year, if indeed
          the Contractor continues to furnish such additional vehicles during
          the succeeding extension year.(5)

          (e) The term "Cost Justification Financial Statement" is defined as a
          written accountant's review report prepared by a Certified Public
          Accountant (CPA) or Public Accountant (PA) licensed by the State of
          New York, except as otherwise noted herein. This review report shall
          state that a review was performed in accordance with AICPA standards
          and that the information in the financial statements is the
          representation of management, and it describes the nature of the
          review as distinct from an audit. The report shall give the limited
          assurance that, based on the review, the CPA/PA is not aware of any
          material modifications that should be made to the financial statement
          in order for it to be in conformity with generally accepted accounting
          principles. In addition, the Certified Public Accountant or Public
          Accountant preparing a report or review must state that he or she has
          studied the cost justification manual supplied by

----------
     (5) This exclusion of additional vehicles granted after each December 15th
shall not apply to any vehicles that the Contractor obtains by way of assignment
or other transfer of contract, if such is approved by the BOE. Except for the
one-and-one half percent (1.5%) daily rate reduction for the 1995-96 Extension
Year, the annual rate augmentation, if any, for each additional vehicle granted
after December 15th of a given extension year shall not become effective until
the succeeding extension year, whereupon any such rate augmentation shall
commence (without retroactivity) cumulatively with the following extension
year's rate increase, if any. For cost justification purposes, the Contractor
shall not add or combine any costs associated with additional vehicles granted
after each December 15th into the Contractor's other operating costs for that
extension year but shall begin to add or combine such costs (without
retroactivity) into other operating costs only at the outset of the succeeding
extension year, i.e., each such additional vehicle shall be treated for cost
justification purposes as if it had been initially granted to the Contractor
effective July 1st of the given following extension year.


                                       11
<PAGE>

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


          the Board and has applied the standards contained in the Board's
          manual to the development of the Cost Justification Financial
          Statement. Contractors who have not had a CPA audited report done for
          any purpose within two (2) years prior to the commencement date of
          this Extension Agreement, shall be required to submit a certified
          audited statement by a CPA for its first cost justification financial
          statement under this Extension Agreement. In addition, the accountant
          must have no interest in this Contract or the Contractor and must so
          certify in writing. The financial statement will utilize a form
          prescribed by the Director as approved by the State Education
          Department.

     (4) Cost Justification Financial Statements. Section 305 of the State
     Education Law requires the Contractor to substantiate any cost increases
     which he/she claims to justify annual payment increases during the term of
     this Extension and Eighth Amendment Agreement. In consultation with the BOE
     Office of Auditor General, the Director of the Office of Pupil
     Transportation (OPT) shall determine whether to approve all or any
     portion(s) of the claims in each of the Contractors' annual Cost
     Justification Financial Statements as described immediately below:

          (a) To substantiate any payment increases received under this Article
          V - A during the Extension Year of July 1, 1996 through June 30, 1997,
          the Contractor must submit by September 30,. 1996 a cost justification
          financial statement by an independent Certified Public Accountant or
          Public Accountant which details total costs incurred by the Contractor
          for all of its operations and, separately, for its operations under
          this Contract for the Extension Years 1995-96 and for 1993-1994.

          (b) To substantiate any payment increases received under this Article
          V - A during the Extension Year of July 1, 1997 through June 30, 1998,
          the Contractor must submit by September 30, 1997 (i) a cost
          justification financial statement by an independent Certified Public
          Accountant or Public Accountant which details the total costs incurred
          by the Contractor for all of its operations and, separately, for its
          operations under this Contract for the Extension Years 1996-1997 and
          1995-1996, and (ii) an additional cost justification financial
          statement by an independent Certified Public Accountant or Public
          Accountant which details the total costs incurred by the


                                       12
<PAGE>

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


          Contractor for all of its operations and, separately, for its
          operations under this Contract for Extension Years 1995-96 and
          1993-1994 (to account for a cost carry-forward, if any)

          (c) To substantiate any payment increases received under this Article
          V - A during the Extension Year of July 1, 1998 through June 30, 1999,
          the Contractor must submit by September 30, 1998, (i) a cost
          justification financial statement by an independent Certified Public
          Accountant or Public Accountant which details the total costs incurred
          by the Contractor for all of its operations and, separately, for its
          operations under this Contract, for the Extension Years 1997-1998 and
          1996-1997, and (ii) an additional cost justification financial
          statement by an independent Certified Public Accountant or Public
          Accountant which details the total costs incurred by the Contractor
          for all of its operations and, separately, for its operations under
          this Contract for Extension Years 1996-97, 1995-1996 and 1993-1994,
          (to account for a cost carry-forward, if any).

          (d) To substantiate any payment increases received under this Article
          V - A during the Extension Year of July 1, 1999 through June 30, 2000,
          the Contractor must submit by September 30, 1999, a cost justification
          financial statement by an independent Certified Public Accountant or
          Public Accountant which details the total costs incurred by the
          Contractor for all of its operations and, separately, for its
          operations under this Contract for the Extension Years 1998-1999 and
          1997-1998.

          (e) In each annual cost justification financial statement, the
          Contractor will treat costs for escorts separately from all other
          costs. As a minimum, the Contractor will supply in each annual cost
          justification financial statement all data required by the New York
          State Education Department related to this Contract, and the submittal
          shall include, but is not necessarily limited to, New York State
          Education Department approved cost justification forms. The Contractor
          must supply promptly any and all additional cost data as required by
          the BOE or the State Education Department.

          (f) Until six (6) years after completion of its services hereunder, or
          six (6) years after the date of termination of this Extension and
          Amendment Agreement, whichever


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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
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          shall occur later, the Contractor shall retain and maintain complete
          and correct books and records related to all aspects of the
          Contractor's obligations hereunder. Records must be maintained
          separately, so as to identify clearly the expenses applicable to the
          Contract, all previous extension and amendment agreements and this
          Extension and Amendment Agreement and be distinguishable from all
          other costs not incurred under the Contract, all previous extension
          and amendment agreements and this Extension and Amendment Agreement.
          Except as provided in this subparagraph, all other provisions of the
          Contract as amended that relate to the retainage and maintenance of
          records shall remain in full force and effect.

          (g) To be eligible to "carry forward" unabsorbed cost increases
          arising from cost growth, if any, greater than the two-and-two-tenths
          percent (2.2%) fixed cap during the 1996-97 Extension Year and the
          two-and-sixth-tenths percent (2.6%) fixed cap during the 1997-98
          Extension Year of Contract Serial Nos. 0070, 8108, G8805, G8891, and
          G9325, the Contractor must meet eligibility conditions and must adhere
          to rules, procedures and definitions expressed in Appendix A. The said
          eligibility conditions, rules, procedures and definitions for the
          allowance of a "cost carry-forward" of such unabsorbed cost increases
          under Contract Serial Nos. 0070, 8108, G8805, G8891, and G9325 are
          hereby incorporated by this reference into this Extension and
          Amendment Agreement as hereby incorporated by this reference into this
          Extension and Amendment Agreement as if set forth herein in their
          entirety, and a copy of the said eligibility conditions, rules,
          procedures and definitions is hereto annexed as "Appendix A".

     (5) Required Analysis of Costs. To determine the allowable increase in
     costs for the extension year, as specified in Section V-A 1 of this
     agreement, the following analysis of the Cost Justification Financial
     Statement must be undertaken:

          Step 1: Divide the total applicable annual operating costs by the
                  number of vehicle days for both the base year and the year
                  previous to the base year to determine the average daily cost
                  per vehicle for each of those years. The base year is the year
                  immediately preceding the extension year.


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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
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          Step 2: Subtract the average daily cost per vehicle for the year
                  previous to the base year from the average daily cost per
                  vehicle for the base year to determine the increase in the
                  average daily cost per vehicle.

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

          Step 4: Compare the percent increase in the average daily cost per
                  vehicle to the percentage by which the Consumer Price Index as
                  of May of the base year shall have increased over the Consumer
                  Price Index as of May of the year previous to the base year
                  and to the appropriate annual caps in the increase as
                  stipulated in Section V-A 1 of this agreement. Whichever is
                  the least of the three percentages will be the allowable
                  increase applied to the daily rate for the extension year.

          Step 5: Only for Contract Serial Nos. 0070, 8108, G8805, G8891 and
                  G9325 for the rate augmentations in the Sixteenth and
                  Seventeenth Extension Years, repeat steps 1 to 4 for any
                  allowable cost increases accrued during the period of Twelfth
                  to Fourteenth Extension Years and, when appropriate, any
                  allowable cost increases accrued during the Fifteenth to
                  Sixteenth Extension Years. Determine the percent increase in
                  the average daily cost per vehicle from the Twelfth to
                  Fourteenth Extension Years and, when appropriate, from the
                  Fifteenth to Sixteenth Extension Years. If the percent
                  increase in the average daily cost resulting in step 3 is
                  insufficient to justify fully the Consumer Price Index
                  increment in Step 4 or any applicable fixed cap, add the
                  percent increase of the Twelfth to Fourteenth Extension Years,
                  if any, to the percent increase in Step 3. If there is any
                  percent increase in the average daily cost per vehicle still
                  unabsorbed, such increase may be carried forward to the
                  Seventeenth Extension Year.


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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
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                  For the Seventeenth Extension Year only, also add the
                  unabsorbed increase of the Fifteenth to Sixteenth Extension
                  Years, if any, to the percent increase in Step 3.

     (6) Allowable Cost Increases. Only increases in "net allowable costs" will
     justify augmentation of the daily vehicle rate from one extension year to
     the next. "Allowable costs" are limited by the following: costs not
     attributable to the Contractor's operations pursuant to this Contract,
     costs which are not ordinary and/or reasonable, costs which are not
     documented, and costs disallowed by the New York State Education Department
     and/or BOE auditors are not permitted to justify increases of the daily
     rate per vehicle. The Director and Office of Auditor General shall have the
     right, power and authority to prescribe standardized miscellaneous cost
     categories for all contractors.

