Document:

<PAGE>

                                                                     Exhibit 4.2

                                  ABX AIR, INC.

                                       and

                                 [RIGHTS AGENT]

                        PREFERRED STOCK RIGHTS AGREEMENT

                         Dated as of             , 2003
                                     ------------

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                                TABLE OF CONTENTS

<TABLE>
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                                                                                     Page
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<S>                                                                                   <C>
Section 1.    Certain Definitions ...................................................  1

Section 2.    Appointment of Rights Agent ...........................................  7

Section 3.    Issuance of Rights Certificates .......................................  7

Section 4.    Form of Rights Certificates ...........................................  8

Section 5.    Countersignature and Registration .....................................  9

Section 6.    Transfer, Split Up, Combination and Exchange of Rights Certificates;
              Mutilated, Destroyed, Lost or Stolen Rights Certificates .............. 10

Section 7.    Exercise of Rights; Exercise Price; Expiration Date of Rights ......... 11

Section 8.    Cancellation and Destruction of Rights Certificates ................... 12

Section 9.    Reservation and Availability of Preferred Shares ...................... 13

Section 10.   Record Date ........................................................... 14

Section 11.   Adjustment of Exercise Price, Number of Shares or Number of Rights .... 14

Section 12.   Certificate of Adjusted Exercise Price or Number of Shares ............ 21

Section 13.   Consolidation, Merger or Sale or Transfer of Assets or Earning Power .. 21

Section 14.   Fractional Rights and Fractional Shares ............................... 25

Section 15.   Rights of Action ...................................................... 25

Section 16.   Agreement of Rights Holders ........................................... 26

Section 17.   Rights Certificate Holder Not Deemed a Stockholder .................... 26

Section 18.   Concerning the Rights Agent ........................................... 27

Section 19.   Merger or Consolidation or Change of Name of Rights Agent ............. 27

Section 20.   Duties of Rights Agent ................................................ 28

Section 21.   Change of Rights Agent ................................................ 30

Section 22.   Issuance of New Rights Certificates ................................... 30

Section 23.   Redemption ............................................................ 31

Section 24.   Exchange .............................................................. 32

Section 25.   Notice of Certain Events .............................................. 33

Section 26.   Notices ............................................................... 34

Section 27.   Supplements and Amendments ............................................ 35

Section 28.   Successors ............................................................ 35

Section 29.   Determinations and Actions by the Board Of Directors, Etc. ............ 35
</TABLE>

                                       -i-

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                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
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<S>                                                                                   <C>
Section 30.   Benefits of this Agreement ............................................ 35

Section 31.   Severability .......................................................... 36

Section 32.   Governing Law ......................................................... 36

Section 33.   Counterparts .......................................................... 36

Section 34.   Descriptive Headings .................................................. 36

EXHIBIT A     CERTIFICATE OF INCORPORATION OF ABX AIR, INC

EXHIBIT B     FORM OF RIGHTS CERTIFICATE

EXHIBIT C     STOCKHOLDER RIGHTS PLAN ABX AIR, INC. SUMMARY OF RIGHTS
</TABLE>

                                      -ii-

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                        PREFERRED STOCK RIGHTS AGREEMENT

     This Preferred Stock Rights Agreement is dated as of             , 2003,
                                                          ------------
between ABX Air, Inc., a Delaware corporation, and [Rights Agent].

     On             , 2003 (the "Rights Dividend Declaration Date"), the Board
        ------------
of Directors of the Company authorized and declared a dividend of one right (a
"Right") for each Common Share (as hereinafter defined) of the Company
outstanding as of the Close of Business (as hereinafter defined) on
            , 2003 (the "Record Date"), each Right representing the right to
------------
purchase one one-thousandth (0.001) of a share of Series A Junior Participating
Preferred Stock (as such number may be adjusted pursuant to the provisions of
this Agreement), having the rights, preferences and privileges set forth in the
Company's Certificate of Incorporation filed with the Delaware Secretary of
State on      , 2003, a form of which is attached hereto as EXHIBIT A, upon the
         -----
terms and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Right (subject to adjustment as provided herein)
with respect to each Common Share that shall become outstanding between the
Record Date and the earlier of the Distribution Date and the Expiration Date (as
such terms are hereinafter defined), and in certain circumstances after the
Distribution Date.

     NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein set forth, the parties hereby agree as follows:

     Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:

          (a) "Acquiring Person" shall mean any Person, who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Shares then outstanding, but shall not include an
Exempt Person. Notwithstanding the foregoing, no Person shall be deemed to be an
Acquiring Person as the result of an acquisition of the Common Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the Common Shares of the Company then outstanding; provided, however, that if
a Person shall become the Beneficial Owner of 15% or more of the Common Shares
of the Company then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial Owner of
any additional Common Shares (other than pursuant to a dividend or distribution
paid or made by the Company on any of the outstanding Common Shares in Common
Shares or pursuant to a split or subdivision of any of the outstanding Common
Shares), then such Person shall be deemed to be an Acquiring Person unless upon
becoming the Beneficial Owner of such additional Common Shares such Person does
not beneficially own 15% or more of the Common Shares of the Company then
outstanding. Notwithstanding the foregoing, (i) if the Company's Board of
Directors determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently (including, without limitation,
because (A) such Person was unaware that it beneficially owned a percentage of
the Common Shares that would otherwise cause such Person to be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph (a),
or (B) such Person was aware of the extent of the Common Shares it beneficially
owned but had no actual knowledge of the

<PAGE>

consequences of such beneficial ownership under this Agreement) and without any
intention of changing or influencing control of the Company, and if such Person
divested or divests as promptly as practicable a sufficient number of any of the
Common Shares so that such Person would no longer be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be or to have become an "Acquiring Person" for any
purposes of this Agreement; and (ii) if, as of the date hereof, any Person is
the Beneficial Owner of 15% or more of the Common Shares outstanding, such
Person shall not be or become an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), unless and until such time as such
Person shall become the Beneficial Owner of additional Common Shares (other than
pursuant to a dividend or distribution paid or made by the Company on any of the
outstanding Common Shares in Common Shares or pursuant to a split or subdivision
of any of the outstanding Common Shares), unless, upon becoming the Beneficial
Owner of such additional Common Shares, such Person is not then the Beneficial
Owner of 15% or more of the Common Shares then outstanding.

          (b) "Adjustment Fraction" shall have the meaning set forth in Section
11(a)(i) hereof.

          (c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement.

          (d) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:

               (i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of Section
13(d) of the Exchange Act and Rule 13d-3 of the General Rules and Regulations
thereunder (or any comparable or successor law or regulation);

               (ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed pursuant to this Section
1(d)(ii)(A) to be the Beneficial Owner of, or to beneficially own, (1)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (2) securities
which a Person or any of such Person's Affiliates or Associates may be deemed to
have the right to acquire pursuant to any merger or other acquisition agreement
between the Company and such Person (or one or more of its Affiliates or
Associates) if such agreement has been approved by the Board of Directors of the
Company prior to there being an Acquiring Person; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided, however, that
a Person shall not be deemed the Beneficial Owner of, or to beneficially own,
any security under this Section 1(d)(ii)(B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable

                                       2

<PAGE>

proxy or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report); or

               (iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such Person
or any of such Person's Affiliates or Associates has any agreement, arrangement
or understanding, whether or not in writing (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section 1(d)(ii)(B)
hereof) or disposing of any securities of the Company; provided, however, that
in no case shall an employee, officer or director of the Company be deemed (x)
the Beneficial Owner of any securities beneficially owned by another employee,
officer or director of the Company solely by reason of actions undertaken by
such persons in their capacity as employees, officers or directors of the
Company or (y) the Beneficial Owner of securities held of record by the trustee
of any employee benefit plan of the Company or any Subsidiary of the Company for
the benefit of any employee of the Company or any Subsidiary of the Company or
their beneficiaries, other than the employee, officer or director, by reason of
any influence that such employee, officer or director, as applicable, may have
over the voting and/or disposition of the securities held in the plan.

          (e) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in New York are authorized or obligated by
law or executive order to close.

          (f) "Close of Business" on any given date shall mean 5:00 P.M., New
York time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York time, on the next succeeding Business Day.

          (g) "Common Shares" when used with reference to the Company shall mean
the shares of Common Stock, par value $0.01 per share, of the Company; provided,
however, that Common Shares when used with reference to any Person other than
the Company shall mean the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person.

          (h) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.

          (i) "Company" shall mean ABX Air, Inc., a Delaware corporation,
subject to the terms of Section 13(a)(iii)(C) hereof.

          (j) "Current Per Share Market Price" of any security (a "Security" for
purposes of this definition), for all computations other than those made
pursuant to Section 11(a)(iii) hereof, shall mean the average of the daily
closing prices per share of such Security for the thirty (30) consecutive
Trading Days immediately prior to such date; provided, however, that

                                       3

<PAGE>

in the event that the Current Per Share Market Price of the Security is
determined during a period following the announcement by the issuer of such
Security of (i) a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares or (ii) any
subdivision, combination or reclassification of such Security, and prior to the
expiration of the applicable thirty (30) Trading Day, after the ex-dividend date
for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per
Share Market Price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last sale price or, if such last sale price is not reported, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Security, the fair value of such
shares on such date as determined in good faith by the Board of Directors of the
Company shall be used. If the Preferred Shares are not publicly traded, the
Current Per Share Market Price of the Preferred Shares shall be conclusively
deemed to be (x) the Current Per Share Market Price of the Common Shares as
determined pursuant to this Section 1(j), as appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof, multiplied by (y) 1,000. If the Security is not publicly held or so
listed or traded, Current Per Share Market Price shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.

          (k) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.

          (l) "Distribution Date" shall mean the earlier of (i) the Close of
Business on the tenth (10th) day after the Shares Acquisition Date (or, if the
tenth (10th) day after the Shares Acquisition Date occurs before the Record
Date, the Close of Business on the Record Date) or (ii) the Close of Business on
the tenth (10th) Business Day (or such later date as may be determined by action
of the Company's Board of Directors) after the date that a tender or exchange
offer by any Person (other than an Exempt Person) is first published or sent or
given within the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, if, assuming the successful consummation thereof, such
Person would be an Acquiring Person.

          (m) "Equivalent Shares" shall mean any class or series of capital
stock of the Company which is entitled to the same rights, privileges and
preferences as the Preferred Shares.

                                       4

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          (n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

          (o) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.

          (p) "Exempt Person" shall mean (i) the Company; (ii) any Subsidiary of
the Company; (iii) any employee benefit plan of the Company or of any Subsidiary
of the Company, or any entity holding Common Shares for or pursuant to the terms
of any such plan; (iv) DHL Worldwide Express, B.V., a company organized and
existing under the laws of the Netherlands ("DHL") or any Subsidiary of DHL or
any direct transferee of Common Shares held by DHL or any Subsidiary of DHL; or
(v) if a transaction is proposed that would constitute a "Change in Control" as
defined in the ACMI Service Agreement between Airborne, Inc., DHL and the
Company (the "ACMI Agreement" for purposes of this definition) and DHL notifies
the Company that it would not exercise its right to terminate the ACMI
Agreement, the Person who triggered the "Change in Control" under the ACMI
Agreement. Notwithstanding any to the contrary, the foreign ownership
restrictions contained in the Company's Certificate of Incorporation will apply
to any Exempt Person.

          (q) "Exercise Price" shall have the meaning set forth in Section 4(a)
hereof.

