S-3

As filed with the Securities and Exchange Commission on May 13, 2002

Registration No. 333-            

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

AIRBORNE, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or Other Jurisdiction of

Incorporation or Organization)

91-2065027

(I.R.S. Employer Identification No.)

3101 Western Avenue

P.O. Box 662

Seattle, Washington 98111

(206) 285-4600

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

SEE TABLE OF ADDITIONAL REGISTRANTS

Lanny H. Michael

Executive Vice President and Chief Financial Officer

Airborne, Inc.

3101 Western Avenue

P.O. Box 662

Seattle, Washington 98111

(206) 285-4600

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

with copies to:

Frank C. Woodruff, Esq.

Riddell Williams, P.S.

1001 Fourth Avenue Plaza, Suite 4500

Seattle, Washington 98154

(206) 624-3600

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.  ¨

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.  x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registrations statement number of the earlier effective registration statement for the same offering.  ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.  ¨

CALCULATION OF REGISTRATION FEE

Title Of Each Class of Securities To Be Registered	Amount To Be Registered	Proposed Maximum Aggregate Price Per Unit (1)	Proposed Maximum Aggregate Offering Price	Amount Of Registration Fee
5.75% Convertible Senior Notes Due April 1, 2007	$150,000,000	115.875%	$173,812,500	$15,991
Common Stock, par value $1.00 per share	(2)	—	—	—  (2)
Guarantees of Guarantor Subsidiaries (3)

(1) Estimated solely for the purpose of calculating the registration fee, pursuant to Rule 457(c), based upon the average of the bid and asked prices of the 5.75% Convertible Senior Notes due April 1, 2007 on the PORTAL Market on May 6, 2002.

(2) Includes such indeterminate number of shares of common stock as shall be issuable upon conversion of the 5.75% Convertible Senior Notes due April 1, 2007 being registered hereunder. Each note may be converted into common stock, initially at the conversion rate of 42.7599 shares per each $1,000 principal amount of notes (equal to a conversion price of approximately $23.39 per share), subject to adjustments. The initial number of shares of common stock issuable upon conversion of the notes is 6,413,985. Pursuant to Rule 416 there are also registered hereby the shares of common stock or other securities that may be issuable upon conversion of the notes as a result of a stock split, stock dividend, recapitalization or similar event. Pursuant to Rule 457(i), there is no additional filing fee required with respect to these securities because no additional consideration will be received in connection with the exercise of the conversion privilege.

(3) Each of the following wholly owned direct and indirect domestic operating subsidiaries of Airborne, Inc. has fully and unconditionally guaranteed all payments of principal and interest on the notes: Airborne Express, Inc., ABX Air, Inc., Sky Courier, Inc., Wilmington Air Park, Inc., Airborne FTZ, Inc., Aviation Fuel, Inc. and Sound Suppression, Inc. Pursuant to Rule 457(n), there is no additional filing fee required with respect to these guarantees.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS

EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER	STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION	I.R.S. EMPLOYER IDENTIFICATION NUMBER	ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT’S PRINCIPAL EXECUTIVE OFFICES
Airborne Express, Inc.	Delaware	91-0837469	3101 Western Avenue P.O. Box 662 Seattle, Washington 98111 (206) 285-4600
ABX Air, Inc.	Delaware	91-1091619	145 Hunter Drive Wilmington, Ohio 45177 (937) 382-5591
Sky Courier, Inc.	Delaware	91-0894946	21240 Ridge Top Circle, Suite 160 Sterling, Virginia 20166 (703) 433-2800
Wilmington Air Park, Inc.	Ohio	34-1261776	145 Hunter Drive Wilmington, Ohio 45177 (937) 382-5591
Airborne FTZ, Inc.	Ohio	34-1375411	145 Hunter Drive Wilmington, Ohio 45177 (937) 382-5591
Aviation Fuel, Inc.	Ohio	31-1139601	145 Hunter Drive Wilmington, Ohio 45177 (937) 382-5591
Sound Suppression, Inc.	Ohio	31-1140852	145 Hunter Drive Wilmington, Ohio 45177 (937) 382-5591

The information in this prospectus is not complete and may be changed. The selling security holders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated May 13, 2002.

PROSPECTUS

AIRBORNE, INC.

$150,000,000 Principal Amount of

5.75% Convertible Senior Notes Due April 1, 2007

and

Shares of Common Stock Issuable Upon Conversion of the Notes

We issued these notes in a private placement in March 2002. This prospectus will be used by selling security holders to resell their notes and the common stock issuable upon conversion of their notes at market prices prevailing at the time of sale, fixed or varying prices determined at the time of sale, or at negotiated prices. The selling security holders may sell the notes or the common stock directly to purchasers or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts or commissions. We will not receive any proceeds from this offering.

The notes will mature on April 1, 2007. You may convert the notes into shares of Airborne’s common stock at any time before their maturity unless Airborne has previously redeemed or repurchased them. The conversion rate is 42.7599 shares per each $1,000 principal amount of notes, subject to adjustment in certain circumstances. This is equivalent to a conversion price of approximately $23.39 per share. On May 8, 2002 the last reported sale price for the common stock of Airborne on the New York Stock Exchange was $21.19 per share. The common stock is listed under the symbol “ABF”.

Airborne will pay interest on the notes on April 1 and October 1 of each year. The first interest payment will be made on October 1, 2002. The notes are senior, unsecured obligations of Airborne, Inc. and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. The notes are unconditionally guaranteed by our wholly owned direct and indirect domestic operating subsidiaries, Airborne Express, Inc., ABX Air, Inc., Sky Courier, Inc., Wilmington Air Park, Inc., Airborne FTZ, Inc., Aviation Fuel, Inc. and Sound Suppression, Inc. The notes are issued only in book-entry form in denominations of $1,000 and integral multiples of $1,000.

On or after April 1, 2005 Airborne has the option to redeem all or a portion of the notes that have not been previously converted at the redemption prices set forth in this prospectus. You have the option, subject to certain conditions, to require Airborne to repurchase any notes held by you in the event of a “change in control”, as described in this prospectus, at a price equal to 100% of the principal amount of the notes plus accrued interest to the date of repurchase. The repurchase price is payable in cash or, at Airborne’s option, and subject to certain conditions, in shares of common stock.

We have not applied for listing of the notes on any securities exchange or for quotation through any automated quotation system. The notes are eligible for trading on The Portal^SM Market of the National Association of Securities Dealers, Inc.

Investing in the securities offered hereby involves risks that are described in the “Risk Factors” section beginning on page 4 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This prospectus is dated                         , 2002.

TABLE OF CONTENTS

	Page
Forward-Looking Statements	i
Summary	1
Risk Factors	4
Ratio of Earnings to Fixed Charges	11
Use of Proceeds	12
Price Range of Common Stock and Dividend Policy	12
Capitalization	13
Description of the Notes	14
Certain United States Federal Income Tax Consequences	30
Description Of Capital Stock	34
Selling Security Holders	37
Plan of Distribution	38
Legal Matters	41
Experts	41
Where You Can Find More Information	41
Incorporation By Reference	41

You should rely only on the information contained in or incorporated by reference in this prospectus. Airborne has not authorized anyone to provide you with different information. You should not assume that the information in this document is accurate as of any date other than that on the front page of this prospectus. We are not making an offer of these securities in any state where the offer is not permitted.

FORWARD-LOOKING STATEMENTS

This prospectus includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements contained in this prospectus other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any statements of the plans and objectives for future operations and any statement of assumptions underlying any of the foregoing. In some cases, forward-looking statements can be identified by the use of terminology such as “may”, “will”, “expects”, “plans”, “anticipates”, “estimates”, “potential” or “continue”, or the negative thereof or other comparable terminology. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure investors that our assumptions and expectations will prove to have been correct. Actual results could differ materially from our forward-looking statements. Important factors that could cause our actual results to differ from our expectations are disclosed under “Risk Factors” and elsewhere in this prospectus. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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SUMMARY

The following summary highlights some information from this prospectus and is qualified in its entirety by the more detailed information appearing elsewhere in this prospectus. Prospective investors should consider carefully the information set forth beginning on page 4 of this prospectus under the heading “Risk Factors”. Unless the context otherwise requires, the terms “we”, “us”, “our” and “Airborne” refer to Airborne, Inc., a Delaware corporation.

Airborne, Inc.

We are a leading provider of time definite small package delivery, freight forwarding and logistics services. Our strategy is to provide business customers with competitively priced time definite delivery services by maintaining a low cost structure while remaining flexible and responsive to customer needs. Using our trade name “Airborne Express”, we provide door-to-door express and deferred delivery of packages and documents throughout the United States and to and from most foreign countries. We also act as an international and domestic freight forwarder for shipments of any size. Our services include Overnight Express, which provides before noon delivery on the next business day to most metropolitan cities in the United States, Next Afternoon Service and Second Day Service, lower-priced alternatives to our Overnight Express service, airborne@home, which serves the residential delivery needs of e-commerce and catalog businesses, Ground Delivery Service, a door-to-door, one to six-day ground transit service, and International Services, which includes international express door-to-door delivery and a variety of freight services.

We had total revenues of $3.21 billion and a net loss of $19.5 million in 2001. Our total shipment volume was 329.2 million in 2001. We rank third in shipment volume behind Federal Express Corporation, or FedEx, and United Parcel Service, Inc., or UPS, in the domestic air express business.

On March 25, 2002, we consummated the sale to the initial purchasers of $150,000,000 aggregate principal amount of the notes described in this prospectus. The net proceeds to us from that sale were approximately $144.7 million, after deducting commissions and offering expenses.

Our principal executive offices are located at 3101 Western Avenue, Seattle, Washington 98111. Our telephone number is 206-285-4600. Our web site is at www.airborne.com.

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The Offering

Securities offered $150,000,000 aggregate principal amount of 5.75% Convertible Senior Notes due April 1, 2007, and the shares of common stock issuable upon conversion of the notes.

