<PAGE>   1
                                                                    EXHIBIT 10.1


                          TRANSITION SERVICES AGREEMENT


                                     between


                          FORWARD AIR CORPORATION f/k/a
                             Landair Services, Inc.


                                       and


                               LANDAIR CORPORATION



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                                TABLE OF CONTENTS


<TABLE>
<S>                                                                                                              <C>
ARTICLE I
         SERVICES TO BE PROVIDED..................................................................................1
         1.1      Provision of Services...........................................................................1
         1.2      Performance Levels..............................................................................2
         1.3      Instructions....................................................................................2
         1.4      Consents; Indemnification; Assets...............................................................2
         1.5      Systems Availability and Data Integrity.........................................................4
         1.6      Systems Users...................................................................................4

ARTICLE II
         PAYMENT FOR SERVICES.....................................................................................4
         2.1      Costs...........................................................................................4
         2.2      Invoices; Payment Procedures....................................................................5
         2.3      Disputed Fees...................................................................................5

ARTICLE III
         TERM; TERMINATION OF SERVICES............................................................................6
         3.1      Term............................................................................................6
         3.2      Termination of Services.........................................................................6

ARTICLE IV
         COOPERATION..............................................................................................7
         4.1      Cooperation.....................................................................................7
         4.2      Provider Administrative Records.................................................................7
         4.3      Periodic Review of Services.....................................................................7

ARTICLE V
         FORCE MAJEURE............................................................................................7
         5.1      Force Majeure...................................................................................7

ARTICLE VI
         CONFIDENTIALITY..........................................................................................8
         6.1      Confidentiality.................................................................................8

ARTICLE VII
         MISCELLANEOUS............................................................................................9
         7.1      Notices.........................................................................................9
         7.2      Severability...................................................................................10
         7.3      Binding Effect; Assignment.....................................................................10
         7.4      No Third Party Beneficiaries...................................................................10
         7.5      Interpretation.................................................................................10
         7.6      Jurisdiction and Consent to Service............................................................10
         7.7      Entire Agreement...............................................................................11
         7.8      Governing Law..................................................................................11
         7.9      Counterparts...................................................................................11
         7.10     Relationship of the Parties....................................................................11
         7.11     Waiver.........................................................................................11
         7.12     Sole Remedy; No Damages........................................................................12
         7.13     Indemnification................................................................................12
</TABLE>



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                          TRANSITION SERVICES AGREEMENT

         This TRANSITION SERVICES AGREEMENT (this "Agreement") is made as of
this 18th day of September, 1998, by and between Forward Air Corporation, a
corporation organized under the laws of the State of Tennessee f/k/a Landair
Services, Inc. (together with its wholly owned subsidiaries, "FAF"), and Landair
Corporation, a corporation organized under the laws of the State of Tennessee
(together with its wholly owned subsidiaries, "Landair Corporation").

                              W I T N E S S E T H:

         WHEREAS, FAF is the holder of all of the issued and outstanding shares
of $.01 par value per share common stock of Landair Corporation (the "Landair
Corporation Common Stock");

         WHEREAS, the Board of Directors of FAF has determined that it is
advisable and in the best interests of FAF, its shareholders and Landair
Corporation to distribute (the "Distribution") all of the outstanding shares of
Landair Corporation Common Stock on a pro rata basis to the holders of the $.01
par value per share common stock of FAF pursuant to the terms of the
Distribution Agreement, dated as of September 18, 1998, entered into by FAF and
Landair Corporation (the "Distribution Agreement") so that after such
Distribution, Landair Corporation will be an independent public company (all
capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed thereto in the Distribution Agreement); and

         WHEREAS, FAF and Landair Corporation have agreed to enter into this
Agreement in order for FAF or Landair Corporation, as the case may be, to
provide the other with certain services and support during a transition period
following the Distribution;

         NOW THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth and other good and valuable consideration, the parties
hereto hereby agree as follows:


                                    ARTICLE I
                             SERVICES TO BE PROVIDED

         1.1 Provision of Services. Subject to all of the terms and conditions
hereof, FAF and Landair Corporation hereby agree that FAF shall offer and
provide to Landair Corporation and its subsidiaries those services described on
SCHEDULE A-1 hereto, and Landair Corporation shall offer and provide to FAF and
its subsidiaries the services described on SCHEDULE A-2 hereto (collectively,
the "Services"); provided, however, that each of the parties hereto acknowledges
and agrees that Services may be added to, or deleted from, SCHEDULE A-1 or
SCHEDULE A-2 by mutual consent of the parties at any time (and the Services Fees
(as defined herein) shall be adjusted appropriately). As used herein, (a) the
term "Recipient" means, with respect to any given Service, the recipient of such
Service and for purposes of enforcing this Agreement, FAF or Landair
Corporation, as the case may be, shall be treated as the recipient of all
Services provided to such recipient and its affiliates, and (b) the term
"Provider" means, with respect to any given Service, the provider of such
Service and


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for purposes of such definition, FAF or Landair Corporation, as the case may be,
shall be treated as the provider of all Services provided by them or any of
their affiliates.

         1.2 Performance Levels. In providing the Services, each party shall
perform according to the performance levels maintained in the past. Each Service
shall be provided priority no less favorably than in the past, consistent with
past practices and without discrimination against the party receiving such
Service. Any Services to be provided hereunder that were not heretofore provided
by FAF or Landair Corporation, as the case may be, shall be provided on a
reasonably timely basis.

         1.3 Instructions. The parties agree that the Services provided by
Provider shall be essentially ministerial in nature so that Provider shall, in
all matters requiring the exercise of discretion, follow Recipient's
instructions, which shall be promptly provided to Provider by Recipient to the
extent requested by Provider and which must be provided in writing if so
requested. Notwithstanding the foregoing, Provider shall not be required to
follow any such instructions that, in Provider's reasonable judgment, are
inconsistent with the proper performance of its responsibilities, or that
require the exercise of discretion, including without limitation the making of
decisions regarding the hiring or firing of employees. The parties agree that it
is their intent that Provider not be deemed a fiduciary with respect to plans
subject to the Employee Retirement Income Securities Act of 1974, as amended.

         1.4 Consents; Indemnification; Assets. If the provision of any of the
Services by Provider to Recipient would place Provider or any other subsidiary
of Provider in violation or breach of any contract or license between any such
entity and any third party, then Recipient and Provider shall use their
respective commercially reasonable efforts, with all costs thereof to be borne
by Recipient, to obtain forthwith any consent required for Provider to provide
such Services to Recipient, and Recipient shall indemnify and hold harmless
Provider against all Losses and Liabilities relating to any claims arising from
any such alleged violation or breach, such indemnification to be provided in a
like manner to the provision of indemnification under the Distribution
Agreement. If, after the exercise of such efforts, such consent cannot be
obtained, Provider shall use commercially reasonable efforts to provide
Recipient with functionally equivalent Services with any additional costs
required in providing such Services to be borne by Recipient. Recipient shall
indemnify and hold harmless Provider against all Losses and Liabilities which
arise from or in any way relate to (i) the use of any software or hardware
provided by Recipient or (ii) the use of any software or hardware in connection
with the performance of the Services hereunder provided to Recipient, such
indemnification to be provided in a like manner to the provision of
indemnification under the Distribution Agreement.

                  (a) The Service Fees (as defined herein) to be paid by
         Recipient hereunder shall subsume all costs incurred by Provider in
         connection with the performance of its obligations hereunder and in
         respect of which separate payment or indemnification by Recipient is
         not otherwise contemplated hereby, including, but not limited to,
         personnel (including fringe benefits and management fees relating
         thereto), computer hardware, computer time, printers, voice and data
         telecommunications equipment, file cabinets, paper files,
         administrative

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         records, photocopies, incidentals and all other assets owned by
         Provider after the Distribution which are needed in connection with the
         provision of such Services on a routine and non-routine basis and
         during peak and non-peak periods; and any such equipment may be
         replaced from time to time by Provider with functionally equivalent or
         upgraded equipment.

                  (b) All data, software or other property or assets owned or
         created by Recipient shall remain the sole and exclusive property and
         responsibility (including, without limitation, with respect to
         maintenance, modification and upgrade) of Recipient. Provider shall not
         acquire any rights to any such data, software or other property or
         assets, including any derivative works of Recipient-owned software or
         data created by Provider, pursuant to this Agreement or Provider's
         performance hereunder.