     (7) Access to Subcontractors. If with the approval of the Director, the
     Contractor subcontracts any portion of the services under this Contract,
     the Contractor must include in any such subcontract agreement a provision
     which allows full and unimpeded access by the BOE, the New York State
     Education Department or the New York City Office of the Comptroller to the
     books and records of a subcontractor for inspection, audit and copying
     purposes. The Contractor agrees and covenants to render all necessary
     assistance to obtain any requested documents from subcontractors. The
     Contractor's inability to obtain requested documentation from any such
     entities will not excuse a failure to provide the documentation as a means
     to justify payment increases.

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

     (9) Cost Increase Surety Bond. If the Contractor desires to receive the
     annual daily vehicle rate(s) augmentation in advance of the "final" results
     of the BOE audit of each year's Cost Justification Financial Statement (5),
     the Contractor must post by September 30th of each Extension Year a surety
     payment bond to insure the refund of any overpayments or debts the BOE


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


     deems to be due and owing from the Contractor. Each bond must insure
     expressly against the Contractor's inability to justify claims in each
     annual Cost Justification Financial Statement to the extent of all payment
     increases the BOE will make to the Contractor during each prospective
     Extension Year. Each bond must be issued by a company licensed to do
     business in New York State by the Superintendent of Insurance. The coverage
     period of each bond must extend from September 1st of each Extension Year
     until such date as the Contractor receives from the BOE "final written
     notice of the results of the audit of each year's Cost Justification
     Financial Statement. Each bond must extend to the BOE a claim submittal
     period of at least ninety (90) days beyond the date of the Contractor's
     receipt of the "final" audit result notice for the purpose of recouping any
     overpayments based on the Contractor's inability to justify all or any
     portion of each annual increase. Each bond must name both the BOE and the
     City of New York as the insured parties. To calculate the amount of a bond,
     use the following formula: the daily rate per vehicle for each contract
     item (i.e., for a given Extension Year) multiplied by the total number of
     vehicles for each contract item (i.e., for a given Extension Year excluding
     spare and maintenance vehicles) multiplied by 180 days and multiplied again
     by the percentage of payment increase as reflected either by the Consumer
     Price Index for the month of May of each succeeding Extension Year or the
     maximum cap for a given Extension Year, whichever is less; then, add to
     this figure an amount equal to the Base Escort Daily Compensation Rate
     (i.e., for a given Extension Year) multiplied by the total number of
     vehicles for each contract item (i.e., for a given Extension Year excluding
     spare and maintenance vehicles) multiplied by 180 days and multiplied again
     by the percentage of payment increase as reflected either by the Consumer
     Price Index for the month of May of each succeeding Extension Year or the
     maximum cap for a given Extension Year, whichever is less.

          (a) Exemption from Cost Increase Surety Bond. If the Contractor
          provides a performance bond, letter of credit or a cash performance
          deposit for a given prospective Extension Year, the Contractor may
          forego the requirements in this Paragraph (B) (9), provided that the
          Contractor submits by September 30th of each Extension Year a written
          consent that the BOE may deduct such amounts of money as the BOE deems
          to be properly due and owing from the Contractor from any money to be
          earned by the Contractor under any Contract at any time. The verified
          consent will be on a form approved and supplied


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


          by the Director. A Contractor who is not required to provide a
          Performance Bond or Letter of Credit because it provides 15 or fewer
          vehicles pursuant to this agreement, may choose to either present the
          BOE with the aforedescribed cost increase Surety Bond or consent to
          have the increase in payments coming due to it withheld until the
          approval of its cost justification statement.

          (b)  Retroactive Payments. (i) Contractors will be entitled to receive
               retroactive payment increases without any interest only after the
               date of approval and to the extent of such approval of the cost
               justification statement, and the Contractor will not be entitled
               to receive retroactive payment in one lump sum but only in
               monthly installments to be determined at the Director's sole
               discretion.

               (ii) Should any retroactive payments promised by the foregoing
               language of Paragraph 9 be deemed or found to be illegal or
               otherwise improper due to being in violation of any Federal,
               State, New York City or BOE law, rule, regulation, by-law or
               official written policy (e.g., the BOE "Standard Operating
               Procedures for Financial Management Centers"), then the BOE, its
               employees or agents cease to have any and all obligations to pay
               same and contractor's obligations hereunder remain unchanged.

               (iii) The Contractor hereby agrees and covenants to refrain from
               any litigation and to release, hold harmless and indemnify the
               BOE and the City of New York (including reasonable attorney fees)
               concerning any claims, actions or special proceedings by the
               Contractor or any other party arising from denial(s) or
               postponement(s) of any payment increase(s) or any portion(s)
               thereof due to the Contractor's failure to meet the express
               terms, conditions and deadlines of this paragraph 9.

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

     (11) Refund of Overpayment. The Contractor further agrees and covenants to
     refund any and all additional monies due to the


                                       18
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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
               FOR SPECIAL EDUCATION PUPIL TRANSPORTATION SERVICES


     BOE within thirty (30) days of the final audit report, if the amount of
     each year's payment excess over allowable cost increase is greater than any
     payments due and owing for the balance of a given Extension Year, except
     where a refund is obtained from the bond herein described

     (12) In the event of any apparent inconsistencies between any other
     provisions of the Contract and this Article V - A, the provisions of this
     Article V - A will prevail.

(C) For Contracts under Serial Nos. 7165, 7200, and 7291, there is no separate
daily rate for escort service. Therefore, during the First, Second and Third
Extension Years of Contracts under Serial Nos. 7165, 7200 and 7291, there shall
be no special or separate increases in any payment or allowance for escorts
other than that expressed herein above at Paragraph (B). Regarding only
Contracts under Serial Nos. 0070, 8108, G8805, G8891 and G9325, Article XIX
entitled, "Escorts," as amended previously, is hereby amended further so that
subparagraph A, subdivision (2), as numbered by the First Amendment Agreement,
shall read as follows for the balance of the Contract term:

     "(2) However, the parties agree that, for only so long as and only to the
     extent that the New York City Administrative Code requires the BOE to
     utilize escorts on special education runs, the Contractor will continue to
     provide such escorts and substitute escorts in addition to vehicle
     operator, as hereinafter allowed, through June 30, 2000, and that:

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

               "(i) During the Fourteenth Extension Year, the "Base Escort Daily
               Compensation Rate" shall be equal to ninety-eight-and-one-half
               percent (98.5%) of the Base Escort Daily Compensation Rate
               provided as of June 30, 1995, or such lesser amount that
               represents the audited and approved decrease from the Base Escort
               Daily Compensation Rate paid to the contractor during the
               Thirteenth Extension Year. Also, the BOE will pay "Wage Accrual
               Compensation" in the exact amount the Contractor actually paid


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


               either to or for escorts during the Fourteenth Extension Year, if
               any, and only when known after a BOE audit and which was required
               to be paid. No contractor may receive as Wage Accrual
               Compensation an amount in the aggregate which is more than ten
               percent (10%) above the total reimbursed costs for wage accruals
               as of June 30, 1995.

               "(ii) During the Fifteenth Extension Year, the BOE will increase
               the "Base Escort Daily Compensation Rate" in an amount to be
               derived by application of subparagraph (b) hereinafter, or such
               lesser amount that represents the audited and approved increase
               over the Base Escort Daily Compensation Rate paid to the
               contractor during the Fourteenth Extension Year. Also, the BOE
               will pay "Wage Accrual Compensation" in the exact amount the
               Contractor actually paid either to or for escorts during the
               Fifteenth Extension Year, if any, and only when known after a BOE
               audit and which was required to be paid. No contractor may
               receive as Wage Accrual Compensation an amount in the aggregate
               which is more than ten percent (10%) above the total reimbursed
               costs for wage accruals as of June 30, 1996.

               "(iii) During the Sixteenth Extension Year, the BOE will increase
               the "Base Escort Daily Compensation Rate" in an amount to be
               derived by application of subparagraph (b) hereinafter, or such
               lesser amount that represents the audited and approved increase
               over the Base Escort Daily Compensation Rate paid to the
               contractor during the Fifteenth Extension Year. Also, the BOE
               will pay "Wage Accrual Compensation" in the exact amount the
               Contractor actually paid either to or for escorts during the
               Sixteenth Extension Year, if any, and only when known after a BOE
               audit and which was required to be paid. No contractor may
               receive as Wage Accrual Compensation an amount in the aggregate
               which is more than ten percent (10%) above the total reimbursed
               costs for wage accruals as of June 30, 1997.

               "(iv) During the Seventeenth Extension Year, the BOE will
               increase the "Base Escort Daily Compensation Rate" in an amount
               to be derived by application of subparagraph (b) hereinafter, or
               such


                                       20
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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
              FOR SPECIAL EDUCATION PUPIL TRANSPORTATION SERVICES


               lesser amount that represents the audited and approved increase
               over the Base Escort Daily Compensation Rate paid to the
               contractor during the Sixteenth Extension Year. Also, the BOE
               will pay "Wage Accrual Compensation" in the exact amount the
               Contractor actually paid either to or for escorts during the
               Seventeenth Extension Year, if any, and only when known after a
               BOE audit and which was required to be paid. No contractor may
               receive as Wage Accrual Compensation an amount in the aggregate
               which is more than ten percent (10%) above the total reimbursed
               costs for wage accruals as of June 30, 1998.

               "(v) During the Eighteenth Extension Year, the BOE will increase
               the "Base Escort Daily Compensation Rate" in an amount to be
               derived by application of subparagraph (b) hereinafter, or such
               lesser amount that represents the audited and approved increase
               over the Base Escort Daily Compensation Rate paid to the
               contractor during the Seventeenth Extension Year. Also, the BOE
               will pay "Wage Accrual Compensation" in the exact amount the
               Contractor actually paid either to or for escorts during the
               Eighteenth Extension Year, if any, and only when known after a
               BOE audit and which was required to be paid. No contractor may
               receive as Wage Accrual Compensation an amount in the aggregate
               which is more than ten percent (10%) above the total reimbursed
               costs for wage accruals as of June 30, 1999.

