Document:

Specimen of Common Stock of ABX Air, Inc.

 EXHIBIT 4.1 
  
 SPECIMEN OF COMMON STOCK CERTIFICATE 
  
 [LOGO OF ABX AIR] 
 ABX AIR, INC. 
  

	 COMMON STOCK
	 	COMMON STOCK
	 NUMBER
	 	SHARES
	 ABX
	 	 

  

	 	 	CUSIP
		
	INCORPORATED UNDER THE LAWS	 	SEE REVERSE FOR CERTAIN
	OF THE STATE OF DELAWARE	 	DEFINITIONS

  
 THIS CERTIFIES THAT 
  
 is the owner of 
  
 FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, 
 PAR VALUE $0.01 PER SHARE, OF 
  
 ABX AIR, INC. 
  
 transferable on the books of the
Corporation by said owner hereof in person or by duly authorized attorney upon surrender of this certificate properly endorsed. This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar. 
  
 WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly
authorized officers. 
  
 Dated: 
  

	 	 	 [CORPORATE SEAL]
	 	 
	
 Secretary
	 	 	 	
 Chief Executive Officer

 Countersigned and Registered: 
 NATIONAL CITY BANK 
 Transfer Agent and Registrar 
  
 By                                      
                
 Authorized Officer 

 ABX AIR, INC. 
  
 THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH SHAREOWNER WHO SO REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF OF THE CORPORATION AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE CORPORATION. 
  
 The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full according to applicable laws or regulations: 
  
 TEN COM – as tenants in common 
 TEN ENT – as tenants by the
entireties 
 JT TEN – as joint tenants with right of survivorship and not as tenants in common 

	 UNIF GIFT MIN ACT -
	  	 	  	Custodian	  	 	  	 
	 	  	
 (Cust)
	  	 	  	
 (Minor)
	  	 
				
	 	  	under Uniform Gifts to Minors Act	  	 	  	 
	 	  	 	  	 	  	
 (State)
	  	 

  
 Additional
abbreviations may also be used though not in the above list. 

 Please Print or Typewrite Name and Address and Zip Code of Assignee below. 
  
 FOR VALUE RECEIVED
                                     hereby sell, assign and
transfer unto 
  

	 	 	 	 	 PLEASE INSERT SOCIAL SECURITY
 OR
OTHER IDENTIFYING NUMBER
 OF ASSIGNEE

	 	 	 	

	 	 	 	 	 
	 	 	 	

  
 Name:
                                        
                                        
                                        
             
 Name:
                                        
                                        
                                        
             
 Name:
                                        
                                        
                                        
             
 Street:
                                        
                                        
                                        
             
 City, State, Zip Code
                                        
                                        
                              
  
 Shares of the capital stock represented by/within Certificate, and do hereby irrevocably constitute and appoint 

 

  

 Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. 
  
 Dated:
                                        
                                        
         
 Signature of
shareowner:                                      
                                        
   
 Signature of shareowner:
                                        
                                        

  
 NOTICE: The signature to that assignment must correspond with the name as
written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. 
  
 SIGNATURE GUARANTEE 
  
 IMPORTANT 
 A NOTARY IS NOT ACCEPTABLE. THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION SUCH AS A COMMERCIAL BANK, TRUST COMPANY, SAVINGS AND LOAN, CREDIT UNION OR BROKER WITH A MEMBER IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO SEC RULE 17 AD-16. 
  
 Medallion Signature(s) Guarantee<PAGE>

                                                                    Exhibit 10.2

                             ACMI SERVICE AGREEMENT

                                     between

                                  AIRBORNE INC.

                                       and

                                  ABX AIR, INC.

                             Dated as of [.] 2003

                    Certain portions of this agreement have
                    been omitted based upon a request for
                    confidential treatment. The nonpublic
                    information has been filed with the Securities
                    and Exchange Commission.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                 ----
<S>                                                                                               <C>
ARTICLE I DEFINITIONS..............................................................................1
   Section 1.1   Definitions.......................................................................1

ARTICLE II EQUIPMENT AND SERVICES TO BE PROVIDED BY AIRCO..........................................7
   Section 2.1   Engagement of Airco...............................................................7
   Section 2.2   ACMI Services; Service Standards..................................................7
   Section 2.3   Air Routes........................................................................8
   Section 2.4   Operation; Maintenance and Safety.................................................8
   Section 2.5   Route Authorizations..............................................................9
   Section 2.6   Operational Reports; Crew Hours & Maintenance.....................................9
   Section 2.7   Tertiary Markets..................................................................9
   Section 2.8   Flight Documentation and Calculations; Weight & Balance; Container Deployment.....9
   Section 2.9   Pilot and Crew Transportation.....................................................9
   Section 2.10  GOM Availability..................................................................9
   Section 2.11  Exceptions to Airco's Responsibilities............................................9

ARTICLE III EQUIPMENT AND SERVICES TO BE PROVIDED BY GROUNDCO.....................................10
   Section 3.1   Schedule and Route Information...................................................
   Section 3.2   Unit Load Devices................................................................10

ARTICLE IV THIRD PARTY SERVICES...................................................................11
   Section 4.1   Supplemental Flying; Filler Cargo Services.......................................11
   Section 4.2   Independent Third Party Services.................................................11
   Section 4.3   Use of Ground Assets.............................................................12

ARTICLE V HAZARDOUS CARGO.........................................................................12
   Section 5.1   Hazardous Cargo..................................................................12

ARTICLE VI CHANGES TO THE SCOPE OF SERVICES.......................................................12
   Section 6.1   The Initial Year.................................................................12
   Section 6.2   After the Initial Year...........................................................13
   Section 6.3   Planning Process; Cooperation....................................................13
   Section 6.4   General Exceptions...............................................................13
   Section 6.5   New Services.....................................................................13

ARTICLE VII REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTIES..............................14
   Section 7.1   Representations, Warranties and Covenants of Airco...............................14
   Section 7.2   Representations, Warranties and Covenants of Groundco............................16

ARTICLE VIII INDEMNIFICATION AND INSURANCE........................................................16
   Section 8.1   Airco Indemnification............................................................16
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                                               <C>
   Section 8.2   Airco Insurance..................................................................17
   Section 8.3   Groundco Indemnification.........................................................18
   Section 8.4   Groundco Insurance...............................................................18
   Section 8.5   Insurance Certificates...........................................................19
   Section 8.6   Notice of Change or Cancellation.................................................20
   Section 8.7   Payment of Premiums..............................................................20
   Section 8.8   Review of Insurance Coverage.....................................................20
   Section 8.9   Limitation on Indemnification....................................................20
   Section 8.10  Indemnification Procedures.......................................................20

ARTICLE IX AIRCO'S OPERATIONS.....................................................................21
   Section 9.1   Independent Contractors..........................................................21
   Section 9.2   Groundco Employees as Agents of Airco............................................22
   Section 9.3   Weight and Balance Operations....................................................22
   Section 9.4   Access to Locations..............................................................22

ARTICLE X COMPENSATION............................................................................23
   Section 10.1  Base Compensation................................................................23
   Section 10.2  Cost Recovery Amount.............................................................25
   Section 10.3  Determination of Cost Recovery Amount............................................29
   Section 10.4  Quarterly Adjustments............................................................30
   Section 10.5  Payment of Base Compensation.....................................................30
   Section 10.6  Revenue from Third Party Services................................................32
   Section 10.7  Capital Expenditures.............................................................34
   Section 10.8  Records..........................................................................34

ARTICLE XI TERM...................................................................................34
   Section 11.1  Term; Renewal....................................................................34

ARTICLE XII TERMINATION...........................................................................35
   Section 12.1  Termination by Airco.............................................................35
   Section 12.2  Termination Rights of Groundco...................................................35
   Section 12.3  Termination Costs................................................................35
   Section 12.4  Expiration Without Renewal.......................................................37
   Section 12.5  Transition Period following Termination..........................................38

ARTICLE XIII EVENTS OF DEFAULT....................................................................39
   Section 13.1  Events of Default................................................................39
   Section 13.2  Groundco Events of Default.......................................................40
   Section 13.3  Termination upon Event of Default................................................40

ARTICLE XIV DELAYS AND DAMAGES....................................................................41
   Section 14.1  Damaged Aircraft.................................................................41
   Section 14.2  Destruction of Aircraft..........................................................42

ARTICLE XV FORCE MAJEURE..........................................................................42
   Section 15.1  Suspension of Obligations........................................................42
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                               <C>
   Section 15.2  Groundco Obligation to Pay During a Force Majeure................................43
   Section 15.3  Make-Up Flights During a Force Majeure...........................................43
   Section 15.4  Other Carriers...................................................................43

ARTICLE XVI ADVERTISING AND NONDISCLOSURE.........................................................43
   Section 16.1  Trademarks; Trade names and Logos................................................43
   Section 16.2  Confidentiality..................................................................44
   Section 16.3  Survival; Severability...........................................................44

ARTICLE XVII MISCELLANEOUS........................................................................44
   Section 17.1  Dispute Resolution...............................................................44
   Section 17.2  Sub-Contracting..................................................................45
   Section 17.3  Time is of the Essence...........................................................45
   Section 17.4  Assignment.......................................................................45
   Section 17.5  Execution in Counterparts........................................................45
   Section 17.6  Certain Construction Rules.......................................................45
   Section 17.7  Notices..........................................................................46
   Section 17.8  Entire Agreement.................................................................46
   Section 17.9  Amendment and Waiver.............................................................46
   Section 17.10 Further Assurances...............................................................47
   Section 17.11 Successors and Assigns...........................................................
   Section 17.12 Severability.....................................................................47

Schedules

New Aircraft           Schedule 1

Aircraft               Schedule 2.2

Air Routes             Schedule 2.3

Operational Reports    Schedule 2.6

Cost Recovery Amount   Schedule 10.1

Exhibits

Exhibit A   DHL Holdings (USA), Inc. Guaranty

Exhibit B   Airco Pay Policy

Exhibit C   Aircraft Transfer Documents

Exhibit D   Wilmington Air Park Sublease
</TABLE>

                                      iii

<PAGE>

                             ACMI SERVICE AGREEMENT

     THIS ACMI SERVICE AGREEMENT (this "Agreement") is entered into as of this
[.] day of [.], 2003, by and between AIRBORNE INC., a Delaware corporation
("Groundco") and ABX AIR, INC., a Delaware corporation ("Airco" and, together
with Groundco, the "Parties").

                                   WITNESSETH:

     WHEREAS, Groundco, a wholly-owned subsidiary of DHL Holdings (USA), Inc., a
Delaware corporation ("Delta"), manages, contracts for, or operates an express
delivery business in the United States, its territories and possessions (the
"U.S.") and between the U.S. and elsewhere in North America;

     WHEREAS, Groundco provides the pick-up and delivery, sorting and gateway
distribution services for all shipments transported by Groundco between points
in the U.S. and between the U.S. and points elsewhere in North America, and
desires to contract with an air carrier to operate a dedicated network of air
transportation services to support its air express business in the U.S. and
elsewhere in North America;

     WHEREAS, Airco is a U.S. certificated air carrier with authority to offer
scheduled and charter air cargo services to the public and is willing to provide
air transportation services to Groundco on an "ACMI" basis (i.e., by providing
aircraft, crew, maintenance, and insurance) to support Groundco's operations in
the U.S. and between the U.S. and elsewhere in North America; and

     WHEREAS, as an inducement to Airco to enter into this Agreement, Delta is
concurrently herewith entering into the guaranty in the form attached hereto as
Exhibit A (the "Guaranty").

     NOW THEREFORE, in consideration of the mutual covenants, agreements, terms,
conditions, and consideration hereinafter set forth, the receipt and sufficiency
of which are hereby acknowledged, the Parties, intending to be legally bound,
hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

          Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings specified or referred to in this Article I and
shall be equally applicable to both the singular and plural forms:

     "ACMI Services" is defined in Section 2.2.

     "Adjustments Statement" is defined in Section 10.4.

     "Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common

<PAGE>

control with, such Person. The term "control" (including, with correlative
meanings, the terms "controlled by" and under "common control with") means the
possession of power to direct the management and policies of the referenced
Person, whether through ownership interests, by contract or otherwise.

     "Air Routes" is defined in Section 2.3.

     "Airco Bid" is defined in Section 6.5(a).

     "Airco Event of Default" is defined in Section 13.1.

     "Airco's Financial Statements" means the financial statements of Airco,
prepared in accordance with GAAP applied on a consistent basis.

     "Airco Indemnified Parties" means Airco and its Affiliates, directors,
officers, employees and agents.

     "Airco's Appraiser" is defined in the definition of "Fair Market Value".

     "Aircraft" is defined in Section 2.2.

     "Base Compensation" is defined in Section 10.1(a).

     "Base Markup" is defined in Section 10.1(a).

     "Book Value" means the value of the Aircraft, net of depreciation, as
reflected in Airco's most recent balance sheet that has been prepared in
accordance with GAAP applied on a consistent basis.

     "Business Day" means any day other than a Saturday or Sunday or a day on
which national banking institutions in Ohio are authorized or obligated by law
or executive order to be closed.

     "Change of Control" means the occurrence of any of the following: (i)
during any period of two (2) consecutive years, individuals who at the beginning
of such period constituted the directors of Airco (together with any new
directors whose election by such directors or whose nomination for election by
the stockholders of Airco was approved by a vote of a majority of the directors
of Airco then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so approved
and together with any directors who are affiliates of Delta) cease for any
reason to constitute a majority of the directors of Airco then in office; (ii)
any merger, consolidation or other business combination with or into any other
entity, or any other similar transaction, whether in a single transaction or
series of related transactions where (A) the stockholders of Airco immediately
prior to such transaction in the aggregate cease to own at least fifty percent
(50%) of the voting securities of the entity surviving or resulting from such
transaction (or the

                                       2

<PAGE>

ultimate parent thereof) (such ownership being based solely on the voting
securities of Airco owned by such stockholders immediately prior to such event)
or (B) any Person becomes the beneficial owner of more than fifty percent (50%)
of the voting securities of the entity surviving or resulting from such
transaction (or the ultimate parent thereof); (iii) any transaction or series of
related transactions after which in excess of fifty percent (50%) of Airco's
voting power is held by any Person or group (within the meaning of Regulation
13D under the Securities Exchange Act of 1934); or (iv) any sale, transfer,
lease, assignment, conveyance, exchange, mortgage or other disposition, in one
or a series of related transactions, of all or substantially all of the assets,
property or business of Airco other than (A) any mortgage or pledge of assets as
collateral for Airco's obligations under Airco's senior credit facility or any
extension or refinancing thereof, (B) dispositions of any assets, property or
business of Airco to Delta or any of its Affiliates or (C) any transaction
involving the sale and leaseback of any aircraft; provided, however, that
"Change of Control" shall not mean (x) any transactions contemplated by the
Merger Agreement or (y) any of the transactions set forth in clauses (ii)
through (iv) above that involve, or are solicited, initiated or encouraged by
Delta, any of its Affiliates, or any licensed U.S. airline in which Delta has a
significant ownership interest.

     "Cost Per Block Hour" means for any applicable period, the total costs
included within the Cost Recovery Amount for such period divided by the number
of block hours flown by the Aircraft in providing the ACMI Services during such
period.

     "Costs Estimate" is defined in Section 10.3(b).

     "Costs Recovery Amount" is defined in Section 10.1(a).

     "CPI Rate" means the increase, for the twelve month period ending prior to
the most recent date for which such data is available, in the Consumer Price
Index for all Urban Consumers, U.S. City Average, published by the United States
Department of Labor, Bureau of Labor Statistics, or if such index is no longer
issued, the most comparable standard nationally recognized cost-of-living index
then issued by the United States Government.

     "Direct Claims" is defined in Section 8.10(b).

     "Disputes" is defined in Section 17.1.

     "DOT" means the U.S. Department of Transportation or any successor
Governmental Authority.

     "Effective Time" means the time immediately prior to the effectiveness of
the merger of Atlantis Acquisition Corporation into Groundco pursuant to the
Merger Agreement.

     "Expiration Date" is defined in Section 11.1.