                  All data, software or other property or assets which are owned
         by Provider, including without limitation derivative works thereof and
         new data or software created by Provider at Provider's sole expense
         pursuant to the provision of Services ("Provider Software") shall be
         the sole and exclusive property and responsibility (including, without
         limitation, with respect to maintenance, modification and upgrade) of
         Provider and any interest of Recipient therein shall be limited to
         licensed materials, if any. Recipient shall not acquire any other
         rights to any such data, software or other property or assets pursuant
         to this Agreement or Recipient's performance hereunder.

                  (c) If as a result of unanticipated events or conditions
         Recipient reasonably determines that it requires modification of any of
         the Services or software used in connection therewith upon Recipient's
         request, Provider shall so modify the Services or software used in
         connection therewith upon Recipient's request (i) to the extent
         commercially reasonable, (ii) to the extent such modifications do not
         adversely affect Provider's ability to maintain its computer systems in
         connection with its continuing business, and (iii) at Recipient's sole
         cost and expense subject to Recipient's approval of Provider's
         estimate. Moreover, Provider may suggest modification of software and
         may, in its sole discretion, offer to share in the cost thereof if it
         determines that any such modifications may be beneficial to Provider.
         Recipient shall have exclusive ownership rights to any software
         modifications it pays for solely, and shared rights to such
         modifications with respect to which, and only to the extent that, it
         shares in the payment therefor.

                  (d) Provider shall provide all support and assistance
         reasonably requested by Recipient at an arm's-length, negotiated price,
         in connection with the transfer of any and all Services from Provider
         to Recipient or any of its affiliates or an alternative third-party
         service provider selected by Recipient. Specifically, during the term
         of this Agreement, Provider shall deliver to Recipient (or as directed
         by Recipient), at the Recipient's request and with minimal interruption
         to the operations of Provider or its affiliates, all data and programs
         owned by Recipient or licensed by Recipient from third party vendors,
         and all backup or archival copies thereof (or any part thereof as
         specified by Recipient), in hard copy, electronic, magnetic or any
         other form which is then in Provider's possession or

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         control, as requested by Recipient, and (in the event that this
         Agreement is terminated) copies of all material licensed by Recipient
         from Provider (with reasonable instructions for the installation and
         use thereof).

         1.5 Systems Availability and Data Integrity. Provider shall maintain,
consistent with past practices, operational recovery procedures to ensure the
availability of systems and the integrity of data relating to the Services at
all times. In the event of the unavailability of any such systems or the loss or
destruction of any such data, Provider shall use commercially reasonable efforts
consistent with past practices to restore such systems and recover or replace
such data as quickly and completely as possible.

         1.6 Systems Users. In each case as it relates to Recipient's employees,
consultants, affiliates or authorized customers during the term of this
Agreement the addition or deletion of authorized users ("Users"), including
persons authorized at the application level or system level, in regard to any
computer system, the modification of computer system authority or access granted
to any person, and the control generally of access to and use of computer
systems, is to be at the direction of Recipient, and Provider shall permit no
changes in such access or use without prior written notice to and consent from
Recipient. No User will be allowed system authority or access greater than the
application level without the prior written consent of Provider. Each party
shall indemnify and hold harmless the other against all degradations in
performance levels caused by users authorized for system level access on behalf
of, or at the request of, such first party, such indemnification to be provided
in a like manner to the provision of indemnification under the Distribution
Agreement.

                                   ARTICLE II
                              PAYMENT FOR SERVICES

         2.1 Costs. The prices charged for the Services shall initially be those
set forth on SCHEDULES A-1 AND A-2, which have been negotiated on an
arm's-length basis (the "Service Fees"). The Service Fees shall be adjusted on
an arm's-length basis every six months, except that the Service Fees for the
period from the Distribution Date through December 31, 1998 shall be as
indicated on SCHEDULES A-1 AND A-2 and Provider shall, not less than three
months before any proposed adjustment to Service Fees, provide Recipient with
details of any proposed adjustment and justification therefor. The Parties shall
negotiate in good faith to reach an agreement within 30 days. Recipient shall
not be charged a fee for any improvements or upgrades to facilities or equipment
without its prior written consent; provided, however, that Recipient
acknowledges and agrees that its failure to timely provide any such consent may
adversely affect its abilities to receive Services hereunder, and Provider shall
not be liable for any harm to Recipient resulting therefrom. Notwithstanding the
immediately preceding sentence, all maintenance fees relating to software used
in connection with the provision of Services hereunder shall be billed
separately from the Service Fees and shall be paid by Recipient together
therewith.