          "(b) Annual Increase of the Base Escort Daily Compensation Rate.
          Except during the Fourteenth Extension Year in which the BOE will
          reduce the Base Escort Daily Compensation Rate to equal
          ninety-eight-and-one-half percent (98.5%) of such rate paid as June
          30, 1995 each succeeding Extension Year the BOE will augment the
          amount of the Base Escort Daily Compensation Rate according to the
          payment increase limits expressed in Article V - A, Paragraph (1)
          (i.e., Paragraph (B)(l) above), provided the Contractor justifies such
          increases, if any, through the submittal of a separate annual Escort
          Cost Justification Financial Statement according to the same terms,
          conditions and deadlines expressed in Article V - A, Paragraphs (3)
          through (12) (i.e., Paragraphs (B) (3) through (B) (12) above). This
          provision does not affect


                                       21
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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
              FOR SPECIAL EDUCATION PUPIL TRANSPORTATION SERVICES


          payment for overtime escort services, which is governed separately at
          Article XIX, Paragraph (2) (c) (i.e., Paragraph (C) (2) (c) below).

          "(c) Payment for Overtime. Where the Contractor actually provides
          scheduled overtime escort services due to BOE authorization, the BOE
          will reimburse the Contractor for such services in the exact amount of
          the costs for overtime wages and statutory fringe benefits. No
          reimbursement will be permitted for occasional or episodic overtime.
          "Overtime" is defined as service which exceeds eight (8) hours within
          any ten (10) hour daily period. The hourly rate for overtime escort
          services will not exceed one-and-one-half times the regular hourly
          wage rate.

          "(d) Monthly Advance Payment for Escort Services. On or about the
          first school day of each calendar month, the BOB will pay an eligible
          contractor in advance an amount equal to the anticipated usage of
          escort service for that month, excluding overtime. For each month's
          overtime claims, the BOE will pay the Contractor only after receipt
          and approval of a voucher on a BOB form, which will contain such
          detail as the BOE may require to confirm the Vendor's claims and which
          will be subject to BOB audit.

               " (i) Surety Payment Bond. To receive advance monthly payments,
               the Contractor must file with the BOE by June 1st of each
               Extension Year a bond in the amount of the anticipated
               utilization of escort service for one (1) month. The coverage
               period for each bond must be from September 1st through August
               31st of each prospective year. To calculate the bond amount for
               one year, use this formula: twenty (20) days multiplied by the
               total number vehicles (excluding spares) multiplied again by the
               Base Escort Daily Compensation Rate for a given Extension Year.
               Each bond must name the BOE and the City of New York as the named
               insureds. Each bond must insure against any and all acts of
               commission or omission by the Contractor, any subcontractors,
               subsidiaries, parent or affiliate entities or any officers,
               owners, directors, employees, servants, agents, independent
               contractors or any other parties which cause the failure of
               proper disbursement to the intended escort beneficiaries, whether
               any such party acts within or outside the scope of


                                       22
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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
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               employment or contractual performance. Bonds must be issued by a
               company licensed by the Superintendent of Insurance to do
               business in New York State.

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

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

          "(e) Limitation on Wage Accruals. The BOE will compensate the
          Contractor for wage accruals only if payment of such wage accruals to
          escorts is mandated by an express provision to that effect in
          existence prior to the execution of this Extension and Eighth
          Amendment Agreement as part of a written collective bargaining
          agreement between the Contractor and a union that represents the
          Contractor's employees. The BOE will not recognize the establishment
          of any new wage accrual packages or collective bargaining agreements
          which provide for such payments if executed after this Extension and
          Eighth Amendment Agreement. Moreover, the BOE will not make payments
          based upon any revision of entitlement schedules even if established
          before execution of this Extension and Eighth Amendment Agreement
          which would increase any benefits to escorts. No enhancements of wage
          accrual benefits will be at the BOE's expense either directly or
          indirectly.

          "(f) The Contractor must provide all of the escorts necessary to
          perform all of the work covered by the Contract, including additional
          and spare vehicles. The Contractor must have sufficient, qualified and
          approved personnel to enable the Contractor to dispatch substitute
          escorts promptly if, when and where necessary to ensure


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


          continuous, uninterrupted and punctual service in each and every
          instance. The Contractor must operate every vehicle for the
          transportation of handicapped children in strict adherence to the
          provisions of Section 19-603, Paragraphs (a) and (b) of the New York
          City Administrative Code. If the law is amended during the term of
          this Extension and Eighth Amendment Agreement to eliminate the further
          requirement of escorts, the Contractor must cease to provide escorts
          upon five (5) days notice from the BOB to that effect. After the
          effective date of the notice, the BOB and the City of New York will
          not be obligated to the Contractor or any other party for the
          provision of escort services.

          "(g) Basic, Refresher and Additional Training for Special Education
          Escorts. The BOE will continue to provide basic and refresher training
          for all special education escorts, including all instructional staff
          and educational materials, at no cost to the Contractor. Whereupon the
          BOE revises basic and/or refresher training courses to include
          additional subject material and/or fields, the Contractor must
          cooperate to have all escorts and substitute escorts trained in the
          additional skills and responsibility, according to BOE training
          schedules.

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

          "(i) Annual List of Escorts. By August 31st of each Extension Year or
          any other time as required by the Director, the Contractor must
          provide a list of all escorts and substitute escorts to be utilized
          for special education school bus service during the prospective school
          year. The list must be on a form to be supplied by OPT and will
          include, but not be limited to, the following information: the name,
          social security number and date of original hire of each escort.
          Whenever a


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


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

(D) NO DUPLICATION OR MISALLOCATION OF COSTS. To prevent unjust enrichment
through misrepresentation or falsification of cost increase claims, the
Contractor hereby agrees, consents and covenants to abide in all respects by the
following rules for the treatment of fixed, variable or other costs utilized to
establish increased expenses from one given Extension Year to the next:

     (1) Duplication of Costs. Concerning only Contracts under Serial Nos. 0070,
     8108, G8805, G8891 and G9325, in the establishment of allowable cost
     increases under Article V - A (see Paragraph (B), supra) and Article XIX
     (see Paragraph (C), supra), the Contractor must not commingle, combine,
     merge or duplicate costs in any manner or to any extent between the two
     Articles, i.e., costs used to justify increased payments for vehicles and
     drivers under Article V - A may not be used again to justify increases in
     the Base Escort Daily Compensation Rate, and vice versa.

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

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

          (b) Costs must be attributable solely to the specific group of
          Contracts covered by this Extension Agreement, i.e., Contract Serial
          Nos. 0070, 7165, 7200, 7291, 8108, G8805, G8891 and G9325. Expenses
          allocable to BOE pupil transportation contracts other than these eight
          serial numbers must not appear in any materials presented to justify
          payment increases under this Extension Agreement.

          (c) Costs must be attributable solely to the corporate, partnership,
          sole proprietorship or other entity which constitutes the Contractor.
          Expenses allocable to a parent or other affiliated entity must not
          appear on the


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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
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          Contractor's cost justification financial statement. Where employees,
          offices, storage and maintenance facilities or other cost items are
          shared by several affiliated or unaffiliated entities, all or some of
          which hold separate BOE transportation contracts, assertions of
          expense increases must reflect only those percentages of utilization
          directly allocable to the claimant Contractor.

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

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

E. AMENDMENTS TO PERFORMANCE SECURITY PROVISIONS.

(1) The Extension and Seventh Amendment of Contract for Special Education Pupil
Transportation Services is hereby amended at Article (E), Paragraph (2) so that
Paragraph 2 (b) of the provisions of the original Contracts, as currently
amended and now entitled, "INSURANCE AND PERFORMANCE SECURITY," shall read as
follows:

               "(b) Any contractor who receives an award of contract for 16 to
          25 vehicles has the following options available to assure full and
          faithful performance of the Contract:

               "(1) Authorize the Board of Education to retain ten percent (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 maintained by the New York City Office of the
               Comptroller to assure full and faithful performance of the
               Contract. This retainage shall be paid to the Contractor with
               interest at the conclusion of each one (1) year period of full
               and faithful performance of this Contract.

               "(2) Provide a confirmed irrevocable Letter(s) of Credit from an
               acceptable financial institution equal in value to ten percent
               (10%) of the contract value which may be reduced each month by
               ten per-


                                       26
<PAGE>

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


               cent (10%) of the monthly payment authorized by the Contractor to
               be retained by the BOE during the Extension Year from July 1,
               1995 through June 30, 1996. Whereupon at any time during this
               Extension Agreement there shall be any increase(s) or decrease(s)
               in the Contractor's number of contract and/or additional vehicles
               beyond five percent (5%) of the Contractor's total fleet
               (excluding spare and maintenance vehicles), the BOE and the
               Contractor shall adjust the performance security accordingly to
               maintain the level at a constant ten percent (10%) of the
               contract value; and, for each instance of any increases, the
               Contractor shall furnish additional performance security via
               confirmed irrevocable Letter(s) of Credit from an acceptable
               financial institution or written authorization of retainage
               within thirty (30) days of the award of each increase in the
               number of vehicles. The amounts retained shall be deposited in an
               interest bearing account maintained by the New York City Office
               of the Comptroller with annual reports of the amounts retained
               and interest earned provided to the Contractor. This retainage
               will be returned to the Contractor with interest after the
               conclusion of the full and faithful performance of this Extension
               Agreement, or whereupon the Contractor replaces the retainage
               with a confirmed irrevocable Letter(s) of Credit from an
               acceptable financial institution in an amount equal to ten
               percent (10%) of the contract value at the time of the
               conversion.

               "3 Provide a confirmed irrevocable Letter(s) of Credit from an
               acceptable financial institution equal in value to ten percent
               (10%) of the contract value which may be reduced each month by
               five percent (5%) of the monthly payment authorized by the
               Contractor to be retained by the BOE during the Extension Years
               of July 1, 1995 through June 30, 1996 and July 1, 1996 through
               June 30, 1997. Whereupon at any time during this Extension
               Agreement there shall be any increase(s) or decrease(s) in the
               Contractor's number of contract and/or additional vehicles beyond
               five percent (5%) of the Contractor's total fleet (excluding
               spare and maintenance vehicles), the BOE and the Contractor shall
               adjust the performance security accordingly


                                       27
<PAGE>

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


               to maintain the level at a constant ten percent (10%) of the
               contract value; and, for each instance of increase, the
               Contractor shall furnish additional performance security via
               confirmed irrevocable Letter(s) of Credit from an acceptable
               financial institution or written authorization of retainage
               within thirty (30) days of the award of each increase in the
               number of vehicles. The amounts retained shall be deposited in an
               interest bearing account maintained by the New York City Office
               of Comptroller with annual reports of the amounts retained and
               interest earned provided to the Contractor. This retainage will
               be returned to the Contractor with interest after the conclusion
               of the full and faithful performance of this Extension Agreement,
               or whereupon the Contractor replaces such retainage with a
               confirmed irrevocable Letter(s) of Credit from an acceptable
               financial institution in an amount equal to ten percent (10%) of
               the contract value at the time of the conversion.