     "Expiration Statement" is defined in Section 12.4(c).

     "FAA" means the U.S. Federal Aviation Administration or any successor
Governmental Authority.

     "Fair Market Value" means, with respect to any Aircraft, the fair market
value thereof, as finally determined pursuant to one of the methods described
below: For any calculation of the Fair Market Value of an Aircraft hereunder,
Airco shall deliver to Groundco a calculation

                                       3

<PAGE>

("Airco's Calculation") of such Fair Market Value determined by Airco in good
faith based upon an independent third party valuation performed by a nationally
recognized appraiser ("Airco's Appraiser"). Upon Groundco's written acceptance
of Airco's Calculation, or if Groundco fails to object to Airco's Calculation
within 15 days after receipt thereof, Airco's Calculation shall become the "Fair
Market Value" of the Aircraft. If Groundco objects to Airco's Calculation, the
parties shall negotiate in good faith to determine a mutually acceptable
calculation of Fair Market Value and any such calculation so determined shall
become the "Fair Market Value" of the Aircraft. If the parties are unable to
determine a mutually acceptable calculation of Fair Market Value within 30 days
after Groundco's receipt of Airco's Calculation, then Groundco shall deliver to
Airco, within 45 days after receipt thereof, a calculation ("Groundco's
Calculation") of such Fair Market Value based on an independent third party
valuation performed by a nationally recognized appraiser selected by Groundco
("Groundco's Appraiser"). If, within 10 days after Airco's receipt of Groundco's
Calculation, the Parties are unable agree upon a mutually acceptable calculation
of Fair Market Value, then Airco's Appraiser and Groundco's Appraiser shall
jointly select (no later than the expiration of such 10 day period) a third
appraiser of nationally recognized standing to conduct an independent valuation,
and such third appraiser shall select, within 10 days after its appointment,
either Airco's Calculation or Groundco's Calculation, whichever is closest to
such third appraiser's independent calculation of Fair Market Value, whereupon
the calculation so selected shall become the "Fair Market Value" of the
Aircraft.

     "Filler Cargo Services" is defined in Section 4.1(c).

     "First Promissory Note" has the meaning ascribed to such term in the Merger
Agreement.

     "Force Majeure" means acts not within the control of the Party bound to
perform and which, by the exercise of due diligence, such party is unable to
overcome. A Force Majeure includes acts of God, weather, strikes, lockouts, or
other industrial disturbances (whether to themselves or their corporate
affiliates), acts of the public enemy, wars, acts of terrorism, national
emergency, shutdown of airspace, embargoes, blockades, riots, epidemics,
lightning, earthquakes, floods, tornadoes, explosions, accidents to machinery or
aircraft, failure of public utilities, unavailability of fuel, U.S. military
airlift emergency activation of the U.S. Civil Reserve Air Fleet, inability to
secure landing slots, and any other causes not within control of the Party
claiming suspension. It is understood that the settlement of strikes, lockouts
or industrial disturbances shall be entirely within the discretion of the Party
having the difficulty, and the requirement that any Force Majeure shall be
remedied shall not require the settlement of strikes or lockouts by acceding to
the demands of the other Party to this Agreement or any other third party when
such course is inadvisable in the discretion of the Party having the difficulty.

     "Forecast of Operating Requirements" means Groundco's forecast of shipment
volumes and weights, by inbound and outbound Air Route sector for any applicable
period.

     "Free Cash" means cash and cash equivalents minus current liabilities (it
being understood that current liabilities will include any deferred taxes that
may become payable as a result of the sale of any Aircraft) as determined in
accordance with GAAP applied on a consistent basis.

                                       4

<PAGE>

     "GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, as applied by Airco or its
predecessor prior to the Effective Time, subject to any changes required as a
result of changes in GAAP.

     "GOM" means Airco's FAA-approved Ground Operations Manual, as amended from
time to time.

     "Governmental Authority" means any foreign, federal, state, provincial or
local government or any agency, subdivision or instrumentality of any of the
foregoing, including any court, tribunal, department, bureau, commission or
board, or any quasi-governmental or private body exercising any regulatory,
taxing, inspecting or other governmental authority.

     "Groundco Assets" is defined in Section 4.3.

     "Groundco Event of Default" is defined in Section 13.2.

     "Groundco Indemnified Parties" means Groundco and its Affiliates, and their
respective directors, officers, employees and agents.

     "Groundco's Appraiser" is defined in the definition of "Fair Market Value".

     "Guaranty" is defined in the recitals hereto.

     "Hubs" means Groundco's central network hub facility located in Wilmington,
Ohio and each regional hub facility.

     "Hub Services Agreement" means the Hub and Linehaul Services Agreement,
dated of even date herewith, between Groundco and Airco.

     "IATA" means the International Air Transport Association.

     "ICAO" means the International Civil Aviation Organization.

     "Incremental Markup" is defined in Section 10.1(a).

     "Independent Auditor" is defined in Section 10.4.

     "Independent Services" is defined in Section 4.2.

     "Indemnified Party" is defined in Section 8.10(a).

     "Indemnifying Party" is defined in Section 8.10(a).

     "Industry Expert" is defined in Section 10.3(d).

     "Initial Year" is defined in Section 6.1.

     "Labor Cost Cap" is defined in Section 10.2(d).

                                       5

<PAGE>

     "Legal Requirement" means any statute, ordinance, code, law, rule,
regulation, order or other requirement, standard or procedure enacted, adopted
or applied by any Governmental Authority (including judicial decisions applying
common law or interpreting any other Legal Requirement) applicable to a Person,
its business and its operations.

     "LIBOR" means, on any day of determination, the British Bankers'
Association ("BBA") interbank offered rate for six-month deposits in U.S.
dollars which appears on the relevant page of the Telerate Service (currently
page 3750) or, if not available, on the relevant pages of any other service
(such as Reuters Service or Bloomberg Financial Markets Service) that displays
such BBA rates.

     "Losses" is defined in Section 8.1.

     "Merger Agreement" means the Agreement and Plan of Merger, dated as of
March 25, 2003, by and among Delta, Atlantis Acquisition Corporation and
Atlantis.

     "New Aircraft" means each of the aircraft listed on Schedule 1 hereto.

     "New Service" means (i) any new air express product that Groundco does not
offer in the United States or North America as of the date hereof or (ii) any
existing air express product that Groundco offers in the United States or North
America that would require an additional Aircraft.

     "New Service Notice" is defined in Section 6.5(a).

     "Outside Cure Date" is defined in Section 13.3(d).

     "On Time Performance" means, with respect to all flights flown in
performing the ACMI Services, arrival within 16 minutes after the scheduled
arrival time for each flight sector; provided, however, that in determining
whether a flight has arrived within 16 minutes after its scheduled arrival time,
delays attributable to factors other than mechanical failures, crew delays,
dispatch delays, fueling delays, pushback delays and weight and balance
functions shall be excluded.

     "Operational Control" means the exercise of authority over initiating,
conducting or terminating a flight.

     "Outstation" means each landing point within Groundco's network other than
the Hubs.

     "Person" means any individual, corporation, partnership, limited liability
company, limited partnership, joint venture, association, joint-stock company,
trust, Governmental Authority or other entity.

     "Purchase Order" is defined in Section 10.3(f).

     "Put Option" is defined in Section 12.3(c).

     "Put Price" is defined in Section 12.3(d).

                                       6

<PAGE>

     "Released Aircraft" is defined in Section 12.3(c).

     "Released Aircraft Statement" is defined in Section 12.3(c).

     "Representatives" is defined in Section 10.3(b).

     "Route Authorizations" is defined in Section 2.5.

     "Second Promissory Note" has the meaning ascribed to such term in the
Merger Agreement.

     "Supplemental Flying" is defined in Section 4.1(b).

     "Term" is defined in Section 11.1.

     "Tertiary Markets" means those markets for air express delivery services
provided with aircraft having a maximum certification weight of 55,111 pounds or
less and originating from or terminating at any Outstation.

     "Third Party Bid" is defined in Section 6.5(a).

     "Third Party Carrier" is defined in Section 6.5(a).

     "Third Party Claim" is defined in Section 8.10(a).

     "Third Party Payment Estimate" is defined in Section 10.6(c).

     "Third Party Services" is defined in Section 4.2.

     "TSA" means U.S. Transportation Security Administration.

     "ULD" means unit load devices.

     "U.S." is defined in the Recitals hereto.

                                   ARTICLE II
                 EQUIPMENT AND SERVICES TO BE PROVIDED BY AIRCO

          Section 2.1 Engagement of Airco. Groundco hereby retains Airco to
provide the air transportation services described herein utilizing the Aircraft
on the Air Routes, and Airco hereby agrees to provide such air transportation
services, in each case, upon and subject to the terms and conditions of this
Agreement.

          Section 2.2 ACMI Services. Commencing at the Effective Time and
continuing during the Term, Airco shall provide air transportation services to
Groundco utilizing the aircraft listed on Schedule 2.2, as such Schedule may be
amended from time to time in accordance with the provisions of this Agreement,
such substitute aircraft as may be permitted or required

                                       7

<PAGE>

hereunder (such specified aircraft, any substitute therefor and, from and after
the time each New Aircraft is acquired by Airco and the FAA shall have issued a
Certificate of Airworthiness with respect thereto, such New Aircraft, being
collectively referred to herein as the "Aircraft"), in order to provide the
services hereunder over the Air Routes in accordance with the Service Standards
(such services, the "ACMI Services"). Schedule 2.2 includes a depreciation
schedule for each owned Aircraft as agreed by the Parties, subject to revision
as contemplated by Section 10.2(a)(i).

          Section 2.3 Air Routes. Airco shall provide each Aircraft at the times
and places indicated on Schedule 2.3 to operate over the routings and perform
the flight schedules set forth in Schedule 2.3 (the "Air Routes"), as such
Schedule may be amended from time-to-time in accordance with the provisions of
this Agreement or as otherwise requested by Groundco in accordance with Section
6.4. Prior to the implementation of any changes in the Air Routes, the Parties
shall meet and confer as to the ability of Airco to perform any proposed change
in flight operations. Subject to applicable Legal Requirements or other
regulatory or safety requirements, Airco shall use its best efforts to address
crew availability and other operational factors in order to implement Groundco's
requested modifications to the Air Routes as promptly as practicable, which
modifications shall be incorporated into a revised Schedule 2.3, and Airco shall
thereafter be responsible to abide by such revised Schedule in accordance with
this Agreement.

          Section 2.4 Operation; Maintenance and Safety(a) Airco, pursuant to
its statutory and regulatory obligations as the certificate holder, shall have
complete and exclusive responsibility for the operation, maintenance and safety
of the Aircraft, and for compliance with all applicable Legal Requirements of
any Governmental Authority having jurisdiction over the ownership, operation and
maintenance of the Aircraft and the ACMI Services to be provided hereunder,
including, but not limited to the Legal Requirements of the FAA and the DOT.
Notwithstanding any other provision herein or in any other agreement between the
Parties providing for any other allocation of responsibility or for the payment
of any costs or expenses incurred by any person in conjunction with the ACMI
Services, any such provision relates solely to the responsibility to pay the
cost or expense of performing particular functions and is not intended to
derogate in any way from Airco's sole responsibility for the operation,
maintenance and safety of the Aircraft and for compliance with all applicable
Legal Requirements.

          (b) Airco shall provide the ACMI Services for the benefit of Groundco
during the Term and in the performance of the ACMI Services shall furnish and
maintain suitable and sufficient equipment and employ adequate personnel, in
each case in accordance with the terms of this Agreement, in order to (i)
minimize flight and on-ground times for the Aircraft (so far as is within its
reasonable control and in accordance with sound operating practice, safety
considerations and applicable Legal Requirements) and (ii) comply with all
applicable Legal Requirements of any Governmental Authority having jurisdiction
over the Aircraft or the Air Routes and any airport that the Aircraft use in the
course of providing the ACMI Services.

          (c) In addition to the Aircraft, Airco shall provide all replacement
and spare aircraft parts and aircraft maintenance services (either directly by
Airco or through third party contractors).

                                       8

<PAGE>

          Section 2.5 Route Authorizations. Airco shall use commercially
reasonable efforts to obtain in a timely manner and maintain any and all
operating authority or permission from any Governmental Authority, including the
FAA and the DOT, having jurisdiction over the Aircraft or Air Routes or which is
otherwise necessary for it to provide the ACMI Services (the "Route
Authorizations").

          Section 2.6 Operational Reports; Crew Hours & Maintenance. Airco shall
provide to Groundco the operational reports specified in Schedule 2.6 at the
times specified therein, and shall promptly prepare and deliver such other
reports and information as Groundco may reasonably request from time-to-time.

          Section 2.7 Tertiary Markets. Airco shall, upon Groundco's request,
use commercially reasonable efforts to negotiate and enter into contracts on
behalf of Groundco with third-party vendors to provide air transportation or
other services within the Tertiary Markets; provided, however, that the
foregoing shall not oblige Groundco to make any such request of Airco or
restrict Groundco from negotiating or entering into any such contract directly
on its own behalf.

          Section 2.8 Flight Documentation and Calculations; Weight & Balance;
Load Plan(a) With respect to ACMI Services performed at the Hubs and at the
Outstations located in Austin, Texas, Memphis, Tennessee and San Jose,
California, Airco shall (i) prepare all documents required by the FAA, DOT, TSA
or any other Governmental Authority to be prepared or maintained by a direct
carrier and (ii) perform the weight and balance calculations and load plan
functions for the loading of each Aircraft.

          (b) Notwithstanding Section 9.3, upon Groundco's request that Airco
perform any of the functions described in Section 2.8(a) in connection with ACMI
Services performed at any Outstation (in addition to those specified in Section
2.8(a)), Airco shall, as promptly as practicable, provide Groundco with a
statement of Airco's projected costs for performing such functions. If,
following Groundco's receipt of such statement of costs, Groundco requests Airco
to perform such functions, Airco shall commence performing such functions at the
specified Outstations as promptly as practicable and the Parties acknowledge
that Airco's costs incurred in so performing shall be included in the Cost
Recovery Amount.

          Section 2.9 Pilot and Crew Transportation. Airco shall be responsible
for providing pilot and crew transportation required in connection with
performing the ACMI Services.

          Section 2.10 GOM Availability. Airco shall be responsible to ensure
that each airport station included on Schedule 2.3 has available a current copy
of the GOM.

          Section 2.11 Exceptions to Airco's Responsibilities. Airco shall have
no responsibility for or otherwise be obligated to:

          (a) design, develop and construct the system for conducting Groundco's
air express business, including (i) purchasing, leasing or acquiring the use of
real estate, (ii) facility

                                       9

<PAGE>

design, placement, purchase and management functions and (iii) engineering of
sortation equipment and staffing requirements;

          (b) provide the system and network requirements applicable to Airco's
provision of the ACMI Services, including aircraft type, schedule, origin,
interim stops and destinations on all lane segments and linehaul schedules;

          (c) provide any equipment, facilities and inputs necessary for the
conduct of Groundco's business, other than aircraft, aircraft parts, aircraft
maintenance, tooling, de-icers, airstarts, ground power units, towbars,
maintenance lift trucks and office and administrative equipment;

          (d) provide any equipment, facilities and inputs necessary to provide
the ACMI Services, except as expressly provided in this Agreement or in the Hub
Services Agreement;

          (e) unless and until Groundco so requests Airco pursuant to Section
2.8(b), perform any of the functions described in Section 2.8(a) in connection
with ACMI Services performed at any Outstation (except as set forth in Section
2.8(a)); and

          (f) provide loading and unloading or other handling services under
this Agreement.

                                   ARTICLE III
                EQUIPMENT AND SERVICES TO BE PROVIDED BY GROUNDCO

          Section 3.1 Unit Load Devices. Groundco shall provide all ULDs used in
connection with the ACMI Services. All such ULDs shall (i) be compatible for use
with the Aircraft, (ii) meet the operational requirements necessary for the
provision of the ACMI Services, (iii) satisfy all applicable Legal Requirements
and (iv) satisfy the requirements of Airco's FAA-approved manuals. Groundco, at
its own cost and expense, shall maintain and repair all ULDs; provided that
Airco shall bear the cost of any maintenance or repair work caused by the gross
negligence or willful misconduct of Airco, its officers, employees, agents or
servants. The storage, loading and handling of ULDs, and the damage tolerance of
ULDs, will be in accordance with the GOM.