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         2.2      Invoices; Payment Procedures.

                  (a) Not later than 30 days after the end of each calendar
         month, Provider shall send Recipient an invoice that includes a
         detailed breakdown of all Service Fees for such month. All invoices
         shall be sent as follows:


         from FAF to Landair Corporation:    from Landair Corporation to FAF :

              Landair Corporation                  Forward Air Corporation
              Attention:  Controller               Attention: Controller
              430 Airport Road                     430 Airport Road
              Greeneville, Tennessee 37745         Greeneville, Tennessee 37745
              
All payments of such invoices shall be made by wire transfer or interbank
transfer in immediately available funds to Provider's account at such banks as
Provider shall designate to Recipient in writing and shall be made within 15
days after the date of any invoice.

                  (b) Landair Corporation or one of its subsidiaries shall
         establish and maintain an account ("Payroll Account") from which FAF or
         one of its subsidiaries shall be authorized to draw in order to meet
         Landair Corporation's or one of its subsidiaries' gross payroll
         obligations, and Landair Corporation or one of its subsidiaries shall
         ensure that such Payroll Account is sufficiently funded at all times.
         Notwithstanding any other provision hereof,

                           (i)  Landair Corporation or one of its subsidiaries
                  shall reimburse FAF or one of its subsidiaries for each
                  payroll paid by FAF or one of its subsidiaries to the
                  employees of Landair Corporation or one of its subsidiaries
                  for the period contemplated above, to the extent that FAF or
                  one of its subsidiaries elects to provide funds despite a
                  deficiency in the Payroll Account, and

                           (ii) Landair Corporation or one of its subsidiaries
                  shall provide each such reimbursement by wire transfer of
                  immediately available funds on the day of the issuance of that
                  payroll to such employees.

         2.3      Disputed Fees. In the event that Recipient and Provider have
a  good faith dispute with respect to the amount of payment for Services
actually rendered (other than with respect to the underlying schedule of fees
for Services generally), Recipient shall withhold payment only of any unpaid
amount in dispute, and shall deliver to Provider promptly (and within 15 days
following receipt of any invoice from Provider that is the basis of such
dispute) a written statement describing the dispute, which statement shall
provide a reasonably detailed breakdown of the disputed payment amounts. The
parties agree to use their best efforts to resolve any such dispute hereunder
within 15 days following Provider's receipt of Recipient's statement describing
the dispute. In the event the parties cannot resolve the dispute within such
time period, each discrepancy or disagreement which

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cannot be so resolved shall be submitted to a firm of nationally recognized
independent certified public accountants (agreed upon by Provider and
Recipient), who shall promptly deliver a report setting forth their calculation
of each item that was the subject of discrepancy or disagreement, which report
shall be final and binding on the parties. The fees and expenses of such firm
shall be borne one-half by Provider and one-half by Recipient, and each party
shall bear its own other expenses in connection therewith.

                                   ARTICLE III
                          TERM; TERMINATION OF SERVICES

         3.1      Term.

                  (a) Subject to Section 3.2 hereof, FAF or one of its
         subsidiaries shall be obligated to provide the Services set forth on
         SCHEDULE A-1 hereto, and Landair Corporation or one of its subsidiaries
         shall be obligated to provide the Services set forth on SCHEDULE A-2
         hereto until the earlier of (i) 18 months following the Distribution
         Date or (ii) termination of all Services (as defined herein) pursuant
         to Section 3.2 hereof; provided, however, that FAF or one of its
         subsidiaries shall be obligated to provide the information technology
         services described on SCHEDULE A-1 hereto until the third anniversary
         of the Distribution Date, unless such Service is terminated by Landair
         Corporation prior to such anniversary in accordance with Section 3.2
         hereof.

                  (b) Notwithstanding anything to the contrary in this
         Agreement, the provisions of Articles 5 and 6 and Sections 1.4 (solely
         as relates to indemnification), 1.6 (solely as relates to
         indemnification), 4.2, 7.6, 7.7, 7.8, 7.11, 7.12 and 7.13 shall survive
         any termination of this Agreement or the provision of Services
         hereunder.