               "(4) Provide a confirmed irrevocable Letter(s) of Credit from an
               acceptable financial institution equal in value to ten-percent
               (10%) of the contract value renewable each year at an amount
               equal to ten percent (10%) of the then current value of the
               Contract.

               "(5) Provide any combination of cash security deposit and
               confirmed irrevocable Letter(s) of Credit from an acceptable
               financial institution equal to ten percent (10%) of the contract
               value. Whereupon at any time during this Extension Agreement
               there shall be any increase(s) or decrease(s) in the Contractor's
               number of contract and/or additional vehicles beyond five percent
               (5%) of the Contractor's total fleet (excluding spare and
               maintenance vehicles), the BOE and the Contractor shall adjust
               the performance security accordingly to maintain the level at a
               constant ten percent (10%) of the contract value; and, for each
               instance of increase, the Contractor shall furnish additional
               performance security via confirmed irrevocable Letter(s) of
               Credit from an acceptable financial institution or written
               authorization for retainage within thirty (30) days of the award
               of each in-


                                       28
<PAGE>

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


               crease in the number of vehicles. Any cash security deposit(s)
               and/or retainage shall be deposited in an interest bearing
               account maintained by the New York City Office of Comptroller
               with annual reports of the amounts held and interest earned
               provided to the Contractor. Any cash security deposit(s) and/or
               retainage will be returned to the Contractor with interest after
               the full and faithful performance of this Extension Agreement or
               whereupon the Contractor replaces any retainage with a confirmed
               irrevocable Letter(s) of Credit from an acceptable financial
               institution that brings the performance security into an amount
               equal to ten percent (10%) of the contract value at the time of
               conversion."

(2) The Extension and Seventh Amendment of contract for Special Education Pupil
Transportation Services is hereby amended at Article (E), Paragraph (2) so that
Paragraph 2 (c) of the provisions of the original Contracts, as currently
amended and now entitled, "INSURANCE AND PERFORMANCE SECURITY," shall read as
follows:

               "(c) Any contractor who receives an award of contract for 26 or
          more vehicles has the following options available to assure full and
          faithful performance of the Contract:

               "(1) Provide a confirmed irrevocable Letter(s) of Credit from an
               acceptable financial institution equal in value to ten percent
               (10%) of the contract value which may be reduced each month by
               ten percent (10%) of the monthly payment authorized by the
               Contractor to be retained by the BOE during the Extension Year
               from July 1, 1995 through June 30, 1996. Whereupon at any time
               during this Extension Agreement there shall be any increase(s) or
               decrease(s) in the Contractor's number of contract and/or
               additional vehicles beyond five percent (5%) of the Contractor's
               total fleet (excluding spare and maintenance vehicles), the BOE
               and the Contractor shall adjust the performance security
               accordingly to maintain the level at a constant ten percent (10%)
               of the contract value; and, for each instance of any increases,
               the Contractor shall furnish additional performance security via
               confirmed irrevocable Letter(s) of Credit from an acceptable
               financial institution or written autho-


                                       29
<PAGE>

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


               rization of retainage within thirty (30) days of the award of
               each increase in the number of vehicles. The amounts retained
               shall be deposited in an interest bearing account maintained by
               the New York City Office of the Comptroller with annual reports
               of the amounts retained and interest earned provided to the
               Contractor. This retainage will be returned to the Contractor
               with interest after the conclusion of the full and faithful
               performance of this Extension Agreement, or whereupon the
               Contractor replaces the retainage with a confirmed irrevocable
               Letter(s) of Credit from an acceptable financial institution in
               an amount equal to ten percent (10%) of the contract value at the
               time of the conversion.

               "2 Provide a confirmed irrevocable Letter(s) of Credit from an
               acceptable financial institution equal in value to ten percent
               (10%) of the contract value which may be reduced each month by
               five percent (5%) of the monthly payment authorized by the
               Contractor to be retained by the BOE during the Extension Years
               of July 1, 1995 through June 30, 1996 and July 1, 1996 through
               June 30, 1997. Whereupon at any time during this Extension
               Agreement there shall be any increase(s) or decrease(s) in the
               Contractor's number of contract and/or additional vehicles beyond
               five percent (5%) of the Contractor's total fleet (excluding
               spare and maintenance vehicles), the BOE and the Contractor shall
               adjust the performance security accordingly to maintain the level
               at a constant ten percent (10%) of the contract value; and, for
               each instance of increase, the Contractor shall furnish
               additional performance security via confirmed irrevocable
               Letter(s) of Credit from an acceptable financial institution or
               written authorization of retainage within thirty (30) days of the
               award of each increase in the number of vehicles. The amounts
               retained shall be deposited in an interest bearing account
               maintained by the New York City Office of Comptroller with annual
               reports of the amounts retained and interest earned provided to
               the Contractor. This retainage will be returned to the Contractor
               with interest after the conclusion of the full and faithful
               performance of this Extension Agreement, or whereupon the
               Contractor replaces


                                       30
<PAGE>

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


               such retainage with a confirmed irrevocable Letter(s) of Credit
               from an acceptable financial institution in an amount equal to
               ten percent (10%) of the contract value at the time of the
               conversion.

               "(3) Provide a confirmed irrevocable Letter(s) of Credit from an
               acceptable financial institution equal in value to ten percent
               (10%) of the contract value renewable each year at an amount
               equal to ten percent (10%) of the then current value of the
               Contract.

               "(4) Provide any combination of cash security deposit and
               confirmed irrevocable Letter(s) of Credit from an acceptable
               financial institution equal to ten percent (10%) of the contract
               value. Whereupon at any time during this Extension Agreement
               there shall be any increase(s) or decrease(s) in the Contractor's
               number of contract and/or additional vehicles beyond five percent
               (5%) of the Contractor's total fleet (excluding spare and
               maintenance vehicles), the BOE and the Contractor shall adjust
               the performance security accordingly to maintain the level at a
               constant ten percent (10%) of the contract value; and, for each
               instance of increase, the Contractor shall furnish additional
               performance security via confirmed irrevocable Letter(s) of
               Credit from an acceptable financial institution or written
               authorization for retainage within thirty (30) days of the award
               of each increase in the number of vehicles. Any cash security
               deposit(s) and/or retainage shall be deposited in an interest
               bearing account maintained by the New York City Office of
               Comptroller with annual reports of the amounts held and interest
               earned provided to the Contractor. Any cash security deposit(s)
               and/or retainage will be returned to the Contractor with interest
               after the full and faithful performance of this Extension
               Agreement or whereupon the Contractor replaces any retainage with
               a confirmed irrevocable Letter(s) of Credit from an acceptable
               financial institution that brings the performance security into
               an amount equal to ten percent (10%) of the contract value at the
               time of conversion."


                                       31
<PAGE>

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


(3) The Extension and Seventh Amendment of Contract for Special Education Pupil
Transportation Services is hereby amended at Article (e), Paragraph (5) so that
Paragraph 5 of the provisions of the original Contracts, as currently amended
and now entitled, INSURANCE AND PERFORMANCE SECURITY," shall read as follows:

               "5. If the Director awards any additional vehicles to the
               Contractor during this extension periods, making it necessary to
               provide performance security for the first time or additional
               performance security, then the Contractor must provide sufficient
               performance security to cover all additional vehicles (excluding
               spare and maintenance vehicles) within thirty (30) days of
               receipt of each award. This condition shall apply to individual
               or cumulative increases of a contractor's total fleet (excluding
               spare and maintenance vehicles) equaling at least five (5)
               vehicles or five percent (5%), whichever is greater."

(4) The Extension and Seventh Amendment of Contract for Special Education Pupil
Transportation Services is hereby amended at Article (E), Paragraph (7) so that
Paragraph 7 of the provisions of the original Contracts, as currently amended
and now entitled, "INSURANCE AND PERFORMANCE SECURITY," shall read as follows:

               "7. For all performance security purposes, contractor entities
               that are subject to common control as determined by the BOE based
               upon an analysis of (a) ownership of the corporate, partnership,
               sole proprietorship or other entity's assets, (b) coincidence of
               corporate, partnership, sole proprietorship or other entity's
               owners, partners, managers, officers and/or directors, and (c)
               such other factors as the BOE shall determine to be relevant,
               shall be deemed to be one contractor. If the BOE determines
               contractor entities to be subject to common control, contractors
               shall be required to provide the appropriate performance security
               for the number of vehicles operated by all of the corporate
               entities that are determined to be subject to common control. For
               the purpose of determining common control and performance
               security requirements, all BOE pupil transportation contracts
               shall be considered."


                                       32
<PAGE>

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


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

     "1. Priority in Hiring and Master Seniority Lists:

     "There shall be established two industry-wide Master Seniority Lists. One
     list shall be composed of all operators (drivers), mechanics, and
     dispatchers and the other list shall be composed of escorts
     (matrons-attendants) who were employed as of June 30, 1995, under a
     contract between their employers and the Board for the transportation of
     school children in the City of New York, who are furloughed or become
     unemployed as a result of loss of contract or any part thereof by their
     employers, or as the result of a reduction in service directed by the Board
     during the term of the contract, in accordance with their date of entry
     into the industry. All operators (drivers), mechanics, dispatchers and
     escorts (matrons-attendants) on the Master Seniority Lists who participated
     in the Division 1181 A.T.U. - New York Employees Pension Fund and Plan as
     of June 30, 1995, 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, 1995 (contractor) shall give priority in employment on
     September, 1995 or thereafter on the basis of position on the Master
     Seniority List of any additional or replacement operators, mechanics and
     dispatchers beyond those performing service as of June 30, 1995 consistent
     with the number of employees required by the specifications of the contract
     expiring June, 1995 for the number of vehicles providing service to the
     Board as of June 30, 1995 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, 1995 (new contractor), shall give priority in
     employment in September, 1995 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.