          (r) "Expiration Date" shall mean the earliest to occur of: (i) the
Close of Business on the Final Expiration Date, (ii) the Redemption Date, or
(iii) the time at which the Board of Directors orders the exchange of the Rights
as provided in Section 24 hereof.

          (s) "Final Expiration Date" shall mean [_________], 2013.

          (t) "NASDAQ" shall mean The Nasdaq Stock Market, Inc.

          (u) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust or other entity, and shall include
any successor (by merger or otherwise) of such entity.

          (v) "Post-Event Transferee" shall have the meaning set forth in
Section 7(e) hereof.

          (w) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $[0.01] per share, of the Company.

          (x) "Pre-Event Transferee" shall have the meaning set forth in Section
7(e) hereof.

          (y) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.

          (z) "Record Date" shall have the meaning set forth in the recitals at
the beginning of this Agreement.

          (aa) "Redemption Date" shall have the meaning set forth in Section
23(a) hereof.

                                       5

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          (bb) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.

          (cc) "Rights Agent" shall mean (i) [Rights Agent], (ii) its successor
or replacement as provided in Sections 19 and 21 hereof or (iii) any additional
Person appointed pursuant to Section 2 hereof.

          (dd) "Rights Certificate" shall mean a certificate substantially in
the form attached hereto as Exhibit B.

          (ee) "Rights Dividend Declaration Date" shall have the meaning set
forth in the recitals at the beginning of this Agreement.

          (ff) "Section 11(a)(iii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.

          (gg) "Section 13 Event" shall mean any event described in clause (i),
(ii) or (iii) of Section 13(a) hereof.

          (hh) "Securities Act" shall mean the Securities Act of 1933, as
amended.

          (ii) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such;
provided that, if such Person is determined not to have become an Acquiring
Person pursuant to Section 1(a) hereof, then no Shares Acquisition Date shall be
deemed to have occurred.

          (jj) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.

          (kk) "Subsidiary" of any Person shall mean any corporation or other
entity of which an amount of voting securities sufficient to elect a majority of
the directors or Persons having similar authority of such corporation or other
entity is beneficially owned, directly or indirectly, by such Person, or any
corporation or other entity otherwise controlled by such Person.

          (ll) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.

          (mm) "Summary of Rights" shall mean a summary of this Agreement
substantially in the form attached hereto as Exhibit C.

          (nn) "Total Exercise Price" shall have the meaning set forth in
Section 4(a) hereof.

          (oo) "Trading Day" shall mean a day on which the principal national
securities exchange on which a referenced security is listed or admitted to
trading is open for the

                                       6

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transaction of business or, if a referenced security is not listed or admitted
to trading on any national securities exchange, a Business Day.

          (pp) A "Triggering Event" shall be deemed to have occurred upon any
Person becoming an Acquiring Person.

     Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable, upon ten (10) days' prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise, and shall in no event be liable
for, the acts or omissions of any co-Rights Agent.

     Section 3. Issuance of Rights Certificates.

          (a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to the provisions of Sections 3(b) and 3(c) hereof) by the certificates
for Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Rights Certificates) and not by separate
Rights Certificates, and (ii) the right to receive Rights Certificates will be
transferable only in connection with the transfer of Common Shares. Until the
earlier of the Distribution Date or the Expiration Date, the surrender for
transfer of certificates for Common Shares shall also constitute the surrender
for transfer of the Rights associated with the Common Shares represented
thereby. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Distribution Date (other than any Acquiring Person
or any Affiliate or Associate of any Acquiring Person), at the address of such
holder shown on the records of the Company, a Rights Certificate evidencing one
Right for each Common Share so held, subject to adjustment as provided herein.
In the event that an adjustment in the number of Rights per Common Share has
been made pursuant to Section 11 hereof, then at the time of distribution of the
Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights (in accordance with Section 14(a)
hereof). As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates and may be transferred by the transfer of the
Rights Certificates as permitted hereby, separately and apart from any transfer
of Common Shares, and the holders of such Rights Certificates as listed in the
records of the Company or any transfer agent or registrar for the Rights shall
be the record holders thereof.

          (b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of the Summary of Rights by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Record Date (other than any Acquiring Person or any Affiliate or
Associate of any Acquiring Person), at the address of such holder shown on the
records of the Company. With respect to certificates for Common Shares

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<PAGE>

outstanding as of the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates registered in the names of the holders thereof
together with the Summary of Rights.

          (c) Unless the Board of Directors by resolution adopted at or before
the time of the issuance of any Common Shares after the Record Date but prior to
the earlier of the Distribution Date or the Expiration Date (or, in certain
circumstances provided in Section 22 hereof, after the Distribution Date)
specifies to the contrary, Rights shall be issued in respect of all Common
Shares that are so issued, and Certificates representing such Common Shares
shall also be deemed to be certificates for Rights, and shall bear the following
legend:

     THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
     RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN ABX AIR, INC. AND [RIGHTS
     AGENT], AS THE RIGHTS AGENT, DATED AS OF        , 2003 (AS THE SAME MAY BE
                                              -------
     AMENDED, SUPPLEMENTED, OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "RIGHTS
     AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE
     AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF ABX
     AIR, INC. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
     AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL
     NO LONGER BE EVIDENCED BY THIS CERTIFICATE. ABX AIR, INC. WILL MAIL TO THE
     HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE
     AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR ADDRESSED TO THE CORPORATE
     SECRETARY AT ABX AIR, INC.'S PRINCIPAL EXECUTIVE OFFICES. UNDER CERTAIN
     CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR
     TRANSFERRED TO ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY
     AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
     AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
     SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID AND WILL NO LONGER BE
     TRANSFERABLE.

With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Shares represented by such certificates shall be evidenced by
such certificates alone, and the surrender for transfer of any such certificate,
except as otherwise provided hereby, shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. Notwithstanding
this paragraph (c), the omission of a legend shall not affect the enforceability
of any part of this Agreement or the rights of any holder of the Rights.

          (d) In the event that the Company purchases or otherwise acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.

                                       8

<PAGE>

     Section 4. Form of Rights Certificates.

          (a) The Rights Certificates (and the forms of election to purchase
Common Shares and of assignment to be printed on the reverse thereof) shall be
substantially in the form of Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or automated quotation system, on which
the Rights may from time to time be listed or included, or to conform to usage.
Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date (or in
the case of Rights issued with respect to Common Shares issued by the Company
after the Record Date, as of the date of issuance of such Common Shares) and on
their face shall entitle the holders thereof to purchase such number of
one-thousandths (0.001) of a Preferred Share as shall be set forth therein at
the price set forth therein (such exercise price per one one-thousandth (0.001)
of a Preferred Share being hereinafter referred to as the "Exercise Price" and
the aggregate Exercise Price of all Preferred Shares issuable upon exercise of
one Right being hereinafter referred to as the "Total Exercise Price"), but the
number and type of securities purchasable upon the exercise of each Right and
the Exercise Price shall be subject to adjustment as provided herein.

          (b) Any Rights Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a Post-Event
Transferee, (iii) a Pre-Event Transferee, or (iv) any subsequent transferee
receiving transferred Rights from a Post-Event Transferee or a Pre-Event
Transferee, either directly or through one or more intermediate transferees, and
any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:

     THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
     OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
     ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
     AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
     HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
     7(e) OF THE RIGHTS AGREEMENT.

     Section 5. Countersignature and Registration.

          (a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer, its Chief Financial
Officer, its President or any Vice President, either manually or by facsimile
signature, and by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature, and shall have affixed thereto the Company's
seal (if any) or a facsimile thereof. The Rights Certificates shall be
countersigned, either manually or by facsimile signature, by the Rights Agent
and shall not be valid for any purpose unless countersigned. In case any officer
of the Company who shall have

                                       9

<PAGE>

signed any of the Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the Person who signed such Rights Certificates on behalf of the
Company had not ceased to be such officer of the Company; and any Rights
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.

          (b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purposes, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.

     Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.

          (a) Subject to the provisions of this Agreement, at any time after the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Rights Certificate or Rights Certificates
may be transferred, split up, combined or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered holder to purchase
a like number of one-thousandths (0.001) of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets, as the case may be) as
the Rights Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred, split up, combined
or exchanged at the office of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to the provisions of this Agreement, countersign and
deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment from the registered holder of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.

          (b) Subject to the provisions of this Agreement, at any time after the
Distribution Date and prior to the Expiration Date, upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Rights Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the

                                       10

<PAGE>

Rights Agent of all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Rights Certificate if mutilated, the
Company will make and deliver a new Rights Certificate of like tenor to the
Rights Agent for delivery to the registered holder in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.

     Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights.

          (a) Except as otherwise provided herein, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date and prior to the Close of Business on the Expiration Date by
surrender of the Rights Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment of the Exercise
Price for each one-thousandth (0.001) of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets as the case may be) as
to which the Rights are exercised.

          (b) The Exercise Price for each one-thousandth (0.001) of a Preferred
Share issuable pursuant to the exercise of a Right shall initially be [One
Hundred and Eighty Dollars and no cents ($180.00)], shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of America in accordance with
paragraph (c) below.

          (c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Exercise Price for the number of one-thousandths (0.001) of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Rights
Certificate in accordance with Section 6 or Section 9(e) hereof, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares (or make available,
if the Rights Agent is the transfer agent for the Preferred Shares) a
certificate or certificates for the number of one-thousandths (0.001) of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests or
(B) if the Company shall have elected to deposit the total number of
one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event,
other securities, cash or other assets as the case may be) issuable upon
exercise of the Rights hereunder with a depository agent, requisition from the
depository agent depository receipts representing such number of one-thousandths
(0.001) of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) as are to be purchased (in
which case certificates for the Preferred Shares (or, following a Triggering
Event, other securities, cash or other assets as the case may be) represented by
such receipts shall be deposited by the transfer agent with the depository
agent) and the Company hereby directs the depository agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depository receipts,
cause the same to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, and (iv) when appropriate, after receipt thereof, deliver such
cash to

                                       11

<PAGE>

or upon the order of the registered holder of such Rights Certificate. The
payment of the Exercise Price (as such amount may be reduced (including to zero)
pursuant to Section 11(a)(iii) hereof) and an amount equal to any applicable
transfer tax required to be paid by the holder of such Rights Certificate in
accordance with Section 6 or Section 9(e) hereof, may be made in cash or by
certified bank check, cashier's check or bank draft payable to the order of the
Company. In the event that the Company is obligated to issue securities of the
Company other than Preferred Shares, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate.

          (d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Rights Certificate or to
his or her duly authorized assigns, subject to the provisions of Section 6 or
Section 14 hereof.

          (e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Triggering Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such (a
"Post-Event Transferee"), (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or
understanding, written or otherwise, regarding the transferred Rights or (B) a
transfer which the Company's Board of Directors has determined is part of a
plan, arrangement or understanding, written or otherwise, which has as a primary
purpose or effect the avoidance of this Section 7(e) (a "Pre-Event Transferee")
or (iv) any subsequent transferee receiving transferred Rights from a Post-Event
Transferee or a Pre-Event Transferee, either directly or through one or more
intermediate transferees, shall become null and void without any further action
and no holder of such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Agreement or otherwise. The
Company shall use all reasonable efforts to ensure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or to any other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person or any of such Acquiring Person's Affiliates, Associates or transferees
hereunder.

          (f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.

                                       12

<PAGE>

     Section 8. Cancellation and Destruction of Rights Certificates.

     All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Rights Certificates, and in such
case shall deliver a certificate evidencing the destruction thereof to the
Company.

     Section 9. Reservation and Availability of Preferred Shares.