         3.2      Termination of Services. Any Recipient may at any time, upon 
thirty days irrevocable written notice to Provider, terminate all the Services
or any Service (or any portion thereof) on a Service-by-Service basis. Any
Provider may, at any time after the first anniversary of the date hereof,
terminate any or all of the Services on three months irrevocable written notice
to Recipient; provided, however, Recipient shall be entitled to continue
receiving the information technology services set forth on Schedule A-1 hereto
through the third anniversary date in its sole discretion. The provision of all
Services pursuant hereto shall in any event terminate on or prior to the third
anniversary of the date hereof. Upon termination of any Service, all
administrative records relating to that Service as such records relate solely to
Recipient which have not already been transferred to the sole possession of
Recipient shall be so transferred, it being understood that Provider may retain
copies of such records.


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                                   ARTICLE IV
                                   COOPERATION

         4.1 Cooperation. Each of the parties shall cooperate with and provide
assistance to the other consistent with the terms and conditions hereof
(including, without limitation, any limitations relating to software) to enable
(i) the full performance of all obligations hereunder, (ii) the review and audit
of books and administrative records as they relate to the provision of Services,
and (iii) Recipient, or any of its affiliates or third party service providers,
to assume the performance of any and all Services upon termination or prior
thereto; such cooperation and assistance to include without limitation providing
the other party, its representatives and its agents (including, without
limitation, its outside auditors) with reasonable access, during normal business
hours and upon reasonable advance notice, to its employees, representatives and
agents and its books, administrative records, offices and properties relating to
the Services. Nothing in this Section 4.1 shall operate to grant any right to
Recipient of Provider-owned software, data or other intellectual property.

         4.2 Provider Administrative Records. Each party providing Services
hereunder shall keep administrative records regarding the provision of Services
for itself regarding such Services prior to the Distribution, and for each
Service shall retain such records for a period of twelve months following the
cessation of Provider's provision of that Service to the Recipient. Recipient,
its agents and representatives shall have reasonable access to such records
(which term is not to be construed to include Provider Software) during normal
business hours and upon reasonable advance notice from the date hereof through
the end of the period for retaining such records pursuant to this Section 4.2.

         4.3 Periodic Review of Services. From time to time during the term of
this Agreement, but not less frequently than once each quarter, the parties
shall meet and discuss the nature, quality, and level of Services covered by
this Agreement, any concerns either party may have in regard to such matters,
and any amendments either party may wish to make to the Services specified on
SCHEDULE A-1 OR A-2 hereto.

                                    ARTICLE V
                                  FORCE MAJEURE

         5.1 Force Majeure. Each party shall be relieved of its obligations
hereunder if and to the extent that any of the following events or conditions
directly or indirectly hinder, limit or make impracticable the performance by
that party of any of its obligations hereunder: Act of God, war, riot, fire,
earthquake, explosion, flood, sabotage, national defense requirement, strike,
lockout, job action, injunction, act or order of a governmental agency or
instrumentality thereof (whether of fact or law), act of a public enemy, embargo
or other concerted act of workers, telecommunications failures or electrical
failures; provided, that each party obligated to provide Services hereunder
shall continue to have in place at all times disaster recovery procedures
consistent with past practices to enable rapid recovery from any such event or
condition. Such procedures may be subject to revision by each party obligated to
provide Services hereunder from time to time as may be required in the


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ordinary course of business, provided, that such revisions do not adversely
affect the levels of protection afforded by such procedures. Prior to being
relieved of any obligations hereunder, each party obligated to provide Services
hereunder shall have used commercially reasonable efforts (consistent with past
practice) to remove or otherwise address the effects of any such event or
condition as soon as practicable. Any Recipient hereunder shall be liable for
all costs incurred by the applicable Provider hereunder in connection with any
Service that such Provider fails to complete and provide as a result of any such
event or condition.