                                       33
<PAGE>

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


"Should the Board determine to require the contractor to provide escort service
in addition to the operator, and in the event that all escorts
(matrons-attendants) on the Master Seniority List, who were employed as of June
30, 1995, are not employed as escorts by contractors for the beginning of
service in September of 1995, then said escorts shall be employed in order of
their position on the Master Seniority List.

"2.  Compensation

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

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

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

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

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

"Such operators (drivers) and escorts (matrons-attendants) shall be available
for extended service, without additional compensation, which shall be defined as
performance within the particular job category (i.e. drivers as drivers, and
escorts (matrons-attendants) as escorts (matrons-attendants) ) within the eight
(8) hour work day within the spread (8 within 10


                                       34
<PAGE>

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


hours) provided for in the collective bargaining agreement covering said
employees, if any.

"3.  Welfare

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

"4.  Pensions

"The contractor shall sign an agreement with Division 1181 A.T.U. - New York
Employees Pension Fund and Plan to participate in such plan on behalf of all
operators (drivers), mechanics, dispatchers and escorts (matrons-attendants), in
the event the contractor employs escorts who appear on the Master Seniority
Lists and who participated in the Fund and Plan as of June 30, 1995. This
requirement shall not be interpreted to require a contractor to enter into a
collective bargaining agreement with the union nor shall it prohibit the
contractor from entering into a collective bargaining agreement with the union.
The contractor shall file a copy of the executed agreement with the Trustees of
the Fund and Plan to participate in said Fund and Plan and with the Secretary of
the Board with the acknowledgment of the Notice of Award.

"The contractor shall contribute $48.15 per week per operator (driver), mechanic
and dispatcher on the Master Seniority List, and participating in the Plan and
Fund as of June 30, 1995, for forty weeks each year for the term of the
contract, or such greater amount as may be required, based on contributions by
contractors on behalf of the majority of employees participating in the Fund and
Plan pursuant to a collective bargaining agreement with Local 1181 - 1061. The
contractor shall withhold $23.00 a week from each operator, mechanic and
dispatcher participating in said Fund and Plan for forty weeks each year for the
term of the contract, or such greater amount as may be required based on
contributions of a majority of the operators (drivers), mechanics or dispatchers
contributing to the Fund and Plan.

"Such contractors who provide escort service, shall contribute $44.15 per week
per escort (matron-attendant) for forty weeks each year for the term of the
contract, or such greater amount


                                       35
<PAGE>

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


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

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

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

"5.  Enforcement

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


                                       36
<PAGE>

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


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

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

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

"7. For the purposes of this section, corporate bidders who are subject to
common control as determined by the Board based upon analysis of:

"(a) ownership of the 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.

"8. The Board may in its sole and unfettered discretion change any date which
determines employee protected status, employer status or any other status, which
is contained in any employee protection provisions of the Contract. The Master
Seniority Lists will be updated to June 30, 1995 as permitted in accordance with
pre-existing collective bargaining agreements executed prior to the date of
execution of this Contract. Furthermore, the rates quoted herein may not be
reflective of current labor rates in effect. The contractor should pay special
attention to the fact that many employees on the Master Seniority Lists have
been in the industry for many years and therefore may be entitled to substantial
wages, pension and welfare benefits and wage accruals.

"The date for inclusion on the Master Seniority List is hereby updated to the
last school day in June, 1995 as permitted in accordance with pre-existing
collective bargaining agreement executed prior to the dare of this Extension
Agreement and Amendment Agreement."


                                       37
<PAGE>

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


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

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

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

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

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


                                       38
<PAGE>

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


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

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

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

     (5) Railroad Crossings. Each vehicle used to perform this Extension
     Agreement must come to a full stop before crossing the track(s) of any
     railroad and, before crossing any state highway.


                                       39
<PAGE>

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


     (6) New Laws. Rules. Regulations. By-Laws or School Bus Safety Features.
     whereupon any Federal, State, Local or Board of Education laws, rules,
     regulations or by-laws are enacted, updated, revised, amended or otherwise
     changed in any manner which require the Contractor to undertake any new or
     revised procedures affecting school bus personnel or operations (i.e.,
     school bus personnel drug or alcohol testing, driver licensing or training
     procedures, etc.) or the introduction onto vehicles of new safety features
     or any other equipment (i.e., increased seat-back padding, back-up beepers,
     stop arms, safety sensors, etc.), the Contractor must comply promptly. The
     Contractor must assume the full cost of compliance with any new or revised
     driver, escort and/or operational procedures or for the purchase and
     installation of new safety features or other equipment in compliance with
     any such changes and will not be entitled to any additional remuneration
     from the BOE except as expressly permitted by law.

     (7) Use of Vehicles. Article XII entitled "Use of Vehicles" in Contract
     Serial Nos. 0070, 8108, G8805, G8891 and G9325 and Article 35 entitled "Use
     of Vehicles" in Contract Serial Nos. 7165, 7200 and 7291, are hereby
     amended by the addition of sixth and seventh unnumbered paragraphs at the
     end of each such Article to read as follows:

     "In addition to all other uses of vehicles prescribed in pupil
     transportation contracts, the Director shall have the right, power and
     authority to require the Contractor to provide vehicles during the hours
     between the transportation of pupils to school for the morning sessions and
     the pick-up of pupils for homeward bound trips for service to other mayoral
     and/or non-mayoral City of New York agencies and to any other public
     agencies and/or private organizations; as determined by the Director. While
     not previously invoked to any great extent during the period of the
     Contract, the provisions of the third unnumbered paragraph contained in
     this Article XII are still in full force and effect as stated herein. The
     Contractor shall be entitled to payment for such services as stipulated in
     this contract. At no time shall such service interfere with the timely
     transportation of pupils to and from school."

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

     (1) Further Amendments. The Contractor hereby agrees and covenants to
     execute any further amendment to the Contract


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


     that the New York State Education Department requires to secure the
     Department's approval of this Extension and Eighth Amendment Agreement and
     to maintain the continuity of funding.

     (2) Insurance Cost Increase Provision. Whereupon the Legislature amends the
     State Education Law to allow the Board of Education to obtain State funding
     to reimburse the Contractor for any amount of demonstrated and approved
     increases in the cost of insurance, this Contract will be deemed
     automatically amended to allow such reimbursement according to the exact
     terms of any such statutory provision.

          (a) Interim Insurance Provision. For only so long as the State
          Education Law does not provide expressly for reimbursement of vehicle
          insurance and/or escort health and welfare insurance cost increases,
          the Board of Education agrees and consents for a limited time to a
          partial or complete suspension of the application of the two percent
          (2%) prompt payment discount, but only to the for Contract Serial Nos.
          0070, 8108, G8805, G8891 and G9325, and only to the extent of the
          Contractor's annual proof of eligibility.

          (b) To be eligible for a partial or complete suspension of the two
          percent (2%) prompt payment discount for each Extension Year regarding
          vehicle insurance rate increases, the Contractor must meet eligibility
          conditions and adhere to rules, procedures and definitions for the
          annual submittal of an "Insurance Rate Increase Claim Statement," as
          such are expressed in Appendix B. The said eligibility conditions,
          rules, procedures and definitions for partial or complete suspension
          of the two percent (2%) prompt payment discount for each Extension
          Year are hereby incorporated by this reference into this Extension and
          Amendment Agreement as if set out herein in their entirety, and a copy
          of the said eligibility conditions, rules, procedures and definitions
          is hereto annexed as Appendix B.

          (c) Documentation of Escort Health & Welfare Insurance Rate Increases.
          To be eligible for a partial or complete suspension of the two percent
          (2%) prompt payment discount for each Extension Year regarding escort
          health and welfare insurance rate increases, the Contractor must
          document to the satisfaction of the Director the amount of escort
          health and welfare insurance cost and increases actually experienced.
          The base year for the escort


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


          health and welfare insurance calculation is January 1, 1990 through
          December 31, 1990.

               (i) During the Fourteenth Extension Year, the Contractor must
               show the difference between all premiums paid for required
               coverage for the period from January 1, 1995 through December 31,
               1995 and the amount paid for such coverage for the period from
               January 1, 1990 through December 31, 1990. For a complete
               suspension of the discount, the difference between the two (2)
               years must be equal to or greater than the value of the two
               percent (2%) discount for each year as adjusted by the annual
               percentage of increase provided above in Paragraph (B) of this
               Extension Agreement and as calculated on a monthly basis at the
               coverage levels prescribed by the BOE during the balance of the
               contract period. To the extent that the difference is between
               zero percent (0%) to two percent (2%), there will be a
               proportionate reduction in the suspension of the discount.

               (ii) During the Fifteenth Extension Year, the Contractor must
               show the difference between all premiums paid for required
               coverage for the period from January 1, 1996 through December 31,
               1996 and the amount paid for such coverage for the period from
               January 1, 1990 through December 31, 1990. For a complete
               suspension of the discount, the difference between the two (2)
               years must be equal to or greater than the value of the two
               percent (2%) discount for each year as adjusted by the annual
               percentage of increase provided above in Paragraph (B) of this
               Extension Agreement and as calculated on a monthly basis at the
               coverage levels prescribed by the BOE during the balance of the
               contract period. To the extent that the difference is between
               zero percent (0%) to two percent (2%), there will be a
               proportionate reduction in the suspension of the discount.

               (iii) During the Sixteenth Extension Year, the Contractor must
               show the difference between all premiums paid for required
               coverage for the period from January 1, 1997 through December 31,
               1997 and the amount paid for such coverage for the period from
               January 1, 1990 through December 31, 1990.


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


               For a complete suspension of the discount, the difference between
               the two (2) years must be equal to or greater than the value of
               the two percent (2%) discount for each year as adjusted by the
               annual percentage of increase provided above in Paragraph (B) of
               this Extension Agreement and as calculated on a monthly basis at
               the coverage levels prescribed by the BOE during the balance of
               the contract period. To the extent that the difference is between
               zero percent (0%) to two percent (2%), there will be a
               proportionate reduction in the suspension of the discount.