          Section 3.2 System and Equipment. Groundco shall provide the system,
system and network requirements, equipment, facilities, inputs and services set
forth in Section 2.11(a) - (f). Subject to Section 2.8(b), in connection with
ACMI Services performed at the Outstations (other than the Outstations located
in Austin, Texas, Memphis, Tennessee and San Jose, California), Groundco shall
(a) prepare all flight manifests showing the weight and location of ULDs, the
total weight by bulk loaded zone or position aboard the Aircraft and all other
information required by the FAA, the DOT, the TSA and the GOM and (b) perform
the weight and balance calculations and container deployment plan functions for
the loading of each Aircraft.

                                       10

<PAGE>

                                   ARTICLE IV
                              THIRD PARTY SERVICES

          Section 4.1 Supplemental Flying; Filler Cargo Services(a) Airco shall
be free to use the Aircraft to provide Third Party Services (other than
Independent Services as defined in Section 4.2) so long as (i) such usage does
not interfere in any material respect with Airco's performance of the ACMI
Services, (ii) Airco does not solicit Groundco's customers in competition with
Groundco, (iii) such usage does not involve Airco's providing air transportation
services to major integrated international air express delivery companies with
annual revenues in excess of $5 billion (other than the United States Postal
Service or any Affiliate of Groundco or Delta) and (iv) an Airco Event of
Default shall not have occurred and be continuing hereunder; provided, however,
that the occurrence of an Event of Default shall not restrict Airco's use of the
Aircraft to provide any such Third Party Services not otherwise prohibited by
this Section 4.1(a) which Airco is contractually obligated to provide at the
time such Event of Default occurs.

          (b) If Airco provides air transportation services to or for third
parties using one or more of the Aircraft on a charter, wet lease, ACMI or other
contractual basis (such services hereinafter referred to as "Supplemental
Flying"), then Airco shall pay Groundco the fee set forth in Section 10.6(a).
Except as set forth herein, all revenue from any Supplemental Flying shall inure
to the benefit of Airco. Airco is responsible for marketing and selling
Supplemental Flying services and determining whether to provide any Supplemental
Flying.

          (c) Airco may transport airport-to-airport, space-available freight
for third parties on any Aircraft while it is servicing an Air Route on behalf
of Groundco under the terms of this Agreement (such freight services hereinafter
referred to as "Filler Cargo Services"). If Airco provides any such Filler Cargo
Services, then Airco will pay Groundco the fee set forth in Section 10.6(b).
Except as set forth herein, all revenue from any Filler Cargo Services shall
inure to the benefit of Airco. Airco is solely responsible for marketing and
selling Filler Cargo Services and determining whether to provide any Filler
Cargo Services.

          Section 4.2 Independent Third Party Services. Airco is free to provide
ACMI and other services to third parties using aircraft other than the Aircraft
so long as any such service is provided by Airco at its own cost and expense
(the "Independent Services" and, together with Supplemental Flying and Filler
Cargo Services, the "Third Party Services"); provided that the provision of such
Independent Services does not interfere in any material respect with Airco's
performance of the ACMI Services. Such Independent Services may include, without
limitation, the charter of flights, wet leases or ACMI services operated for
third parties, flight training and the provision of airframe or engine
maintenance services. Any and all revenue Airco receives from providing
Independent Services shall be for its own account and Airco shall have no
obligation to pay any compensation or other sums to Groundco in conjunction with
the provision of such Independent Services, except as may otherwise expressly be
provided herein. In the event that at any time Airco derives more than 10% of
its revenue from the provision of Third Party Services, the parties agree to
negotiate in good faith to determine a reasonable allocation of the overhead
costs attributable to Airco's provision of such

                                       11

<PAGE>

Third Party Services, and the amount of overhead costs so allocated by the
Parties shall be excluded from the Cost Recovery Amount.

          Section 4.3 Use of Groundco Assets. To the extent Airco reasonably
determines that in order to provide any Third Party Services it needs to utilize
material handling equipment or facilities owned by or leased to Groundco (the
"Groundco Assets"), Groundco agrees to (i) unless the Groundco Assets are fully
utilized such that they are not available for use by Airco and subject to the
Parties' prior agreement on compensation terms specified in clause (ii) below,
allow Airco reasonable access to and use of the relevant Groundco Assets in
exchange for reasonable compensation and (ii) negotiate in good faith with Airco
the compensation terms (including the amount of compensation and the terms for
payment thereof) on which it will make such Groundco Assets available for use by
Airco; provided, that no compensation, other than the fee set forth in Section
10.6(b), shall be required with respect to Filler Cargo; and provided, further,
that Airco shall indemnify and hold Groundco and its Affiliates, employees,
agents, servants, contractors or subcontractors harmless from any and all loss,
damage or liability arising from, out of or related to its use of and access to
the Groundco Assets to provide Third Party Services (unless such loss, damages
or liability results from gross negligence or willful misconduct on Groundco's
part).

                                    ARTICLE V
                                 HAZARDOUS CARGO

          Section 5.1 Hazardous Cargo. Groundco has the right to tender for
transport on the Aircraft cargo of a dangerous, hazardous or offensive nature
provided that (i) such cargo is properly identified, packed, marked, labeled and
placarded in accordance with applicable IATA and ICAO/FAA dangerous goods and
hazardous materials regulations and is accompanied by a duly signed "shippers
declaration of dangerous goods," (ii) such transportation is in compliance with
the GOM and Legal Requirements and (iii) Airco is authorized to carry such
cargo.

                                   ARTICLE VI
                        CHANGES TO THE SCOPE OF SERVICES

          Section 6.1 The Initial Year. Subject to Section 6.4, for a period of
twelve (12) months (the "Initial Year") following the Effective Time, Groundco
shall not have the right to make any changes in Schedules 2.2 or 2.3 that would
reduce the scope of the ACMI Services to be provided by Airco (including,
without limitation, by reducing the number of Aircraft or pilots employed);
provided that Groundco may reduce the scope of the ACMI Services to be provided
during the Initial Year if (i) an Airco Event of Default of the type specified
in Section 13.1(a) shall have occurred or (ii) Airco shall have failed to enter
into a new collective bargaining agreement with its pilots within 180 days after
the Effective Time. In the event Groundco desires to exercise its rights
pursuant to clause (i) of this Section 6.1, Groundco shall promptly notify Airco
of the occurrence any such Airco Event of Default and, prior to exercising such

                                       12

<PAGE>

rights, consult in good faith with Airco as to Airco's ability to cure such
Airco Event of Default within a reasonable period of time.

          Section 6.2 After the Initial Year. After the expiration of the
Initial Year, Groundco may add, delete or modify the Air Routes (provided that
the ACMI Services as so modified would not require the procurement of additional
Aircraft or material modifications to the Aircraft), including by terminating
specific Air Routes or Aircraft, upon prior written notice to Airco, and Airco
shall implement such modifications as soon as practicable. The parties hereby
agree to promptly amend Schedule 2.2 and/or 2.3 hereto to reflect any such
change or modification of the Air Routes. In the event Groundco terminates this
Agreement with respect to an Aircraft prior to the Expiration Date and the
affected Aircraft is not reassigned to another Air Route under this Agreement,
the Parties shall have the rights and obligations set forth in Section 12.3(c).

          Section 6.3 Planning Process; Cooperation. On a quarterly basis, the
Parties shall meet (which meeting may occur telephonically) to review Groundco's
updated quarterly Forecast of Operating Requirements and Airco's available
Aircraft fleet capacity for the next four (4) quarters. Such review shall take
place no later than thirty (30) days prior to the start of each fiscal quarter
of Groundco. The Parties will conduct, in the third quarter of each year, a
formal annual budget review with respect to the ACMI Services for the upcoming
year. In addition to the foregoing, the Parties agree to cooperate as reasonably
requested in the exchange of information, on a daily or as-needed basis,
regarding operational matters.

          Section 6.4 General Exceptions. Notwithstanding any other provision of
this Agreement:

          (a) Groundco may request minor changes in timing or frequency of
existing Air Routes in accordance with current management practices, and Airco
shall implement such changes as soon as practicable; and

          (b) Groundco may, from time to time and with not less than thirty (30)
days' prior notice to Airco, request cancellation of any Air Route for a single
day (or set of days) in order to recognize reduced traffic and volume during a
holiday and Airco shall comply with such request to the extent practicable. The
total number of operating days affected by such cancellations during a calendar
year shall not exceed ten (10) days. During the first thirty (30) days following
the Effective Time, if any holiday cancellations are planned by Groundco,
Groundco shall endeavor to notify Airco not less than fifteen (15) days prior to
the applicable holiday.

          Section 6.5 New Services(a) Right of First Offer. With respect to any
New Service that Groundco or its Affiliates may elect to offer or develop in the
U.S. or elsewhere in North America, prior to discussing, negotiating with or
providing information to any third party air transportation service provider in
respect of such New Service, Groundco shall first give written notice (the "New
Service Notice") to Airco stating its intention to offer or develop such New
Service and specifying Groundco's preliminary Aircraft and Air Route
specifications and cost

                                       13

<PAGE>

estimates in connection with such New Service; provided, however, that the
foregoing shall not restrict Groundco from providing information with respect to
such New Service to Delta Airways at or after the time at which such information
is provided to Airco. Within ten (10) Business Days after receipt of a New
Service Notice, Airco may submit in writing to Groundco an estimate of the Cost
Recovery Amount for providing such New Service, together with any other relevant
information requested by Groundco in the New Service Notice (such amount, plus
the applicable Base Markup, the "Airco Bid"). If necessary, Airco may request
additional information from Groundco or a reasonable amount of additional time
in order to prepare and submit the Airco Bid, and Groundco shall not
unreasonably withhold such information or its consent to such additional time.
Upon the expiration of such 10 Business Day period (and any extension period
agreed by the Parties), whether or not Airco has submitted an Airco Bid,
Groundco shall be free to solicit bids (each, including any bid submitted by
[Delta] Airways, a "Third Party Bid") from, provide information to, and
negotiate with any third party air transportation service provider (each a
"Third Party Carrier") in respect of such New Service. In the event that one or
more Third Party Bids is superior to the Airco Bid, Groundco shall be free to
contract with any Third Party Carrier that submitted a superior Third Party Bid
to provide the New Service; provided that Groundco shall provide Airco with
sufficient information regarding the terms and conditions of the accepted Third
Party Bid for Airco to verify that such Third Party Bid is superior to the Airco
Bid.

          (b) Capital Expenditures Associated with New Services. In the event
that Groundco accepts any Airco Bid with respect to any New Service, any new
capital equipment required to modify an existing Aircraft in connection with the
New Service shall result in an adjustment, determined in accordance with GAAP,
to the depreciation schedule contained in Schedule 2.2 for the affected
Aircraft. In the event additional aircraft are required for a New Service
pursuant to this Section 6.5, Airco shall be responsible for obtaining such
aircraft on commercially reasonable terms from a third party provider, and
Groundco shall cooperate in such efforts. Any Aircraft acquired by Airco to
provide a New Service shall be listed on Schedule 2.2 and shall be an "Aircraft"
for all purposes of this Agreement.

          Section 6.6 Adjustment to Base Compensation. In the event that
Groundco accepts any Airco Bid, then the costs and expenses designated in the
Airco Bid shall be included in the Cost Recovery Amount, and the Forecast of
Operating Requirements and the Cost Estimate shall be adjusted accordingly. In
the event that Groundco modifies the ACMI Services pursuant to Section 6.2, 6.3,
6.4 or 6.5, the costs and expenses of Airco resulting from any such modification
shall be included in the Cost Recovery Amount.

                                  ARTICLE VII
            REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTIES

          Section 7.1 Representations, Warranties and Covenants of Airco. Airco
hereby represents, warrants and covenants to Groundco as follows:

          (a) Airco is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;

                                       14

<PAGE>

          (b) Airco has the corporate power to execute and deliver this
Agreement;

          (c) The making, execution and performance of this Agreement by Airco
(i) has been duly authorized by all necessary corporate action, and (ii) except
to the extent resulting from actions taken by Delta or its Affiliates, will not
violate, breach or contravene any provision of or constitute a default under (A)
any material provision of any applicable Legal Requirement, (B) the certificate
of incorporation or bylaws of Airco, (C) any material license or permit under
which Airco conducts its business, or any insurance required hereunder, or (D)
any material contract, indenture, agreement or other instrument binding on
Airco;

          (d) This Agreement constitutes a legally valid and binding agreement
of Airco, enforceable against Airco in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting generally the enforcement of creditors'
rights and remedies and general principles of equity, including any limitations
on the availability of the remedy of specific performance or injunctive relief
regardless of whether specific performance or injunctive relief is sought in a
proceeding at law or in equity;

          (e) Airco has at the Effective Time, and shall maintain during the
Term, the requisite authority from the FAA, the DOT and each other applicable
Governmental Authority to provide the ACMI Services; Airco is at the Effective
Time, and shall perform the ACMI Services during the Term, in compliance in all
material respects with all Legal Requirements;

          (f) Each Aircraft is at the Effective Time, and shall be all times
during the Term, covered by a currently valid Certificate of Airworthiness
issued by the FAA, and Airco shall operate, maintain, service and repair the
Aircraft, including spare engines and spare parts, in all material respects in
accordance with all Legal Requirements, including Airco's FAA-approved
maintenance program, and the terms hereof; and

          (g) Airco shall (i) be solely responsible for the Operational Control
of the Aircraft, (ii) operate the Aircraft, in all material respects, in a safe,
skilled and competent manner and in accordance with all applicable Legal
Requirements, including noise, environmental and emission standards and
requirements, and including those of the FAA, the DOT, the TSA and the airports
served, and (iii) provide qualified flight crews for each flight in accordance
with such Legal Requirements.

          (h) Airco shall, to the extent permitted by Legal Requirements, inform
Groundco (i) on an ongoing basis as to any material developments or, otherwise,
as reasonably requested by Groundco, with respect to Airco's efforts to enter
into a new collective bargaining agreement with Airco's pilots and (ii) as
promptly as practicable with respect to any actual or prospective labor dispute
that could reasonably be expected to materially adversely impact Airco's
performance of the ACMI Services. Prior to entering into any binding agreement
or settlement in respect of any matters described in clause (i) or (ii) of this
Section 7.1(h), Airco shall consult in good faith with Groundco as to the
prospective terms and conditions of any such agreement or settlement.

                                       15

<PAGE>

          Section 7.2 Representations, Warranties and Covenants of Groundco.
Groundco hereby represents, warrants and covenants to Airco as follows:

          (a) Groundco is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;

          (b) Groundco has the corporate power to execute and deliver this
Agreement;

          (c) The making, execution and performance of this Agreement by
Groundco (i) has been duly authorized by all necessary corporate action, and
(ii) will not violate, breach or contravene any provision of or constitute a
default under (A) any material provision of any applicable Legal Requirement,
(B) the certificate of incorporation or bylaws of Groundco, (C) any material
license or permit under which Groundco conducts its business, or any insurance
required hereunder, or (D) any material contract, indenture, agreement or other
instrument binding on Groundco;

          (d) This Agreement constitutes a legally valid and binding agreement
of Groundco, enforceable against Groundco in accordance with its terms, except
as the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting generally the enforcement of creditors'
rights and remedies and general principles of equity, including any limitations
on the availability of the remedy of specific performance or injunctive relief
regardless of whether specific performance or injunctive relief is sought in a
proceeding at law or in equity;

          (e) Groundco and its employees shall comply in all material respects
with all Legal Requirements and the GOM in connection with its performance
hereunder, including performance of related ground services and delivery of
goods for air transport services hereunder; and

          (f) Groundco will, pursuant to that Sublease dated of even date
herewith between Airco and Groundco and attached hereto as Exhibit D (as amended
from time to time, the "Sublease"), provide to Airco sufficient space at the
Wilmington Air Park to serve as Airco's corporate headquarters.