Interest 5.75% per annum. We will pay interest on the notes semi-annually on April 1 and October 1 of each year, commencing October 1, 2002.

Conversion You may convert the notes into shares of our common stock at a conversion rate of 42.7599 shares of common stock per each $1,000 principal amount of notes, subject to adjustment in certain circumstances. This is equivalent to a conversion price of approximately $23.39 per share. The conversion rate is subject to adjustment in certain events. The notes will be convertible at any time before the close of business on April 1, 2007, unless we have previously redeemed or repurchased the notes. Holders of notes called for redemption or submitted for repurchase will be entitled to convert the notes up to the close of business on the business day immediately preceding the date fixed for redemption or repurchase, as the case may be.

Ranking The notes are senior, unsecured obligations of Airborne, Inc. and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. The indenture under which the notes were issued does not restrict the incurrence of senior or other indebtedness or other liabilities by us or any of our subsidiaries.

Guarantees The notes are unconditionally guaranteed by our wholly owned direct and indirect domestic operating subsidiaries, Airborne Express, Inc., ABX Air, Inc., Sky Courier, Inc., Wilmington Air Park, Inc., Airborne FTZ, Inc., Aviation Fuel, Inc. and Sound Suppression, Inc., which we refer to as the “guarantor subsidiaries”.

Global note: Book-entry system The notes are issued only in fully registered form without interest coupons and in minimum denominations of $1,000. The notes are evidenced by a global note deposited with the trustee for the notes, as custodian for The Depository Trust Company, or DTC. Beneficial interests in the global note will be shown on, and transfers of those beneficial interests can only be made through, records maintained by DTC and its participants.

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Optional redemption by Airborne We may redeem the notes, at our option, in whole or in part, on or after April 1, 2005, at the redemption prices set forth in this prospectus plus accrued and unpaid interest to the redemption date.

Repurchase at option of holders upon a change in control If a “change in control”, as defined in the indenture under which the notes were issued, occurs, you will have the right, subject to certain conditions and restrictions, to require us to repurchase your notes, in whole or in part, at 100% of their principal amount, plus accrued but unpaid interest to, but excluding, the repurchase date. The repurchase price is payable in cash or, at our option, and subject to certain conditions, in shares of common stock.

Use of proceeds We will not receive any of the proceeds from the sale by any selling security holder of the notes or the common stock issuable upon conversion of the notes.

Risk factors You should read the “Risk Factors” section, beginning on page 4 of this prospectus, so that you understand the risks associated with an investment in the notes.

Ratio of earnings to fixed charges See “Ratio of Earnings to Fixed Charges” on page 11 of this prospectus.

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RISK FACTORS

In addition to the other information contained in this prospectus, you should carefully consider the following risk factors in evaluating an investment in our notes or our common stock. The trading price of our notes or our common stock could decline due to any of these risks, and you may lose all or part of your investment.

Risks Related to Airborne

The current economic recession may continue to adversely affect our business and results of operations.

Businesses are the primary customers for our various services, and our success is therefore highly dependent on the level of business activity and overall economic conditions in the markets in which we operate. Our business and results of operations have been adversely affected by the recession in the United States and elsewhere, and we expect that our business and results of operations will continue to be adversely affected as a result of the recession. We cannot predict when or the extent to which economic growth will resume in the future.

The terrorist attacks of September 11, 2001, and the resulting government responses may continue to harm our business, reduce our revenues and increase our costs.

As a result of the terrorist acts of September 11, 2001, we experienced significant flight disruption costs due to the FAA’s temporary grounding of all U.S. air traffic, increased security and other costs and reduced capacity utilization. Further terrorist attacks involving aircraft, or the threat of such attacks, could result in another grounding of our fleet, and would likely result in additional reductions in capacity utilization, along with increased security and other costs. In addition, terrorist attacks not involving aircraft, or the general increase in hostilities relating to reprisals against terrorist organizations or otherwise, could adversely affect our business.

We expect that the general increase in hostilities relating to reprisals against terrorist organizations and the continued threat of further terrorist attacks may continue to negatively impact our revenues and costs in the near and mid-term.

The extent of the impact that the terrorist attacks and their aftermath will have on our operations, and the sufficiency of our financial resources to absorb this impact, may depend on a number of factors, including:

• the magnitude and duration of the adverse impact of the terrorist attacks on the economy in general and business activity in particular;

• the higher costs associated with potential new airline security directives and any other increased regulation of air carriers;

• the higher costs of insurance coverage for future claims caused by acts of war, terrorism, sabotage, hijacking and other similar perils, and the extent to which such insurance will continue to be available;

• our ability to raise additional financing;

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• the price and availability of jet and motor fuel, and the availability to us of fuel hedges in light of current industry conditions;

• the number of pilots who may be called for duty in the reserve forces of the armed services and the resulting impact on our ability to operate as planned;

• any resulting declines in the values of the aircraft in our fleet;

• the extent of the benefits received by us under the Air Transportation Safety and System Stabilization Act; and

• the scope and nature of any future terrorist attacks and resulting government responses.

If we are unable to compete successfully, our business will be materially harmed.

The market for our services has been and is expected to remain highly competitive. FedEx is our dominant competitor in the domestic air express business, followed by UPS. We rank third in shipment volume behind these two companies in the domestic air express business. Other domestic air express competitors include the U.S. Postal Service’s Express and Priority Mail Services and several other transportation companies offering next morning or next-plane-out delivery service. We also compete with companies offering domestic ground transportation services, including UPS and FedEx, and with facsimile and other forms of electronic transmission. In the international markets, in addition to FedEx and UPS, we compete with DHL Worldwide Express, TNT Express, air freight forwarders and carriers and most commercial airlines. We have significantly less capital resources than our two primary competitors. If we are unable to compete successfully with these competitors, our business and results of operations will be adversely affected.

If our new Ground Delivery Service is not successful, we may lose customers and our results of operations may suffer.

In 2001, we undertook a number of initiatives targeted to improve revenue growth and profitability. These included introduction of our new Ground Delivery Service, a new pricing structure for our domestic services, e-commerce and marketing alliances and an expansion of our sales force. Our new Ground Delivery Service is intended to provide product parity with our competitors and enable us to offer our customers both air and ground services utilizing a bundled marketing approach. Our revenue growth depends in part on the success of our new Ground Delivery Service as well as on our success in increasing our customers’ use of our higher-margin products. If we do not effectively implement and execute these and other appropriate initiatives, our business and results of operations will suffer.

Strikes, work stoppages and slowdowns by our employees can negatively affect our results of operations.

Our business depends to a significant degree on our ability to avoid strikes and other work stoppages and slowdowns by our employees. The International Brotherhood of Teamsters and other unions represent about 7,500, including our 800 pilots, or about one-half, of our full-time employees, and 2,500, or about one-third, of our part-time and casual employees. Collective bargaining agreements covering most of our union ground personnel were renegotiated in 1998 or 1999 and expire in either 2003 or 2004.

Our pilots are covered by a contract that became amendable on July 31, 2001. This contract is governed by the Railway Labor Act, which provides that an amendable contract continues in effect upon the expiration of its stated term while the parties negotiate a new contract. We are in the mediation phase

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of negotiations with the International Brotherhood of Teamsters. Because the terms of new labor agreements will be determined by collective bargaining, we cannot predict the outcome of the remaining negotiations at this time or the effect of the terms of a new contract on our business or results of operations. If our pilots and we are unable to successfully renegotiate a new labor agreement, our pilots may strike or institute a work stoppage or slowdown. Any prolonged strike or work stoppage or slowdown by our pilots or other employees would have a material adverse effect on our business, results of operations and financial condition.

If we are unable to generate sufficient cash flows from our operations, our liquidity will suffer and we may be unable to satisfy our obligations.

We require significant capital to fund our business. As of December 31, 2001, we had approximately:

• $282.4 million of long-term debt;

• $381.7 million of operating lease commitments;

• $191.1 million of unconditional obligations for committed aircraft and aircraft related acquisitions;

• $43.1 million of capital lease obligations; and

• $138.1 million of commercial commitments, including standby letters of credit and surety bonds.

Approximately $250.5 million of those obligations are due in 2002. In addition, we are required to fund approximately $54.0 million of our pension plan liabilities in 2002 and anticipate our capital expenditures to be approximately $175.0 million in 2002, which includes unconditional purchase obligations of approximately $60.1 million for committed aircraft and aircraft related acquisitions. While we believe we have the ability to sufficiently fund our planned operations and capital expenditures for 2002, circumstances could arise that would materially affect our liquidity. For example, cash flows from our operations could be affected by deterioration in shipment volumes caused by a prolonged recession or a further slowdown in the economy or our inability to successfully implement sales growth initiatives in a cost effective manner or further terrorist attacks. Our operating results could also be negatively impacted by prolonged labor disputes or changes in our cost structure such as from a significant increase in fuel prices. If available cash on hand and cash flows from our operations are not sufficient to fund our obligations, it may be necessary for us to secure alternative financing. We may be unsuccessful in securing alternative financing when needed, on terms that we consider acceptable, or at all.

Our level of earnings depends on our ability to match our fixed costs, including aircraft, vehicles and sort capacity, with customer shipment volumes.

We are subject to a high degree of operating leverage. The revenues that we generate from a particular delivery route, flight or truck linehaul vary directly with the amount of shipments that we carry on that segment. However, since fixed costs comprise a high proportion of the operating costs of each segment, the expenses of each segment do not vary proportionately with the amount of shipments that we carried. Accordingly, a decrease in our revenues could result in a disproportionately higher decrease in our earnings because our expenses would basically remain the same.

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Increases in jet and motor fuel prices can negatively affect our results of operations.

We require significant quantities of gasoline, diesel fuel and jet fuel for our aircraft and delivery vehicles. We therefore are exposed to commodity price risk associated with variations in the market price for petroleum products. Although we historically have implemented temporary fuel surcharges to mitigate the earnings impact of unusually high fuel prices, competitive and other pressures may prevent us from passing these costs on to our customers. We cannot assure you that our supply of these products will continue uninterrupted, that rationing will not be imposed or that the prices of, or taxes on, these products will not increase significantly in the future. Increases in prices that we are unable to pass on to our customers will adversely affect our results of operations.