               (iv) During the Seventeenth Extension Year, the Contractor must
               show the difference between all premiums paid for required
               coverage for the period from January 1, 1998 through December 31,
               1998 and the amount paid for such coverage for the period from
               January 1, 1990 through December 31, 1990. For a complete
               suspension of the discount, the difference between the two (2)
               years must be equal to or greater than the value of the two
               percent (2%) discount for each year as adjusted by the annual
               percentage of increase provided above in Paragraph (B) of this
               Extension Agreement and as calculated on a monthly basis at the
               coverage levels prescribed by the BOE during the balance of the
               contract period. To the extent that the difference is between
               zero percent (0%) to two percent (2%), there will be a
               proportionate reduction in the suspension of the discount.

               (v) During the Eighteenth Extension Year, the Contractor must
               show the difference between all premiums paid for required
               coverage for the period from January 1, 1999 through December 31,
               1999 and the amount paid for such coverage for the period from
               January 1, 1990 through December 31, 1990. For a complete
               suspension of the discount, the difference between the two (2)
               years must be equal to or greater than the value of the two
               percent (2%) discount for each year as adjusted by the annual
               percentage of increase provided above in Paragraph (B) of this
               Extension Agreement and as calculated on a monthly basis at the
               coverage levels prescribed by the BOE during the balance of the
               contract period. To the extent that the difference is


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


               between zero percent (0%) to two percent (2%), there will be a
               proportionate reduction in the suspension of the discount.

          (d) Payment Deadline for Application of Prompt Payment Discount. The
          Contractor consents, agrees and stipulates that the two percent (2%)
          prompt payment discount will apply to payments for all services
          rendered pursuant to this Contract which the BOE makes within six (6)
          business days after thirty (30) days have elapsed from the date of the
          BOE's receipt of the Contractor's monthly invoice.

          (e) Audit and Recovery of Overpayment. Each Insurance Cost
          Justification Financial Statement will be subject to audit and
          approval by the BOE. As above provided, the BOE will have the right,
          power and authority to recover any amounts paid to the Contractor
          which the BOE determines to be unjustified either by deductions from
          any later payments which become due and owing to the Contractor.

          (g) Limitation on Discount Suspension. The Contractor consents, agrees
          and stipulates that the suspension of the prompt payment discount will
          survive only so long as the insurance crisis continues or until the
          effective date of any amendment of the State Education Law as
          mentioned above at Paragraph (H) (3) (a). The BOE will have the right,
          power and authority to cease the suspension of this discount when the
          insurance crisis abates, as determined at the Director's sole
          discretion.

          (h) Contractor's Use of Revenue. The Contractor hereby agrees,
          covenants and warrants that any funds which the Contractor derives
          because of the suspension of the two percent (2%) prompt payment
          discount will be applied only to the payment of insurance premiums and
          will be used for no other purpose. Whereupon the BOE discovers that
          the Contractor will have used such funds for other purposes, the
          Contractor will be disqualified permanently from any future suspension
          of the prompt payment discount.

          (i) Limitation on Actions. If, after the BOE will have determined the
          Contractor not to be entitled to further suspension of the prompt
          payment discount, there arises litigation at any future time whereby
          the Contractor attempts to secure the prompt payment discount
          suspension in perpetuity, the Contractor consents, agrees, stipu-


                                       44
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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
               FOR SPECIAL EDUCATION PUPIL TRANSPORTATION SERVICES


          lates and covenants not to use or attempt to use this document in any
          manner to establish that the BOE or the City of New York must suspend
          the prompt payment discount or pay any amounts thereunder to the
          Contractor.

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

     (4) Vacillation in the Number of Contract and/or Additional Vehicles during
     Extension Periods. Article XIII entitled, "Increase or Decrease in the
     Number of Vehicles," is henceforth amended as follows:

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

               C. Increases and/or Decreases in the Number of Vehicles during
               Extension Periods. The Board of Education and the Contractor
               hereby acknowledge and stipulate that the number of vehicles
               required to serve pupil transportation needs may change often
               during each school year due to changes in pupil population,
               default or voluntary surrender of a Contract or changes in policy
               or directives adopted by the BOE, the City of New York, the State
               Department and/or Financial Control Board, over the term of an
               Extension Agreement.

               "If the Director eliminates any vehicle(s) from the number
               originally awarded to the Contractor and later offers again a
               vehicle(s) of the same type(s)


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


               and geographical service area(s) due to any resumed need, the
               Contractor shall be entitled to restoration up to and including
               the number of vehicles of the same type(s) and geographical
               service area(s) originally awarded pursuant to the procedures
               specified above in Paragraph B.

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

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

     (5) Pending Litigation. (a) Pertaining only to contracts under Serial Nos.
     0070, 8108, G8805, G8891, and G9325, the contractor does hereby acknowledge
     that he/she is fully aware and apprised of pending litigation cases
     concerning cost justification which have been consolidated under the
     caption of A.C. Transportation. Inc., et. al., v. Board of Education of
     City of New York. et al., Index No. 30841/92 (5. Ct. New York County) (the
     "litigation"). Subject to the final judicial disposition or settlement of
     the litigation, the Contractor does hereby consent, agree and covenant that
     the daily rate(s) per vehicle to be paid by the BOE to the Contractor
     during the period of the 1995-2000 Extension and Amendment Agreement shall
     be the daily rate(s) per vehicle approved by the BOE Office of Auditor
     General and as first decreased and thereafter augmented each Extension Year
     pursuant to provisions contained herein (the "OAG Rate"), unless the
     Contractor shall make a written request to the Director to


                                       46
<PAGE>

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


     be paid the daily rate(s) per vehicle based on such rate(s) paid during the
     Eleventh Extension Year, as augmented during the Twelfth and Thirteenth
     Extension Years, decreased during the Fourteenth Extension Year, and
     thereafter augmented during the Fifteenth, Sixteenth, Seventeenth and
     Eighteenth Extension Years pursuant to provisions contained herein (the
     "Contractor's Rate").

          (b) To be effective, the Contractor's written request to be paid at a
          higher daily rate(s) per vehicle must state that the Contractor does
          consent, agree and covenant to be bound by the terms and conditions of
          any settlement(s) or final judicial disposition(s) in these pending
          litigation cases. To be effective, the Contractor's written request
          must also state that the Contractor shall provide collateral annually
          in a form and amount acceptable to the BOE Office of Auditor General
          sufficient to secure the difference(s) each Extension Year between the
          OAG Rate and the Contractor's Rate (the "Annual Rate Difference"),
          i.e., the difference(s) between the daily rate(s) per vehicle in fact
          paid during the Eleventh Extension Year, as augmented during the
          Twelfth and Thirteenth Extension Years, decreased during the
          Fourteenth, and augmented during the Fifteenth, Sixteenth, Seventeenth
          and Eighteenth Extension Years pursuant to provisions contained
          herein, and such daily rate(s) per vehicle for which has been or shall
          have been determined to be appropriate by the BOE Office of Auditor
          General for the Twelfth and Thirteenth Extension Years, decreased
          during the Fourteenth Extension Years, and augmented during the
          Fifteenth, Sixteenth, Seventeenth and Eighteenth Extension Years
          pursuant to provisions contained herein.

          (c) The BOE shall be required to surrender or release such collateral
          to the Contractor only on the following conditions: (i) upon the
          settlement(s) or final judicial disposition(s) of the said litigation
          cases and upon the Contractor's payment to the BOE of any amounts
          agreed or determined to be due and owing from the Contractor to the
          BOE; and, (ii) if and to the extent that a higher daily rate(s) per
          vehicle than that approved by the BOE Office of Auditor General is
          sustained upon a final judicial disposition(s) of the litigation.

          (d) The following forms of collateral are deemed to be acceptable: (i)
          if the BOE withheld retainage as perfor-


                                       47
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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
               FOR SPECIAL EDUCATION PUPIL TRANSPORTATION SERVICES


          mance security from the Contractor during the Thirteenth Extension
          Year and the estimated cumulative performance security retainage
          amounts for the Fourteenth, Fifteenth, Sixteenth, Seventeenth and
          Eighteenth Extension Years are equal to or greater than the minimum
          collateral amounts estimated by the BOE Office of Auditor General for
          the Fourteenth, Fifteenth, Sixteenth and Seventhteenth and Eighteenth
          Extension Years, the Contractor may use such retainage for the
          Fourteenth, Fifteenth, Sixteenth, Seventeenth and Eighteenth Extension
          Years as collateral, provided the Contractor furnishes a written
          agreement each year to the Director that such retainage shall be
          pledged as collateral against any rate reduction(s) and overpayment
          recovery by the BOE; (ii) if the Contractor's monthly service payments
          plus performance security retainage for the Fourteenth, Fifteenth,
          Sixteenth, Seventeenth and Eighteenth Extension Years are equal to or
          greater than the minimum collateral amounts estimated by the BOE
          Office of Auditor General for Fourteenth, Fifteenth, Sixteenth,
          Seventeenth and Eighteenth Extension Years, the Contractor shall
          provide to the Director a written agreement to receive monthly service
          payments on or about the twenty-fifth (25th) day following each month
          of service with no surrender by the BOE of the Two Percent (2%) Prompt
          Payment Discount if payment shall be delayed by more than thirty (30)
          days after the BOE's receipt of each monthly invoice, as provided in
          Article V of the Contract; (iii) the Contractor shall provide a
          confirmed irrevocable Letter of Credit from an acceptable financial
          institution for the benefit of the BOE, renewed annually, in an amount
          minimally equal to the collateral deemed necessary by the BOE Office
          of the Auditor General; (iv) a surety payment bond on which the BOE
          shall appear as the insured, issued by an insurer licensed to do
          business in the State of New York, renewed annually, in an amount
          minimally equal to the collateral deemed necessary by the BOE Office
          of Auditor General; (v) the Contractor shall furnish title vested in
          the BOE to a frozen bank account to be held by the BOE in escrow in an
          amount minimally equal to the collateral deemed necessary by the BOE
          Office of Auditor General; or, (vi) in the event that the Contractor
          does not elect one of the foregoing forms of collateral provided for
          in this subparagraph (d), the Contractor's daily rate(s) per vehicle
          shall be reduced to a level(s) approved by the BOE Office of the
          Auditor General, the disputed difference(s) shall be held by the BOE
          in escrow for the


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


          Contractor in an interest bearing account maintained by the
          Comptroller of the City of New York pending the outcome of the
          litigation, and such amount shall be payable to the Contractor in
          accordance with subparagraph (c) hereof.