                                  ARTICLE VIII
                          INDEMNIFICATION AND INSURANCE

          Section 8.1 Airco Indemnification. Airco hereby agrees to indemnify
and hold harmless the Groundco Indemnified Parties from and against any and all
liabilities, claims, demands, suits, judgments, damages and losses, including
the costs and expenses (including reasonable attorney's fees and disbursements)
incurred in connection therewith or incident thereto (collectively, "Losses")
arising out of the death of or injury to any person whomsoever, including
employees of Airco or Groundco, or arising out of loss of, damage to, or
destruction of any property whatsoever, including cargo, the Aircraft and any
other property of Groundco or of third parties, caused by, arising out of or in
connection with Airco's performance hereunder or its possession, use, operation
or maintenance of the Aircraft, including any equipment, machinery,

                                       16

<PAGE>

spare engines and spare parts utilized to provide such services. Notwithstanding
the foregoing, Airco's indemnification obligations herein (i) shall not extend
to Losses to the extent caused by the gross negligence or willful misconduct of
Groundco or any of the other Groundco Indemnified Parties; and (ii) are limited
to the kinds and amounts of insurance Airco agrees to provide herein, unless
such insurance coverage is unavailable through the fault of Airco, and except to
the extent such obligations arise from the gross negligence or willful
misconduct of Airco or its agents or employees.

          Section 8.2 Airco Insurance. During the term of this Agreement, Airco
shall, to the extent available on commercially reasonable terms, maintain the
following insurance in the form and with insurers reasonably satisfactory to
Groundco and with terms and policy limits to be agreed upon by the Parties:

          (a) All risk hull and war risk insurance, including ground coverage,
on the aircraft-valued form with sufficient limits for full recovery of the
higher of Fair Market Value or Book Value of the Aircraft (unless a U.S.
Government indemnity reasonably satisfactory to Groundco is provided in lieu
thereof). These policies shall cover all geographical areas of operation
contemplated under this Agreement. Any deductibles thereunder shall be paid by
Airco, except such deductibles as may be payable as a result of damage caused
solely by the gross negligence or willful misconduct of Groundco or any of the
Groundco Indemnified Parties;

          (b) Aircraft liability insurance, including bodily injury and death,
property damage and passenger legal liability in at least the amount of
$1,000,000,000 combined single limit;

          (c) Worker's compensation as required by law and employer's liability
insurance with a limit of not less than $1,000,000 per occurrence;

          (d) Comprehensive General Liability Insurance (including contractual
liability) with a combined single limit of not less than $5,000,000;

          (e) Automobile liability insurance with a combined single limit of not
less than $5,000,000;

          (f) Airport premises liability insurance with a combined single limit
of not less than $500,000,000;

          (g) All risk cargo liability insurance in the minimum amount of
$10,000,000 per occurrence;

          (h) Property insurance covering standard "all risk" perils for Airco
owned equipment and facilities.

          (i) Crime insurance with a combined single limit of not less than
$5,000,000;

          (j) Directors and Officers Insurance with a combined single limit of
not less than $10,000,000;

                                       17

<PAGE>

          (k) Employment Practices Liability Insurance with a combined single
limit of not less than $10,000,000;

          (l) Fiduciary liability insurance with a combined single limit of not
less than $10,000,000.

          (m) The insurance in Subsections 8.2(b), (d), (e), (f), (g), (h), (i),
and (k) shall include the following provisions:

               (i) An endorsement naming Groundco and the Groundco Indemnified
          Parties as additional insureds;

               (ii) A standard clause as to cross liability or severability of
          interests among parties appearing as insureds;

               (iii) An acceptance by the underwriters of the contractual
          obligations of Airco to Groundco as set forth in Subsection 8.1 above;

               (iv) A clause stating that Groundco's and the Groundco
          Indemnified Parties' interests are insured regardless of any breach or
          failure or violation by Airco of any warranties, representations,
          declarations or conditions contained in such policies, including the
          failure to pay premiums;

               (v) Waivers of underwriters' rights of subrogation against any
          party hereto, and its parent, its affiliated companies, and the
          officers, directors, agents and employees of each of those companies;
          and

               (vi) The insurance will be for primary coverage, without right of
          contribution from any insurance maintained by Groundco.

          Section 8.3 Groundco Indemnification(a) . (a) Groundco hereby agrees
to indemnify and hold harmless the Airco Indemnified Parties from and against
any and all Losses arising out of the death of or injury to any person
whomsoever, including employees of Airco or Groundco, or arising out of loss of,
damage to, or destruction of any property whatsoever, including cargo, the
Aircraft and any other property of Airco or of third parties, including any
equipment or machinery utilized to provide such services, caused by, arising out
of or in connection with Groundco's performance of its obligations under this
Agreement. Notwithstanding the foregoing, Groundco's indemnification obligations
herein (i) shall not extend to Losses to the extent caused by the gross
negligence or willful misconduct of Airco or any of the other Airco Indemnified
Parties and (ii) are limited to the kinds and amounts of insurance Groundco
agrees to provide herein, unless such insurance coverage is unavailable through
the fault of Groundco, and except to the extent such obligations arise from the
gross negligence or willful misconduct of Groundco or its agents or employees.

          Section 8.4 Groundco Insurance. During the term of this Agreement,
Groundco shall, to the extent available on commercially reasonable terms, carry
the following insurance, with insurers reasonably satisfactory to Airco and with
terms and policy limits to be agreed upon by the Parties:

                                       18

<PAGE>

          (a) Cargo liability insurance in the amount of $10,000,000 per
occurrence covering all cargo and shipments to be transported on flights
operated by Airco under this Agreement;

          (b) Property insurance covering standard "all risk" perils for
Groundco-owned equipment and facilities. Any deductibles thereunder shall be
paid by Groundco, except such deductibles as may be payable as a result of
damage caused by the gross negligence or willful misconduct of Airco or any of
the Airco Indemnified Parties;

          (c) Automobile liability insurance with a combined single limit of not
less than $5,000,000;

          (d) Comprehensive General Liability (including contractual liability)
with a combined single limit of not less than $5,000,000

          (e) Worker's compensation as required by law and employer's liability
insurance with a limit of not less than $1,000,000

          (f) Airport premises liability insurance with a combined single limit
of not less than $500,000,000;

          (g) The insurance in Subsection 8.4(a), (b), (c), (d) and (f) shall
include the following provisions:

               (i) Airco and the Airco Indemnified Parties shall be named as
          additional insureds;

               (ii) A standard clause as to cross liability or severability of
          interests among parties appearing as insureds;

               (iii) Acceptance by the underwriters of the contractual
          obligations of Groundco to Airco as set forth in Section 8.3 above;

               (iv) A clause stating that Airco's and the Airco Indemnified
          Parties' interests are insured regardless of any breach of, failure,
          or violation by, the procuring party of any warranties,
          representations, declarations or conditions contained in such
          policies;

               (v) waivers of underwriter's rights of subrogation against any
          respective party hereto, and its affiliated companies, and the
          officers, directors, agents and employees of each of those companies;
          and

               (vi) The insurance will be for primary coverage, without right of
          contribution from any insurance maintained by Airco.

          Section 8.5 Insurance Certificates. The Party procuring the insurance
hereunder shall provide to the other Party hereto prior to the commencement of
operations a certificate

                                       19

<PAGE>

from the insurers that such insurance is in effect. These certificates shall
state policy numbers, dates of expiration, and limits of liability thereunder.

          Section 8.6 Notice of Change or Cancellation. Each insurance policy,
and each certificate evidencing the same, shall contain a provision that not
less than thirty (30) days' advance notice will be given to the Parties hereto
of cancellation or reduction in the insured value or reductions in type of
perils to be insured against or any other material changes in the policies. War
risk policies may be subject to standard war risk cancellation provisions and
availability on commercially reasonable terms.

          Section 8.7 Payment of Premiums. If the procuring Party fails to pay
its premiums when due on any or all of the foregoing policies for any reason
whatsoever, the other Party may, at its sole discretion, pay such premiums and
charge the other party therefor, and the procuring Party shall promptly
reimburse the other party for such charges. Subject to Section 12.2(b), if any
of the foregoing policies are canceled and not immediately replaced because they
are not available on commercially reasonable terms, the Parties will promptly
negotiate in good faith alternatives to such policies and/or seek replacement
coverage under other policies.

          Section 8.8 Review of Insurance Coverage. The Parties will
periodically review the scope and amount of insurance that Airco and Groundco
are required to carry pursuant to Sections 8.2 and 8.4, and shall negotiate in
good faith to effect such modifications to such requirements as may be advisable
based on changes in market conditions, including availability of such coverage
on commercially reasonable terms and increases in premiums.

          Section 8.9 Limitation on Indemnification. Notwithstanding Sections
8.1 and 8.3, neither Party shall be entitled to indemnification hereunder for
lost profits, reputational damage or incidental, special or consequential
damages, except to the extent such damages are required to be paid to a
non-affiliated third party.

          Section 8.10 Indemnification Procedures. (a) If any Groundco
Indemnified Party or Airco Indemnified Party (as applicable, the "Indemnified
Party") receives notice of the assertion of any claim or the commencement of any
action or proceeding by any entity that is not a Party to this Agreement or an
Affiliate of such a Party (a "Third Party Claim") against such Indemnified Party
with respect to which Airco or Groundco (as applicable, the "Indemnifying
Party") is obligated to provide indemnification under this Agreement, the
Indemnified Party will promptly notify the Indemnifying Party of such Third
Party Claim; provided, however, that the failure of such Indemnified Party to so
notify the Indemnifying Party shall not relieve the Indemnifying Party of its
obligation to indemnify the Indemnified Party hereunder except to the extent
that the Indemnifying Party is materially prejudiced by such failure (whether as
a result of the forfeiture of substantive rights or defenses or otherwise). The
notice of claim shall state the nature of the claim, the amount of the
liability, if known, and the method of computation thereof, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such right of indemnification is claimed or arises. Upon
receipt of notification of a Third Party Claim, the Indemnifying Party shall be
entitled, upon written notice to the Indemnified Party, to assume the
investigation and defense thereof with counsel reasonably satisfactory to the
Indemnified Party. Whether or not the Indemnifying Party elects to assume the
investigation and defense of any Third Party Claim, the Indemnified Party shall
have the

                                       20

<PAGE>

right to employ separate counsel and to participate in the investigation and
defense thereof; provided, however, that the Indemnified Party shall pay the
fees and disbursements of such separate counsel unless (i) the employment of
such separate counsel has been specifically authorized in writing by the
Indemnifying Party or (ii) the Indemnifying Party has failed to assume the
defense of such Third Party Claim within a reasonable time after receipt of
notice thereof with counsel reasonably satisfactory to such Indemnified Party.
Notwithstanding the foregoing, the Indemnifying Party shall not be liable for
the fees and disbursements of more than one counsel for all Indemnified Parties
in connection with any one proceeding or similar or related proceedings arising
out of the same general allegations or a common set of facts. Without the prior
written consent of the Indemnified Party, the Indemnifying Party will not enter
into any settlement of any Third Party Claim that would lead to liability or
create any financial or other obligation on the part of the Indemnified Party
unless such settlement includes as an unconditional term thereof the release of
the Indemnified Party from all liability in respect of such Third Party Claim.
If a settlement offer solely for money damages is made by the applicable third
party claimant and the Indemnifying Party notifies the Indemnified Party in
writing of the Indemnifying Party's willingness to accept the settlement offer
and pay the amount called for by such offer without any reservation of any
rights or defenses against the Indemnified Party, the Indemnified Party may
continue to contest such claim, free of any participation by the Indemnifying
Party, and the amount of any ultimate liability with respect to such Third Party
Claim that the Indemnifying has an obligation to pay hereunder shall be limited
to the lesser of (A) the amount of the settlement offer that the Indemnified
Party declined to accept plus the Losses of the Indemnified Party relating to
such Third Party Claim through the date of its rejection of the settlement offer
or (B) the aggregate Losses of the Indemnified Party with respect to such Third
Party Claim.

          (b) Any claim by an Indemnified Party with respect to Losses that do
not result from a Third Party Claim (a "Direct Claim") shall be asserted by
giving the Indemnifying Party reasonably prompt written notice thereof, and the
Indemnifying Party shall have a period of 30 days within which to respond in
writing to such Direct Claim, during which period the Indemnified Party shall
forbear from filing any legal process in respect of such Direct Claim. If the
Indemnifying Party does not so respond within such 30 day period, the
Indemnified Party shall be free to pursue such remedies as may be available to
the Indemnified Parties on the terms and subject to the provisions of this
Agreement.

                                   ARTICLE IX
                               AIRCO'S OPERATIONS

          Section 9.1 Independent Contractors. The services contracted for
herein shall be conducted by Airco solely as an independent contractor and
neither it nor its employees, subcontractors, if any, or their employees,
servants or agents, shall be deemed to be employees of Groundco. Additionally,
any services provided by Groundco hereunder shall be conducted or provided
solely as an independent contractor and neither Groundco nor its employees,
subcontractors, if any, or their employees, servants or agents, shall be deemed
to be employees of Airco.

                                       21

<PAGE>

          Section 9.2 Groundco Employees as Agents of Airco. Notwithstanding
Section 9.1, Groundco employees, agents and contractors shall be authorized to
act as agents of Airco in connection with the issuance of airbills and other
transportation documents, in the acceptance of materials and goods from shippers
and in determining their suitability for air transportation and any other
matters reasonably related thereto. Groundco and its employees, agents and
contractors shall be governed by and shall act in compliance with Airco's FAA or
TSA-approved security program, its policies and programs for the acceptance or
rejection of hazardous materials or dangerous goods, its policies and procedures
for DOT, FAA, and TSA compliance, in compliance with all Legal Requirements
applicable to the provision of air transportation, including import/export laws,
customs laws, and other commercial laws restricting or allowing such
transportation, and in compliance with the GOM. Groundco and its employees,
agents and contractors shall be authorized to act as an agent for Airco in
determining whether to cause any materials or goods to be transported by Airco
or to cause such materials or goods to be transported by any other U.S. air
carrier or foreign carrier on an interline or any other basis. Such
authorization shall include the power to complete and deliver interline
manifests, airbills or other required transportation documents. Groundco
employees, agents and contractors will meet or exceed Airco's Legal Requirements
in regard to employee training and qualifications for weight and balance,
hazardous material recognition, alcohol and drug testing, employee background
checks and similar matters, in accordance with regulatory requirements for
employees in safety sensitive positions. Groundco shall indemnify and hold Airco
harmless from any and all loss, damage or liability arising from, out of or
related to, the actions or omissions of the Groundco employees, agents and
contractors under this Section 9.2.

          Section 9.3 Procedures Under GOM. At those airport locations
where loading, unloading, and weight and balance calculations are performed by
Groundco, Airco shall train and audit employees of Groundco at each such
location to conduct and perform the loading (including with respect to hazardous
materials), weight and balance calculations, ramp operations and fueling
operations required by the FAA to be performed for each of the flight operations
to be flown by Airco for Groundco hereunder. The employees and agents of
Groundco shall not become the employees of Airco as a consequence thereof, but
shall be acting as agents for Airco when performing such loading, weight and
balance, ramp operations and fueling operations or calculations. Any employees
or agents not qualified or capable of performing such work shall be identified
to Groundco by Airco, and if requested to do so by Airco, such employees or
agents shall be promptly removed from doing such work.