          (a) The Company covenants and agrees that it will use its best efforts
to cause to be reserved and kept available out of its authorized and unissued
Preferred Shares or Preferred Shares held in its treasury (and, following the
occurrence of a Triggering Event, out of its authorized and unissued Common
Shares and/or other securities), the number of Preferred Shares (and, following
the occurrence of the Triggering Event, Common Shares and/or other securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights.

          (b) If the Company shall hereafter list any of its Preferred Shares on
a national securities exchange, then so long as the Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities) issuable and deliverable upon exercise of the Rights may be listed
on such exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable (but only to the extent that it
is reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.

          (c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights is described in Section 11(a)(ii) or Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act with respect to
the securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the date of expiration of the
Rights. The Company may temporarily suspend, for a period not to exceed ninety
(90) days after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating, and notify
the Rights Agent, that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notification to the Rights Agent
at such time as the suspension is no longer in effect. The Company will also
take such action as may be appropriate under, or to ensure

                                       13

<PAGE>

compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction, unless the requisite qualification in such jurisdiction shall have
been obtained, or an exemption therefrom shall be available, and until a
registration statement has been declared and remains effective.

          (d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares (or other securities of
the Company) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such securities (subject to payment of the Exercise Price),
be duly and validly authorized and issued and fully paid and nonassessable.

          (e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the original issuance or delivery of the Rights
Certificates or of any Preferred Shares (or other securities of the Company)
upon the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax or charge which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of certificates or depository receipts for the Preferred Shares (or
other securities of the Company) in a name other than that of, the registered
holder of the Rights Certificate evidencing Rights surrendered for exercise or
to issue or to deliver any certificates or depository receipts for Preferred
Shares (or other securities of the Company) upon the exercise of any Rights
until any such tax or charge shall have been paid (any such tax or charge being
payable by the holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that no
such tax or charge is due.

     Section 10. Record Date.

     Each Person in whose name any certificate for a number of one-thousandths
(0.001) of a Preferred Share (or other securities of the Company) is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of Preferred Shares (or other securities of the Company)
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of the Total Exercise Price with respect to which the Rights have been exercised
(and any applicable taxes and governmental charges) was made; provided, however,
that if the date of such surrender and payment is a date upon which the transfer
books of the Company are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a holder of Preferred Shares
(or other securities of the Company) for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.

                                       14

<PAGE>

     Section 11. Adjustment of Exercise Price, Number of Shares or Number of
Rights.

     The Exercise Price, the number and kind of shares or other property covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.

          (a) (i) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this Agreement
(A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares (by reverse stock split or otherwise) into a smaller number of
Preferred Shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such event, except as otherwise
provided in this Section 11 and Section 7(e) hereof: (1) the Exercise Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification shall be adjusted so that
the Exercise Price thereafter shall equal the result obtained by dividing the
Exercise Price in effect immediately prior to such time by a fraction (the
"Adjustment Fraction"), the numerator of which shall be the total number of
Preferred Shares (or shares of capital stock issued in such reclassification of
the Preferred Shares) outstanding immediately following such time and the
denominator of which shall be the total number of Preferred Shares outstanding
immediately prior to such time; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of such Right; and (2) the number of one-thousandths (0.001) of a
Preferred Share (or share of such other capital stock) issuable upon the
exercise of each Right shall equal the number of one-thousandths (0.001) of a
Preferred Share (or share of such other capital stock) as was issuable upon
exercise of a Right immediately prior to the occurrence of the event described
in clauses (A) - (D) of this Section 11(a)(i), multiplied by the Adjustment
Fraction; provided, however, that, no such adjustment shall be made pursuant to
this Section 11(a)(i) to the extent that there shall have simultaneously
occurred an event described in clause (i), (ii), (iii) or (iv) of this Section
11(n) with a proportionate adjustment being made thereunder. Each Common Share
that shall become outstanding after an adjustment has been made pursuant to this
Section 11(a)(i) shall have associated with it the number of Rights, exercisable
at the Exercise Price and for the number of one-thousandths (0.001) of a
Preferred Share (or shares of such other capital stock) as one Common Share has
associated with it immediately following the adjustment made pursuant to this
Section 11(a)(i).

               (ii) Subject to Section 24 of this Agreement, in the event that a
Triggering Event shall have occurred, then promptly following such Triggering
Event each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive for each Right, upon exercise thereof in
accordance with the terms of this Agreement and payment of the Exercise Price in
effect immediately prior to the occurrence of the Triggering Event, in lieu of a
number of one-thousandths (0.001) of a Preferred Share, such number of Common
Shares of the Company as shall equal the quotient obtained by dividing (A) the
product obtained by multiplying (1) the Exercise Price in effect immediately
prior to the occurrence of the Triggering Event by (2) the number of
one-thousandths (0.001) of a Preferred Share for which a Right was exercisable
(or would have been exercisable if the Distribution Date had

                                       15

<PAGE>

occurred) immediately prior to the first occurrence of a Triggering Event, by
(B) fifty percent (50%) of the Current Per Share Market Price for Common Shares
on the date of occurrence of the Triggering Event; provided, however, that the
Exercise Price and the number of Common Shares of the Company so receivable upon
exercise of a Right shall be subject to further adjustment as appropriate in
accordance with Section 11(e) hereof to reflect any events occurring in respect
of the Common Shares of the Company after the occurrence of the Triggering
Event.

               (iii) In lieu of issuing Common Shares in accordance with Section
11(a)(ii) hereof, the Company may, if the Company's Board of Directors
determines that such action is necessary or appropriate and not contrary to the
interest of holders of Rights and, in the event that the number of Common Shares
which are authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights, or
if any necessary regulatory approval for such issuance has not been obtained by
the Company, the Company shall: (A) determine the excess of (i) the value of the
Common Shares issuable upon the exercise of a Right (the "Current Value") over
(ii) the Exercise Price (such excess, the "Spread") and (B) with respect to each
Right (other than Rights which have become void pursuant to Section 7(e)), make
adequate provision to substitute for such Common Shares, upon exercise of the
Rights, (1) cash, (2) a reduction in the Exercise Price, (3) other equity
securities of the Company (including, without limitation, shares or units of
shares of any series of preferred stock which the Company's Board of Directors
has deemed to have the same value as Common Shares (such shares or units of
shares of preferred stock are herein called "Common Stock Equivalents")), except
to the extent that the Company has not obtained any necessary stockholder or
regulatory approval for such issuance, (4) debt securities of the Company,
except to the extent that the Company has not obtained any necessary stockholder
or regulatory approval for such issuance, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Company's Board of
Directors based upon the advice of an independent nationally recognized
investment banking firm selected by the Company's Board of Directors; provided,
however, that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following the later
of (x) the first occurrence of a Triggering Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "Section 11(a)(iii) Trigger Date"),
then the Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Exercise Price, Common Shares
(to the extent available), except to the extent that the Company has not
obtained any necessary stockholder or regulatory approval for such issuance, and
then, if necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread. If the Company's Board of Directors shall determine in good faith
that it is likely that sufficient additional Common Shares could be authorized
for issuance upon exercise in full of the Rights or that any necessary
regulatory approval for such issuance will be obtained, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(iii) Trigger Date, in order that
the Company may seek stockholder approval for the authorization of such
additional shares or take action to obtain such regulatory approval (such
period, as it may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (X) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights and (Y) may suspend

                                       16

<PAGE>

the exercisability of the Rights until the expiration of the Substitution Period
in order to seek any authorization of additional shares, to take any action to
obtain any required regulatory approval and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Shares shall be the Current Per Share Market Price of the
Common Shares on the Section 11(a)(iii) Trigger Date and the value of any Common
Stock Equivalent shall be deemed to have the same value as the Common Shares on
such date.

          (b) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the issuance of rights, options or warrants to
all holders of Preferred Shares entitling such holders (for a period expiring
within forty-five (45) calendar days after such record date) to subscribe for or
purchase Preferred Shares or Equivalent Shares or securities convertible into
Preferred Shares or Equivalent Shares at a price per share (or having a
conversion price per share, if a security convertible into Preferred Shares or
Equivalent Shares) less than the then Current Per Share Market Price of the
Preferred Shares or Equivalent Shares on such record date, then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares and Equivalent Shares (if any) outstanding on such record date,
plus the number of Preferred Shares or Equivalent Shares, as the case may be,
which the aggregate offering price of the total number of Preferred Shares or
Equivalent Shares, as the case may be, to be offered or issued (and/or the
aggregate initial conversion price of the convertible securities to be offered
or issued) would purchase at such current market price, and the denominator of
which shall be the number of Preferred Shares and Equivalent Shares (if any)
outstanding on such record date, plus the number of additional Preferred Shares
or Equivalent Shares, as the case may be, to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Company's
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights. Preferred Shares and Equivalent Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights, options or warrants are
not so issued, the Exercise Price shall be adjusted to be the Exercise Price
which would then be in effect if such record date had not been fixed.

          (c) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the making of a distribution to all holders of
the Preferred Shares or of any class or series of Equivalent Shares (including
any such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend, if any, or
a

                                       17

<PAGE>

dividend payable in Preferred Shares) or subscription rights, options or
warrants (excluding those referred to in Section 11(b)), then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Per Share
Market Price of a Preferred Share or an Equivalent Share on such record date,
less the fair market value per Preferred Share or Equivalent Share (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to a Preferred
Share or Equivalent Share, as the case may be, and the denominator of which
shall be such Current Per Share Market Price of a Preferred Share or Equivalent
Share on such record date; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. Such adjustments shall be made successively whenever such
a record date is fixed, and in the event that such distribution is not so made,
the Exercise Price shall be adjusted to be the Exercise Price which would have
been in effect if such record date had not been fixed.

          (d) Anything herein to the contrary notwithstanding, no adjustment in
the Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1.0%) of the Exercise Price;
provided, however, that any adjustments which by reason of this Section 11(d)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth (0.0001) of a Common Share
or other share or one hundred-thousandth (0.00001) of a Preferred Share, as the
case may be. Notwithstanding the first sentence of this Section 11(d), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three (3) years from the date of the transaction which requires such
adjustment or (ii) the Expiration Date.

          (e) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right and, if required, the Exercise Price thereof, shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained in
subsections (a), (b), (c), (d), (g), (h), (i), (j), (k) and (l) if this Section
11, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Shares shall apply on like terms to any such other shares.

          (f) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one-thousandths (0.001)
of a Preferred Share purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.

          (g) Unless the Company shall have exercised its election as provided
in subsection (h) of this Section 11, upon each adjustment of the Exercise Price
as a result of the calculations made in subsections (b) and (c) of this Section
11, each Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to

                                       18

<PAGE>

purchase, at the adjusted Exercise Price, that number of Preferred Shares
(calculated to the nearest one hundred-thousandth (0.00001) of a share) obtained
by (i) multiplying (x) the number of Preferred Shares covered by a Right
immediately prior to this adjustment by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price, and (ii) dividing
the product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.

          (h) The Company may elect on or after the date of any adjustment of
the Exercise Price as a result of the calculations made in subsection (b) or (c)
of this Section 11 to adjust the number of Rights, in substitution for any
adjustment in the number of Preferred Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one-thousandths (0.001) of a
Preferred Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
hundred-thousandth (0.00001)) obtained by dividing the Exercise Price in effect
immediately prior to adjustment of the Exercise Price by the Exercise Price in
effect immediately after adjustment of the Exercise Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Exercise Price is adjusted or any day thereafter, but, if any Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this subsection (h) of this
Section 11, the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Rights Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Exercise Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.