          (e) If the Contractor elects under Article (G), Paragraph (5) (d) (vi)
          above to receive the reduced daily rate(s) per vehicle during the
          1995-96 Extension Year, then the amount to be escrowed shall be the
          difference(s) between 98.5% of the higher daily rate(s) and 98.5% of
          the reduced daily rate(s) per vehicle to be paid to the Contractor
          during the 1995-96 Extension Year shall be 98.5% of the reduced daily
          rate(s).

          (f) If litigation is unresolved prior to June of the Fourteenth,
          Fifteenth, Sixteenth, Seventeenth and Eighteenth Extension Years, the
          BOE shall retain from the Contractor's monthly service payment(s) for
          June of each Extension Year any underpayment collateral for the year
          then ended, as determined by the BOE Office of Auditor General. The
          BOE shall hold such retainage in escrow for the Contractor in an
          interest bearing account maintained by the Comptroller of the City of
          New York pending the outcome of the litigation.

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

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

     (b) General Terms and Conditions Section 7 entitled, "Cancellation," is
     amended by the addition of a new paragraph "D" to read as follows: "In the
     event of significant or repeated safety violations due to acts of
     commission or omission by the Contractor or by its employees, which result
     from the Contractor's failure to conduct its operations in accordance with
     good practices in the pupil transportation business, the BOE


                                       49
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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
               FOR SPECIAL EDUCATION PUPIL TRANSPORTATION SERVICES


     shall have the right to terminate the contract upon thirty days advance
     written notice to the Contractor, unless the Contractor can establish to
     the Director's reasonable satisfaction that the Contractor's record of
     safety will thereafter be satisfactory in accordance with good industry
     practices. For purposes of this provision, "safety violations" shall mean
     significant or repeated violation of safety laws and/or regulations of the
     United States Department of Transportation, the New York State Department
     of Transportation, The New York City Department of Transportation, and the
     BOE Office of Pupil Transportation, provided that prior to terminating this
     agreement for repeated safety violations the BOE Office of Pupil
     Transportation shall provide the contractor with notice and an opportunity
     to cure."

     (c) General Terms and Conditions Section 7 entitled, "Cancellation," is
     amended by the addition of a new paragraph "E" to read as follows: "In the
     event of an indictment of the Contractor, any of its principals, officers,
     or management employees on the basis of acts of commission or omission
     involving or affecting the provision of pupil transportation services under
     any BOE pupil transportation contract(s) including, but not limited to,
     acts of commission or omission which excessively increase BOE costs of
     doing business, the BOE will have the right, at the Director's discretion,
     either to terminate the Contract upon thirty days advance written notice to
     the Contractor or to require the Contractor to obtain the employment
     termination and ownership divestiture of the indicted party. Before a final
     decision on either alternative disposition, the Director will afford the
     Contractor a personal meeting to allow for a full, open discussion of
     relevant issues."

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

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


                                       50
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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
               FOR SPECIAL EDUCATION PUPIL TRANSPORTATION SERVICES


     every driver, escort and other affected employee has received written
     notification of such new standards.

     (3) Advertising on Vehicles. (a) The Contractor hereby agrees and warrants
     to cooperate fully and completely with the Board of Education regarding the
     placement of advertisements on the two (2) exterior sides of all vehicles,
     including all spare vehicles. The Contractor shall not be responsible for
     any costs, labor or other work associated with the installation, repair,
     maintenance, replacement and/or removal of advertisements or the repair
     and/or maintenance of school bus vehicles in relation thereto. In addition,
     the Contractor must not cause, incur or allow any costs, expenses or other
     liabilities on its own part concerning anything whatsoever directly or
     indirectly related to the placement, repair, maintenance and/or removal of
     advertisements on school bus vehicles or the repair or maintenance of
     school bus vehicles in connection with such advertisements, and the
     Contractor shall not demand, nor be entitled to, any compensation from the
     Board of Education for any such costs, expenses or other liabilities.

     (b) The Contractor shall allow the Board or the Board's agents, employees,
     contractors, subcontractors or other representatives to affix any and all
     such advertisements to the Contractor's vehicles by any means the Board
     selects including, but not limited to, metal and/or plastic frames and/or
     direct application, adhesive decals, provided, that the BOE or its agent,
     contractor and/or subcontractor shall be responsible for the cost to
     restore the vehicle bodies with respect to any damage upon removal. The
     Contractor shall cooperate fully to provide access to all of its vehicles
     under the Contract, including spare vehicles, at such times when they are
     not in use for Board transportation service including the early morning,
     midday and evening hours, as the Board or the Board's agents, employees,
     contractors, subcontractors or other representatives shall schedule with at
     least three business days advance notice. Whereupon any advertisement or
     any component part thereof becomes damaged to any extent or destroyed, for
     any reason whatsoever, and/or whereupon any vehicle sustains damage or
     requires repairs or maintenance due to any advertisements or any component
     part thereof, the Contractor shall notify the Board or the Board's
     designated agents, employees, contractors, subcontractors or other
     representatives within twenty-four (24) hours by calling an "(800)"
     telephone number which the Board shall supply to the Contractor. It the
     Contractor is dissatisfied for any reason


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


     with any vehicle repairs or maintenance supplied by the Board or the
     Board's designated agents, employees, contractors, subcontractors or other
     representatives, the Contractor shall submit any such claim or dispute in
     writing to the Director of the Office of Pupil Transportation for
     resolution whose decision shall be final and binding upon the Contractor,
     except for administrative appeal to the Chancellor's Board of Review
     pursuant to Section 8.3 of the Board of Education's Bylaws.

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

     (4) Incorporation of More Favorable Terms. As an inducement to the
     Contractor to execute this Extension and Eighth Amendment Agreement prior
     to April 15, 1994, the BOE agrees that, if there are any subsequent
     extension agreements with other contractors for any handicapped student
     transportation originally awarded under Serial Nos. 0070, 8108, G8805,
     G8891 and G9325 which contains terms more favorable to the contractors, the
     BOE will agree to amend the Contract further to incorporate those same more
     favorable terms.

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

     (6) Approval and Execution. This Extension and Eighth Amendment Agreement
     will not become binding or effective upon the Board of Education until the
     following series of events will have transpired: (a) approval as to form by
     the BOE Office of Legal Services; (b) authorization by a resolution duly
     adopted


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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
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     by a vote of the Board of Education which will be deemed to be incorporated
     herein; (c) execution on behalf of the Board of Education by the Chancellor
     or his/her designee; (d) approval by the New York State Commissioner of
     Education; (e) initial registration with Comptroller and re-registration
     with the Comptroller each year thereafter; and, (f) initial approval and
     subsequent annual re-approval by the New York State Financial Control Board
     pursuant to the New York State Emergency Act for the City of New York, the
     rules and regulations of said Board so require.

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

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

     (9) As used herein, the singular will include the plural and vice versa.

     (10) All other provisions of the Contract as amended by the 1984 Extension
     Agreement and Fourth Amendment Agreement, by the 1987 Extension Agreement
     and Fifth Amendment Agreement, and the 1990 Extension and Sixth Amendment
     Agreement, except those provisions herein noted and revised, will remain in
     full force and effect.

     (11) The Contractor does hereby consent and agree to cooperate with the BOE
     concerning the elimination of the Contractor's payment of Federal, State
     and local sales, excise and use taxes on purchases, leases and other
     transfers which the Contractor makes, effects, causes or allows in the
     performance of the Contract. The particular rules and


                                       53
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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
               FOR SPECIAL EDUCATION PUPIL TRANSPORTATION SERVICES


     procedures concerning the elimination of such taxes shall be promulgated in
     the Board's "SCHOOL BUS CONTRACTOR'S MANUAL OF PROCEDURES AND
     REQUIREMENTS," a draft copy of which shall be circulated to the contractors
     for comment before final promulgation. Such rules and procedures may
     include, but are not necessarily limited to, the following: (A) the
     Contractor's use of the Board's tax exempt status when making, effecting,
     causing or allowing purchases, leases and other transfers in the
     performance of the Contract (the Board shall furnish the Contractor with
     appropriate forms and procedures), provided that the Contractor shall
     remain the purchases or lessee of its vehicles, goods, commodities,
     supplies, equipment and so forth; and, (B) the Contractor's cooperation
     through the production of documentary evidence, as specified by the Board,
     with any and all attempts by the Board to seek and obtain refunds of any
     and all Federal, State and local excise, sales and use taxes which the
     Contractor has paid during the applicable statutory period of limitation
     for goods, fuel, commodities, services, leases, etc. in the performance of
     the Contract. Whereupon the Board requires the Contractor to produce
     documentary evidence in the course of any attempt by the Board to seek and
     obtain such refunds of taxes, the Board shall pay the Contractor, as
     consideration for such cooperation, twenty percent (20%) of any refund
     amount attributable to the Contractor's purchases, leases and other
     transfers, but only when and after such refund amounts are actually
     received by the Board.


                                       54
<PAGE>

IN WITNESS WHEREOF the parties have executed this Extension Agreement and Eighth
Amendment Agreement in septuplicate the year and day below written.

For the Board                          For the Contractor


/s/ [ILLEGIBLE]          for           Amboy Bus Company, Inc.
-----------------------------          -----------------------------------------
CHANCELLOR                             (Print full name above)


                                       46-81 Metropolitan Avenue
                                       -----------------------------------------

                                       Ridgewood, NY 11385
                                       -----------------------------------------
                                              (Print address above)


BY: /s/ Michael P. Coneys                  BY: /s/ Michael Gatto
    -------------------------                  ---------------------------------
    Approved as to Form                        Sec. Tres
                                               (Sign in ink above - Print 
                                               name and title below)

                                           Michael Gatto
                                           -------------------------------------
                                           Sec Tres

Michael P. Coneys
-----------------------------
OFFICE OF LEGAL SERVICES


DATED: 6/19/96

                                       Subscribed and sworn to me this 26
                                       day of June, 1996


                                       /s/ Marilyn C. Wise
                                       -----------------------------------------
                                                   Notary Public

                                                        MARILYN C. WISE
                                                Notary Public, State of New York
                                                        No. 41-6834893
                                                   Qualified in Queens County
                                                   Commission Expires 10/31/97


                                       55
<PAGE>

IN WITNESS WHEREOF the parties have executed this Extension Agreement and Eighth
Amendment Agreement in septuplicate the year and day below written.