                                   ARTICLE VI
                                 CONFIDENTIALITY

         6.1 Confidentiality. The parties acknowledge that in connection with
the provision of Services hereunder, each may gain access to confidential and
proprietary information regarding the other's financial and business affairs
(hereinafter "Confidential Information" or "Information"). Each party hereby
agrees to use commercially reasonable efforts to:

                  (a) confine its access to and examination of Confidential
         Information to the minimum Information necessary to enable any Provider
         hereunder to provide the Services hereunder and any Recipient hereunder
         to operate its business;

                  (b) limit access to such Information only to those individuals
         who reasonably need to receive such access to enable any Provider
         hereunder to provide the Services hereunder and any Recipient hereunder
         to operate its business;

                  (c) inform such individuals of the confidential nature of such
         Information and take all reasonable steps to secure the compliance of
         such individuals with the terms of this Article 6;

                  (d) use such Information solely to enable any Provider
         hereunder to provide the Services hereunder and any Recipient hereunder
         to operate its business;

                  (e) keep such Information confidential and not disclose it to
         any third party in any manner except as may be required by law or court
         order; and

                  (f) provide the other party with reasonable access to that
         party's employees, representatives and agents and its books and
         administrative records relating to the relevant business (including,
         without limitation, any and all computer access reports and security
         access reports) in order for the other party to monitor compliance with
         this Article 6. Notwithstanding the foregoing, disclosures of
         Information may be made to third parties:


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                  (i)      with the prior written consent of the party whose
                           Information it is;

                  (ii)     if the Information is in the public domain and has
                           entered the public domain through no fault of the
                           party seeking to make such disclosure or its
                           affiliates or representatives;

                  (iii)    if the Information is lawfully acquired by the party
                           seeking to make such disclosure or its affiliates or
                           representatives from sources other than the party 
                           whose Information it is or its affiliates or 
                           representatives and the party seeking to make such
                           disclosure, its affiliates or its representatives is
                           not aware that such source was under any obligation 
                           (whether contractual, legal or fiduciary) to the 
                           party whose Information it is or any of its 
                           affiliates or representatives to keep such
                           Information confidential; or

                  (iv)     to the extent disclosure is compelled by law or court
                           order.

Each party shall be responsible for any breach of this Article 6 caused by
itself or any of its employees, agents or representatives. Anything contained
herein to the contrary notwithstanding, the parties acknowledge and agree that
irreparable damage would occur in the event that any provision of this Article 6
was not performed in accordance with its terms, and that the parties shall be
entitled to specific performance as the sole remedy.

                                   ARTICLE VII
                                  MISCELLANEOUS

         7.1 Notices. All notices, requests, demands, consents, waivers and
other communications required or permitted to be given under this Agreement
(excluding invoices as described in Section 2.2 above) shall be in writing and
may be given by any of the following methods: (a) personal delivery; (b)
facsimile transmission; (c) registered or certified mail, postage prepaid,
return receipt requested; or (d) overnight delivery service. Notices shall be
sent to the appropriate party at its address or facsimile number given below (or
at such other address or facsimile number for such party or other person as
shall be specified by notice given hereunder):


If to Provider to:                        If to Recipient to:
         Forward Air Corporation                   Landair Corporation
         Attention: General Counsel                Attention:  General Counsel
         430 Airport Road                          430 Airport Road
         P.O. Box 1058                             P.O. Box 1058
         Greeneville, Tennessee 37745              Greeneville, Tennessee  37745
         Fax No.: (423) 636-7274                   Fax No.: (423) 636-7274


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<PAGE>   12

         All such notices, requests, demands, waivers and communications shall
be deemed received upon actual receipt thereof by the addressee or actual
delivery thereof to the appropriate address.

         7.2 Severability. Should any provision of this Agreement for any reason
be declared invalid or unenforceable, such declaration shall not affect the
validity or enforceability of any of the other provisions of this Agreement,
which other provisions shall remain in full force and effect. The application of
such invalid or unenforceable provision to persons or circumstances other than
those as to which it has been held invalid or unenforceable shall be valid and
enforced to the fullest extent permitted by law.

         7.3 Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned, directly or indirectly, including, without limitation, by operation
of law, by any party hereto without the prior written consent of the other party
hereto; provided, (a) that either of the parties hereto may without such prior
written consent transfer or assign its rights hereunder to one or more of its
affiliates, but no such transfer arrangement shall release the transferring
party of its obligations hereunder and (b) that any Provider hereunder may
subcontract to any party so long as such Provider remains liable for the
performance of Services provided by any such subcontractor.

         7.4 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties and their respective successors and permitted assigns,
and shall not be deemed to confer upon or give to any other party any remedy,
claim, liability, reimbursement, cause of action or other right.