          (i) Irrespective of any adjustment or change in the Exercise Price or
the number of Preferred Shares issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Exercise Price per one one-thousandth (0.001) of a Preferred Share and the
number of one-thousandths (0.001) of a Preferred Share which were expressed in
the initial Rights Certificates issued hereunder.

          (j) Before taking any action that would cause an adjustment reducing
the Exercise Price below the par or stated value, if any, of the number of
one-thousandths (0.001) of a Preferred Share issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue as fully paid and nonassessable shares such number of one-thousandths
(0.001) of a Preferred Share at such adjusted Exercise Price.

                                       19

<PAGE>

          (k) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the number of one-thousandths (0.001) of a Preferred Share and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one-thousandths (0.001) of a Preferred Share and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Exercise Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) upon the occurrence of the event requiring such
adjustment.

          (l) Anything in this Section 11 to the contrary notwithstanding, prior
to the Distribution Date, the Company shall be entitled to make such reductions
in the Exercise Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that it, in its sole discretion, shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred or Common Shares, (ii) issuance wholly for cash of any Preferred
or Common Shares at less than the current market price, (iii) issuance wholly
for cash of Preferred or Common Shares or securities which by their terms are
convertible into or exchangeable for Preferred or Common Shares, (iv) stock
dividends, or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred or Common
Shares shall not be taxable to such stockholders.

          (m) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take (or
permit to be taken) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.

          (n) In the event that the Company shall at any time after the date of
this Agreement (i) declare a dividend on the Common Shares payable in Common
Shares, (ii) subdivide the outstanding Common Shares, (iii) combine the
outstanding Common Shares (by reverse stock split or otherwise) into a smaller
number of Common Shares, or (iv) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such event, except as otherwise
provided in this Section 11(a) and Section 7(e) hereof: (A) each Common Share
(or shares of capital stock issued in such reclassification of the Common
Shares) outstanding immediately following such time shall have associated with
it the number of Rights as were associated with one Common Share immediately
prior to the occurrence of the event described in clauses (i)-(iv) above; (B)
the Exercise Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification shall
be adjusted so that the Exercise Price thereafter shall equal the result
obtained by multiplying the Exercise Price in effect immediately prior to such
time by a fraction, the numerator of which shall be the total number of Common
Shares outstanding immediately prior to the event described in clauses (i)-(iv)
above, and the denominator of which shall be the total number of Common Shares
outstanding immediately after such event; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (C) the number of one-

                                       20

<PAGE>

thousandths (0.001) of a Preferred Share (or shares of such other capital stock)
issuable upon the exercise of each Right outstanding after such event shall
equal the number of one-thousandths (0.001) of a Preferred Share (or shares of
such other capital stock) as were issuable with respect to one Right immediately
prior to such event. Each Common Share that shall become outstanding after an
adjustment has been made pursuant to this Section 11(n) shall have associated
with it the number of Rights, exercisable at the Exercise Price and for the
number of one-thousandths (0.001) of a Preferred Share (or shares of such other
capital stock) as one Common Share has associated with it immediately following
the adjustment made pursuant to this Section 11(n). If an event occurs which
would require an adjustment under both this Section 11(n) and subsection (a)(ii)
of this Section 11, the adjustment provided for in this Section 11(n) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
subsection (a)(ii) of this Section 11.

     Section 12. Certificate of Adjusted Exercise Price or Number of Shares.

     Whenever an adjustment is made as provided in Sections 11 and 13 hereof,
the Company shall promptly (i) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(ii) file with the Rights Agent and with each transfer agent for the Preferred
Shares a copy of such certificate, and (iii) mail a brief summary thereof to
each holder of a Rights Certificate in accordance with Section 26 hereof.
Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or give such notice shall not affect the validity of such
adjustment or the force or effect of the requirement for such adjustment. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment contained therein and shall not be deemed to have knowledge of
such adjustment unless and until it shall have received such certificate.

     Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.

          (a) In the event that, following a Triggering Event, directly or
indirectly:

               (i) the Company shall consolidate with, or merge with and into,
any other Person (other than a wholly-owned Subsidiary of the Company in a
transaction the principal purpose of which is to change the state of
incorporation of the Company and which complies with Section 11(m) hereof);

               (ii) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such merger,
all or part of any of the Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Company); or

               (iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating fifty percent (50%) or more of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company or one or more of
its wholly owned Subsidiaries in one or more transactions, each of which
individually

                                       21

<PAGE>

(and in the aggregate) complies with Section 11(m) hereof), then, concurrent
with and in each such case,

                    (A) each holder of a Right (except as provided in Section
7(e) hereof) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the Total Exercise Price applicable immediately
prior to the occurrence of the Section 13 Event in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of the Principal Party
(hereinafter defined), free of any liens, encumbrances, rights of first refusal
or other adverse claims, as shall be equal to the result obtained by dividing
such Total Exercise Price by an amount equal to fifty percent (50%) of the
Current Per Share Market Price of the Common Shares of such Principal Party on
the date of consummation of such Section 13 Event, provided, however, that the
Exercise Price and the number of Common Shares of such Principal Party so
receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(e) hereof;

                    (B) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Agreement;

                    (C) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event;

                    (D) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of its Common Shares)
in connection with the consummation of any such transaction as may be necessary
to ensure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to its Common Shares thereafter deliverable
upon the exercise of the Rights; and

                    (E) upon the subsequent occurrence of any consolidation,
merger, sale or transfer of assets or other extraordinary transaction in respect
of such Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Total Exercise Price as
provided in this Section 13(a), such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had such holder,
at the time of such transaction, owned the Common Shares of the Principal Party
receivable upon the exercise of such Right pursuant to this Section 13(a), and
such Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.

                    (F) For purposes hereof, the "earning power" of the Company
and its Subsidiaries shall be determined in good faith by the Company's Board of
Directors on the basis of the operating income of each business operated by the
Company and its Subsidiaries during the three fiscal years preceding the date of
such determination (or, in the case of any business not operated by the Company
or any Subsidiary during three full fiscal years preceding such date, during the
period such business was operated by the Company or any Subsidiary).

                                       22

<PAGE>

          (b) For purposes of this Agreement, the term "Principal Party" shall
mean:

               (i) in the case of any transaction described in clause (i) or
(ii) of Section 13(a) hereof: (A) the Person that is the issuer of the
securities into which any of the Common Shares are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the Common
Shares of which have the greatest aggregate market value of shares outstanding,
or (B) if no securities are so issued, (x) the Person that is the other party to
the merger, if such Person survives said merger, or, if there is more than one
such Person, the Person the Common Shares of which have the greatest aggregate
market value of shares outstanding or (y) if the Person that is the other party
to the merger does not survive the merger, the Person that does survive the
merger (including the Company if it survives) or (z) the Person resulting from
the consolidation; and

               (ii) in the case of any transaction described in clause (iii) of
Section 13(a) hereof, the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction
or transactions, or, if more than one Person that is a party to such transaction
or transactions receives the same portion of the assets or earning power so
transferred and each such portion would, were it not for the other equal
portions, constitute the greatest portion of the assets or earning power so
transferred, or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons is the issuer of
Common Shares having the greatest aggregate market value of shares outstanding;
provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Shares of such Person are not at such time or
have not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (A) if such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been so
registered, the term "Principal Party" shall refer to such other Person, or (B)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of which are and have been so registered, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of Common Shares
having the greatest aggregate market value of shares outstanding, or (C) if such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly by the same Person, the
rules set forth in clauses (A) and (B) above shall apply to each of the owners
having an interest in the venture as if the Person owned by the joint venture
was a Subsidiary of both or all of such joint venturers, and the Principal Party
in each such case shall bear the obligations set forth in this Section 13 in the
same ratio as its interest in such Person bears to the total of such interests.

          (c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized Common Shares that
have not been issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 13 and unless prior thereto the
Company and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Agreement in accordance with
Sections 13(a) and 13(b) hereof, that all rights of first refusal or preemptive
rights in respect of the issuance of Common Shares of such Principal Party upon
exercise of outstanding Rights have been waived, that there are no rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would

                                       23

<PAGE>

eliminate or substantially diminish the benefits intended to be afforded by the
Rights and that such transaction shall not result in a default by such Principal
Party under this Agreement, and further providing that, as soon as practicable
after the date of such Section 13 Event, such Principal Party will:

               (i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, use its best efforts to cause
such registration statement to become effective as soon as practicable after
such filing and use its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date, and similarly comply with applicable
state securities laws;

               (ii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on Nasdaq and list (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on Nasdaq; and

               (iii) deliver to holders of the Rights historical financial
statements for such Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act.

     In the event that at any time after the occurrence of a Triggering Event
some or all of the Rights shall not have been exercised at the time of a Section
13 Event, the Rights which have not theretofore been exercised shall thereafter
be exercisable in the manner described in Section 13(a) (without taking into
account any prior adjustment required by Section 11(a)(ii)).

          (d) In case the "Principal Party" for purposes of Section 13(b) hereof
has provision in any of its authorized securities or in its certificate of
incorporation or by-laws or other instrument governing its corporate affairs,
which provision would have the effect of (i) causing such Principal Party to
issue (other than to holders of Rights pursuant to Section 13 hereof), in
connection with, or as a consequence of, the consummation of a Section 13 Event,
Common Shares or Equivalent Shares of such Principal Party at less than the then
Current Per Share Market Price thereof or securities exercisable for, or
convertible into, Common Shares or Equivalent Shares of such Principal Party at
less than such then Current Per Share Market Price, or (ii) providing for any
special payment, tax or similar provision in connection with the issuance of the
Common Shares of such Principal Party pursuant to the provisions of Section 13
hereof, then, in such event, the Company hereby agrees with each holder of
Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with or as a consequence of, the consummation of
the proposed transaction.

          (e) The Company covenants and agrees that it shall not, at any time
after the Triggering Event, effect or permit to occur any Section 13 Event, if
(i) at the time or immediately after such Section 13 Event there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate

                                       24

<PAGE>

the benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Section 13 Event, the stockholders
or other equity holders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(b) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
or Associates, or (iii) the form or nature of organization of the Principal
Party would preclude or limit the exercisability of the Rights.

          (f) The provisions of this Section 13 shall similarly apply to
successive Section 13 Events.

     Section 14. Fractional Rights and Fractional Shares.

          (a) The Company shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable, as determined pursuant to the second sentence of
Section 1(j) hereof.

          (b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions that are integral multiples of one one-thousandth
(0.001) of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
that are integral multiples of one one-thousandth (0.001) of a Preferred Share).
Interests in fractions of Preferred Shares in integral multiples of one
one-thousandth (0.001) of a Preferred Share may, at the election of the Company,
be evidenced by depository receipts, pursuant to an appropriate agreement
between the Company and a depository selected by it; provided, however, that
such agreement shall provide that the holders of such depository receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depository
receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one one-thousandth (0.001) of a Preferred Share, the Company shall pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of a Preferred Share. For purposes of this Section 14(b), the
current market value of a Preferred Share shall be (x) one thousand (1,000)
multiplied by (y) the closing price of a Common Share (as determined pursuant to
the second sentence of Section 1(j) hereof) for the Trading Day immediately
prior to the date of such exercise.

          (c) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares
upon the exercise or exchange of Rights. In lieu of such fractional Common
Shares, the Company shall pay to the registered holders of Rights Certificates
at the time such Rights are exercised or exchanged for Common Shares as herein
provided an amount in cash equal to the same fraction of the current market
value of a Common Share. For purposes of this Section 14(c), the current market
value of a Common Share shall be the closing price of a Common Share (as
determined pursuant to the

                                       25

<PAGE>

second sentence of Section 1(j) hereof) for the Trading Day immediately prior to
the date of such exercise.