          Section 9.4 Access to Locations. Groundco shall provide access to and
use of certain space or locations at facilities leased or licensed by Groundco
at the airports to be served under this Agreement in order to enable, under
appropriate FAA or TSA security requirements, Airco, its Affiliates or the
respective employees, agents or contractors thereof, (i) to deliver materials
and goods to the Aircraft and to retrieve such materials and goods from the
Aircraft, (ii) to provide the ground handling and ground servicing of the
Aircraft that is contemplated hereunder, (iii) to provide the operational
support for the Aircraft that is contemplated hereunder (including the
calculation and preparation of weight and balance calculations that are being
performed by Airco pursuant to Section 2.8), (iv) to store Aircraft, spare
parts, mechanic's equipment, ramp equipment and provide work space and (v) to
interact with Groundco as may be required to conduct the business of Airco in
the U.S. or other applicable jurisdictions. At any airport where Airco provides
the ACMI Services, Airco and Groundco shall use their respective

                                       22

<PAGE>

commercially reasonable efforts to obtain all credentials and make all
arrangements with the airport as shall be required to allow Groundco employees
to have access to the airport operations areas of such airports in accordance
with the security plans or arrangements in place at such airports pursuant to
the Legal Requirements issued by the FAA, DOT and TSA. Employees of each of the
Parties shall act in accordance with the requirements of Airco's FAA and
TSA-approved security plan or the plans and arrangements in effect at any
airport receiving services hereunder, including but not limited to the
maintenance of known shipper lists, the screening of materials or goods placed
aboard any aircraft, including the Aircraft covered hereunder, and the
restrictions on access to any airport areas where security limitations are
imposed.

                                    ARTICLE X
                                  COMPENSATION

          Section 10.1 Base Compensation(a) In exchange for the services
provided by Airco to Groundco under this Agreement, Groundco shall (i) reimburse
Airco, in accordance with the terms hereof, for all of the costs described in
Section 10.2(a) that Airco incurs in providing the ACMI Services to Groundco,
such costs to be determined in accordance with this Article X (such amount, the
"Cost Recovery Amount") and (ii) pay Airco a fee equal to (x) the base mark-up
determined pursuant to Section 10.1(b) (the "Base Markup" and, together with the
Cost Recovery Amount, the "Base Compensation") and (y) subject to Section
10.1(d), the incremental markup determined pursuant to Section 10.1(c) (the
"Incremental Markup"). Airco's good faith estimate of the Cost Recovery Amount
for the third fiscal quarter of 2003 is set forth in Schedule 10.1. Prior to the
Effective Time, the Parties agree to update Schedule 10.1, in accordance with
the provisions of Section 10.4, in order to reflect the actual costs experienced
by Airco during the intervening quarter or quarters prior to the Effective Time
and the impact of such actual costs on estimated costs for the four quarters
immediately following the Effective Time. Such updated Schedule 10.1 shall be
the initial Cost Recovery Amount for the period immediately following the
Effective Time.

          (b) the Base Markup shall be 1.75% and shall be payable (x) on all
Cost Recovery Amount items described in Section 10.2(a) and (y)
contemporaneously with each payment of any Cost Recovery Amount; and

          (c) the Incremental Markup shall be payable subject to Section 10.1(d)
and shall consist of:

               (i) with respect to each applicable quarterly or annual period, a
          cost component equal to, subject to Sections 10.1(e) and 10.1(g): (A)
          0.25% of any reduction of up to 4.0% in Airco's Cost Per Block Hour
          during such period as compared with Airco's targeted Cost Per Block
          Hour in respect of such period as set forth in the applicable Costs
          Estimate, plus, (B) 0.35% of any amount of reduction in excess of 4.0%
          (if any) in Airco's Cost Per Block Hour during such period as compared
          with Airco's targeted Cost Per Block Hour in respect of such period as
          set forth in the applicable Costs Estimate, in each case multiplied by
          the Cost Recovery Amount for such period; provided, however, that
          during the first

                                       23

<PAGE>

          year following the Effective Time, no Incremental Markup shall be
          payable in respect of any percentage reduction in Airco's Cost Per
          Block Hour during any applicable period within such period that is
          greater than 5.0%. After the first anniversary of the Effective Time,
          Groundco shall review the desirability of maintaining such 5.0%
          limitation with respect to subsequent periods. An illustration of the
          application of this formula based on hypothetical figures is provided
          in footnote 1./1/

     plus:

               (ii) a service quality component equal to the Incremental Markup
          Percentage calculated according to the following table multiplied by
          the Cost Recovery Amount in respect of the applicable year:

--------------------------------------------------------------------
    On Time Performance Standard       Incremental Markup Percentage
--------------------------------------------------------------------
98.3% or greater but less than 98.6%                0.05%
--------------------------------------------------------------------
98.6% or greater but less than 98.9%                0.10%
--------------------------------------------------------------------
98.9% or greater but less than 99.1%                0.15%
--------------------------------------------------------------------
99.1% or greater but less than 99.3%                0.20%
--------------------------------------------------------------------
          99.3% or greater                          0.25%
--------------------------------------------------------------------

          (d) No part of the Incremental Mark-Up shall be payable to Airco
unless at least 25% of such amount shall be placed in a senior and middle
management bonus plan the terms of which shall be determined by the Board of
Directors of Airco.

          (e) Within 60 days after the end of each fiscal quarter in respect of
which the cost component of the Incremental Markup was earned, Groundo will pay
to Airco 40% of such cost component.

          (f) Within 90 days after the end of each fiscal year, Groundco shall
pay to Airco an amount equal to 60% of the cost component of the annual
Incremental Markup earned for the fiscal year then ended, such cost component to
be calculated in accordance with Section

----------
/1/  Actual Block Hours                 = 25,000
     Target Cost Per Block Hour         = $3,000
     Actual Cost Per Block Hour         = $2,950
     Target Cost Recovery Amount        = $75,000,000
     Actual Cost Recovery Amount        = $73,750,000
     Actual Cost Reduction (%)          = $1,250,000 (1.67%)
     Applicable award @ 1.67% Reduction = 25%
     Incentive award                    = $312,500

                                       24

<PAGE>

10.1(c)(i), based upon the reduction in Airco's Cost Per Block Hour during the
fiscal year then ended.

          (g) The service quality component of the Incremental Markup shall be
payable annually, within 90 days after the end of each fiscal year, in respect
the fiscal year then ended, in an amount equal to the Incremental Markup
Percentage determined pursuant to the table set forth in Section 10.1(c)(ii),
multiplied by the aggregate Cost Recovery Amount payable during such fiscal
year.

          (h) In the event of any extraordinary increase or decrease in the
number of block hours flown within any applicable period, Groundco will consult
with Airco to determine, and may make at Groundco's option, a commensurate
adjustment to the applicable thresholds for determining the cost component of
the Incremental Markup in respect of any such affected period. The Parties
acknowledge that the applicable thresholds for determining the cost and service
components of the Incremental Markup for the first year following the Effective
Time have been prepared based upon historical cost and service information
provided by Airco to Groundco, and Groundco shall have the right to adjust such
threshholds after the date hereof if it determines that the actual data
pertaining to such historical periods differs from the data provided to it by
Airco.

          Section 10.2 Cost Recovery Amount (a) The Cost Recovery Amount shall
include all of Airco's costs incurred in providing the ACMI Services pursuant to
this Agreement, including:

               (i) all costs associated with the ownership, possession or use of
          the Aircraft to the extent that such costs are not otherwise specified
          in this Agreement as being for the account of or to be paid by either
          Groundco or Airco (including depreciation costs determined in
          accordance with GAAP and on a basis consistent with the determination
          of such depreciation costs as set forth in the Closing Balance Sheet
          (as defined in the Merger Agreement), subject to changes required by
          GAAP; provided that, for purposes hereof, no adjustment to
          depreciation costs shall be made which are based on or attributable to
          a termination or non-renewal, or expected termination or non-renewal,
          of this Agreement; and lease and financing costs incurred by Airco
          with respect to the Aircraft);

               (ii) all costs for fully qualified, licensed and experienced
          cockpit crews as necessary to fly the Aircraft, as well as compliance
          with the latest Category II weather standards, including all
          recurrent, upgrade, requalification, transition or other training for
          flight crews, mechanics, dispatchers or other personnel required as a
          result of attrition or operational requirements, Airco's training and
          safety program or FAA or other Governmental Authority directives;

               (iii) all compensation and benefits of Airco's employees engaged
          in the provision of ACMI Services hereunder (other than the allocable
          share of compensation and benefits attributable to the performance of
          Supplemental Flying or Independent Services), including salaries,
          social security, insurance, uniforms, payroll taxes, health and
          medical benefits, retirement benefits and other fringe

                                       25

<PAGE>

          benefits, per diem and meals for the flight crews, maintenance crews,
          crew scheduling, dispatchers, supervisory and administrative
          personnel, and all related expenses, including accommodations and
          transportation at, to and from any airport or station, for the flight
          crews, ground staff and other Airco personnel;

               (iv) all costs of providing the retirement benefits and retiree
          welfare benefits to former employees of Airco, including those who
          terminated employment prior to the Effective Time;

               (v) all costs incurred in maintaining and repairing of the
          Aircraft and flight simulators as required by the FAA and by Airco's
          FAA-approved maintenance programs, including the cost of oil or other
          incidental fluids;

               (vi) all costs incurred in preparing and submitting to Groundco,
          at its reasonable request, reports concerning flight exceptions,
          aircraft systems and engine reliability, including the reports set
          forth in Schedule 2.6 to this Agreement;

               (vii) all costs incurred in the preparation of all flight-related
          documents related to the ACMI Services, except flight-related
          documents that will be prepared by Groundco's employees or agents;

               (viii) all costs associated with coordination between Airco's
          flight or airline control and/or dispatch functions and the ground
          operations and non-airline system control function performed by or for
          Groundco to facilitate the timely and efficient performance of
          Groundco services;

               (ix) all costs associated with the insurance policies required by
          Section 8.2 of this Agreement;

               (x) all expenses associated with Airco's regulatory compliance
          (including record-keeping, training, development of manual(s)/forms,
          regulatory communications and any fines/penalties (except for
          fines/penalties incurred as a result of gross negligence or willful
          misconduct);

               (xi) all administrative or corporate overhead expenses of Airco,
          except to the extent allocated, pursuant to Section 4.2, to Airco's
          provision of Third Party Services;

               (xii) subject to Section 12.3, costs associated with expansion,
          contraction or redeployment of Aircraft or Airco personnel, including
          any termination and relocation benefits;

               (xiii) costs under any employee incentive program in effect at
          the Effective Time (including, for the avoidance of doubt, Airco's
          Management Incentive Program and Star Program) or adopted by Airco at
          the request of Groundco to encourage improvements in services and
          costs;

                                       26

<PAGE>

               (xiv) Depreciation costs of equipment owned by Airco (including
          flight simulators and other training equipment) and spare parts;

               (xv) costs incurred by Airco in performing its obligations under
          Section 9.3;

               (xvi) any costs related to Airco applying for, obtaining or
          maintaining Route Authorizations pursuant to Section 2.5; and

               (xvii) all costs incurred by Airco in accordance with Section 2.7
          in connection with entering into and performing under third-party
          vendor contracts related to Tertiary Markets.

          (b) The Cost Recovery Amount shall not include costs attributable to
any of the following, which Groundco, at its option, will either procure or
provide at its own expense or, if Groundco elects not to procure or provide the
following items, Airco shall provide such items and Groundco will promptly
reimburse Airco for any out of pocket costs incurred in providing such items:

               (i) fuel for the Aircraft; provided that any fuel purchase by
          Groundco shall be as agent for Airco, and Groundco shall be authorized
          to purchase such fuel in the name of Airco; and provided that such
          amounts shall be prepaid by Groundco to Airco;

               (ii) airport landing, parking ramp and aircraft servicing fees
          (including, but not limited to, de-icing, ground support equipment and
          fueling) at all stations;

               (iii) all fees for use of or access to navigational aids and
          overfly permits;

               (iv) all Animal, Plant Health Inspection Service fees charged for
          inspections of plants or animals;

               (v) any taxes of Airco other than income taxes or taxes
          attributable to Airco's performance of Third Party Services.

               (vi) taxes, duties and charges levied by any Governmental
          Authority on Groundco freight;

               (vii) all interest expense in respect of Airco's obligations
          under the First Promissory Note.

               (viii) all fines levied by any Government Authority against Airco
          arising as a result of actions taken by or at the direction of
          Groundco or from cargo tendered to Airco by Groundco;

                                       27

<PAGE>

               (ix) to the extent agreed by the Parties to be Groundco expenses
          pursuant to Section 10.7, all capital expenditures of Airco in
          connection with providing the ACMI Services;

               (x) any amounts payable by Airco to Groundco pursuant to the
          Sublease Agreement, dated of even date herewith, between Groundco, as
          sublessor, and Airco, as sublessee; and

               (xi) all costs incurred by Airco in obtaining alternative or
          replacement facilities as necessary to continue performing the ACMI
          Services if the facilities under the Sublease become unavailable,
          including following any casualty or partial condemnation of any
          facilities used in performing the ACMI Services.

          (c) The Cost Recovery Amount shall not include, and Airco shall not be
entitled to reimbursement of any amounts incurred in respect of, any of the
following:

               (i) any income tax of Airco;

               (ii) any costs related to Airco applying for, obtaining or
          maintaining any and all licenses or other operating authorities issued
          by any Governmental Authority required solely for the performance of
          Third Party Services;

               (iii) all administrative or corporate overhead expenses of Airco,
          allocated, pursuant to Section 4.2, to Airco's provision of Third
          Party Services;

               (iv) all interest expense in respect of Airco's obligations under
          the Second Promissory Note; and

               (v) all amounts payable by Groundco pursuant to Section 10.1 of
          the Employee Matters Agreement.

          (d) Notwithstanding Section 10.2(a)(iii), to the extent that the
average increase in stated hourly wage rate scales for the positions applicable
to hourly workers, stated hourly wage rate range scales for positions of
non-exempt workers or stated annual salary range scales for the positions of
exempt workers (including, with respect to non-exempt and exempt workers,
potential bonus opportunity based on the merit matrix), in each case as
currently specified in Airco's pay policy for Airco employees engaged in the
provision of the ACMI Services hereunder is more than the lesser of 3% per annum
or the CPI Rate plus 0.5% per annum measured on a same quarter comparison to the
corresponding quarter in the prior year (the "Labor Cost Cap"), such increases
shall not be included in the Cost Recovery Amount. Nothing in the preceding
sentence shall prohibit Airco from moving employees up or down scales, giving
seniority increases or providing pay increases consistent with past practice and
the pay policy. Set forth on Exhibit B is the Airco pay policy in effect at the
Effective Time. The average increase in hourly wage rates/stated annual salary
shall be submitted by Airco in the Adjustments Statement described in Section
10.4 and any objections by Groundco or disputes shall be resolved in accordance
with Section 10.4. In connection with the quarterly planning process described
in Section 6.3, the Parties will review the Labor Cost Cap and negotiate in good
faith any increases or decreases to the Labor Cost Cap reasonably required to
reflect

                                       28

<PAGE>

changes in the ACMI Services, labor markets, industry conditions, general
economic conditions and the needs of the Parties.

          Section 10.3 Determination of Cost Recovery Amount (a) At least 120
days prior to the beginning of each fiscal year, Groundco shall provide Airco
with its Forecast of Operating Requirements for the upcoming fiscal year.

          (b) As promptly as practicable (but in any event at least 60 days
prior to the beginning of each fiscal year), Airco shall deliver to Groundco a
detailed statement setting forth an estimate of the Cost Recovery Amount (the
"Costs Estimate") for the upcoming year, which shall be based on amounts
actually incurred in respect of the items described in Section 10.2(a) in the
prior fiscal year and Airco's good faith estimates as to any increases in such
amounts in the coming fiscal year. At any time, Airco shall permit Groundco and
its counsel, financial advisors, auditors, consultants, employees and other
authorized representatives (collectively, the "Representatives") to have
reasonable access, during normal business hours, upon reasonable notice and in
such manner as will not unreasonably interfere in the conduct of Airco's
business, to Airco's properties, books, records and personnel for the purpose of
auditing the Costs Estimate. Within 30 days of the receipt of the Costs
Estimate, Groundco may deliver to Airco a written notice setting forth any
objections to the Costs Estimate. If Groundco does not so object within such 30
day period, the Costs Estimate will be final and binding as the Cost Recovery
Amount for the following year.