Our failure to comply with, or the costs of complying with, government regulations could negatively affect our results of operations.

Our operations are subject to complex aviation, transportation, environmental, labor, employment and other laws and regulations. These laws and regulations generally require us to maintain and comply with a wide variety of certificates, permits, licenses and other approvals. Our failure to maintain required certificates, permits or licenses, or to comply with applicable laws, ordinances or regulations, could result in substantial fines or, in the case of FAA requirements, possible revocation of our authority to conduct our operations.

New laws or regulations may be adopted or become applicable to us. For example:

• the FAA may issue maintenance directives and other mandatory orders relating to, among other things, inspection of aircraft and replacement of aircraft structures, components and parts, based on the age of the aircraft and other factors;

• recent legislation requires that the FAA mandate the installation of collision avoidance systems in all cargo aircraft by October 2003;

• the Transportation Security Administration, or TSA, may adopt security related regulations, including new requirements for the screening of cargo, that could have an impact on our ability to efficiently process cargo or otherwise increase costs in order to comply with new regulatory requirements; and

• the TSA may require that we reimburse it for the cost of security services it may provide us in the future.

We cannot assure you that existing laws or regulations will not be revised or that new laws or regulations, which could have an adverse impact on our operations, will not be adopted or become applicable to us. We also cannot assure you that we will be able to recover any or all increased costs of compliance from our customers or that our business and financial condition will not be adversely affected by future changes in applicable laws and regulations.

Economic and other conditions in the international markets in which we operate can affect demand for our services and our results of operations.

A key component of our business is our operations outside of the United States. For the year ended December 31, 2001, we derived approximately 11% of our revenues from international operations. If we are unable to compete successfully in these markets, our results of operations will be adversely affected. Operations in international markets present currency exchange, inflation, governmental and other risks. In

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some countries where we operate, economic and monetary conditions could affect our ability to convert our earnings to United States dollars or to remove funds from those countries. We may experience adverse tax consequences as we attempt to repatriate funds to the United States from other countries.

Risks Related to the Notes

We significantly increased our leverage as a result of the sale of the notes.

We incurred $150,000,000 of indebtedness as a result of the sale of the notes to the initial purchasers, and we have other significant debt service obligations. The degree to which we are leveraged could materially and adversely affect our ability to obtain additional financing for working capital, acquisitions or other purposes and could make us more vulnerable to industry downturns and competitive pressures. Our ability to meet our debt service obligations will be dependent upon our future performance, which will be subject to financial, business and other factors affecting our operations, many of which are beyond our control.

The notes and the guarantees are effectively subordinated to the secured debt of our subsidiaries.

We have granted security interests in all of the equity interests in our receivables finance subsidiary, Airborne Credit, Inc., to secure our guarantee of certain indebtedness of our subsidiaries. In addition, our most significant direct and indirect subsidiaries have granted security interests in a substantial majority of their assets to secure certain of their existing indebtedness and guarantees. As a result, the notes and the guarantees are effectively subordinated to the secured debt of our subsidiaries to the extent of the value of the assets that secure the indebtedness. As of December 31, 2001, our subsidiaries had approximately $325.5 million of secured indebtedness outstanding.

The indenture governing the notes does not limit our ability, or that of any of our presently existing or future subsidiaries, to incur indebtedness or other liabilities or to pledge assets to secure any indebtedness or liabilities. We and our subsidiaries may incur additional indebtedness and grant security interests to secure that indebtedness, which could adversely affect our ability to pay our obligations under the notes and our guarantor subsidiaries’ ability to perform under the guarantees.

Federal and state statutes allow courts, under specific circumstances, to void guarantees.

The guarantees may be subject to review under United States federal or state fraudulent transfer law. To the extent that a United States court were to find that:

• a guarantee was incurred by a guarantor subsidiary with intent to hinder, delay or defraud any present or future creditor, or a guarantor subsidiary contemplated insolvency with a design to prefer one or more creditors to the exclusion in whole or in part of others, or

• a guarantor subsidiary did not receive fair consideration or reasonably equivalent value for issuing its guarantee, and the guarantor subsidiary was insolvent,

• was rendered insolvent by reason of the issuance of the guarantee,

• was engaged or about to engage in a business or transaction for which its remaining assets constituted unreasonably small capital to carry on its business, or

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• intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they matured,

a court could avoid or subordinate the guarantee in favor of the guarantor subsidiary’s creditors. If one or more guarantees are subordinated, payments of principal and interest on the notes generally would be subject to the prior payment in full of all indebtedness and other liabilities of the affected guarantor subsidiaries. Among other things, a legal challenge of a guarantee on fraudulent conveyance grounds may focus on the benefits, if any, realized by a guarantor subsidiary as a result of the issuance by Airborne of the notes. The extent, if any, to which a particular guarantor subsidiary may be deemed to have received such benefits may depend on Airborne’s use of the proceeds from the offering of the notes, including the extent, if any, to which such proceeds or benefits therefrom are contributed to the guarantor subsidiary. The measure of insolvency for purposes of the foregoing will vary depending on the law of the applicable jurisdiction. Generally, however, an entity will be considered insolvent if the sum of its debts, including contingent or unliquidated debts, is greater than all of its property at a fair valuation or if the present fair saleable value of its assets is less than the amount that will be required to pay its probable liability under its existing debts as such debts become absolute and matured.

The notes will effectively be subordinated to the liabilities of our subsidiaries if a court avoids or subordinates the guarantees.

Airborne, Inc. is a holding company whose primary assets are its equity interests in its subsidiaries. If a court avoids or subordinates the guarantees in favor of our guarantor subsidiaries’ creditors, Airborne, Inc.’s obligations, including the notes, will be effectively subordinated in right of payment to all existing and future indebtedness and other obligations, including trade payables and lease obligations, of our subsidiaries. As of December 31, 2001, our subsidiaries had approximately $912.6 million of indebtedness and other liabilities (excluding intercompany liabilities).

We may be unable to repay or repurchase the notes.

At maturity, the entire outstanding principal amount of the notes will become due and payable by us. In addition, if a “change in control”, as defined in the indenture, occurs, each holder of the notes may require that we repurchase all or a portion of that holder’s notes. We cannot assure you that we will have sufficient funds or will be able to arrange for additional financing to pay the principal amount or repurchase price due. Under the terms of the indenture for the notes, we may elect, if we meet certain conditions, to pay the repurchase price with shares of common stock. Our existing revolving credit agreement contains prohibitions against our repurchase of the notes prior to their maturity and provides that an acceleration of the maturity of the notes, including upon a “change in control”, would constitute an event of default under the credit agreement. In addition, future borrowing arrangements or agreements to which we become a party may contain restrictions on, or prohibitions against, our repayment or repurchase of the notes. In the event that the maturity date or “change in control” occurs at a time when we are prohibited from repaying or repurchasing the notes, we could attempt to obtain the consent of the lenders under those arrangements to purchase the notes or we could attempt to refinance the borrowings that contain the restrictions. If we do not obtain the necessary consents or refinance these borrowings, we will be unable to repay or repurchase the notes.

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The price of our stock and the notes may be subject to wide fluctuations.

The stock market has recently experienced significant price and volume fluctuations that have affected the market prices of virtually all public companies. The market price of our common stock, and consequently the price of the notes, may be subject to wide fluctuations in response to the factors discussed above as well as the following factors, some of which are beyond our control:

• changes in customer demand patterns, including the impact of technology developments on demand for our services;

• operating results that vary from the expectations of securities analysts and investors and changes in estimates of our earnings by securities analysts;

• our ability to match aircraft, vehicle and sort capacity with customer shipment volumes;

• any inability to use our facilities in Wilmington, Ohio or elsewhere because of bad weather or other factors;

• changes in market valuations of other transportation and logistics companies;

• general market and economic conditions;

• announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;

• downgrades in the ratings of our or our subsidiaries’ outstanding debt;

• announcements by third parties of significant claims or proceedings against us or adverse litigation or arbitration results; and

• future sales of our common stock or other equity or debt securities.

There may be no public market for the notes, and an active trading market for the notes may not develop.

The notes are a new class of securities for which there is no established public trading market, and there can be no assurance as to:

• the liquidity of any such market that may develop;

• the ability of the holders of the notes to sell their notes; or

• the price at which the holders of the notes would be able to sell their notes.

If such a market were to exist, the notes could trade at prices that may be higher or lower than their principal amount or purchase price, depending on many factors, including:

• prevailing interest rates;

• the market price of our common stock;

• the market for similar notes; and

• our financial performance and the performance of our subsidiaries.

The notes are eligible for trading in The Portal^SM Market of the National Association of Securities Dealers, Inc. We have been advised by the initial purchasers of the notes that they presently intend to make a market in the notes. However, the initial purchasers are not obligated to do so, and market-making

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activity with respect to the notes may be discontinued at any time without notice. In addition, such market-making activity will be subject to limitations imposed by federal securities laws. There can be no assurance as to the development or liquidity of any market for the notes. If an active market for the notes fails to develop or be sustained, the trading price of the notes could be materially and adversely affected.

Securities we issue to fund our operations could dilute your ownership.

We may decide to raise additional funds through public or private debt or equity financing to fund our operations. If we raise funds by issuing equity securities, the percentage ownership of current shareholders will be reduced and the new equity securities may have rights prior to those of the common stock issuable upon conversion of the notes. We may not obtain sufficient financing on terms that are favorable to you or us. We may delay, limit or eliminate some or all of our proposed or existing operations if adequate funds are not available.

Provisions in our charter documents and Delaware law may delay or prevent an acquisition of us, which could decrease the value of our common stock and our notes.