         7.5 Interpretation. The section headings contained in this Agreement
are solely for the purpose of reference, are not part of the agreement of the
parties and shall not in any way affect the meaning or interpretation of this
Agreement.

         7.6 Jurisdiction and Consent to Service. In accordance with the laws of
the State of Tennessee, and without limiting the jurisdiction or venue of any
other court, the parties

                  (a) agree that any suit, action or proceeding arising out of
         or relating to this Agreement (other than proceedings arising under
         Section 2.3 above with respect to the amount of payment for Services)
         shall be brought solely in the state or federal courts of Tennessee;

                  (b) consent to the exclusive jurisdiction of each such court
         in any suit, action or proceeding relating to or arising out of this
         Agreement;


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                  (c) waive any objection which any of them may have to the
         laying of venue in any such suit, action or proceeding in any such
         court; and

                  (d) agree that service of any court paper may be made in any
         manner as may be provided under the applicable laws or court rules
         governing service of process in such court.

         7.7  Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof, and supersedes all
other prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof. Any conflicts between the
language herein and the language used in the Distribution Agreement shall be
resolved in favor of the language used herein.

         7.8  Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED 
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TENNESSEE (REGARDLESS OF THE LAWS
THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF) AS TO ALL MATTERS, INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY,
CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.

         7.9  Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.

         7.10 Relationship of the Parties. In carrying out the provisions of
this Agreement, FAF and Landair Corporation are and shall be deemed to be for
all purposes, separate and independent entities. FAF and Landair Corporation
shall select their employees and agents, and such employees and agents shall be
under the exclusive and complete supervision and control of FAF or Landair
Corporation, as the case may be. It is the express intent of this Agreement that
the relationship of FAF to Landair Corporation and Landair Corporation to FAF
shall be solely that of separate and independent companies and not that of a
joint venture, partnership or any other joint relationship.
Neither party shall transact or commit the other party in any manner.

         7.11 Waiver. Any failure by either party to comply with any obligation,
covenant or agreement herein or to fulfill any condition herein may be waived
only by a written notice from the party entitled to the benefits thereof. No
failure by either party hereto to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right hereunder preclude any other or future exercise of
that right or any other right hereunder by that party.


                                       11
  
<PAGE>   14



         7.12 Sole Remedy; No Damages. If either party becomes dissatisfied with
the quality or level of Services provided hereunder, claims any breach of this
Agreement by the other party or otherwise becomes dissatisfied with any matter
relating hereto or arising herefrom, its sole remedy shall be termination of all
or a part of the Services without right to seek actual, compensatory or
consequential damages. EACH PARTY HEREBY ACKNOWLEDGES AND AGREES THAT IT IS
HEREBY WAIVING CERTAIN LEGAL RIGHTS AND REMEDIES, AND THAT THIS WAIVER IS A
FUNDAMENTAL ELEMENT OF THE BARGAIN BETWEEN THE PARTIES HERETO, WITHOUT WHICH
PROVIDER WOULD NOT HAVE ENTERED INTO THIS AGREEMENT. EACH PARTY HEREBY
ACKNOWLEDGES AND AGREES FURTHER THAT, NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, THE OTHER PARTY MAY, BUT SHALL IN NO EVENT BE OBLIGATED TO,
ADVANCE FUNDS OR INCUR COSTS IN CONNECTION WITH ITS PERFORMANCE HEREUNDER.

         7.13 Indemnification. Each Recipient hereunder, at its own expense,
shall indemnify, defend and hold each Provider hereunder, its subsidiaries and
their present or former officers, directors, shareholders, agents, employees,
representatives, successors-in-interest, parents, affiliates, insurers,
attorneys and assigns (collectively, the "Indemnified Parties") harmless from
and against any claims, judgments, losses, deficiencies, damages, punitive or
exemplary damages, fines or penalties, liabilities, costs and expenses
(including reasonable attorneys' fees, charges and disbursements) whether
required to be paid to a third party or otherwise incurred in connection with or
arising from any claim, suit, action or proceeding ("Claim") against the
Indemnified Party to the extent the basis of such Claim is that: (a) such
Recipient has failed to pay any amounts owed to third parties in connection with
the Services provided by such Provider under this Agreement; (b) a third party
has been or may be injured or damaged in any way by any breach of such Recipient
of any of its duties, representations or warranties under this Agreement; (c)
such Recipient or any of its employees, agents, or servants acted improperly in
connection with the notification, investigation, adjustment or settlement of
claims and losses arising out of the Services described on SCHEDULES A-1 OR A-2
hereto, and (d) there is no other liability or obligation arising out of such
Provider's administration or operation of the Services or functions described on
SCHEDULES A-1 OR A-2 hereto, except to the extent that same arises from the
gross negligence or willful misconduct of such Provider.