          (c) If Groundco so objects within such 30 day period, Groundco and
Airco shall use their reasonable efforts to resolve by written agreement, within
15 days after the receipt by Airco of Groundco's objections, any differences as
to the Costs Estimate. During such 15 day period, Airco shall continue to
provide Groundco and its Representatives with reasonable access to its
properties, books, records and personnel. If Airco and Groundco resolve all such
differences, the Costs Estimate, as adjusted by the agreed adjustments, shall be
final and binding (subject to Section 10.4 and subject to any changes in costs
resulting from modifications of the ACMI Services permitted by Article VI) as
the Cost Recovery Amount for the following year. If the fiscal year has begun
without resolution of the Costs Estimate, then Groundco shall pay the Base
Compensation based on amounts paid in the prior quarter.

          (d) If Groundco's objections are not resolved by agreed adjustments
within fifteen (15) days after the receipt by Airco of Groundco's objections,
then Airco and Groundco shall promptly submit the items of disagreement to an
industry expert mutually acceptable to Groundco and Airco, and such Person (the
"Industry Expert") shall be directed by Airco and Groundco to resolve such items
of disagreement (based solely on information provided to the Industry Expert by,
or available from, Airco and Groundco) as promptly as reasonably practicable and
to deliver written notice to each of Airco and Groundco setting forth its
resolution of the disputed matters (such notice to include a worksheet setting
forth all material calculations used in arriving at such resolution). The Costs
Estimate, after giving effect to any agreed adjustments and to the resolution of
disputed matters by the Industry Expert, shall be final and binding as the Cost
Recovery Amount for each week and quarter of the following year. The fees and
expenses of the Industry Expert shall be allocated between Airco and Groundco in
the same proportion that the aggregate amount of the disputed items so submitted
to the Industry

                                       29

<PAGE>

Expert that is unsuccessfully disputed by each such party (as finally determined
by the Industry Expert) bears to the total amount of such disputed items so
submitted.

          (e) Unless specified in the then effective Costs Estimate, Groundco
shall notify Airco of the Base Compensation applicable to the next week by
Thursday of the prior week.

          (f) Groundco shall submit written purchase orders (each a "Purchase
Order") to Airco in respect of any changes to the ACMI Services not contemplated
by the most recent Forecast of Operating Requirements.

          Section 10.4 Quarterly Adjustments. Within forty-five (45) days
following the last calendar day of a fiscal quarter, Airco shall deliver to
Groundco a statement setting forth any adjustments (the "Adjustments Statement")
to the Cost Recovery Amount to reflect the actual costs experienced by Airco
during the prior quarter. Within thirty (30) days of the receipt of the
Adjustments Statement, Groundco may deliver to Airco a written notice setting
forth any objections to the Adjustments Statement. If Groundco does not so
object within such thirty (30) day period, the Adjustments Statement will be
final and binding and the amount payable thereunder shall be paid as promptly as
practicable, and in any event within 15 Business Days, by either Airco or
Groundco, as applicable, by wire transfer of immediately available funds to an
account designated by the other Party. If Groundco objects to the information
contained in the Adjustments Statement and Groundco's objections are not
resolved by agreed adjustments within fifteen (15) days after the receipt by
Airco of Groundco's objections, the Parties shall promptly submit the items of
disagreement to an independent auditor mutually acceptable to Groundco and Airco
(the "Independent Auditor") to determine the actual costs incurred by Airco in
respect of such items, and the Independent Auditor shall as promptly as
reasonably practicable deliver written notice to each of Airco and Groundco
setting forth its resolution of the disputed matters (such notice to include a
worksheet setting forth all material calculations used in arriving at such
resolution). The Adjustments Statement, after giving effect to any agreed
adjustments and to the resolution of disputed matters by the Independent
Auditor, shall be final and binding as the adjustments for the previous quarter
and the amount payable thereunder shall be paid as promptly as practicable (and
in any event within 15 Business Days) by either Airco or Groundco, as
applicable, by wire transfer of immediately available funds to an account
designated by the party receiving such funds. The fees and expenses of the
Independent Auditor shall be allocated between Airco and Groundco in the same
proportion as the aggregate amount of the disputed items so submitted to the
Independent Auditor that are unsuccessfully disputed by such party (as finally
determined by the Independent Auditor) bears to the total amount of such
disputed items so submitted.

          Section 10.5 Payment of Base Compensation (a) Subject to Section
10.5(b), Groundco will pay the Base Compensation weekly, in advance, by wire
transfer to Airco on Monday of each week (or, if such day is not a Business Day,
on the immediately succeeding

                                       30

<PAGE>

Business Day), of the Cost Recovery Amount for the forthcoming week (as
determined pursuant to Section 10.3) plus the applicable Base Markup.

          (b) If, at any time prior to December 31, 2005, all cash and cash
equivalents and investments or other financial assets of any and every nature
held by Airco ("Cash") is less than $60 million (the difference between $60
million and Airco's actual Cash being referred to herein as the "Deficiency
Amount"), Airco may request that Groundco (and Groundco shall if so requested)
prepay (a "Prepayment"), by wire transfer to Airco contemporaneously with the
next payment of Base Compensation and in addition to the Base Compensation for
the forthcoming week payable pursuant to Section 10.5(a), the Base Compensation
payable in respect of: (i) if the Deficiency Amount is less than $20 million,
the Base Compensation for the one week immediately following the forthcoming
week, (ii) if the Deficiency Amount is $20 million or more (but less than $40
million), the Base Compensation for the two weeks immediately following the
forthcoming week and (iii) if the Deficiency Amount is $40 million or greater,
the Base Compensation for the three weeks immediately following the forthcoming
week; provided, however, that Airco may not make a request for Prepayment at any
time after it has made requests (in one or multiple requests) for Prepayments
for a total of three weeks, until the aggregate amount of Prepayments has been
reduced in accordance with this Section 10.5 by the amount of the Prepayment in
respect of (x) one week, in which case a Prepayment request for one week may be
made, (y) two weeks, in which case a Prepayment request for two weeks may be
made or (z) the entire aggregate Prepayment Amount, in which case a Prepayment
request for three weeks may be made. Airco shall maintain a record of the date
and amount of each such Prepayment (such record being referred to herein as the
"Prepayment Account") and the Prepayment Account shall have a starting balance
of zero, which shall be (i) increased by the amount of each Prepayment (each of
which shall be deemed to be a credit of Groundco to be applied towards future
payments of Base Compensation as provided in Section 10.5(c) or other amounts
owing hereunder or repaid as set forth in this Section 10.5) and (ii) decreased,
dollar-for-dollar, by the amount of all costs incurred by Airco in providing the
ACMI Services in respect of which Groundco has not paid the Base Compensation,
as provided in Section 10.5(c).

          (c) At any time from and after the first anniversary of the making of
each Prepayment or, if such first anniversary falls after December 31, 2005,
from and after December 31, 2005, Groundco shall be entitled to apply the
aggregate amount of such Prepayment then on balance in the Prepayment Account as
a credit against future payments of Base Compensation or other amounts owing
hereunder and, if Groundco so elects to apply such amount (or any portion
thereof) as a credit against future payments of Base Compensation pursuant to
this Section 10.5(c), then the Base Compensation payable pursuant to Section
10.5(a) shall be reduced accordingly.

          (d) If, as of January 1 or July 1 of each of 2003, 2004 and 2005,
Airco's Cash exceeds $60 million and there is a positive balance in the
Prepayment Account, Airco shall, within two Business Days after any such date,
as applicable, pay to Groundco, by wire transfer to an account designated by
Groundco, an amount equal to the lower of (i) the excess of Airco's actual Cash
as of such date over $60 million or (ii) the balance in the Prepayment Account.

          (e) Within two Business Days following the occurrence of (i) a Change
of Control or (ii) any expiration or termination of this Agreement, Airco shall
pay to Groundco, by

                                       31

<PAGE>

wire transfer to an account designated by Groundco, an amount equal to the
balance then outstanding in the Prepayment Account.

          (f) Airco shall maintain complete and accurate records to support and
document each Prepayment, the Prepayment Account and Airco's Cash for purposes
of this Section 10.5, and shall provide to Groundco such information in respect
thereof as Groundco may reasonably request in order to substantiate any matters
pertaining to this Section 10.5. In the event that Groundco disputes the amount
of any payment owed by Airco pursuant to this Section 10.5, the Parties shall
use their reasonable efforts to resolve by written agreement, within 15 days
after the receipt by Airco of Groundco's objections, any differences as to such
amount. During such 15 day period, Airco shall continue to provide Groundco and
its Representatives with reasonable access to its properties, books, records and
personnel. If Airco and Groundco resolve all such differences, the amount at
issue, as adjusted by the agreed adjustments, shall be final and binding. If
Groundco's objections are not resolved by agreed adjustments within fifteen (15)
days after the receipt by Airco of Groundco's objections, then Airco and
Groundco shall promptly submit the items of disagreement to an industry expert
mutually acceptable to Groundco and Airco, and such Person (the "Industry
Expert") shall be directed by Airco and Groundco to resolve such items of
disagreement (based solely on information provided to the Industry Expert by, or
available from, Airco and Groundco) as promptly as reasonably practicable and to
deliver written notice to each of Airco and Groundco setting forth its
resolution of the disputed matters (such notice to include a worksheet setting
forth all material calculations used in arriving at such resolution). The fees
and expenses of the Industry Expert shall be allocated between Airco and
Groundco in the same proportion that the aggregate amount of the disputed items
so submitted to the Industry Expert that is unsuccessfully disputed by each such
party (as finally determined by the Industry Expert) bears to the total amount
of such disputed items so submitted.

          Section 10.6 Revenue from Third Party Services (a) In connection with
Supplemental Flying during the first year following the Effective Time, Airco
shall pay Groundco a fee equal to (i) $. per hour for Supplemental Flying using
DC-9 Aircraft, (ii) $. per hour for Supplemental Flying using DC-8 Aircraft and
(iii) $. for Supplemental Flying using Boeing 767 Aircraft. Following the first
anniversary of the Effective Time, the Parties agree to negotiate in good faith
to determine a commercially reasonable fee payable by Airco to Groundco in
respect of such Supplemental Flying.

----------
.. The parties have requested confidential treatment of the information redacted.
The confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       32

<PAGE>

          (b) In connection with Filler Cargo Services during the first year
following the Effective Time, Airco shall pay Groundco a fee equal to $. per
pound of Filler Cargo transported. Following the first anniversary of the
Effective Time, the Parties agree to negotiate in good faith to determine a
commercially reasonable fee payable by Airco to Groundco in respect of such
Filler Cargo Services.

          (c) (i) Within ten (10) Business Days of the end of each month, Airco
          shall deliver to Groundco a detailed statement setting forth the
          amounts due to Groundco in accordance with Sections 10.6 (a) and (b)
          for such month, as well as any amounts due Groundco pursuant to
          Section 4.3 of this Agreement during such month (the "Third Party
          Payment Estimate"). Following receipt of the Third Party Payment
          Estimate, Airco shall permit Groundco and its Representatives to have
          reasonable access, during normal business hours, upon reasonable
          notice and in such manner as will not unreasonably interfere in the
          conduct of Airco's business, to Airco's properties, books, records and
          personnel for the purpose of auditing the Third Party Payment
          Estimate. Within ten (10) Business Days of the receipt of the Third
          Party Payment Estimate, Groundco may deliver to Airco a written notice
          setting forth any objections to the Third Party Payment Estimate. If
          Groundco does not so object within such 10 Business Day period, the
          Third Party Payment Estimate will be final and binding and Airco shall
          promptly pay the amount set forth in the Third Party Payment Estimate
          to Groundco.

               (i) If Groundco so objects within such 10 Business Day period,
          Groundco and Airco shall use their reasonable efforts to resolve by
          written agreement, within two (2) Business Days after the receipt by
          Airco of Groundco's objections, any differences as to the Third Party
          Payment Estimate. During such 2 Business Day period, Airco shall
          continue to provide Groundco and its Representatives with reasonable
          access to its properties, books, records and personnel. If Airco and
          Groundco resolve all such differences, the Third Party Payment
          Estimate, as adjusted by the agreed adjustments, shall be final and
          binding and Airco shall promptly pay the amount set forth in the Third
          Party Payment Estimate to Groundco.

               (ii) If Groundco's objections are not resolved by agreed
          adjustments within two (2) Business Days after the receipt by Airco of
          Groundco's objections, then Airco and Groundco shall promptly submit
          the items of disagreement to an Independent Auditor who shall be
          directed to resolve such items of disagreement (based solely on
          information provided to the Independent Auditor by, or available from,
          Airco and Groundco) as promptly as reasonably practicable and to
          deliver written notice to each of Airco and Groundco setting forth its
          resolution of the disputed matters (such notice to include a worksheet
          setting forth all material

----------
.. The parties have requested confidential treatment of the information redacted.
The confidential portion has been omitted and filed separately with the
Securities and Exchange Commission.

                                       33

<PAGE>

          calculations used in arriving at such resolution). The Third Party
          Payment Estimate, after giving effect to any agreed adjustments and to
          the resolution of disputed matters by the Independent Auditor, shall
          be final and binding and Airco shall promptly pay the amount set forth
          in the Third Party Payment Estimate to Groundco. The fees and expenses
          of the Independent Auditor shall be allocated between Airco and
          Groundco in the same proportion that the aggregate amount of the
          disputed items so submitted to the Independent Auditor that are
          unsuccessfully disputed by each such party (as finally determined by
          the Independent Auditor) bears to the total amount of such disputed
          items so submitted.

          Section 10.7 Capital Expenditures. The Parties anticipate that Airco's
compensation will be sufficient to cover capital expenditures in the ordinary
course. To the extent that Airco's cash resources are not sufficient to fund any
capital expenditures necessary to provide the ACMI Services, to the extent
agreed by the Parties in connection with determining the capital budget portion
of the applicable Costs Estimate, Groundco will fund such necessary capital
expenditures in excess of those capital expenditures to be funded by Airco,
either, in its sole discretion, directly or through modifying the compensation
payable under this Agreement; provided, that if Groundco elects to fund all or
some portion of any capital expenditure, the portion of such capital expenditure
funded by Groundco will be excluded from the Cost Recovery Amount.

          Section 10.8 Records. Airco shall maintain complete and accurate
records to support and document all costs related to its provision of the ACMI
Services, including with respect to the Cost Recovery Amount, Supplemental
Flying and Filler Cargo Services, in each case in accordance with GAAP
consistently applied to past periods in all material respects. Airco shall
provide reasonable statements of costs incurred and will make its financial
personnel available to discuss such statements.

                                   ARTICLE XI
                                      TERM

          Section 11.1 Term; Renewal. The term of this Agreement (the "Term")
shall commence at the Effective Time and shall terminate on the day immediately
preceding the seventh (7th) anniversary of the Effective Time (the "Expiration
Date"), unless earlier terminated under the express terms hereof or unless
extended as provided below. The Term shall automatically renew for an additional
three (3) years after the Expiration Date upon substantially the same terms and
conditions, modified only to reflect those changes to the provision of services
under the Agreement that have evolved and been incorporated in this Agreement at
the time of renewal, unless either Party provides the other written notice of
its intent not to renew the Agreement not less than one (1) year prior to the
Expiration Date; provided that the Term shall not renew automatically, but may
be extended in Groundco's discretion, if in the twelve month period prior to the
renewal date Airco is in default under Section 13.1(a), subject to Section
13.3(c).

                                       34

<PAGE>

                                   ARTICLE XII
                                   TERMINATION

          Section 12.1 Termination by Airco. Airco may terminate this Agreement
at any time upon written notice:

          (a) subject to and in accordance with Section 13.3, following a
Groundco Event of Default;

          (b) upon two Business Days prior written notice to Groundco after an
event of Force Majeure shall have continued for 30 days; provided, however, that
Airco may not terminate this Agreement pursuant to this Section 12.1(b) so long
as Groundco elects to continue paying the Cost Recovery Amount.