Our certificate of incorporation and by-laws and Delaware law contain provisions that could make it harder for a third party to acquire us without the consent of our board of directors. Delaware law imposes some restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock. Our certificate of incorporation contains additional restrictions on business combinations. Our certificate of incorporation and by-laws include staggered board provisions that provide that only a minority of the total number of our board members can be elected each year, which may make it more difficult for a potential purchaser to elect enough directors to assure control of us. In addition, our board of directors has the right to issue preferred stock without shareholder approval, which could be used to dilute the stock ownership of a potential hostile acquirer. Although we believe these provisions of our certificate of incorporation and by-laws and Delaware law will provide for an opportunity to receive a higher bid by requiring potential acquirers to negotiate with our board of directors, these provisions apply even if the offer may be considered beneficial by some shareholders. In addition, under currently applicable federal aviation law, our operating subsidiary, ABX Air, Inc., could cease to be eligible to operate as an all-cargo carrier if more than 25% of our voting stock were owned or controlled by non-U.S. citizens or the airline were not effectively controlled by U.S. citizens.

RATIO OF EARNINGS TO FIXED CHARGES

Set forth below is the ratio of our earnings to fixed charges for each of the years in the five year period ended December 31, 2001.

Year Ended December 31,
1997	1998	1999	2000	2001
5.68x	7.94x	5.53x	1.40x	—

For the purpose of calculating the ratio of earnings to fixed charges, earnings represents pre-tax earnings (loss) from operations plus fixed charges less interest capitalized during the period. Our fixed charges consist of interest expensed and capitalized, amortization of financing costs and the portion of operating rental expense that management believes is representative of the interest component of rental expense. Our fixed charges in 2001 exceeded earnings, as so defined, by approximately $31.3 million.

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USE OF PROCEEDS

Airborne will not receive any proceeds from the sale by any selling security holder of the notes or the common stock issuable upon conversion of the notes.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

Our common stock is listed on the New York Stock Exchange and the Pacific Exchange, Inc. under the symbol “ABF”. The following table shows, for the periods indicated, the high and low closing sales prices per share of our common stock as reported by the New York Stock Exchange.

Quarter ended	High		Low
Calendar Year 2002:
June 30, 2002 (through May 8, 2002)	$	21.36	$	16.49
March 31, 2002		20.67		13.97
Calendar Year 2001:
December 31, 2001	$	14.97	$	9.04
September 30, 2001		14.20		8.25
June 30, 2001		11.80		8.54
March 31, 2001		13.61		9.56
Calendar Year 2000:
December 31, 2000	$	10.94	$	8.44
September 30, 2000		19.31		10.19
June 30, 2000		22.94		18.38
March 31, 2000		25.38		17.25
Calendar Year 1999:
December 31, 1999	$	25.38	$	20.00
September 30, 1999		28.88		21.06
June 30, 1999		36.63		24.69
March 31, 1999		41.63		28.63

On May 8, 2002, the last sale price of our common stock, as reported by the New York Stock Exchange, was $21.19 per share.

We have paid a cash dividend of $.04 per share of common stock in each calendar quarter of the last two calendar years. Under our primary credit facility, we cannot declare or pay more than $2 million in dividends during any calendar quarter plus, with respect to any common stock issued upon conversion of the notes, an additional amount not exceeding $300,000 during any calendar quarter.

On February 5, 2002, our board of directors terminated the rights that had traded with the common stock under our shareholder rights plan. In connection with this termination, the board authorized a distribution in redemption of the rights of $.005 per share of common stock, which will be paid on May 28, 2002 to shareholders of record on May 14, 2002.

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CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2001 and as adjusted to give effect to the issuance of the notes on March 25, 2002.

	As of December 31, 2001
	Actual			As Adjusted
	(in thousands)
Short-term debt:
Current portion of long-term debt	$	107,410		$	107,410
Total short-term debt	$	107,410		$	107,410
Long-term debt (less current portion):
Pre-offering long-term debt	$	218,053		$	218,053
5.75% Convertible Senior Notes due April 1, 2007		—			150,000
Total long-term debt		218,053			368,053
Shareholders’ equity
Preferred stock, no par value, 6,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $1.00 par value, 120,000,000 shares authorized, 51,375,711 shares issued and outstanding		51,376			51,376
Additional paid-in capital		304,984			304,984
Retained earnings		540,544			540,544
Accumulated other comprehensive income (loss)		(2,820	)		(2,820	)
		894,084			894,084
Treasury stock, 3,240,526 shares, at cost		(59,868	)		(59,868	)
Total shareholders’ equity		834,216			834,216
Long-term debt (excluding current portion) and shareholders’ equity	$	1,052,269		$	1,202,269

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DESCRIPTION OF THE NOTES

We issued the notes under an indenture among us, the guarantor subsidiaries and The Bank of New York, as trustee. Because this section is a summary, it does not describe every aspect of the notes, the related guarantees and the indenture. The following summaries of certain provisions of these documents do not purport to be complete and are subject to, and are qualified in their entirety by reference to the detailed provisions of the notes, the related guarantees and the indenture, including the definitions therein of certain terms.

General

The notes are senior, unsecured obligations of Airborne, Inc. The aggregate principal amount of the notes is $150,000,000. We are required to repay the principal amount of the notes in full on their maturity date, which is April 1, 2007.

The notes bear interest at the rate of 5.75% per annum from March 25, 2002, the original issue date. We will pay interest on the notes on April 1 and October 1 of each year, commencing on October 1, 2002. Interest payable per $1,000 principal amount of notes for the period from March 25, 2002 to October 1, 2002 will be $29.71.

You may convert the notes into shares of our common stock at any time before the close of business on the maturity date, unless the notes have been previously redeemed or repurchased by us. Holders of notes called for redemption or submitted for repurchase will be entitled to convert the notes up to and including the business day immediately preceding the date fixed for redemption or repurchase, as the case may be. The initial conversion rate is 42.7599 shares of common stock per each $1,000 principal amount of notes, but it may be adjusted as described below.

We may redeem the notes at our option at any time on or after April 1, 2005, in whole or in part, at the redemption prices set forth below under “—Optional Redemption by Airborne”, plus accrued and unpaid interest to the redemption date. If we undergo a change in control, you will have the right to require us to repurchase your notes as described below under “—Repurchase at Option of Holders Upon a Change in Control”.

The notes rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. We have granted security interests in all of the equity interests in our receivables finance subsidiary, Airborne Credit, Inc., to secure our guarantee of certain indebtedness of our subsidiaries. In addition, our most significant direct and indirect subsidiaries have granted security interests in a substantial majority of their assets to secure certain of their existing indebtedness and guarantees. As a result, the notes and the guarantees are effectively subordinated to the secured indebtedness of our subsidiaries to the extent of the value of the assets that secure that indebtedness. As of December 31, 2001, our subsidiaries had approximately $325.5 million of secured indebtedness outstanding.

The indenture under which the notes were issued does not limit our ability or the ability of our subsidiaries to incur debt, including secured debt.

Subsidiary Guarantees

The notes are fully and unconditionally, and jointly and severally, guaranteed on an unsecured basis as to the payment of principal, premium, if any, and interest by our wholly owned direct and indirect domestic operating subsidiaries, Airborne Express, Inc., ABX Air, Inc., Sky Courier, Inc., Wilmington Air Park, Inc., Airborne FTZ, Inc., Aviation Fuel, Inc. and Sound Suppression, Inc., which we refer to as

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“guarantor subsidiaries”. If we form or acquire a new direct or indirect subsidiary that is or becomes a material subsidiary, that material subsidiary will be required to guarantee the notes on the same basis as the then existing guarantor subsidiaries. A “material subsidiary” is a domestic subsidiary that has revenues or sales equal to 5% or more of our consolidated revenues or sales, or assets equal to 5% or more of our consolidated assets. If any subsidiary guaranteeing the notes is sold or otherwise disposed of in a matter permitted by the indenture under which the notes were issued, that subsidiary will be released from all of its obligations under its guarantee of the notes. For selected summary financial data of the guarantor subsidiaries, see “Note R—Subsequent Event” to our consolidated financial statements included in our Current Report on Form 8-K filed with the Securities and Exchange Commission, or SEC, on May 9, 2002.

The guarantees may be subject to review under United States federal or state fraudulent transfer law. A court could avoid or subordinate a guarantee in favor of a guarantor subsidiary’s creditors to the extent that the guarantor subsidiary did not receive fair consideration or reasonably equivalent value for issuing its guarantee and the guarantor subsidiary was insolvent, was rendered insolvent by reason of the issuance of the guarantee, was engaged or about to engage in a business or transaction for which the remaining assets of the guarantor subsidiary constituted unreasonably small capital to carry on its business or intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they matured. If one or more guarantees are subordinated, payments of principal and interest on the notes generally would be subject to the prior payment in full of all indebtedness and other liabilities of the affected guarantor subsidiaries. As of December 31, 2001, our subsidiaries had approximately $912.6 million of indebtedness and other liabilities (excluding intercompany liabilities). See “Risk Factors—Risks Related to the Notes—Federal and state statutes allow courts, under specific circumstances, to void guarantees”.

Form, Denomination, Transfer, Exchange and Book-Entry Procedures

The notes are issued:

• only in fully registered form;

• without interest coupons;

• and in denominations of $1,000 and greater multiples.

The notes are currently evidenced by a note, which we refer to as the “global note”, which has been deposited with the trustee as custodian for DTC and registered in the name of Cede & Co., as nominee of DTC. The global note and any notes issued in exchange for the global note will be subject to restrictions on transfer and will bear a legend regarding those restrictions. Except as set forth below, record ownership of the global note may be transferred, in whole or in part, only to another nominee of DTC or to a successor of DTC or its nominee.

The global note will not be registered in the name of any person, or exchanged for notes that are registered in the name of any person, other than DTC or its nominee, unless either of the following occurs:

• DTC notifies us that it is unwilling, unable or no longer qualified to continue acting as the depositary for the global note; or

• an event of default with respect to the notes represented by the global note has occurred and is continuing.

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In those circumstances, DTC will determine in whose names any securities issued in exchange for the global note will be registered.