          (d) The holder of a Right by the acceptance of the Right expressly
waives his or her right to receive any fractional Rights or any fractional
shares (other than fractions that are integral multiples of one one-thousandth
(0.001) of a Preferred Share) upon exercise of a Right.

     Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights Certificate (or, prior
to the Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his or her own behalf and for
his or her own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his or her right to exercise the Rights evidenced by such Rights Certificate in
the manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.

     Section 16. Agreement of Rights Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

          (a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;

          (b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed; and

          (c) subject to Sections 6(a) and 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary.

     Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose to be the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything

                                       26

<PAGE>

contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as specifically provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights Certificate shall have been exercised
in accordance with the provisions hereof.

     Section 18. Concerning the Rights Agent.

          (a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent and its affiliates, directors,
officers and other employees (collectively, the "Indemnitees") for, and to hold
them harmless against, any loss, liability, damage, cost or expense, incurred
without gross negligence, bad faith or willful misconduct on the part of the
Indemnitees, for anything done or omitted by the Indemnitees in connection with
the acceptance and administration of this Agreement, including the reasonable
costs and expenses of defending against any claim of liability in the premises.
In no event will the Indemnitees be liable for special, indirect, incidental,
punitive or consequential loss or damage of any kind whatsoever, even if the
Indemnitees have been advised of the possibility of such loss or damage.

          (b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Rights
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document reasonably believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.

     Section 19. Merger or Consolidation or Change of Name of Rights Agent.

          (a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been

                                       27

<PAGE>

countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.

          (b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.

     Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:

          (a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.

          (b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of Current Per Share Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.

          (c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct.

          (d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.

          (e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be

                                       28

<PAGE>

responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 7(e)) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided for in
Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the exercise
of Rights evidenced by Rights Certificates after receipt by the Rights Agent of
a certificate furnished pursuant to Section 12 describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.

          (f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.

          (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, the Chief Executive Officer,
any Vice President, the Chief Financial Officer, the Secretary or any Assistant
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on and/or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five (5) Business Days after the
date on which any officer of the Company actually receives such application,
unless any such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.

          (h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.

          (i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.

                                       29

<PAGE>

          (j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.

          (k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

     Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Shares and the Common Shares by registered or
certified mail, and, following the Distribution Date, to the holders of the
Rights Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon thirty (30) days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Preferred Shares and the Common Shares by registered or
certified mail, and, following the Distribution Date, to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his or her Rights
Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any state of the United
States, in good standing, which is authorized under such laws to exercise
corporate trust or stockholder services powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $100
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Preferred
Shares and the Common Shares, and, following the Distribution Date, mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.

                                       30

<PAGE>

     Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Exercise Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement. In addition, in connection with the issuance
or sale of Common Shares following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement or upon the exercise, conversion or
exchange of other securities of the Company outstanding at the date hereof or
upon the exercise, conversion or exchange of securities hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board of Directors of the Company, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued and this
sentence shall be null and void ab initio if, and to the extent that, such
issuance or this sentence would create a significant risk of or result in
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued or would create a significant risk of or
result in such options' or employee plans' or arrangements' failing to qualify
for otherwise available special tax treatment, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.

     Section 23. Redemption.

          (a) The Company may, at its option and with the approval of the Board
of Directors, at any time prior to the Close of Business on the earlier of (i)
the fifth (5th) day following the Shares Acquisition Date (or such later date as
may be determined by action of the Company's Board of Directors and publicly
announced by the Company), and (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of $0.001
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
herein referred to as the "Redemption Price") and the Company may, at its
option, pay the Redemption Price either in Common Shares (based on the Current
Per Share Market Price thereof at the time of redemption) or cash. Such
redemption of the Rights by the Company may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. The date on which the Board of Directors elects to
make the redemption effective shall be referred to as the "Redemption Date."

          (b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights (or at such later time as the
Board of Directors may establish for effectiveness of such redemption), evidence
of which shall have been filed with the Rights Agent, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption. Within ten (10)
days after the action of the Board of Directors ordering the redemption of the
Rights (or at such later time as the Board of Directors may

                                       31

<PAGE>

establish for effectiveness of such redemption), the Company shall give notice
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.

     Section 24. Exchange.

          (a) Subject to applicable laws, rules and regulations, and subject to
subsection (c) of this Section 24, the Company may, at its option, by action of
the Board of Directors, at any time after the occurrence of a Triggering Event,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have not become effective or that have become void
pursuant to the provisions of Section 7(e) hereof) for Common Shares at an
exchange ratio of one (1) Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than an Exempt Person), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of Common Shares aggregating fifty percent
(50%) or more of the Common Shares then outstanding. From and after the
occurrence of a Section 13 Event, any Rights that theretofore have not been
exchanged pursuant to this Section 24(a) shall thereafter be exercisable only in
accordance with Section 13 and may not be exchanged pursuant to this Section
24(a). The exchange of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.

          (b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of Common Shares equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall give
public notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange.
The Company shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 7(e) hereof) held by each holder of Rights.

                                       32

<PAGE>

          (c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with subsection (a) of this Section 24, the
Company shall either take such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the Rights or
alternatively, at the option of a majority of the Board of Directors, with
respect to each Right (i) pay cash in an amount equal to the Current Value (as
hereinafter defined), in lieu of issuing Common Shares in exchange therefor, or
(ii) issue debt or equity securities or a combination thereof, having a value
equal to the Current Value, in lieu of issuing Common Shares in exchange for
each such Right, where the value of such securities shall be determined by an
independent nationally recognized investment banking firm selected by majority
vote of the Board of Directors, or (iii) deliver any combination of cash,
property, Common Shares and/or other securities having a value equal to the
Current Value in exchange for each Right. For purposes of this Section 24(c)
only, the Current Value shall mean the product of the Current Per Share Market
Price of Common Shares on the date the Board of Directors orders the exchange of
any Rights pursuant to this Section 24(a), multiplied by the number of Common
Shares for which the Right otherwise would be exchangeable if there were
sufficient shares available. To the extent that the Company determines that some
action need be taken pursuant to clauses (i), (ii) or (iii) of this Section
24(c), the Board of Directors may temporarily suspend the exercisability of the
Rights for a period of up to sixty (60) days following the date the Board of
Directors orders the exchange of any Rights pursuant to this Section 24(a), in
order to seek any authorization of additional Common Shares and/or to decide the
appropriate form of distribution to be made pursuant to the above provision and
to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended.

          (d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Common
Shares would otherwise be issuable, an amount in cash equal to the same fraction
of the closing price of a whole Common Share (as determined pursuant to the
second sentence of Section 1(j) hereof).

          (e) The Company may, at its option, by majority vote of the Board of
Directors, at any time before any Person has become an Acquiring Person,
exchange all or part of the then outstanding Rights for rights of substantially
equivalent value, as determined reasonably and with good faith by the Board of
Directors based upon the advice of one or more independent nationally recognized
investment banking firms.

          (f) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to this Section 24(e) and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive
that number of rights in exchange therefor as has been determined by the Board
of Directors in accordance with this Section 24(e). The Company shall give
public notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange.
The Company shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books of
the transfer agent for the Common Shares of the Company.

                                       33

<PAGE>

Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Rights will be effected.

     Section 25. Notice of Certain Events.

          (a) In case the Company shall propose to effect or permit to occur any
Triggering Event or Section 13 Event, the Company shall give notice thereof to
each holder of Rights in accordance with Section 26 hereof at least twenty (20)
days prior to occurrence of such Triggering Event or such Section 13 Event.

          (b) In case any Triggering Event or Section 13 Event shall occur,
then, in any such case, the Company shall as soon as practicable thereafter give
to each holder of a Rights Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Sections 11(a)(ii) and 13
hereof.

     Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, sent by facsimile transmission (which is confirmed) or
sent by an overnight courier service, addressed (until another address is filed
in writing with the Rights Agent) as follows:

               ABX AIR, INC.
               145 Hunter Drive
               Wilmington, Ohio 45177
               Attention:  General Counsel
               Facsimile No.: (937) 382-2452

               with a copy to:

               O'Melveny & Myers LLP
               400 South Hope Street
               Los Angeles, California 90071
               Attention: C. James Levin
               Facsimile No.: (213) 430-6000

     Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, sent by facsimile
transmission (which is confirmed) or sent by an overnight courier service such
as Airborne Express, addressed (until another address is filed in writing with
the Company) as follows:

                                    [RIGHTS AGENT]

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

                                       34

<PAGE>

                                    ---------------------
                                    Attention:
                                    Facsimile No.: (___)
                                                         ----------

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

     Section 27. Supplements and Amendments. Prior to the occurrence of a
Distribution Date, the Company may supplement or amend this Agreement in any
respect without the approval of any holders of Rights and the Rights Agent
shall, if the Company so directs, execute such supplement or amendment. From and
after the occurrence of a Distribution Date, the Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of
any holders of Rights in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereunder in any
manner that the Company may deem necessary or desirable and that shall not
adversely affect the interests of the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); provided, this
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person). Upon the delivery of a certificate from an appropriate officer of the
Company that states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Shares.

     Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.

     Section 29. Determinations and Actions by the Board Of Directors, Etc. For
all purposes of this Agreement, any calculation of the number of Common Shares
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding Common Shares of which any Person is
the Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the

                                       35

<PAGE>

Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (B) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (A) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights Certificates and all other parties, and
(B) not subject the Board to any liability to the holders of the Rights.

     Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim pursuant
to this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, the Common Shares).

     Section 31. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of Business on the
tenth (10th) day following the date of such determination by the Board of
Directors.

     Section 32. Governing Law. This Agreement and each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.

     Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.

     Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

                                       36

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

"COMPANY"                                    ABX AIR, INC.

                                             By:
                                                 -------------------------------
                                                 Name:
                                                 Title:

"RIGHTS AGENT"                               [RIGHTS AGENT]

                                             By:
                                                 -------------------------------
                                                 Name:
                                                 Title:

                                       37<PAGE>

                                                                    Exhibit 10.3

                      HUB AND LINE-HAUL SERVICES AGREEMENT

                                 by and between

                                  AIRBORNE INC.
                             a Delaware corporation

                                       and

                                  ABX AIR, INC.
                             a Delaware corporation

                                            , 2003
                              --------------

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

SECTION 1    EQUIPMENT AND SERVICES TO BE PROVIDED BY AIRCO...................1

SECTION 2    EQUIPMENT AND SERVICES TO BE PROVIDED BY GROUNDCO................2

SECTION 3    CHANGES IN SCOPE OF SERVICE......................................2

SECTION 4    PLANNING PROCESS.................................................4

SECTION 5    COMPENSATION.....................................................4

SECTION 6    COVENANTS AND WARRANTIES.........................................9

SECTION 7    INDEMNIFICATION AND INSURANCE...................................10

SECTION 8    INDEPENDENT CONTRACTOR..........................................12

SECTION 9    TERM............................................................12

SECTION 10   FORCE MAJEURE...................................................13

SECTION 11   EVENTS OF DEFAULT...............................................14

SECTION 12   TERMINATION.....................................................17

SECTION 13   NONDISCLOSURE...................................................18

SECTION 14   MISCELLANEOUS...................................................18

SCHEDULE 1   HUB SERVICES
SCHEDULE 2   GROUNDCO HUB FACILITIES
SCHEDULE 3   SURFACE LINEHAUL SCHEDULING SERVICES
SCHEDULE 4   MAINTENANCE SERVICES
SCHEDULE 5   HUB EQUIPMENT
SCHEDULE 6   STAFF
SCHEDULE 7   SERVICE STANDARDS
SCHEDULE 8   QUARTERLY FORECAST OF HUB OPERATING REQUIREMENTS
SCHEDULE 9   COMPENSATION
SCHEDULE 10  MANAGEMENT
SCHEDULE 11  INSURANCE

                                       -i-

<PAGE>

                      HUB AND LINE-HAUL SERVICES AGREEMENT

     This HUB AND LINE-HAUL SERVICES AGREEMENT (this "Agreement"), is made and
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"). Each of Airco and Groundco is a "Party" and collectively are the
"Parties."