          Section 12.2 Termination Rights of Groundco. Groundco may terminate
this Agreement upon written notice:

          (a) subject to and in accordance with Section 13.3, at any time
following an Airco Event of Default;

          (b) in the event that Airco fails to maintain at all times during the
Term the insurance required pursuant to Section 8.2(a);

          (c) upon the occurrence of a Change of Control without the prior
written consent of Groundco, if any Person or Persons acquiring stock or
becoming a director or officer of Airco in connection with such Change of
Control is a major integrated international air express delivery company with
annual revenues in excess of $5 billion or is an Affiliate of such company (or
is a director or officer of such company or its Affiliates, as applicable);

          (d) upon two Business Days prior written notice to Airco after an
event of Force Majeure shall have continued for 30 days; and

          (e) with respect to any Aircraft as provided in Article VI.

          Section 12.3 Termination Costs.

          (a) Termination by Airco. If Airco terminates this Agreement pursuant
to Section 12.1(a), Groundco shall not be obligated to pay any termination costs
specified in Section 12.3(c) or 12.3(d) of this Agreement, and Airco shall
retain any remedies it may have against Groundco at law or in equity. If Airco
terminates this Agreement pursuant to Section 12.1(b) and such termination was
predicated upon an event of Force Majeure related to any labor dispute at Airco,
Groundco shall not be obligated to pay or reimburse Airco for any costs
associated with such termination. If Airco terminates this Agreement pursuant to
Section 12.1(b) and such termination was predicated upon an event of Force
Majeure not related to a labor dispute at Airco, Groundco shall reimburse Airco
for all costs associated with such termination.

                                       35

<PAGE>

          (b) Termination by Groundco. In the event Groundco terminates this
Agreement pursuant to Sections 12.2(a), (b) or (c), Groundco will not be
obligated to pay any termination costs specified in this Agreement. If Groundco
terminates this Agreement pursuant to Section 12.2(d) and such termination was
predicated upon an event of Force Majeure related to any labor dispute at Airco,
Groundco shall not be obligated to pay or reimburse Airco for any costs
associated with such termination. If Groundco terminates this Agreement pursuant
to Section 12.2(d) and such termination was predicated upon an event of Force
Majeure not related to a labor dispute at Airco, Groundco shall reimburse Airco
for all costs associated with such termination.

          (c) Early Termination of an Aircraft by Groundco. In the event
Groundco elects to terminate this Agreement with respect to any specific
Aircraft and such termination results in the aggregate number of Aircraft
exceeding the number of Aircraft required to perform the ACMI Services, (i)
Groundco will reimburse Airco for any direct costs (other than depreciation and
employee termination costs) resulting from such termination of an Aircraft, and
the Parties will use their commercially reasonable efforts to minimize any such
direct costs and (ii) unless such termination results from a termination of this
Agreement pursuant to Section 12.2(c) and Groundco elects to terminate such
right by delivering written notice of such termination to Airco, Airco will have
the right to put (the "Put Option") to Groundco the Aircraft that Groundco in
its sole discretion has so elected to terminate (a "Released Aircraft") in
accordance with the following provisions if any value with respect to the
Released Aircraft remains undepreciated for purposes of Airco's Financial
Statements:

               (i) If Airco's total shareholders equity would be in excess of
          $100 million after giving effect to any writedowns reasonably
          anticipated by Airco to be associated with the disposition of a
          Released Aircraft:

                    (A)  the Put Price will be the lower of the Book Value or
                         Fair Market Value of the Released Aircraft; and

                    (B)  Airco's shareholders equity will be decreased by the
                         difference (if any) between Book Value and Fair Market
                         Value;

               (ii) If Airco's total shareholders equity would not be in excess
          of $100 million after giving effect to any writedowns reasonably
          anticipated by Airco to be associated with the disposition of a
          Released Aircraft and any amounts remain outstanding in respect of the
          First Promissory Note:

                    (A)  the Put Price will be the lower of the Book Value or
                         Fair Market Value of the Released Aircraft; and

                    (B)  the amounts owed by Airco under the First Promissory
                         Note will be reduced by the excess (if any) of Book
                         Value over Fair Market Value so long as the First
                         Promissory Note is outstanding; or

                                       36

<PAGE>

               (iii) If Airco's total shareholders equity would not be in excess
          of $100 million after giving effect to any such writedown and the
          First Promissory Note is no longer outstanding, the Put Price will be
          the higher of the Book Value or Fair Market Value of the Released
          Aircraft.

          (d) Released Aircraft Statement. No later than 30 days following
receipt by Airco of a written notice of Groundco's intention to terminate this
Agreement with respect to a Released Aircraft, Airco shall, if it elects to
exercise its Put Option with respect to such Released Aircraft, prepare or cause
to be prepared, in accordance with GAAP, and delivered to Groundco a statement
(the "Released Aircraft Statement") setting forth (i) the Book Value and the
Fair Market Value (as determined by the Board of Directors of Airco) of the
Released Aircraft and (ii) the current amount of Airco's shareholder equity as
set forth in Airco' most recent month-end financial statements and (iii) a
statement of the total shareholders equity reasonably anticipated for Airco
after giving effect to any writedowns associated with the disposition of the
Released Aircraft. If applicable, the Fair Market Value shall then be promptly
determined as provided in the definition thereof. As promptly as practicable
following the receipt by Groundco of the Released Aircraft Statement (and in any
event within 10 Business Days after the later of delivery thereof or, if
applicable, the determination of Fair Market Value), Groundco shall, subject to
the closing of the transaction pursuant to the next sentence, make a payment to
Airco by wire transfer of immediately available funds of the put price (the "Put
Price") payable in accordance with section 12.3(c). Upon the closing of the
transaction in accordance with the procedures and the delivery of documents set
forth in Exhibit C, Groundco shall pay the Put Price and Airco shall deliver the
Released Aircraft to Groundco or its designee at such location within the
continental United States as Groundco shall reasonably request; provided that,
if the Released Aircraft is not then situated at the location requested by
Groundco, Groundo shall reimburse Airco's costs for transporting the Aircraft to
the location requested by Groundco.

          Section 12.4 Expiration Without Renewal.

          (a) Termination Costs and Put Option. In the event this Agreement is
allowed to expire on the Expiration Date without the Term being extended
automatically as provided in Subsection 11.1, (i) Groundco will promptly upon
notice reimburse Airco for the costs of terminating any unexpired third party
maintenance contracts relating to the Aircraft (provided that the Parties will
use their commercially reasonable efforts to minimize any termination costs
associated therewith) and (ii) if, after giving effect to any asset writedowns,
payment of expiration costs (other than costs associated with the termination of
pilots and mechanics) resulting from the expiration hereof, Groundco's
reimbursement to Airco of costs arising from the termination of third party
maintenance contracts and other costs or expenses arising as a result of such
expiration resulting from the expiration hereof, Airco's balance sheet with
respect to the business represented by this Agreement would not reflect (A)
shareholders equity of at least $[shareholders equity at Effective Time] and (B)
$25 million in Free Cash, then Airco will have a Put Option (unless a Change of
Control shall have occurred and Groundco elects to terminate such Put Option by
delivering written notice of such termination to Airco) with respect to any of
the Aircraft then included on its balance sheet for which any value remains
undepreciated for purposes of Airco's Financial Statements to the extent
necessary to achieve the above-referenced levels of shareholders equity
(provided that the Fair Market Value of the affected Aircraft exceeds Book
Value) and Free Cash.

                                       37

<PAGE>

          (b) Put Price. In the event Airco puts any Aircraft to Groundco
pursuant to Subsection 12.4(a), and so long as any amounts remain outstanding
under the First Promissory Note, the Put Price will be, at Groundco's option,
either of the following:

               (i) the lower of the Book Value or Fair Market Value of the
          affected Aircraft, and the amounts owed by Airco under the First
          Promissory Note will be reduced by the excess (if any) of Book Value
          over Fair Market Value so long as the First Promissory Note is
          outstanding; or

               (ii) the higher of the Book Value or Fair Market Value of the
          affected Aircraft, and the First Promissory Note will remain
          outstanding.

Notwithstanding the foregoing, if the First Promissory Note is no longer
outstanding, the Put Price will be the higher of the Book Value or Fair Market
Value of the affected Aircraft.

          (c) Expiration Statement. No later than 60 days following receipt by
Airco of a written notice from Groundco of Groundco's intention not to allow
this Agreement to renew, Airco shall prepare or cause to be prepared, in
accordance with GAAP, and delivered to Groundco a statement (the "Expiration
Statement") setting forth Airco's balance sheet, including its shareholders
equity, Free Cash, the Book Value and Fair Market Value (as determined by the
Board of Directors of Airco) of the Aircraft. If applicable, the amount of Fair
Market Value shall then be promptly determined as provided in the definition
thereof. As promptly as practicable following the receipt by Groundco of the
Expiration Statement (and in any event within 10 Business Days after the later
of delivery thereof or, if applicable, the determination of Fair Market Value),
Groundco shall make a payment to Airco by wire transfer of immediately available
funds of the Put Price payable in accordance with section 12.4(b). Upon payment
of the Put Price and the closing of the transaction in accordance with the
procedures and delivery of the documents set forth in Exhibit C hereto, Airco
shall deliver the Aircraft to Groundco or its designee at such location within
the continental United States as Groundco shall reasonably request; provided
that, if the Released Aircraft is not then situated at the location requested by
Groundco, Groundo shall reimburse Airco's costs for transporting the Aircraft to
the location requested by Groundco.

          Section 12.5 Transition Period following Termination. If this
Agreement is terminated pursuant to Section 12.1 or 12.2 of this Agreement,
Groundco and Airco will cooperate in good faith to transition the ACMI Services
to such Person or Persons as Groundco desires and to ensure that the ACMI
Services are provided until such transition is complete. During such transition
period, Groundco will cooperate with Airco to provide access to its facilities
in order for Airco to perform its obligations in respect of Third Party
Services. The Parties will use their respective commercially reasonable efforts
to minimize costs during such transition period. Groundco shall continue to pay
the Base Compensation to Airco to the extent that Airco continues to provide
ACMI Services during such transition period.

                                       38

<PAGE>

                                  ARTICLE XIII
                                EVENTS OF DEFAULT

          Section 13.1 Events of Default. The occurrence of any of the following
events or conditions shall constitute an event of default by Airco hereunder
(each an "Airco Event of Default" and collectively, the "Airco Events of
Default"):

          (a) Without limiting the provisions of Section 13.1(i), the failure of
Airco to maintain an On-Time Performance rate of at least 96.5% in either (i)
each of any two consecutive months or (ii) each of any three months (whether or
not consecutive) within any trailing twelve-month period.

          (b) The material breach of any representation or warranty of Airco
hereunder;

          (c) The dissolution, liquidation, cessation of business or immediate
termination of existence of Airco;

          (d) The insolvency or bankruptcy of Airco or the appointment of a
trustee or receiver for Airco or for a substantial part of its business, or the
admission in writing of Airco of its inability to pay its debts as they may
mature;

          (e) The institution by or against Airco of bankruptcy, reorganization,
arrangement, insolvency, or liquidation proceedings or any other proceedings for
relief under any bankruptcy or similar federal, state or local law for the
relief of debtors, provided that, if such proceeding is instituted against Airco
and is not consented to by Airco, it is not dismissed or stayed within sixty
(60) days after such institution;

          (f) Any other material breach or failure of Airco to observe or
perform any term, condition, covenant or agreement required to be observed or
performed by it hereunder;

          (g) The violation of any Legal Requirement or the suspension or
revocation of any license, certificate or permit necessary to conduct all or any
portion of Airco's obligation's hereunder and that prevents Airco from
performing in any material respect its obligations hereunder, unless such
violation, suspension or revocation occurred as a result of actions or omissions
of Groundco;

          (h) The occurrence of any Change of Control unless, prior to the
occurrence of such Change of Control, the Person proposing the transaction which
resulted in such Change of Control shall have notified Groundco of its intent to
enter into such transaction and, if so requested by Groundco, consulted in good
faith with Groundco to discuss the terms and conditions of such transaction; and

          (i) Following the occurrence of any Change of Control, if Groundco
elects to elevate the expected On-Time Performance rate by delivering written
notice to Airco, the failure of Airco to maintain, during (i) any period of 45
consecutive days or (ii) any two calendar months (whether or not consecutive),
in either case, within the first 15 months following the occurrence of such
Change of Control, an On-Time Performance rate equal to or greater than the

                                       39

<PAGE>

higher of (x) Airco's average On-Time Performance rate for the 180-day period
immediately prior to the occurrence of such Change of Control and (y) 98.5%.

          Section 13.2 Groundco Events of Default. The occurrence of any of the
following events or conditions shall constitute an event of default of Groundco
hereunder (each a "Groundco Event of Default" and, collectively, the "Groundco
Events of Default"):

          (a) The failure of Groundco to pay when due the Base Compensation in
accordance with Article X or any other amounts which may be payable by Groundco
hereunder;

          (b) A termination of, or default by Delta Holdings under, the Guaranty
or a repudiation by Delta Holdings of its obligations thereunder;

          (c) The material breach of any representation or warranty of Groundco
hereunder;

          (d) The dissolution, liquidation, cessation of business or immediate
termination of existence of Groundco;

          (e) The insolvency or bankruptcy of Groundco or the appointment of a
trustee or receiver for Groundco or for a substantial part of its business, or
the admission in writing of Groundco of its inability to pay its debts as they
mature;

          (f) The institution by or against Groundco of bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceedings or any other
proceedings for relief under any bankruptcy or similar federal, state or local
law for the relief of debtors, provided that, if such proceeding is instituted
against Groundco and is not consented to by Groundco, it is not dismissed or
stayed within sixty (60) days after such institution;

          (g) Any other material breach or failure of Groundco to observe or
perform any term, condition, covenant or agreement required to be observed or
performed by it hereunder; and

          (h) The violation of any Legal Requirement or the suspension or
revocation of any license, certificate or permit necessary to conduct all or any
portion of Groundco's obligation's hereunder and that prevents Groundco from
performing in any material respect its obligations hereunder, unless such
violation, suspension or revocation occurred as a result of actions or omissions
of Airco.

          Section 13.3 Termination upon Event of Default. (a) Upon the
occurrence and during the continuance of any Event of Default enumerated in
Section 13.1(c), (d) or (e) or in Section 13.2(d), (e) or (f), the
non-defaulting Party may elect to terminate this Agreement immediately in its
entirety upon giving written notice to the defaulting Party.

          (b) Upon the occurrence and during the continuance of any Event of
Default enumerated in Section 13.1(b), (f) or (g) or in Section 13.2(b), (c),
(g) or (h), the non-defaulting Party may, without prejudice to any other remedy
which it may have at law or in equity, terminate this Agreement by giving notice
of such default, and the Party receiving such notice

                                       40

<PAGE>

shall have thirty (30) days from the date of receipt of such notice to cure such
default. If the Event of Default has not been cured by midnight of the thirtieth
(30th) day after receipt of such notice, this Agreement shall be deemed
immediately terminated, unless such cure period has been extended in writing by
the non-defaulting Party or the defaulting Party is using commercially
reasonable efforts to cure such default and such default is, in the reasonable
judgment of the defaulting Party, capable of being cured with a reasonable
period of time (not to exceed 30 days), in which case such additional time shall
be allowed in order to cure such default.

          (c) Upon the occurrence and during the continuance of any Event of
Default enumerated in Subsection 13.1(a), Groundco may only terminate this
Agreement after giving notice of such default to Airco and the following
procedures shall have been employed in an effort to cure such default: (i) the
Parties shall have met and conferred to determine the nature and the causes of
the default and, if possible, the changes to operations, schedules or routings
as may be necessary to eliminate such default and (ii) following such meeting
between the Parties, they shall diligently attempt to implement any such changes
to the operations or schedules that have been determined will resolve such
default, and they shall make such further adjustments or changes as are foreseen
to be necessary to avoid a recurrence of the conditions that gave rise to the
default. If the Parties are completely unable to reconcile the problems
associated with the default, or the changes they have implemented fail to cure
the default within ninety (90) days of operations after the implementation of
such changes, Groundco may terminate this Agreement unless Airco in good faith
contests the default, in which event Groundco's right to terminate shall be
resolved in accordance with Section 17.1 of this Agreement.