DTC or its nominee will be considered the sole owner and holder of the global note for all purposes, and as a result:

• you cannot receive notes registered in your name if they are represented by the global note;

• you cannot receive physical certificated notes in exchange for your beneficial interest in the global note;

• you will not be considered to be the owner or holder of the global note or any note it represents for any purpose; and

• all payments on the global note will be made to DTC or its nominee.

The laws of some jurisdictions require that certain kinds of purchasers, such as insurance companies, can only own securities in definitive certificated form. These laws may limit your ability to transfer your beneficial interests in the global note to these types of purchasers.

Only institutions, such as a securities broker or dealer, that have accounts with DTC or its nominee (called participants) and persons that may hold beneficial interests through participants can own a beneficial interest in the global note. The only place where the ownership of beneficial interests in the global note will appear and the only way the transfer of those interests can be made will be on the records kept by DTC (for their participants’ interests) and the records kept by those participants (for interests of persons held by participants on those persons’ behalf).

Secondary trading in bonds and notes of corporate issuers is generally settled in clearinghouse (that is, next-day) funds. In contrast, beneficial interests in a global note usually trade in DTC’s same-day funds settlement system, and settle in immediately available funds. We make no representations as to the effect that settlement in immediately available funds will have on trading activity in those beneficial interests.

We will make cash payments of interest on and principal of, and the redemption or repurchase price of, the global note, as well as any payment of liquidated damages, to Cede & Co., the nominee for DTC, as the registered owner of the global note. We will make these payments by wire transfer of immediately available funds on each payment date.

We have been informed that DTC’s practice is to credit participants’ accounts on the payment date with payments in amounts proportionate to their respective beneficial interests in the notes represented by the global note as shown on DTC’s records, unless DTC has reason to believe that it will not receive payment on that payment date. Payments by participants to owners of beneficial interests in notes represented by the global note held through participants will be the responsibility of those participants, as is now the case with securities held for the accounts of customers registered in street name.

We will send any redemption notices to Cede & Co. We understand that if less than all the notes are being redeemed, DTC’s practice is to determine by lot the amount of the holdings of each participant to be redeemed.

We also understand that neither DTC nor Cede & Co. will consent or vote with respect to the notes. We have been advised that under its usual procedures, DTC will mail an omnibus proxy to us as soon as

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possible after the record date. The omnibus proxy assigns the consenting and voting rights of Cede & Co. to those participants to whose accounts the notes are credited on the record date identified in a listing attached to the omnibus proxy.

Because DTC can only act on behalf of participants, who in turn act on behalf of indirect participants, the ability of a person having a beneficial interest in the principal amount represented by the global note to pledge the interest to persons or entities that do not participate in the DTC book-entry system, or otherwise take actions in respect of that interest, may be affected by the lack of a physical certificate evidencing its interest.

DTC has advised us that it will take any action permitted to be taken by a holder of notes (including the presentation of notes for exchange) only at the direction of one or more participants to whose account with DTC interests in the global note are credited and only in respect of such portion of the principal amount of the notes represented by the global note as to which such participant or participants has or have given such direction.

DTC has also advised us as follows:

• DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a clearing corporation within the meaning of the Uniform Commercial Code, as amended, and a clearing agency registered pursuant to the provisions of Section 17A of the Exchange Act;

• DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants;

• Participants include securities brokers and dealers, banks, trust companies and clearing corporations and may include certain other organizations;

• Certain participants, or their representatives, together with other entities, own DTC; and

• Indirect access to the DTC System is available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

The policies and procedures of DTC, which may change periodically, will apply to payments, transfers, exchanges and other matters relating to beneficial interests in the global note. We and the trustee have no responsibility or liability for any aspect of DTC’s or any participants’ records relating to beneficial interests in the global note, including for payments made on the global note. Further, we and the trustee are not responsible for maintaining, supervising or reviewing any of those records.

Conversion Rights

You have the option to convert any portion of the principal amount of any note that is an integral multiple of $1,000 into shares of our common stock at any time on or prior to the close of business on April 1, 2007, unless the notes have been previously redeemed or repurchased. The conversion rate is equal to 42.7599 shares per each $1,000 principal amount of notes, subject to adjustment in certain circumstances. The conversion rate is equivalent to a conversion price of approximately $23.39 per share. Your right to convert a note called for redemption or delivered for repurchase will terminate at the close

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of business on the business day immediately preceding the redemption date or repurchase date for that note, unless we default in making the payment due upon redemption or repurchase.

You may convert all or part of any note by delivering the note at the Corporate Trust Office of the trustee in the Borough of Manhattan, The City of New York, accompanied by a duly signed and completed conversion notice, a copy of which may be obtained from the trustee. The conversion date will be the date on which the note and the duly signed and completed conversion notice are so delivered.

As promptly as practicable on or after the conversion date, we will issue and deliver to the trustee a certificate or certificates for the number of full shares of our common stock issuable upon conversion, together with payment in lieu of any fraction of a share. The certificate or certificates will then be sent by the trustee to the conversion agent for delivery to the holder of the note being converted. The shares of our common stock issuable upon conversion of the notes will be fully paid and nonassessable and will rank equally with the other shares of our common stock.

If you surrender a note for conversion on a date that is not an interest payment date, you will not be entitled to receive any interest for the period from the next preceding interest payment date to the conversion date, except as described below in this paragraph. Any note surrendered for conversion during the period from the close of business on any regular record date to the opening of business on the next succeeding interest payment date (except notes, or portions thereof, called for redemption on a redemption date or to be repurchased on a repurchase date for which the right to convert would terminate during such period) must be accompanied by payment of an amount equal to the interest payable on such interest payment date on the principal amount of notes being surrendered for conversion. In the case of any note that has been converted after any regular record date but before the next succeeding interest payment date, interest payable on such interest payment date shall be payable on such interest payment date notwithstanding such conversion, and such interest shall be paid to the holder of such note on such regular record date.

No other payment or adjustment for interest, or for any dividends in respect of our common stock, will be made upon conversion. Holders of our common stock issued upon conversion will not be entitled to receive any dividends payable to holders of our common stock as of any record time or date before the close of business on the conversion date. We will not issue fractional shares upon conversion. Instead, we will pay cash in lieu of fractional shares based on the market price of our common stock at the close of business on the conversion date. For a summary of the U.S. federal income tax considerations relating to conversion of a note, see “Certain United States Federal Income Tax Consequences—Conversion of the Notes”.

You will not be required to pay any taxes or duties relating to the issue or delivery of our common stock on conversion but you will be required to pay any tax or duty relating to any transfer involved in the issue or delivery of our common stock in a name other than yours. Certificates representing shares of our common stock will not be issued or delivered unless all taxes and duties, if any, payable by you have been paid.

The conversion rate will be subject to adjustment for, among other things:

• dividends and other distributions payable in our common stock on shares of our capital stock;

• the issuance to all holders of our common stock of rights, options or warrants entitling them to subscribe for or purchase our common stock at less than the then current market price of such common stock as of the record date for shareholders entitled to receive such rights, options or warrants;

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• subdivisions, combinations and reclassifications of our common stock;

• distributions to all holders of our common stock of evidences of our indebtedness, shares of capital stock, cash or assets, including securities, but excluding:

• those dividends, rights, options, warrants and distributions referred to above;

• dividends and distributions paid exclusively in cash; and

• distributions upon mergers or consolidations discussed below;

• distributions consisting exclusively of cash, excluding any cash portion of distributions referred to immediately above, or cash distributed upon a merger or consolidation to which the next succeeding bullet point applies, to all holders of our common stock in an aggregate amount that, combined together with:

• other all-cash distributions made within the preceding 365-day period in respect of which no adjustment has been made; and

• any cash and the fair market value of other consideration payable in connection with any tender offer by us or any of our subsidiaries for our common stock concluded within the preceding 365-day period in respect of which no adjustment has been made,

exceeds 10% of our market capitalization, being the product of the current market price per share of the common stock on the record date for such distribution and the number of shares of common stock then outstanding; and

• the successful completion of a tender offer made by us or any of our subsidiaries for our common stock that involves an aggregate consideration that, together with:

• any cash and other consideration payable in a tender offer by us or any of our subsidiaries for our common stock expiring within the 365-day period preceding the expiration of that tender offer in respect of which no adjustment has been made; and

• the aggregate amount of all cash distributions referred to above to all holders of our common stock within the 365-day period preceding the expiration of that tender offer in respect of which no adjustments have been made, exceeds 10% of our market capitalization on the expiration of such tender offer.

We reserve the right to effect such increases in the conversion rate in addition to those required by the foregoing provisions as we consider to be advisable in order that any event treated for United States federal income tax purposes as a dividend of stock or stock rights will not be taxable to the recipients. We will not be required to make any adjustment to the conversion rate until the cumulative adjustments amount to 1.0% or more of the conversion rate. We will compute all adjustments to the conversion rate and will give notice of any adjustments by mail to holders of the notes.

In the event that we consolidate or merge with or into another entity or another entity is merged into us, or in case of any sale or transfer of all or substantially all of our assets, each note then outstanding will become convertible only into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer by a holder of the number of shares of common stock into which the note was convertible immediately prior to the consolidation or merger or sale or transfer. The

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preceding sentence will not apply to a merger or sale of all or substantially all of our assets that does not result in any reclassification, conversion, exchange or cancellation of the common stock.

We may increase the conversion rate for any period of at least 20 days if our board of directors determines that the increase would be in our best interest. The board of directors’ determination in this regard will be conclusive. We will give holders of notes at least 15 days’ notice of such an increase in the conversion rate. Any increase, however, will not be taken into account for purposes of determining whether the closing price of our common stock exceeds the conversion price by 105% in connection with an event that otherwise would be a change in control as defined below.