     WHEREAS, Groundco is a wholly owned subsidiary of Delta Holdings USA, Inc.,
a         corporation ("Delta"); and
  -------

     WHEREAS, Groundco provides the pick-up and delivery, sorting and gateway
distribution services for some shipments handled by certain Delta affiliates in
the United States and desires to arrange for certain hub, line-haul and
maintenance services at its sorting facilities, as more fully described herein;
and

     WHEREAS, Airco is willing to provide hub, line-haul and maintenance
services to Groundco pursuant to the terms set forth herein; and

     WHEREAS, pursuant to the Guaranty dated the date hereof, Delta will
guaranty Groundco's obligations under this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants, agreements,
terms, conditions and consideration hereafter set forth, Groundco and Airco
agree as follows:

                                   SECTION 1

                             EQUIPMENT AND SERVICES
                             TO BE PROVIDED BY AIRCO

     1.1 Airco will provide to Groundco the hub services listed on Schedule 1
(the "Hub Services"), which will be performed by certain Airco personnel (the
"Hub Staff") at the hub facilities listed on Schedule 2 (the "Hub Facilities").

     1.2 Airco will provide to Groundco the surface line-haul scheduling
services listed on Schedule 3 (the "Line-Haul Services"), by contracting with
third parties to provide these services as necessary or otherwise providing such
services through Airco personnel (the "Line-Haul Staff").

      1.3 Airco will provide to Groundco the hub maintenance service personnel
("Maintenance Staff" and together with the Hub Staff and Line-Haul Staff, the
"Staff") to perform the maintenance services listed on Schedule 4 (the
"Maintenance Services" and together with the Hub Services and Line-Haul
Services, the "Services") with respect to the Hub Facilities and the related
equipment listed on Schedule 5 (the "Hub Equipment"). A description of the job
categories, head counts, seniority levels, and pay grade scales for the Hub
Staff, the Line-Haul Staff and the Maintenance Staff, including a break-down of
numbers of full-time and part time Staff and showing aggregate labor costs in
respect of all Staff, in each case, as of the most recent practicable date prior
to the date hereof is set forth in Schedule 6.

<PAGE>

     1.4 Airco will provide the Services in accordance with the performance
standards set forth in Schedule 7 ("Service Standards"). The Service Standards
will be subject to periodic review and adjustment by mutual agreement of the
Parties, based on market conditions and the needs of the Parties.

                                   SECTION 2

                             EQUIPMENT AND SERVICES
                           TO BE PROVIDED BY GROUNDCO

     2.1 Groundco will be responsible for designing, developing and constructing
the system, including real estate purchase and management; facility design,
placement, purchase and management; engineering of sortation equipment and
staffing requirements. Groundco will update as necessary the network
requirements and associated plans applicable to Airco's provision of the
Services under this Agreement, including the size and location of facilities,
type of equipment used, size and throughput requirements, line-haul delivery
routing, schedules and capacity requirements and maintenance schedules, will
consult with Airco regarding all such changes or updates and will give Airco
reasonable advance notice of any changes or updates. The Parties agree to
negotiate in good faith with respect to any modifications in pricing, service
levels, access or other arrangements that may be necessary or desirable as a
result of such changes in the system parameters. Airco will use its commercially
reasonable efforts to implement the plans, including the changes or updates
thereto, specified by Groundco pursuant to this Section 2.1.

     2.2 Groundco will provide to Airco all equipment, facilities and other
inputs, information and materials necessary for Airco to provide the Services,
including the Hub Facilities and Hub Equipment, and will be responsible for the
repair, replacement and maintenance of such equipment, facilities and other
personalty as necessary (whether performed by itself, by contracting with a
third party or by compensating Airco for such work hereunder) to enable Airco to
perform such Services in accordance with the Service Standards.

                                   SECTION 3

                           CHANGES IN SCOPE OF SERVICE

     3.1 Subject to Section 3.3, Groundco will not have the right to reduce the
scope of the Services during the 12 months following the date of this Agreement
(the end of such 12-month period being the "Anniversary Date"), except in
connection with performance failures or labor disputes that cause Airco's
failure to meet the Service Standards, in which case Subsection 11.4 will
govern.

     3.2 In the event that Groundco desires to increase substantially the volume
of packages for which Services are required, or to revise the methods or
equipment used for providing Services, Groundco will give Airco reasonable
advance notice of any such proposed changes, but in any event no less than 90
days advance notice, and the Parties agree to negotiate in good faith with
respect to any modifications in pricing, service levels, access or other
arrangements that may be necessary or desirable as a result of such changes.

                                      -2-

<PAGE>

     3.3 Notwithstanding Subsection 3.1, Groundco has the right to take over
certain system design, planning, operational, auditing and purchasing functions
by hiring Airco Staff who fill the positions identified on Schedule 10 during
the first 12 months, but in such event (i) Groundco will offer to hire the Airco
employees performing such functions on substantially the same terms as their
current employment (including salary and benefits) and (ii) Groundco will pay
any costs incurred by Airco in transferring such employees to Groundco and
reimburse any termination or other costs incurred by Airco in connection with
employees who do not accept Groundco's offer of employment; provided however if
any of such Airco employees perform a dual function of providing Services
hereunder to Groundco and providing services to Airco, then the Parties will
negotiate in good faith with respect to Groundco's right under this Subsection
3.3 and the appropriate employees to be transferred. After the date hereof, if a
Party requests an amendment to Schedule 10, the Parties agree to negotiate in
good faith and not unreasonably withhold its approval of an amendment.

     3.4 Following the Anniversary Date, Groundco will have the ability to
change the scope of Services to be provided pursuant to this Agreement by
terminating specific Services at one or more Hub Facilities. In the event that
Groundco desires to terminate such Services, Groundco will give Airco reasonable
advance notice of any such terminations, but in any event no less than 60 days
advance notice, and the Parties agree to negotiate in good faith with respect to
any modifications in pricing, service levels, access or other arrangements that
may be necessary or desirable as a result of such terminations. In the event of
any such partial termination of Services pursuant to this Agreement, Groundco
will either, at its option, (i) offer employment to any affected Staff on
substantially the same terms as their current employment (including salary and
benefits), pay any costs incurred by Airco in transferring such Staff to
Groundco and reimburse any termination or other costs incurred by Airco in
connection with employees who do not accept Groundco's offer of employment, or
(ii) pay associated severance or other costs arising out of terminating or
reducing Staff who have not been offered employment. Following any such
termination, the Parties will use their commercially reasonable efforts to
minimize any such costs.

     3.5 With respect to any new main or regional hub or linehaul service
similar to the Services provided hereunder that Groundco or its Affiliates may
require in the United States (a "New Service"), prior to discussing, negotiating
with or providing information to any third party 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 cost estimates in connection with such New Service.
Within ten (10) Business Days after receipt of a New Service Notice, Airco may
submit in writing to Groundco an estimate of the Airco's cost 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 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 a "Third Party Bid") from, provide information to, and negotiate with, any
third party provider (each a "Third Party Provider") in respect of such New
Service. In the event that one or more Third Party Bids is superior to the Airco
Bid,

                                      -3-

<PAGE>

Groundco shall be free to contract with any Third Party Provider 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. Notwithstanding the foregoing, nothing
in this Section 3.5 shall impose any obligation or restriction on Groundco in
respect of services it desires to in-source or otherwise provide directly on its
own behalf.

                                   SECTION 4

                                PLANNING PROCESS

     4.1 The Parties will review, on a quarterly basis, Groundco's Quarterly
Forecast of Hub Operating Requirements and Airco's capability for the next four
quarters no later than 30 days prior to the start of each fiscal quarter. The
Parties will conduct, in the third quarter of each year, a formal annual budget
review with respect to the Services for the upcoming year. The initial Quarterly
Forecast of Hub Operating Requirements is set forth in Schedule 8. During the
fourth quarter of each fiscal year, the Parties will hold weekly meetings at the
option of either Party.

                                   SECTION 5

                                  COMPENSATION

     5.1 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 5.7 that Airco incurs in
providing the Services to Groundco (such amount, the "Cost Recovery Amount") and
(ii) pay Airco a fee equal to (x) the base mark-up determined pursuant to
Section 5.2 (the "Base Markup" and, together with the Cost Recovery Amount, the
"Base Compensation") plus (y) subject to Section 5.6, an incremental markup
determined pursuant to Section 5.3 (the "Incremental Markup" and, together with
the Base Markup and the Cost Recovery Amount, the "Compensation"). The initial
estimated Cost Recovery Amount, as of the Effective Time, is set forth in
Schedule 9.

     5.2 The Base Markup shall be 1.75% of and shall be payable (i) on all Cost
Recovery Amount items described in Section 5.7 and (ii) contemporaneously with
each payment of any Cost Recovery Amount.

     5.3 The Incremental Markup shall be payable subject to Section 5.6 and
shall consist of (a) the cost component determined pursuant to Section 5.4 plus
(b) the service component determined pursuant to Section 5.5.

     5.4 With respect to each applicable quarterly or annual period, the cost
component of the Incremental Markup shall equal (A) 0.25% of any reduction of up
to 4% in Airco's Cost Per Piece during such period as compared with Airco's
targeted Cost Per Piece in respect of such period as set forth in the applicable
Quarterly Forecast of Hub Operating Requirements plus (B)

                                      -4-

<PAGE>

0.35% of any amount of reduction in excess of 4.0% (if any) in Airco's Cost Per
Piece during such period as compared with Airco's targeted Cost Per Piece in
respect of such period as set forth in the applicable Quarterly Forecast of Hub
Operating Requirements, in each case multiplied by the Cost Recovery Amount for
such period; provided, however, that, until the first anniversary of the date
hereof, no Incremental Markup shall be payable in respect of any percentage
reduction in Airco's Cost Per Piece during any applicable period within such one
year period that is greater than 5.0%. After the first anniversary of the date
hereof, Groundco shall review the desirability of maintaining such 5.0%
limitation with respect to subsequent periods.

     5.5 The service component of the Incremental Markup shall be equal to the
sum of the Incremental Markup percentages determined pursuant to the tables set
forth in paragraphs (a) (b) and (c) of this Section 5.5, multiplied by the Cost
Recovery Amount for the applicable year.