          (d) Upon the occurrence of any Event of Default enumerated in Section
13.2(a), Airco will give Groundco notice thereof, and Groundco will have two (2)
Business Days from the date of receipt of such notice (the "Outside Cure Date")
to cure such default. In addition to payment of the Base Compensation, Groundco
will pay to Airco an additional amount equal to the Base Compensation payment
times LIBOR plus 2% divided by 365 for each day such payment has not been made
from the Outside Cure Date. Groundco shall pay such Base Compensation payment
and additional amount as set forth in the preceding sentence and, to the extent
Groundco contests any such amount, Groundco shall seek recovery in accordance
with Section 17.1 after it has paid and Airco has received such Base
Compensation and any additional payments as set forth in the preceding sentence.

          (e) Subject to Section 8.9 hereof, the right of either Party under
this Article XIII to terminate this Agreement following a Default of the other
Party hereto shall not be deemed an exclusive remedy, and will be in addition to
any other remedy such Party may have either at law or in equity.

                                   ARTICLE XIV
                               DELAYS AND DAMAGES

          Section 14.1 Damaged Aircraft. (a) If an Aircraft is damaged and the
ACMI Services cannot be satisfactorily performed in accordance with the terms of
this Agreement,

                                       41

<PAGE>

Airco will (i) promptly notify Groundco, (ii) use commercially reasonable
efforts to repair the Aircraft and return it to service as soon as possible and
(iii) liaise and cooperate with Groundco regarding the course of action which is
adopted. At the request of Groundco, Airco will use commercially reasonable
efforts to arrange for the use of a suitable substitute aircraft during any
period during which the damaged Aircraft may be unavailable. If the damage to
the Aircraft was the fault of Airco, Airco will hold Groundco harmless from all
liabilities, costs and expenses arising from such use of a substitute aircraft
to the extent that Groundco would not have been responsible for such
liabilities, costs and expenses if they had been performed with an Aircraft in
accordance with the terms of this Agreement. If the damage to the Aircraft was
the fault of Groundco, Groundco will hold Airco harmless from all liabilities,
costs and expenses arising from such use of a substitute aircraft to the extent
that Airco would not have been responsible for such liabilities, costs and
expenses if they had been performed with an Aircraft in accordance with the
terms of this Agreement.

          (b) In the event that Airco is unable to provide any or all
transportation services on a particular date within a time-frame reasonably
satisfactory to Groundco with an Aircraft or a substitute aircraft in accordance
with Section 14.1(a), due to causes other than Force Majeure, Groundco may make
any reasonable or necessary arrangements with other air carriers to provide the
ACMI Services as provided for in this Agreement. All such costs shall be for the
account of Groundco and Airco's sole liability to Groundco shall be the
reduction in the amount payable to Airco under this Agreement by reason of it
not performing its obligations hereunder; provided, however, that to the extent
it becomes necessary to repair or replace any Aircraft, spare part or item of
equipment due to the gross negligence or willful misconduct of Airco, Airco
shall bear directly the costs of such repair or replacement; and provided,
further, that if such costs are covered by insurance, Airco shall nevertheless
be responsible for the costs of any deductible required to be paid under any
applicable insurance policy.

          Section 14.2 Destruction of Aircraft. If an Aircraft is destroyed, or
otherwise suffers a casualty occurrence that would constitute a total loss or a
constructive total loss under the terms of the hull insurance maintained by
Airco with respect to such Aircraft, this Agreement shall terminate with respect
to such Aircraft as of the date of the loss, and Groundco shall have no further
obligation or liability to Airco with respect to such Aircraft.

                                   ARTICLE XV
                                  FORCE MAJEURE

          Section 15.1 Suspension of Obligations. Except as specifically
provided hereunder in this Article XV, if either party hereto is rendered unable
in whole or in part by Force Majeure to carry out its obligations under this
Agreement, or Groundco is unable to supply cargo for Airco flights due in whole
or in part to a Force Majeure, it is agreed that the obligations of each party,
other than (i) in the case of Groundco preexisting payment obligations then due
and owing, obligations for services which have been performed by Airco under
this Agreement but which have not yet been billed, and obligations under this
Article XV, and, (ii) in the case of Airco, preexisting or existing maintenance
obligations under this Agreement and its obligations under this Article XV,
shall be suspended during the continuance of any inability so

                                       42

<PAGE>

caused, provided that good faith endeavors by the Party giving such notice are
made to remedy such cause with all reasonable dispatch. Each Party will give
written notice of such Force Majeure to the other Party as soon as possible
after the occurrence of the event constituting Force Majeure.

          Section 15.2 Groundco Obligation to Pay During a Force Majeure. (a)
During the period a Force Majeure continues which affects the Parties jointly,
or which affects only Airco so that it is not able to provide the services
contracted for hereunder (including the inability to secure landing slots),
subject to Subsection 15.4 hereof, Groundco shall pay the Cost Recovery Amount
in respect of periods during the continuance of such Force Majeure but shall not
be obligated to pay the Base Markup or the Incremental Markup.

          (b) During a period when a Force Majeure continues which affects
Groundco's need for flight services hereunder, but does not prevent Airco from
providing such flight services, Groundco shall pay the Cost Recovery Amount in
respect of periods during the continuance of such Force Majeure but shall not be
obligated to pay the Base Mark-up or the Incremental Markup.

          Section 15.3 Make-Up Flights During a Force Majeure. Provided Groundco
gives Airco sufficient notice, Airco shall make additional or make-up flights
over normal routings requested by Groundco to the extent that it is commercially
able to do so, consistent with safety and Legal Requirements.

          Section 15.4 Other Carriers. If a condition of Force Majeure arises
that affects Airco's ability to provide the ACMI Services required hereunder,
Groundco shall have the right, but not the obligation, to arrange for another
carrier to perform such ACMI Services until such time as such Force Majeure can
be cured and for a reasonable period thereafter and, except as otherwise
provided for herein, Airco shall be reinstated as soon as is reasonable under
the circumstances. For a Force Majeure that renders only a portion of the ACMI
Services hereunder unavailable to Groundco, a prorated reduction in Base
Compensation shall be made according to the portion of these ACMI Services that
Airco is actually unable to so perform. Groundco and Airco shall mutually
determine what portions of the ACMI Services are unavailable for use by
Groundco.

                                  ARTICLE XVI
                          ADVERTISING AND NONDISCLOSURE

          Section 16.1 Trademarks; Trade names and Logos. Airco covenants and
agrees with Groundco, for the benefit of Groundco, that it will not make any use
whatsoever of, or cause others to make or assist others making any use
whatsoever, of the corporate or trade name of "Groundco" or "Delta" or any
portion thereof, in connection with any advertising, promotion, publicity or
other printed material, without the prior written consent of Groundco. The
Parties understand that Airco shall retain the ABX Air, Inc. name. Groundco and
Delta shall license other Groundco and Delta trademarks, names or logos to Airco
on a royalty-free basis as determined by Groundco and Delta. Upon termination of
this Agreement, unless expressly

                                       43

<PAGE>

agreed to by the Parties in writing, all of such other uses of the Groundco name
or logo shall immediately cease and shall be removed from all such equipment,
facilities, uniforms, business records or forms by Airco and be replaced, at
Groundco's expense in a reasonable time period (but in any event, not to exceed
180 days after the date of such termination).

          Section 16.2 Confidentiality. Airco covenants and agrees that except
as required by the provisions of any Legal Requirement for which Airco is
obligated regarding Airco's ordinary business operations, Airco shall use
commercially reasonable efforts not to disclose publicly or describe its
commercial relationship with Groundco or Delta to any Person. The Parties
acknowledge that this Agreement will be filed with the Securities and Exchange
Commission and will cooperate to seek confidential treatment of such portions
hereof as may be agreed to by the Parties.

          Section 16.3 Survival; Severability. It is expressly understood and
agreed that Airco's obligations under Subsections 16.1 and 16.2 above shall
survive the expiration or termination of this Agreement, its rescission or other
termination and that these subsections shall remain in full force and effect and
shall be deemed severable from and independent of the other sections of this
Agreement.

                                  ARTICLE XVII
                                  MISCELLANEOUS

          Section 17.1 Dispute Resolution. Except as otherwise provided herein,
any and all controversies or claims arising out of, under or relating to this
Agreement or its performance ("Disputes"), including any amendments hereto or
the breach hereof shall be determined and settled in accordance with the laws of
the state of New York as follows:

          (a) Airco and Groundco shall use their best reasonable efforts to
resolve any and all Disputes. If a Dispute cannot be resolved by the
representatives of the Parties hereto within a reasonable time, it shall be
referred to the Chief Executive Officers of Airco and Groundco, as the case may
be, or their respective designees, for further negotiation for a period of
thirty (30) days. Only upon failure by Airco and Groundco to resolve the Dispute
through such negotiation may either party prosecute such claim in a more formal
proceeding as provided herein; provided that in the event good faith
negotiations are ensuing and a party reasonably believes that it will forfeit
claims as a result of statute of limitations, laches, or other similar defenses,
then the Parties shall enter into a customary tolling arrangement in order to
preserve any such claims during the informal dispute resolution procedures.

          (b) If a Dispute cannot be resolved as provided in Section 17.1(a),
then the Parties shall submit to the binding arbitration procedures hereinafter
set forth. Such binding arbitration shall take place in New York, New York, and
shall be in accordance with the rules of the American Arbitration Association.
The parties shall each choose an arbitrator within thirty (30) days after the
written request by either of them, and the arbitrators so chosen shall choose a
third arbitrator within thirty (30) days after their selection by the Parties.
The Parties agree that within sixty (60) days after selection, the arbitrators
shall submit a written report of their

                                       44

<PAGE>

determination of the Dispute. If such report is not unanimous, the determination
of two (2) of the arbitrators shall nevertheless be binding upon the Parties.
Arbitrators designated hereunder shall have substantial commercial experience in
the air transport or air express industry. The losing Party shall pay all costs
of such arbitration; provided, that if neither Party is clearly the losing
Party, then the arbitrators shall allocate the arbitration costs between the
Parties in an equitable manner, as the arbitrators may determine in their sole
discretion. Any decision, determination or award rendered as a result of such
arbitration shall be final, conclusive and binding on the Parties and may be
reduced to judgment in any appropriate court having jurisdiction thereof.

          Section 17.2 Sub-Contracting. Airco may, to the extent permitted by
applicable regulations of the DOT and the FAA, and with prior written approval
of Groundco, which approval shall not be unreasonably withheld, engage another
U.S. certificated air carrier to perform any of the obligations of Airco under
this Agreement on an emergency, occasional or infrequent sub-service basis, with
equivalent capacity aircraft; provided that Airco shall not thereby be relieved
of its obligations to Groundco hereunder should such other Service provider fail
to perform or operate to Groundco's satisfaction the flight or flights so
sub-serviced.

          Section 17.3 Time is of the Essence. Time is of the essence to this
Agreement. The term "days" as used in this Agreement shall mean calendar days
unless otherwise indicated herein.

          Section 17.4 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the Parties and
their respective successors and permitted assigns. No Party to this Agreement
may assign its rights or delegate its obligations under this Agreement to any
other Person, without the express prior written consent of the other party
hereto (such consent not to be unreasonably withheld); provided that Groundco
may assign this Agreement to any of its Affiliates as long as the obligations of
such assignee are guaranteed by Delta. Any such assignment or transfer made
without the prior written consent of the other Party hereto shall be null and
void.

          Section 17.5 Execution in Counterparts. To facilitate execution, this
Agreement may be executed in any number of counterparts (including by facsimile
transmission), each of which shall be deemed to be an original, but all of which
together shall constitute one binding agreement on the Parties, notwithstanding
that not all Parties are signatories to the same counterpart.

          Section 17.6 Headings; Certain Construction Rules. The Article and
section headings and the table of contents contained in this Agreement are for
reference purposes only and do not form a part of this Agreement and do not in
any way modify, interpret or construe the intentions of the Parties. As used in
this Agreement, unless otherwise provided to the contrary, (a) all references to
days or months shall be deemed references to calendar days or months and (b) any
reference to a "Section," "Article" or "Schedule" shall be deemed to refer to a
section or article of this Agreement or a schedule to this Agreement. The words
"hereof," "herein" and "hereunder" and words of similar import referring to this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement. Whenever the words "include," "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the

                                       45

<PAGE>

words "without limitation." Unless otherwise specifically provided for herein,
the term "or" shall not be deemed to be exclusive.

          Section 17.7 Notices. All notices, requests, claims, demands and other
communications hereunder shall, except where specifically provided otherwise, be
in writing and shall be deemed to have been duly given to a Party if delivered
in person or sent by overnight delivery (providing proof of delivery) to the
Parties at the following address (or at such other address for a Party as shall
be specified by like notice) on the date of delivery, or if by facsimile, upon
confirmation of receipt:

If to Groundco:

          Groundco
          Address
          Attn: Chief Executive Officer
          Facsimile:

If to Airco:

          Airco
          Address
          Attn: Chief Executive Officer
          Facsimile:

Groundco and Airco may each change, from time to time, their named
representative and respective addresses for the purpose of this section by
written notice to the other as herein provided.

          Section 17.8 Entire Agreement. This Agreement, including the Schedules
hereto, constitutes the entire agreement between the Parties and supersedes any
and all prior and contemporaneous agreements, memoranda, arrangements and
understandings, both written and oral, between the Parties with respect to the
subject matter hereof. No representation, warranty, promise inducement or
statement of intention has been made by either Party which is not contained in
this Agreement or the Schedules to this Agreement and no Party shall be bound
by, or be liable for, any alleged representation, promise, inducement or
statement of intention not contained herein or therein. All Schedules to this
Agreement and expressly made a part of, and incorporated by reference into this
Agreement.

          Section 17.9 Amendments; Waivers. Subject to applicable law, this
Agreement may only be amended pursuant to a written agreement executed by all
Parties, and no waiver of compliance with any provision or condition of this
Agreement and no consent provided for in this Agreement shall be effective
unless evidenced by a written instrument executed by the Party against whom such
waiver or consent is to be effective. No waiver of any term or provision of this
Agreement shall be construed as a further or continuing waiver of such term or
provision or any other term or provision.

                                       46

<PAGE>

          Section 17.10 Further Assurances. Each Party hereto shall, at its own
expense (except as otherwise provided herein), take such other actions and
execute and deliver such documents as may be reasonably necessary to effectuate
the purpose of this Agreement.

          Section 17.11 Severability. If any provision or any part of any
provision of this Agreement is void or unenforceable for any reason whatsoever,
then such provision shall be stricken and of no force and effect. However,
unless such stricken provision goes to the essence of the consideration
bargained for by a Party, the remaining provisions of this Agreement shall
continue in full force and effect and, to the extent required, shall be modified
to preserve their validity. Upon such determination that any term or other
provision or any part of any provision is void or unenforceable, the Parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.

          Section 17.12 Gender, Tense, Etc. Where the context or construction
requires, all words applied in the plural shall be deemed to have been used in
the singular, and vice versa; the masculine shall include the feminine and
neuter, and vice versa; and the present tense shall include the past and future
tense, and vice versa.

          Section 17.13 No Third-Party Rights. Nothing in this Agreement,
whether express or implied, is intended to or shall confer any rights, benefits
or remedies under or by reason of this Agreement on any Persons other than the
Parties and their respective successors and permitted assigns, nor is anything
in this Agreement intended to relieve or discharge the obligation or liability
of any third Persons to any Party, nor shall any provisions give any third
Persons any right or subrogation over or action against any Party.

          Section 17.14 Specific Performance. The Parties agree that irreparable
damage would occur in the event any of the provisions of this Agreement were not
performed in accordance with the terms hereof and that the Parties are entitled
to specific performance of the terms hereof in addition to any other remedies at
law or in equity.

                  [Remainder of page intentionally left blank]

                                       47

<PAGE>

     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.

                                          AIRBORNE INC.

                                          By:
                                              ----------------------------------

                                          Name:
                                                --------------------------------

                                          Title:
                                                 -------------------------------

                                          ABX AIR, INC.

                                          By:
                                              ----------------------------------

                                          Name:
                                                --------------------------------

                                          Title:
                                                 -------------------------------

                                       48

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