If at any time we make a distribution of property to our shareholders that would be taxable to such shareholders as a dividend for United States federal income tax purposes, such as a distribution of evidences of indebtedness or assets by us, but generally not stock dividends on common stock or rights to subscribe for common stock, and, pursuant to the anti-dilution provisions of the indenture under which the notes were issued, the number of shares into which notes are convertible is increased, that increase may be deemed for United States federal income tax purposes to be the payment of a taxable dividend to holders of notes. See “Certain United States Federal Income Tax Consequences—Dividends”.

Optional Redemption by Airborne

On or after April 1, 2005, we may redeem the notes in whole or in part, at the prices set forth below. If we elect to redeem all or part of the notes, we will give at least 30, but no more than 60, days notice to you.

The redemption price, expressed as a percentage of principal amount, is as follows for the following periods:

Period	Redemption Price
Beginning on April 1, 2005 and ending on March 31, 2006	102.30%
Beginning on April 1, 2006 and ending on March 31, 2007	101.15%

and thereafter is equal to 100% of the principal amount. In each case, we will pay interest to, but excluding the redemption date.

No sinking fund is provided for the notes, which means that the indenture does not require us to redeem or retire the notes periodically.

Payment and Conversion

We will make all payments of principal and interest on the notes by dollar check drawn on an account maintained at a bank in The City of New York. If you are the registered holder of notes with a face value greater than $2,000,000, at your request we will make payments of principal or interest to you by wire transfer to an account maintained by you at a bank in The City of New York.

Payment of any interest on the notes will be made to the person in whose name the note, or any predecessor note, is registered at the close of business on March 15 or September 15, whether or not a business day, immediately preceding the relevant interest payment date (a “regular record date”). If you are the registered holder of notes with a face value in excess of $2,000,000 and you would like to receive payments by wire transfer, you will be required to provide the trustee with wire transfer instructions at least 15 days prior to the relevant payment date.

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Payments on any global note registered in the name of DTC or its nominee will be payable by the trustee to DTC or its nominee in its capacity as the registered holder under the indenture. Under the terms of the indenture, we and the trustee will treat the persons in whose names the notes, including any global note, are registered as the owners for the purpose of receiving payments and for all other purposes. Consequently, neither we, the trustee nor any of our agents or the trustee’s agents has or will have any responsibility or liability for:

• any aspect of DTC’s records or any participant’s or indirect participant’s records relating to or payments made on account of beneficial ownership interests in the global note, or for maintaining, supervising or reviewing any of DTC’s records or any participant’s or indirect participant’s records relating to the beneficial ownership interests in the global note; or

• any other matter relating to the actions and practices of DTC or any of its participants or indirect participants.

We will not be required to make any payment on the notes due on any day that is not a business day until the next succeeding business day. The payment made on the next succeeding business day will be treated as though it were paid on the original due date and no interest will accrue on the payment for the additional period of time.

Notes may be surrendered for conversion at the Corporate Trust Office of the trustee in the Borough of Manhattan, New York. Notes surrendered for conversion must be accompanied by appropriate notices and any payments in respect of interest or taxes, as applicable, as described above under “—Conversion Rights”.

We have initially appointed the trustee as paying agent and conversion agent. We may terminate the appointment of any paying agent or conversion agent and appoint additional or other paying agents and conversion agents. However, until the notes have been delivered to the trustee for cancellation, or moneys sufficient to pay the principal of, premium, if any, and interest on the notes have been made available for payment and either paid or returned to us as provided in the indenture, the trustee will maintain an office or agency in the Borough of Manhattan, New York for surrender of notes for conversion. Notice of any termination or appointment and of any change in the office through which any paying agent or conversion agent will act will be given in accordance with “—Notices” below.

All moneys deposited with the trustee or any paying agent, or then held by us, in trust for the payment of principal of, premium, if any, or interest on any notes that remain unclaimed at the end of two years after the payment has become due and payable will be repaid to us, and you will then look only to us for payment.

Repurchase at Option of Holders Upon a Change in Control

If a “change in control” as defined below occurs, you will have the right, at your option, to require us to repurchase all of your notes not previously called for redemption, or any portion of the principal amount thereof, that is equal to $1,000 or an integral multiple of $1,000. The price we are required to pay is 100% of the principal amount of the notes to be repurchased, together with interest accrued but unpaid to, but excluding, the repurchase date.

At our option, instead of paying the repurchase price in cash, we may pay the repurchase price in our common stock valued at 95% of the average of the closing prices of our common stock for the five trading days immediately preceding and including the third trading day prior to the repurchase date. We

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may only pay the repurchase price in our common stock if we satisfy conditions provided in the indenture.

Within 30 days after the occurrence of a change in control, we are obligated to give to you notice of the change in control and of the repurchase right arising as a result of the change in control. We must also deliver a copy of this notice to the trustee. To exercise the repurchase right, you must deliver on or before the 30th day after the date of our notice irrevocable written notice to the trustee of your exercise of your repurchase right, together with the notes with respect to which the right is being exercised. We are required to repurchase the notes on the date that is 45 days after the date of our notice.

A change in control will be deemed to have occurred at the time after March 25, 2002 that any of the following occurs:

• any person acquires beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of our capital stock entitling the person to exercise 50% or more of the total voting power of all shares of our capital stock that is entitled to vote generally in elections of directors, other than an acquisition by us, any of our subsidiaries or any of our employee benefit plans; or

• we merge or consolidate with or into any other person, another person merges into us or we convey, sell, transfer, lease or otherwise dispose of all or substantially all of our assets to another person, other than any such transaction:

• that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of our capital stock; and

• pursuant to which the holders of 50% or more of the total voting power of all shares of our capital stock entitled to vote generally in elections of directors immediately prior to such transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all shares of capital stock entitled to vote generally in the election of directors of the continuing or surviving corporation immediately after such transaction; or

• any transaction that is effected solely to change our jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding shares of our common stock into solely shares of common stock.

However, a change in control will not be deemed to have occurred if:

• the closing price per share of our common stock for any five trading days within the period of 10 consecutive trading days ending immediately after the later of the change in control or the public announcement of the change in control, in the case of a change in control relating to an acquisition of capital stock, or the period of 10 consecutive trading days ending immediately before the change in control, in the case of change in control relating to a merger, consolidation or asset sale, equals or exceeds 105% of the conversion price of the notes in effect on each of those trading days; or

• all of the consideration, excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights, in a merger or consolidation otherwise constituting a change in control under the first and second bullet points in the preceding paragraph above consists of shares of common stock, depository receipts or other certificates representing common equity interests traded on a national securities exchange or quoted on the Nasdaq National

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Market, or will be so traded or quoted immediately following such merger or consolidation, and as a result of such merger or consolidation the notes become convertible solely into such common stock, depository receipts or other certificates representing common equity interests.

For purposes of these provisions:

• the conversion price is equal to $1,000 divided by the conversion rate;

• whether a person is a “beneficial owner” will be determined in accordance with Rule 13d-3 under the Exchange Act; and

• “person” includes any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.

The rules and regulations promulgated under the Exchange Act require the dissemination of prescribed information to security holders in the event of an issuer tender offer and may apply in the event that the repurchase option becomes available to you. We will comply with these rules to the extent they apply at that time.

We may, to the extent permitted by applicable law, at any time purchase notes in the open market, by tender at any price or by private agreement. Any note that we purchase may, to the extent permitted by applicable law and subject to restrictions contained in the purchase agreement with the underwriters, be re-issued or resold or may, at our option, be surrendered to the trustee for cancellation. Any notes surrendered for cancellation may not be re-issued or resold and will be canceled promptly.

The definition of change in control includes a phrase relating to the conveyance, transfer, sale, lease or disposition of all or substantially all of our assets. There is no precise, established definition of the phrase “substantially all” under applicable law. Accordingly, your ability to require us to repurchase your notes as a result of conveyance, transfer, sale, lease or other disposition of less than all of our assets may be uncertain.

The foregoing provisions would not necessarily provide you with protection if we are involved in a highly leveraged or other transaction that may adversely affect you.

Our ability to repurchase notes upon the occurrence of a change in control is subject to important limitations. Some of the events constituting a change in control could result in an event of default under, or be prohibited or limited by, the terms of our other senior debt. Although we have the right to repurchase the notes with our common stock, subject to certain conditions, we cannot assure you that we would have the financial resources, or would be able to arrange financing, to pay the repurchase price in cash for all the notes that might be delivered by holders of notes seeking to exercise the repurchase right.

Mergers and Sales of Assets by Airborne

We may not consolidate with or merge into any other entity or convey, transfer, sell or lease our properties and assets substantially as an entirety to any entity other than to one or more of our subsidiaries, and we may not permit any entity to consolidate with or merge into us or convey, transfer, sell or lease such entity’s properties and assets substantially as an entirety to us unless:

• the entity formed by such consolidation or into or with which we are merged or the entity to which our properties and assets are so conveyed, transferred, sold or leased, shall be a corporation, limited liability company, partnership or trust organized and existing under the laws

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of the United States, any State within the United States or the District of Columbia and, if we are not the surviving entity, the surviving entity assumes the payment of the principal of, premium, if any, and interest on the notes and the performance of our other covenants under the indenture; and

• immediately after giving effect to the transaction, no event of default, and no event that, after notice or lapse of time or both, would become an event of default, will have occurred and be continuing.

Events of Default

The following will be events of default under the indenture:

• we fail to pay principal of or premium, if any, on any note when due;

• we fail to pay any interest, including any liquidated damages, on any note when due, which failure continues for 30 days;

• we fail to provide notice of a change in control;

• we fail to perform any other covenant in the indenture, which failure continues for 60 days following notice as provided in the indenture;

• any indebtedness under any bonds, debentures, notes or other evidences of indebtedness for money borrowed, or any guarantee thereof, by us or any of our significant subsidiaries, in an aggregate principal amount in excess of $10 million is not paid when due either at its stated maturity or upon acceleration thereof, and such indebtedness is not discharged, or such acceleration is not rescinded or annulled, within a period of 30 days after notice as provided in the indenture; and

• certain events of bankruptcy, insolvency or reorganization involving us or any of our significant subsidiaries.