                                       12
  
<PAGE>   15



         IN WITNESS WHEREOF, the parties have each caused this Agreement to be
executed by its duly authorized representative as of the day and year first
above written.

                             FORWARD AIR CORPORATION
                             f/k/a Landair Services, Inc., on behalf of itself
                             and its wholly owned subsidiaries

                             By: /s/ Bruce A. Campbell
                                -----------------------------------------------

                             Its: President
                                -----------------------------------------------


                             LANDAIR CORPORATION, on behalf of itself and
                             its wholly owned subsidiaries

                             By: /s/ E. R. Brown
                                -----------------------------------------------

                             Its: President
                                -----------------------------------------------



                                       13
<PAGE>   16



                                  SCHEDULE A-1

                 SERVICES PROVIDED BY FAF TO LANDAIR CORPORATION


         FAF will provide, or cause to be provided, the following Services to
Landair Corporation or its subsidiaries:

<TABLE>
<CAPTION>
                                     SERVICE                                                       COST

<S>      <C>                                                                     <C>
I        Accounts payable......................................................  To be charged on a per check processed basis

II       Payroll...............................................................  To be charged based on the number of employees

III      Human resources services and benefit                                    
         plan administration...................................................  To be charged based on the number of employees

IV       Settlement services.................................................... To be charged based on the number of owner-
                                                                                 operators

V        Central purchasing services............................................ Items ordered from Central Purchasing to be charged
                                                                                 based on cost plus reasonable mark-up on such costs

VI       Accounting and legal services.......................................... To be charged cost of such services prorated 50% to
                                                                                 Landair Corporation and 50% to FAF.
VII      General administrative services
         (Chairman's salary and support staff,
         mail room functions, receptionists,
         corporate office maintenance staff, etc.).............................. To be charged cost of such services prorated 50% 
                                                                                 to Landair Corporation and 50% to FAF.

VIII     Information technology services,                                        
         including providing general computing                                   
         services.  This will include the following:                             
         (a) maintaining connection to the two
         FAF Local Area Networks;
         (b) maintaining e-mail connection;
         (c) AS 400; (d) maintain and support
         FAF computer applications and provide
         Landair Corporation personnel with
         access to same......................................................... To be charged cost of such services prorated 50% 
                                                                                 to Landair Corporation and 50%    
                                                                                 to FAF.    
                                                                                
</TABLE>

         In connection with the information technology services described above,
such services will be reviewed and adjusted by FAF and Landair Corporation every
six months as needed. Access to FAF's applications and data provided to Landair
Corporation's personnel will be reviewed and approved by the FAF security
administrator.


<PAGE>   17


                                  SCHEDULE A-2

                 SERVICES PROVIDED BY LANDAIR CORPORATION TO FAF


         Landair Corporation will provide, or cause to be provided, the
following Services to FAF or its subsidiaries:

<TABLE>
<CAPTION>
                                     SERVICE                                                       COST

<S>  <C>                                                                         <C> 
I    Safety services............................................................ To be charged based on the number of trucks

II   Licensing/permitting/fuel tax.............................................. To be charged based upon number of trucks

III  Insurance/claims services (including                                                                                           
     maintaining relationships with brokers,                                                                                        
     coordination of claims processing and                                                                                          
     allocation between parties and assistance                                                                                      
     with reserve computations)................................................. To be charged as follows: (i) 50% of the costs of
                                                                                 such services shall be allocated 50%/50% to each of
                                                                                 Landair Corporation and FAF and (ii) 50% of the
                                                                                 costs of such services shall be allocated based on
                                                                                 the number of claims processed.



IV   Recruiting/retention services.............................................. To be charged based on the number of drivers hired


V    Training center services................................................... To be charged based upon the number of drivers
                                                                                 completing the training and orientation program in
                                                                                 Columbus

</TABLE>