(a) the Incremental Markup Percentage determined pursuant to the following table
based on Airco's reduction in the number of mis-sorts as compared with the
mis-sort target set forth in the applicable Quarterly Forecast of Operating
Requirements:

     Mis-Sort Target                       Incremental Markup Percentage
     ---------------                       -----------------------------
          0.60%                                        .037%
          0.55%                                        .075%
          0.50%                                        .112%
          0.45%                                        .150%

PLUS

(b) the Incremental Markup Percentage determined pursuant to the following table
based on Airco's reduction in the number of delays attributable to Aircraft
delays as compared with the Aircraft delay target set forth in the applicable
Quarterly Forecast of Operating Requirements:

     Aircraft Delay Target                 Incremental Markup Percentage
     ---------------------                 -----------------------------
             5.0%                                      .10%
             4.0%                                      .20%
             3.0%                                      .30%
             2.0%                                      .40%

PLUS

(c) the Incremental Markup Percentage determined pursuant to the following table
based on Airco's reduction in the number of delays attributable to Regional
delays as compared with the Regional delay target set forth in the applicable
Quarterly Forecast of Operating Requirements:

     Regional Delay Target                 Incremental Markup Percentage
     ---------------------                 -----------------------------
             3.3%                                      0.05%
             2.9%                                      0.10%
             2.5%                                      0.15%
             2.1%                                      0.20%

                                      -5-

<PAGE>

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

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

     5.8 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 5.5, based upon the applicable targets for
the fiscal year then ended.

     5.9 The service quality component of the Incremental Markup shall be
payable annually, within 90 days after the end of each fiscal year, in respect
of the fiscal year then ended, in an amount equal to the Incremental Markup
Percentage determined pursuant to Section 5.4, multiplied by the aggregate Cost
Recovery Amount payable during such fiscal year.

     5.10 In the event of any extraordinary increase or decrease in the number
of pieces 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 date hereof 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.

     5.11 The Cost Recovery Amount is intended to cover all of Airco's costs
with respect to providing the Services to Groundco. Such costs will include all
costs of maintaining the Staff (including salaries and benefits and the cost of
any program established to encourage improvements in Services and costs and in
meeting the Service Standards), the cost of line-haul delivery services,
insurance, taxes of Airco (other than income taxes) attributable to its
performance of the Services, any costs associated with expansion, contraction or
redeployment of the Staff (including any termination and/or relocation benefits)
or related equipment or services at the request of Groundco, and corporate
overhead; provided, however, that if at any time Airco derives more than 10% of
its revenue from the provision of services to third parties ("Ancillary
Services"), the parties agree to negotiate in good faith to determine a
reasonable allocation of the overhead costs attributable to Airco's provision of
Ancillary Services, and the overhead costs so allocated by the Parties shall be
excluded from the Cost Recovery Amount.

     5.12 (a) Groundco will submit written purchase orders to Airco in respect
of any changes to the Services not contemplated by the most recent Quarterly
Forecast of Hub Operating Requirements. Groundco will pay for the Cost Recovery
Amount (plus the applicable Base Markup) on a weekly basis by advancing funds by
wire transfer to Airco on Monday of

                                      -6-

<PAGE>

each week, or if not a Business Day (as defined below), on the following
Business Day using the estimated Compensation amount. The estimated Cost
Recovery Amount will initially be as set forth in Schedule 9 and thereafter
Groundco and Airco will adjust the estimated Compensation amount charged to
Groundco on a quarterly basis to reflect actual costs from the prior quarter
based on Airco's statement of costs. Within 45 days after the end of each
quarter, Airco will submit a statement of costs incurred to Groundco. Groundco
and Airco will reconcile the actual costs against previous funds paid by
Groundco to Airco and the resulting payment (the "Reconciliation Payment") to
the appropriate party will occur no later than 15 days after the reconciliation
process has concluded. Airco will make its financial personnel available to
discuss its statement of costs. Groundco will have the right to evaluate and
audit Airco's costs, plus the agreed commissions, at Groundco's sole cost and
expense. Any payment to be made to a Party as a result of an audit will be paid
no later than 15 days after the audit has been completed and the amount owing
has been agreed to by the Parties. Any such audit will be conducted during
regular business hours at Airco's offices at a mutually agreed time. Any
disputes regarding cost statements or any audit will be handled pursuant to
Subsection 14.1(a) and if not resolved in accordance with Subsection 14.1(a)
will be submitted to an independent accountant agreed to by both Parties for
resolution, without causing any interruption in Services or payments of invoices
thereafter. The conclusions of such accountant will be final and binding on the
Parties. For avoidance of doubt, Groundco will continue to pay to Airco the
estimated Compensation, despite any disputes with respect to prior payments.
Business Day means a day other than Saturday, Sunday or a day in which banks in
Ohio are closed.

          (b) If, at any time prior to December 31, 2005, the 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 5.12(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 5.12 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 5.12(c) or other amounts
owing hereunder or repaid as set forth in this Section 5.12) and (ii) decreased,
dollar-

                                      -7-

<PAGE>

for-dollar, by the amount of all costs incurred by Airco in providing the
Services in respect of which Groundco has not paid the Base Compensation, as
provided in Section 5.12(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, then the Base
Compensation payable pursuant to Section 5.12(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 (as defined in the ACMI Agreement) or (ii) any expiration or
termination of this Agreement, Airco shall pay to Groundco, by 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 5.12, 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 5.12. In the event that Groundco disputes the amount
of any payment owed by Airco pursuant to this Section 5.12, 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.

                                      -8-

<PAGE>

     5.13 In the event that Airco experiences extraordinary costs not
contemplated in the planning process set forth in Section 4.1, Airco may give
written notice to Groundco of such extraordinary costs and the Parties will
negotiate in good faith with respect to any increases to the estimated
Compensation to be advanced to Airco prior to the reconciliation process.

     5.14 The payment of the Cost Recovery Amount does not include the
following, which will be paid directly by Groundco or which Groundco will
promptly reimburse (but in any event, within 2 Business Days) to Airco upon
receipt of a statement setting forth in reasonable detail Airco's actual cost
incurred in respect thereof and, for the avoidance of doubt, no Base Markup or
Incremental Markup shall be payable based on the items set forth in Schedule 9
as "Reimbursable Expenses." The Cost Recovery Amount shall not include, and
Airco shall not be entitled to reimbursement under this Agreement for amounts
incurred in respect of, amounts payable by Groundco pursuant to Section 10.1 of
the Employee Matters Agreement.

     5.15 Any revenue from Ancillary Services will inure to the benefit of
Airco.

     5.16 Notwithstanding Section 5.7, (i) the Cost Recovery Amount shall
exclude Airco's labor costs incurred in connection with providing any Ancillary
Services and (ii) 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 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 Schedule 9 is the Airco pay
policy in effect as of the date hereof. In connection with the quarterly
planning process described in Section 4.1, 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 changes in the Services, labor markets,
industry conditions, general economic conditions and the needs of the Parties.

                                   SECTION 6

                            COVENANTS AND WARRANTIES

     6.1 Airco represents, warrants and covenants:

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

     (b) It has the corporate power and authority to enter into this Agreement;

                                      -9-

<PAGE>

     (c) The making, execution and performance of this Agreement by Airco has
been duly authorized by all necessary corporate action, this Agreement has been
duly executed and delivered by Airco and this Agreement constitutes the valid
and binding obligation of Airco, enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to creditors rights generally, including, without
limitation, fraudulent conveyance laws, and by general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific performance
or injunctive relief, whether considered in a proceeding in equity or at law;
and

     (d) It will comply in all material respects with all applicable
governmental laws and regulations in the performance of the Services hereunder.

     6.2 Groundco represents, warrants and covenants:

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

     (b) It has the corporate power and authority to enter into this Agreement;

     (c) The making, execution and performance of this Agreement by Groundco has
been duly authorized by all necessary corporate action, this Agreement has been
duly executed and delivered by Groundco and this Agreement constitutes the valid
and binding obligation of Groundco, enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to creditors rights generally, including, without
limitation, fraudulent conveyance laws, and by general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific performance
or injunctive relief, whether considered in a proceeding in equity or at law;
and

     (d) It will comply in all material respects with all applicable
governmental laws and regulations in the performance of its obligations
hereunder.

                                   SECTION 7

                          INDEMNIFICATION AND INSURANCE

     7.1 Each of Airco and Groundco (the "Indemnifying Party") hereby
indemnifies and holds the other Party, including its officers, directors, agents
and employees (the "Indemnified Party") harmless from and against any and all
liabilities, claims, demands, suits, judgments, damages and losses, including
the costs, expenses and legal fees in connection therewith or incident thereto
(collectively, "Losses") arising out of the death or injury to any person or
entity, including but not limited to employees of Airco or Groundco, or arising
out of loss of, damage to, or destruction of any property whatsoever, including
but not limited to cargo and any other property of Airco or Groundco, as
applicable, or third parties caused by or arising out of (or in any way
connected with) such Party's performance of its obligations hereunder.
Notwithstanding the foregoing, (i) the indemnification obligations herein will
not extend to Losses caused by the negligence or willful misconduct of the
Indemnified Party (including its

                                      -10-

<PAGE>

employees and agents), (ii) the indemnification obligations herein are limited
to the proceeds recoverable with respect to such Losses under any such insurance
policies held by the Indemnifying Party, unless such obligations arise solely
from the gross negligence or willful misconduct of the Indemnifying Party, and
(iii) no Indemnifying Party will have any obligation to indemnify the
Indemnified Party for any lost profits, reputational damage, incidental, special
or consequential damages, except to the extent that such damages are required to
be paid to a non-affiliated third party.

     7.2 During the term of this Agreement, Airco will, to the extent available
on commercially reasonable terms and to the extent carried by similarly situated
companies in the industry, carry insurance described in Part I of Schedule 11.
Except for workers compensation insurance and excess workers compensation
insurance, the insurance set forth herein will contain provisions waiving
underwriter's rights of subrogation against any respective party hereto, and its
parent, its affiliated companies and the officers, directors, agents and
employees of each of those companies. Airco will obtain an endorsement naming
Groundco as an additional insured under general liability insurance and
automobile liability insurance and as a loss payee under its cargo legal
liability insurance. With respect to general liability insurance and automobile
liability insurance, Airco will obtain a standard severability of interest/cross
liability endorsement. The insurance to be procured by Airco will be for primary
coverage, without right of contribution among other insurers.

     7.3 During the term of this Agreement, Groundco will, to the extent
available on commercially reasonable terms and to the extent carried by
similarly situated companies in the industry, carry insurance, described in Part
II of Schedule 11. Except for workers compensation insurance and excess workers
compensation insurance, the insurance set forth herein will contain provisions
waiving underwriter's rights of subrogation against any respective party hereto,
and its parent, its affiliated companies and the officers, directors, agents and
employees of each of those companies. Groundco will obtain an endorsement naming
Airco as an additional insured under general liability insurance and automobile
liability insurance and as a loss payee under its cargo legal liability
insurance. With respect to general liability insurance and automobile liability
insurance, Groundco will obtain a standard severability of interest/cross
liability endorsement. The insurance to be procured by Groundco will be for
primary coverage, without right of contribution among other insurers.

     7.4 The Parties will periodically review the scope and amount of insurance
that Airco and Groundco are required to carry pursuant to Subsections 7.2 and
7.3 and make any necessary changes based on changes in market conditions,
including, without limitation, availability of such coverage on commercially
reasonable terms and increases in premiums.

     7.5 Each insurance policy, and each certificate evidencing the same, will
contain a provision that not less then thirty (30) days' advance notice will be
given to the respective party hereto of cancellation or reduction in the insured
value or reduction in type of perils to be insured against in the policies. War
risk policies may be subject to standard war risk cancellation provisions and
availability on commercially reasonable terms.

     7.6 The Party procuring the insurance hereunder will provide to the other
Party hereto prior to the commencement of Services a certificate from the
insurers that such

                                      -11-

<PAGE>

insurance is in effect. These certificates will state policy numbers, dates of
expiration, and limits of liability thereunder.