Subject to the provisions of the indenture relating to the duties of the trustee in case an event of default shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any holder, unless the holder shall have offered reasonable indemnity to the trustee. Subject to providing indemnification of the trustee, the holders of a majority in aggregate principal amount of the outstanding notes will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee.

If an event of default other than an event of default arising from events of insolvency, bankruptcy or reorganization occurs and is continuing, either the trustee or the holders of at least 25% in principal amount of the outstanding notes may accelerate the maturity of all notes. However, after such acceleration, but before a judgment or decree based on acceleration, the holders of a majority in aggregate principal amount of outstanding notes may, under certain circumstances, rescind and annul the acceleration if all events of default, other than the non-payment of principal of the notes that have become due solely by such declaration of acceleration, have been cured or waived as provided in the indenture. If an event of default arising from events of insolvency, bankruptcy or reorganization occurs, then the principal of, and accrued interest on, all the notes will automatically become immediately due and

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payable without any declaration or other act on the part of the holders of the notes or the trustee. For information as to waiver of defaults, see “—Meetings, Modification and Waiver” below.

You will not have any right to institute any proceeding with respect to the indenture, or for any remedy under the indenture, unless:

• you give the trustee written notice of a continuing event of default;

• the holders of at least 25% in aggregate principal amount of the outstanding notes have made written request and offered reasonable indemnity to the trustee to institute proceedings;

• the trustee has not received from the holders of a majority in aggregate principal amount of the outstanding notes a direction inconsistent with the written request; and

• the trustee shall have failed to institute such proceeding within 60 days of the written request.

However, these limitations do not apply to a suit instituted by you for the enforcement of payment of the principal of, premium, if any, or interest, including liquidated damages, on your note on or after the respective due dates expressed in your note or your right to convert your note in accordance with the indenture.

We will be required to furnish to the trustee annually a statement as to our performance of certain of our obligations under the indenture and as to any default in such performance.

Meetings, Modification and Waiver

The indenture contains provisions for convening meetings of the holders of notes to consider matters affecting their interests.

Certain limited modifications of the indenture may be made without the necessity of obtaining the consent of the holders of the notes.

Other modifications and amendments of the indenture may be made, compliance by us with certain restrictive provisions of the indenture may be waived and any past defaults by us under the indenture (except a default in the payment of principal, premium, if any, or interest) may be waived, either:

• with the written consent of the holders of not less than a majority in aggregate principal amount of the notes at the time outstanding; or

• by the adoption of a resolution, at a meeting of holders of the notes at which a quorum is present, by the holders of at least 66 2/3% in aggregate principal amount of the notes represented at such meeting.

The quorum at any meeting called to adopt a resolution will be persons holding or representing a majority in aggregate principal amount of the notes at the time outstanding and, at any reconvened meeting adjourned for lack of a quorum, 25% of such aggregate principal amount.

However, a modification or amendment requires the consent of the holder of each outstanding note affected if it would:

• change the stated maturity of the principal or interest of a note;

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• reduce the principal amount of, or any premium or interest on, any note;

• reduce the amount payable upon a redemption or mandatory repurchase;

• modify the provisions with respect to the repurchase rights of holders of notes in a manner adverse to the holders;

• modify our right to redeem the notes in a manner adverse to the holders;

• impair the right to institute suit for the enforcement of any payment on any note;

• modify our obligation to maintain an office or agency in New York City;

• modify the ranking of the notes in a manner that is adverse to the holders of the notes;

• adversely affect the right to convert the notes other than a modification or amendment required by the terms of the indenture;

• modify our obligation to deliver information required under Rule 144A to permit resales of the notes and common stock issued upon conversion of the notes if we cease to be subject to the reporting requirements under the Exchange Act;

• reduce the above-stated percentage of the principal amount of the holders whose consent is needed to modify or amend the indenture;

• reduce the percentage of the principal amount of the holders whose consent is needed to waive compliance with certain provisions of the indenture or to waive certain defaults; or

• reduce the percentage required for the adoption of a resolution or the quorum required at any meeting of holders of notes at which a resolution is adopted.

As permitted by Delaware law, our certificate of incorporation contains a provision pursuant to which application may be made to a court of equitable jurisdiction within the State of Delaware to order a meeting of our creditors or a class of our creditors whenever a compromise or arrangement is proposed between us and our creditors or a class of our creditors. If 75% of our creditors or that class of creditors, as the case may be, agrees to any compromise or arrangement, such compromise or arrangement, if sanctioned by the court, will be binding on all of our creditors or that class of creditors and on us. This provision is also applicable to any compromise or arrangement between us and our shareholders or a class of our shareholders. The certificates of incorporation of certain subsidiary guarantors also contain similar provisions.

Registration Rights

We and the guarantor subsidiaries have entered into a registration rights agreement with the initial purchasers of the notes. In the registration rights agreement we agreed, for the benefit of the holders of the notes and related guarantees and the shares of common stock issuable upon conversion of the notes, commonly referred to as the registrable securities, that we would, at our expense:

• file with the SEC, within 90 days after the date the notes were originally issued, a shelf registration statement covering resales of the registrable securities;

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• use our best efforts to cause the shelf registration statement to be declared effective under the Securities Act no later than 180 days after the date the notes were originally issued; and

• use our best efforts to keep effective the shelf registration statement until two years after the date the shelf registration statement is declared effective or, if earlier, until there are no outstanding registrable securities.

We satisfied the first of these requirements when we filed our shelf registration statement on Form S-3 in May 2002, and we will satisfy the second of these requirements so long as the date of this prospectus is on or before September 21, 2002.

We will be permitted to suspend the use of this prospectus in connection with the sales of registrable securities during prescribed periods of time for reasons relating to pending corporate developments, public filings with the SEC and other events. The periods during which we can suspend the use of this prospectus may not, however, exceed a total of 30 days in any 90-day period or a total of 90 days in any 365-day period. We will provide to each holder of registrable securities copies of this prospectus, notify each holder when the shelf registration statement has become effective and take certain other actions required to permit public resales of the registrable securities.

We may, upon written notice to all the holders of notes, postpone having the shelf registration statement declared effective, for a reasonable period not to exceed 90 days, if our board of directors has determined in good faith that because of valid business reasons, including the acquisition or divestiture of assets, pending corporate developments and similar events, it is in our best interests to postpone having the shelf registration statement declared effective. Notwithstanding any such postponement, additional interest referred to as “liquidated damages” will accrue on the notes if either of the following registration defaults occurs:

• on or prior to 90 days following the date the notes were originally issued, a shelf registration statement has not been filed with the SEC; or

• on or prior to 180 days following the date the notes were originally issued, the shelf registration statement is not declared effective.

In that case, liquidated damages will accrue on any notes, and shares issued on conversion of the notes, that are then restricted securities from and including the day following the registration default to but excluding the day on which the registration default has been cured. Liquidated damages will be paid semi-annually in arrears, with the first semi-annual payment due on the first interest payment date following the date on which the liquidated damages began to accrue.

The rates at which liquidated damages will accrue will be as follows:

• 0.25% of the principal amount per annum to and including the 90th day after the registration default; and

• 0.5% of the principal amount per annum from and after the 91st day after the registration default.

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In addition, the interest rate on all of the notes will be increased if either of the following effectiveness defaults occurs:

• the shelf registration statement ceases to be effective, or we otherwise prevent or restrict holders of registrable securities from making sales under the shelf registration statement, for more than 30 days, whether or not consecutive, during any 90-day period; or

• the shelf registration statement ceases to be effective, or we otherwise prevent or restrict holders of registrable securities from making sales under the shelf registration statement, for more than 90 days, whether or not consecutive, during any 365-day period.

In either event, the interest rate on the notes will increase by an additional 0.5% per annum from the 31st day or the 91st day, as the case may be, of the effectiveness default. The increased rate will continue until the earlier of the following:

• the time the shelf registration statement again becomes effective or the holders of registrable securities are again able to make sales under the shelf registration statement; or

• two years after the date the shelf registration statement is declared effective or, if earlier, until there are no outstanding registrable securities.

A holder who elects to sell any registrable securities pursuant to the shelf registration statement:

• will be required to be named as a selling security holder in this prospectus;

• will be required to complete and return to us a notice and questionnaire in the form that we have provided to the holders of registrable securities;

• may be required to deliver a prospectus to purchasers;

• may be subject to certain civil liability provisions under the Securities Act in connection with those sales; and

• will be bound by the provisions of the registration rights agreement that apply to a holder making such an election, including certain indemnification provisions.

We have mailed a notice and questionnaire to the holders of registrable securities. The registration statement requires us to mail that notice not less than 30 calendar days prior to the time the shelf registration statement is declared effective.

No holder of registrable securities will be entitled:

• to be named as a selling security holder in the shelf registration statement as of the date the shelf registration statement is declared effective; or

• to use this prospectus for offers and resales of registrable securities at any time,

unless such holder has returned a completed and signed notice and questionnaire to us by the deadline for response set forth in the notice and questionnaire.

Holders of registrable securities will, however, have at least 28 calendar days from the date on which the notice and questionnaire is first mailed to return a completed and signed notice and questionnaire to us.

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Beneficial owners of registrable securities who have not returned a notice and questionnaire by the questionnaire deadline described above may receive another notice and questionnaire from us upon request. Following our receipt of a completed and signed notice and questionnaire, we will include the registrable securities covered thereby in the shelf registration statement as provided in the registration rights agreement.

We agreed in the registration rights agreement to use our best efforts to cause the shares of common stock issuable upon conversion of the notes to be listed on the New York Stock Exchange. However, if the common stock is not then listed on the New York Stock Exchange, we will use our best efforts to cause the shares of common stock issuable upon conversion of the notes to be listed on whichever other stock exchange or trading system the common stock primarily trades on prior to the effectiveness of the shelf registration statement.

Because this section is a summary, it does not describe every aspect of the registration rights agreement. This summary is subject to, and qualified in its entirety by reference to, all the provisions of the registration rights agreement.