For the Board                          For the Contractor


/s/ [ILLEGIBLE]          for           Staten Island Bus Co.
-----------------------------          -----------------------------------------
CHANCELLOR                             (Print full name above)


                                       7 North Street
                                       -----------------------------------------

                                       Staten Island, New York 10302
                                       -----------------------------------------
                                              (Print address above)


BY: /s/ Michael P. Coneys                  BY: /s/ Michael Gatto
    -------------------------                  ---------------------------------
    Approved as to Form                        (Sign in ink above - Print 
                                               name and title below)

                                           Michael Gatto
                                           -------------------------------------
                                           Sec Tres

Michael P. Coneys
-----------------------------
OFFICE OF LEGAL SERVICES


DATED June 19, 1996

                                       Subscribed and sworn to me this 26
                                       day of June, 1996


                                       /s/ Marilyn C. Wise
                                       -----------------------------------------
                                                   Notary Public

                                                        MARILYN C. WISE
                                                Notary Public, State of New York
                                                        No. 41-4836893
                                                   Qualified in Queens County
                                                   Commission Expires 10/31/97


                                       55
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                   EXTENSION AND EIGHTH AMENDMENT OF CONTRACT
               FOR SPECIAL EDUCATION PUPIL TRANSPORTATION SERVICES


                                   APPENDIX A

Only for Contracts under Serial Nos. 0070, 8108, G8805, G8891 and G9325, where a
contractor meets conditions of eligibility may allowable cost increases accrued
during the period of the Twelfth to Fourteenth Extension Years be carried
forward "below-the-line" to supplement those cost increases which are used to
justify an augmentation of the daily rate per vehicle for the Sixteenth and
Seventeenth Extension Years. In addition, only for Contracts under Serial Nos.
0070, 8108, G8805, G8891 and G9325 where a contractor meets conditions of
eligibility may allowable cost increases accrued the during the period of
Fifteenth to Sixteenth Extension Years be carried forward "below-the-line" to
supplement those cost increases which are used to justify an augmentation of the
daily rate per vehicle for the Seventeenth Extension Year. To be eligible to
carry forward such cost increases, a contractor must provide annually a cost
increase comparison between the Twelfth and Fourteenth Extension Years and the
Fifteenth and Sixteenth Extension Years (when appropriate that identifies all
items of cost increase and, separately, the percentage of cost increase if any,
to be carried forward and applied to a given subsequent base year. The base year
is the year immediately preceding the given subsequent extension year to which
the cost increases from the Twelfth to Fourteenth Extension Years and/or the
Fifteenth to Sixteenth Extension Years are to be applied. The Board's Auditor
General may prescribe additional eligibility conditions as deemed appropriate in
his/her sole discretion. The term "below-the-line" is defined to mean that cost
increases from the periods of the Twelfth to Fourteenth and Fifteenth to
Sixteenth Extension Years, which are carried forward, are deemed as allocated to
the period of accrual, i.e., the Twelfth to Fourteenth and Fifteenth to
Sixteenth Extension Years, respectively, and not to the subsequent extension
year(s) to which they are carried forward and applied both supplementally and
"below-the-line" as prior cost increases that have not as yet been absorbed by
the lesser of an annual Consumer Price Index increment or a fixed annual rate
augmentation cap. Once a cost increase item accrued during the Twelfth to
Fourteenth or Fifteenth to Sixteenth Extension Years has been carried forward
and applied "below-the-line" to a given base year, it may not be used again in
any later base year.


                                        i
<PAGE>

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


                                   Appendix B

(1) Eligibility for Discount Suspension. For contracts under Serial Nos. 0070,
8108, G8805, G8891 and G9325 to be eligible for a suspension of the two percent
(2%) prompt payment discount, to which the BOE is otherwise entitled under the
provisions of the Contract, the Contractor must demonstrate in an annual
"Vehicle Insurance Rate Increase Claim Statement" that increases of insurance
premium rates have created unreasonable financial burdens. Each annual "Vehicle
Insurance Rate Increase Claim Statement" will be subject to approval at the sole
discretion of the Director in consultation with the BOE Office of Auditor
General. Eligibility for vehicle insurance also rests on the Contractor's
showing that the insurance premiums which reflect annual increases are
sufficient to provide minimum levels of coverage required pursuant to the BOE
Resolution of September 6, 1985, as amended, and the Contract, as amended. The
extent of the discount suspension, if any, is governed by the provisions
immediately below at Paragraphs (L) (2) and (3).

(2) The term "Vehicle Insurance Rate Increase Claim Statement" is defined as a
written accountant's review report prepared by an independent Certified Public
Accountant ("CPA") or Public Accountant ("PA") licensed by the State of New
York. Each such review report must state (a) that a review was performed in
accordance with the standards of the American Institute of Certified Public
Accountants ("AICPA"), (b) that the information and data contained in the
"Vehicle Insurance Rate Increase Claim Statement" are the representations of the
Contractors management, and (c) that it describes the nature of the review as
distinct from an audit. Each such review report must furnish at least the
limited assurance that, based upon the review, the CPA/PA is not aware of any
material modifications that should be made to the "Vehicle Insurance Rate
Increase Claim Statement" in order for it to conform to the AICPA's generally
accepted accounting principles. Contractor's who have not had a CPA audited
report performed for tax, securities or other operation-wide purpose within two
(2) years of the commencement date of this Extension and Amendment Agreement
must submit a certified and audited "Vehicle Insurance Rate Increase Claim
Statement" prepared by an independent CPA for the 1995-96 Extension Year.
Furthermore, the CPA or PA who prepares each "Vehicle Insurance Rate Increase
Claim Statement" and each review report must state that he/she has studied the
cost justification manual supplied by the BOE and has applied the standards
contained therein for


                                        i
<PAGE>

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


the development of the "Vehicle Insurance Rate Increase Claim Statement." Still
further, the CPA or PA must have no interest in this Contract, the Contractor or
any of the Contractor's parent, subsidiary or other affiliated entities and must
so certify in writing. The "Vehicle Insurance Rate Increase Claim Statement"
shall utilize form prescribed by the Director as approved by the State Education
Department.

(3) Documentation of Vehicle Insurance Rate Increases. The Contractor must
submit a copy of the full insurance policy and a copy of all invoices from the
insurance carrier(s) noting the full amount of premiums which are the subject of
any claims. During the 1995-96 and 1996-97 Extension Years, the base year for
the vehicle insurance calculation is January 1, 1991, through December 31, 1991.
During the 1997-98, 1998-99 and 1999-2000 Extension Years, the base year for the
vehicle insurance calculation is January 1, 1994, through December 31, 1994.

          (a) During the Fourteenth Extension Year, the Contractor must show the
          difference between all premiums paid for required coverage for the
          period from January 1, 1995 through December 31, 1995 and the amount
          paid for such coverage for the period from January 1, 1994 through
          December 31, 1994. For a complete suspension of the discount, the
          difference between the two (2) years must be equal to or greater than
          the value of the two percent (2%) discount for each year as adjusted
          by the annual percentage of increase provided above in Paragraph (B)
          of this Extension Agreement and as calculated on a monthly basis at
          the coverage levels prescribed by the BOE during the balance of the
          contract period. To the extent that the difference is between zero
          percent (0%) to two percent (2%), there will be a proportionate
          reduction in the suspension of the discount.

          (b) During the Fifteenth Extension Year, the Contractor must show the
          difference between all premiums paid for required coverage for the
          period from January 1, 1996 through December 31, 1996 and the amount
          paid for such coverage for the period from January 1, 1994 through
          December 31, 1994. For a complete suspension of the discount, the
          difference between the two (2) years must be equal to or greater than
          the value of the two percent (2%)


                                       ii
<PAGE>

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


          discount for each year as adjusted by the annual percentage of
          increase provided above in Paragraph (B) of this Extension Agreement
          and as calculated on a monthly basis at the coverage levels prescribed
          by the BOE during the balance of the contract period. To the extent
          that the difference is between zero percent (0%) to two percent (2%),
          there will be a proportionate reduction in the suspension of the
          discount.

          (c) During the Sixteenth Extension Year, the Contractor must show the
          difference between all premiums paid for required coverage for the
          period from January 1, 1997 through December 31, 1997 and the amount
          paid for such coverage for the period from January 1, 1994 through
          December 31, 1994. For a complete suspension of the discount, the
          difference between the two (2) years must be equal to or greater than
          the value of the two percent (2%) discount for each year as adjusted
          by the annual percentage of increase provided above in Paragraph (B)
          of this Extension Agreement and as calculated on a monthly basis at
          the coverage levels prescribed by the BOE during the balance of the
          contract period. To the extent that the difference is between zero
          percent (0%) to two percent (2%), there will be a proportionate
          reduction in the suspension of the discount.

          (d) During the Seventeenth Extension Year, the Contractor must show
          the difference between all premiums paid for required coverage for the
          period from January 1, 1998 through December 31, 1998 and the amount
          paid for such coverage for the period from January 1, 1994 through
          December 31, 1994. For a complete suspension of the discount, the
          difference between the two (2) years must be equal to or greater than
          the value of the two percent (2%) discount for each year as adjusted
          by the annual percentage of increase provided above in Paragraph (B)
          of this Extension Agreement and as calculated on a monthly basis at
          the coverage levels prescribed by the BOE during the balance of the
          contract period. To the extent that the difference is between zero
          percent (0%) to two percent (2%), there will be a proportionate
          reduction in the suspension of the discount.


                                       iii

<PAGE>

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


          (e) During the Eighteenth Extension Year, the Contractor must show the
          difference between all premiums paid for required coverage for the
          period from January 1, 1999 through December 31, 1999 and the amount
          paid for such coverage for the period from January 1, 1994 through
          December 31, 1994. For a complete suspension of the discount, the
          difference between the two (2) years must be equal to or greater than
          the value of the two percent (2%) discount for each year as adjusted
          by the annual percentage of increase provided above in Paragraph (B)
          of this Extension Agreement and as calculated on a monthly basis at
          the coverage levels prescribed by the BOE during the balance of the
          contract period. To the extent that the difference is between zero
          percent (0%) to two percent (2%), there will be a proportionate
          reduction in the suspension of the discount.


                                       iv