     7.7 If the procuring Party fails to pay its premium when due on any or all
of the foregoing policies for any reason whatsoever, in violation of this
Agreement, the other Party may, at its sole discretion, pay such premiums. In
the case of policies to be procured by Groundco but paid by Airco pursuant to
the foregoing sentence, Airco will charge Groundco the premium cost, plus 2%,
and in such case Groundco will promptly reimburse Airco for such charges. 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.

     7.8 The Parties agree to cooperate and use their respective commercially
reasonable efforts to minimize the insurance requirements applicable to this
Agreement, including, where practicable, by seeking to obtain a single policy of
insurance which names Groundco and Airco as co-insureds in respect of all rights
and liabilities referred to therein, consistent with maintaining adequate
insurance coverage for both parties.

                                   SECTION 8

                             INDEPENDENT CONTRACTOR

     8.1 The Services provided by Airco hereunder will be conducted by Airco as
an independent contractor and neither it nor its employees, subcontractors, if
any, or their employees or agents, will be deemed employees of Groundco. Any
services provided by Groundco hereunder will be conducted or provided as an
independent contractor and neither it nor its employees, subcontractors, if any,
or their employees or agents, will be deemed employees of Airco. Unless
otherwise agreed by the Parties, the Staff will at all times remain employees of
Airco.

                                   SECTION 9

                                      TERM

     9.1 The term of this Agreement (the "Term") shall be for a period of three
(3) years commencing from the date hereof, unless earlier terminated under the
express terms hereof or unless extended as provided below. The Term shall
automatically renew thereafter for additional one (1) year periods, 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 90 days prior to expiration.

                                      -12-

<PAGE>

                                   SECTION 10

                                  FORCE MAJEURE

     10.1 Except as specifically provided hereunder in this Section 10, in the
event either Party hereto is rendered unable in whole or in part by force
majeure to carry out its obligations under this Agreement, it is agreed that the
obligations of each Party, other than preexisting payment obligations of
Groundco then due and owing, obligations for services which have been performed
under this Agreement but which have not yet been billed, and obligations under
this Section 10, will be suspended during the continuance of any inability so
caused, provided good faith endeavors by the Party giving notice of such force
majeure as required by the following sentence are made to remedy such cause with
all reasonable dispatch. A Party who is rendered unable, in whole or in part, by
force majeure to carry out its obligations 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.

     10.2 The term 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.

     10.3 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, 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.

     10.4 During a period when a force majeure continues which affects
Groundco's requirement for Services, but does not prevent Airco from providing
such Services, Groundco will pay to Airco the Cost Recovery Amount, but shall
not be required to pay any Base Markup or Incremental Markup in respect of such
Services. During such period, the Parties will use their commercially reasonable
efforts to minimize costs. To the extent Groundco desires to suspend all or a
portion of the Services during such period, Groundco may request that the
Parties meet to discuss possible reductions in Staff; provided that Groundco
pays the termination and other costs relating to any such reductions. To the
extent that Airco does not implement any Staff reductions requested by Groundco
and Groundco has agreed to pay the termination and other costs associated
therewith, then Groundco shall have no obligation to pay any Compensation in
respect of employment of any Staff in excess of Staff designated by Groundco for
any particular operation under this Agreement.

                                      -13-

<PAGE>

     10.5 If a force majeure continues for 30 days, either Party may terminate
this Agreement by giving the other Party two Business Days notice, in writing,
of such termination. Nevertheless, if as a result of events described in
Subsection 10.4 hereof, Groundco is paying the applicable amounts required
therein, Airco may not terminate this Agreement hereunder so long as Groundco
continues to pay to Airco, as and when required, the Cost Recovery Amount.
Groundco may terminate any period of suspension under Subsection 10.4 in order
to terminate this Agreement by giving Airco at least fifteen (15) days notice in
writing of such termination. In the alternative, upon cessation of a force
majeure during such suspension period, Groundco may reactivate this Agreement on
written notice to Airco, and Airco will resume the performance of Services as
soon as reasonably practicable, taking into account any time necessary to rehire
any employees that may have been laid off during the suspension period.

     10.6 If a condition of force majeure arises that affects Airco's ability to
provide Services hereunder, Groundco will have the right, but not the
obligation, to arrange for another provider to perform such services until such
time as such force majeure can be cured and Airco will be reinstated as soon as
is reasonable under the circumstances. For force majeure that renders only a
portion of Airco Services unusable to Groundco, a reduction in Compensation will
be made to reflect payment for the portion of the Services which Airco is
actually unable to so perform.

                                   SECTION 11

                                EVENTS OF DEFAULT

     11.1 Airco 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) The failure of Airco to meet or exceed the Service Standards 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;

                                      -14-

<PAGE>

     (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; and

     (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.

     11.2 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 Compensation in accordance
with Section 5 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.

                                      -15-

<PAGE>

     11.3 Upon the occurrence and during the continuance of any Event of Default
enumerated in Section 11.1(c), (d) or (e) or in Section 11.2(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.

     11.4 Upon the occurrence and during the continuance of any Event of Default
enumerated in Section 11.1(b), (f) or (g) or in Section 11.2 (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 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 within 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.

     11.5 Upon the occurrence and during the continuance of any Event of Default
enumerated in Subsection 11.1(a), Groundco may only terminate this Agreement
after giving notice of such default to Airco and after 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 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 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 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 14.1 of this Agreement.

     11.6 Upon the occurrence of any event of default enumerated in Section
11.2(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 Compensation, Groundco will
pay to Airco an additional amount equal to the 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 14.1 after it has paid and Airco has received such Base
Compensation and any additional payments as set forth in the preceding sentence.

     11.7 Subject to the last sentence of Section 7.1, the right of either Party
under this Article XI to terminate this Agreement following a Default of the
other Party hereto shall not

                                      -16-

<PAGE>

be deemed an exclusive remedy, and will be in addition to any other remedy such
Party may have either at law or in equity.

                                   SECTION 12

                                   TERMINATION

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

     (a) subject to and in accordance with Section 11, 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; 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; or

     (c) upon a termination of the ACMI Service Agreement between the Parties
dated of even date herewith (the "ACMI Agreement")

     12.2 Termination by Groundco. Groundco may terminate this Agreement upon
written notice:

     (a) subject to and in accordance with Section 11, at any time following an
Airco Event of Default;

     (b) upon the occurrence of a Change of Control (as defined in the ACMI
Agreement) 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;

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

     (d) upon a termination of the ACMI Agreement.

     12.3 Upon termination of this Agreement pursuant to Subsection 12.1 or
12.2, there will be a transition period of up to 60 days to be mutually agreed
by the Parties during which time Airco will have access to the Hub Facilities
and Hub Equipment and will continue to provide Services to Groundco. During such
transition period, Groundco will continue to pay Airco the Cost Recovery Amount
and the Base Markup.

     12.4 Upon termination of this Agreement pursuant to Subsection 12.1 or
12.2, Groundco will pay to Airco the costs of termination. In the event of any
such termination, Groundco will either, at its option, (i) offer employment to
any affected Staff on substantially the

                                      -17-

<PAGE>

same terms to their current employment (including salary and benefits), pay any
costs incurred by Airco in transferring such Staff to Groundco, and reimburse
any termination or other costs incurred by Airco in connection with employees
who do not accept Groundco's offer of employment, or (ii) pay associated
severance or other costs arising out of terminating or reducing Staff who has
not been offered employment. Following the termination of this Agreement, the
Parties will use their commercially reasonable efforts to minimize any
termination costs.

                                   SECTION 13

                                  NONDISCLOSURE

     13.1 Airco agrees that except as required by the provisions of any law,
order, rule or regulation to which Airco is subject, Airco will make every
reasonable effort not to publicly disclose or describe its business relationship
with Groundco, its parent or any of its parent's other subsidiaries to any
person, firm or entity. The Parties acknowledge that this Agreement will be
filed with the Securities and Exchange Commission and will cooperate to seek
confidential treatment of the portions agreed to by the Parties.

                                   SECTION 14

                                  MISCELLANEOUS

     14.1 Any and all controversies or claims arising out of, under or relating
to this Agreement or its performance (other than payment of estimated
Compensation amounts which will first be governed by Subsection 11.6, continued
failure of Airco to maintain in any material respect the Service Standards which
will first be governed by Subsection 11.5) ("Disputes"), including any
amendments hereto, or breach hereof, will be determined and settled in
accordance with the laws of the State of New York as follows:

     (a) Airco and Groundco will use their commercially reasonable efforts to
resolve any and all Disputes. If a Dispute cannot be resolved by the
representatives of the Parties hereto, it will be referred to the Chief
Executive Officers of Airco and Groundco, or their respective designees, for
further negotiation. Only upon failure by Airco and Groundco to resolve the
Dispute through such negotiation either Party may prosecute such claim in a more
formal proceeding as provided in clause (b) below; 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 will enter into a customary tolling arrangement in
order to preserve any such claims during the informal dispute resolutions
procedures.

     (b) If Disputes cannot be resolved as provided in Section 14.1(a), then the
Parties will submit to the binding arbitration procedures hereinafter set forth.
Such binding arbitration will take place in New York, New York, and will be in
accordance with the rules of the American Arbitration Association. The Parties
will each choose an arbitrator within thirty (30) days after the written request
by either of them, and the arbitrators so chosen will choose a third arbitrator
within thirty (30) days after their selection by the Parties hereto. The Parties
agree that within sixty (60) days after the selection, the arbitrators will
submit a written report of

                                      -18-

<PAGE>

their determination of the Dispute. If such report is not unanimous, the
determination of two (2) of the arbitrators will nevertheless be binding upon
the Parties. Arbitrators designated hereunder will 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 will be final, conclusive and binding on the Parties hereto
and may be reduced to judgment in any appropriate court having jurisdiction
thereof.

     14.2 Time is of the essence in this Agreement.

     14.3 Neither Party may assign this Agreement, in whole of in part, without
the prior written consent of the other Party hereto (such consent not to be
unreasonably withheld), except that Groundco may assign this Agreement to Delta
WN, Delta Groundco or any other affiliated company without the prior written
consent of Airco, provided that the obligations of such assignee under this
Agreement continue to be guaranteed by Delta pursuant to the Guaranty.

     14.4 A waiver of a default hereunder will not be deemed a waiver of any
other or subsequent default.

     14.5 All notices and other communications authorized hereunder will be
given in writing to the person listed below by personal delivery to said person,
or by registered or certified mail, return receipt requested, by facsimile, or
overnight courier, and the date upon which any such notice is so delivered will
be deemed to be the date of such notice, irrespective of the date appearing
therein.

     If to Groundco:

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

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

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

     Attn:
     Facsimile to:

     With a copy at the same address to the attention of Groundco's general
counsel.

     If to Airco:

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

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

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

     Attn:
     Facsimile to:

     With a copy at the same address to the attention of Airco's general
counsel.

                                      -19-

<PAGE>

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

     14.6 This Agreement, including the Schedules hereto, constitutes the entire
agreement between the Parties. Any modification of this Agreement will be
invalid unless in writing signed by the Parties.

     14.7 Airco will keep true and accurate accounting records with respect to
the Services provided hereunder in such manner and detail as to permit
verification thereof. Such records will be available for audit by Groundco, upon
reasonable notice, during reasonable business hours, during the term hereof.

                  [Remainder of Page Intentionally Left Blank]

                                      -20-

<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.

                                           ABX AIR, INC.

                                           By:
                                              ----------------------------------
                                           Name:
                                                --------------------------------
                                           Title:
                                                 -------------------------------

                                           AIRBORNE INC.

                                           By:
                                              ----------------------------------
                                           Name:
                                                --------------------------------
                                           Title:
                                                 -------------------------------

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