Notices

Notice to holders of the registered notes will be given by mail to the addresses as they appear in the security register. Notices will be deemed to have been given on the date of such mailing.

Notice of a redemption of notes will be given not less than 30 nor more than 60 days prior to the redemption date and will specify the redemption date. A notice of redemption of the notes will be irrevocable.

Replacement of Notes

We will replace any note that becomes mutilated, destroyed, stolen or lost at the expense of the holder upon delivery to the trustee of the mutilated notes or evidence of the loss, theft or destruction satisfactory to us and the trustee. In the case of a lost, stolen or destroyed note, indemnity satisfactory to the trustee and us may be required at the expense of the holder of the note before a replacement note will be issued.

Payment of Stamp and Other Taxes

We will pay all stamp and other duties, if any, that may be imposed by the United States or any political subdivision thereof or taxing authority thereof or therein with respect to the issuance of the notes or of shares of common stock upon conversion of the notes. We will not be required to make any payment with respect to any other tax, assessment or governmental charge imposed by any government or any political subdivision thereof or taxing authority thereof or therein.

Governing Law

The indenture, the notes, the guarantees and the registration rights agreement will be governed by and construed in accordance with the laws of the State of New York.

The Trustee

If an event of default occurs and is continuing, the trustee will be required to use the degree of care of a prudent person in the conduct of his own affairs in the exercise of its powers. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the

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indenture at the request of any of the holders of notes, unless they shall have furnished to the trustee reasonable security or indemnity.

The Bank of New York is a lender on our revolving credit agreement and has in the past, and may in the future, engage in other commercial banking transactions with us. In addition, The Bank of New York is the trustee under a separate indenture for Airborne Express, Inc.’s 8.875% Notes due December 15, 2002 and 7.35% Notes due September 15, 2005. Pursuant to the Trust Indenture Act, upon the occurrence of a default with respect to the notes, The Bank of New York may be deemed to have a conflicting interest by virtue of its lending and other business relationships with us. In that event, The Bank of New York would be required to resign as a trustee or eliminate the conflicting interest.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

This section describes the material U.S. federal income tax considerations relating to the purchase, ownership, and disposition of the notes and of common stock into which the notes may be converted. This description is based on the opinion of Riddell Williams P.S., special tax counsel to Airborne. This description does not provide a complete analysis of all potential tax considerations. The information provided below is based on the Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, existing and proposed regulations under the Code, published rulings and court decisions, all as in effect on May 1, 2002. These authorities may change, possibly on a retroactive basis, or the Internal Revenue Service (the “IRS” ) might interpret the existing authorities differently. In either case, the tax consequences of purchasing, owning or disposing of notes or common stock could differ from those described below. This description assumes that (i) U.S. Holders (as defined below) hold the notes (or common stock into which the notes have been converted) as “capital assets” (generally, property held for investment) within the meaning of section 1221 of the Code; and (ii) the notes are not subject to the contingent payment debt instrument rules as further described herein.

This description generally applies only to “U.S. Holders”. For purposes of this description, a “U.S. Holder” is (i) a citizen or resident of the United States; (ii) a corporation organized in or under the laws of the United States or any state thereof (including the District of Columbia); (iii) an estate (other than a foreign estate as defined in Code section 7701(a)(31)(A)); or (iv) a trust if: (a) a court within the United States can exercise primary supervision over its administration; and (b) one or more United States persons have the authority to control all of the substantial decisions of such trust, or any trust if such trust validly elects to be treated as a United States person for United States federal income tax purposes.

This description is general in nature and does not discuss all aspects of U.S. federal income taxation that may be relevant to a particular U.S. Holder in light of the U.S. Holder’s particular circumstances, or to certain types of U.S. Holders subject to special treatment under U.S. federal income tax laws (such as financial institutions, real estate investment trusts, regulated investment companies, grantor trusts, insurance companies, tax-exempt organizations, brokers, dealers or traders in securities or foreign currencies, persons holding notes or common stock as part of a position in a “straddle” or as part of a “hedging”, “conversion” or “integrated” transaction for U.S. federal income tax purposes, and persons that have a “functional currency” other than the United States dollar). This description also does not address U.S. federal, state, local and foreign tax consequences for persons that are not U.S. Holders, which consequences may differ from the consequences described below for U.S. Holders. In addition, this description does not consider the effect of any foreign, state, local or other tax laws, or any U.S. tax considerations (e.g., estate or gift tax) other than U.S. federal income tax considerations, that may be applicable to particular U.S. Holders.

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Investors considering the purchase of notes should consult their own tax advisors regarding the application of the U.S. federal income tax laws to their particular situations and the consequences of U.S. federal estate and gift tax laws, foreign, state and local laws, and tax treaties.

Taxation of Interest

U.S. Holders will be required to recognize as ordinary income any interest paid or accrued on the notes, in accordance with their regular method of accounting.

If the amount or timing of any payments on a debt instrument is contingent, the debt instrument may be subject to special rules that apply to contingent payment debt instruments. These rules generally require holders of debt instruments to accrue interest income at a rate higher than the stated interest rate on the debt instruments and to treat as ordinary income (rather than capital gain) any gain recognized on a sale, exchange or retirement of the debt instruments before the resolution of the contingencies. Under the terms of the notes, upon a change in control, an investor could require us to repurchase some or all of the investor’s notes and we might elect to pay the repurchase price in shares of our common stock. It is possible, in that case, that the value of the stock could exceed the sum of the principal amount of the notes and accrued and unpaid interest. We do not believe that the notes should be treated as contingent payment debt instruments. Therefore, for purposes of filing tax or information returns with the IRS, we do not intend to treat the notes as contingent payment debt instruments.

Investors considering the purchase of notes should make their own decision as to whether the notes are contingent payment debt instruments and should consult their own tax advisors in that connection.

Market Discount; Acquisition Premium

A U.S. Holder that purchases a note with “market discount”, which generally occurs when the purchase price for the note is less than the note’s principal amount, will be subject to special rules. Under a de minimis exception, however, those special rules will not apply if the amount of market discount does not exceed one quarter of one percent for each full year remaining until the maturity of the notes. If the special rules apply, any gain recognized by the U.S. Holder upon a sale or other disposition of the note will be treated as ordinary income rather than capital gain to the extent of that portion of the market discount that accrued prior to the disposition. Market discount generally accrues on a straight line basis over the remaining term of the note, but the U.S. Holder can elect to compute accrued market discount based on the economic yield of the note. The U.S. Holder of a note with market discount might be required to recognize gain to the extent of accrued market discount even if the disposition takes a form, such as a gift, in which the U.S. Holder would not normally be required to recognize gain. The market discount rules will not affect the tax consequences to the U.S. Holder upon conversion of the note, which will generally be nontaxable under the rules described below under “—Conversion of the Notes”. The market discount accrued prior to conversion, however, will be carried over to the stock received on conversion, so that, to that extent, any gain recognized by the U.S. Holder upon disposition of the stock will be treated as ordinary (interest) income. Finally, if the U.S. Holder’s purchase of the notes is debt-financed, the U.S. Holder will not be entitled to deduct interest expense allocable to accrued market discount until the U.S. Holder recognizes the corresponding income. The U.S. Holder of a note with market discount may elect to include the market discount in income as it accrues. If a U.S. Holder makes this election, any gain recognized on a disposition of the note will be entirely capital gain, and the rules deferring the deduction of interest on related loans will not apply.

If a U.S. Holder purchases a note at a price that exceeds the principal amount plus accrued interest, the U.S. Holder can elect to amortize the premium as a reduction to interest income so that the income reported by the U.S. Holder each period reflects the U.S. Holder’s economic yield. Any premium paid on

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acquiring a note is not amortizable, however, to the extent that it reflects the value of the conversion privilege of the note. Once made, such an election is revocable only with IRS consent. The election applies to all bonds, other than bonds the interest on which is not includible in gross income, held by the electing U.S. Holder at the beginning of the first taxable year to which the election applies and all such bonds thereafter acquired by the U.S. Holder. If the U.S. Holder elects to amortize premium, the amortized premium would reduce the U.S. Holder’s tax basis in the note.

Sale, Exchange or Redemption of the Notes

A U.S. Holder generally will recognize capital gain or loss if the U.S. Holder disposes of a note in a sale, redemption or exchange other than a conversion of the note into common stock. The U.S. Holder’s gain or loss will equal the difference between the amount realized by the U.S. Holder and the U.S. Holder’s adjusted tax basis in the note. The U.S. Holder’s adjusted tax basis in the note will generally equal the amount the U.S. Holder paid for the note. The amount realized by the U.S. Holder will include the amount of any cash and the fair market value of any other property received for the note, except that the portion of any proceeds attributable to accrued interest, including accrued unrecognized market discount, as discussed above, will not be taken into account in computing the U.S. Holder’s capital gain or loss. Instead, that portion will be recognized as ordinary interest income to the extent that the U.S. Holder has not previously included the accrued interest in income. The gain or loss recognized by a U.S. Holder on a disposition of the note will be long-term capital gain or loss if the U.S. Holder held the note for more than one year. Long-term capital gains of non-corporate taxpayers are taxed at lower rates than those applicable to ordinary income. The deductibility of capital losses is subject to certain limitations.

If, upon a change in control, a holder requires us to repurchase some or all of the holder’s notes and we elect to pay the repurchase price in shares of our common stock, the redemption may qualify as a recapitalization for U.S. federal income tax purposes if the notes qualify as “securities” for those purposes. While the notes probably qualify as “securities”, the matter is not free from doubt. If the redemption qualifies as a recapitalization, a U.S. Holder would not recognize any income, gain or loss on the holder’s receipt of our common stock in exchange for notes, except to the extent the stock received is attributable to accrued interest. If the holder receives cash in lieu of fractional shares of stock, however, the holder would be treated as if he received the fractional share and then had the fractional share redeemed for cash. The holder would recognize gain or loss equal to the difference between the cash received and that portion of his basis in the stock attributable to the fractional share. The holder’s aggregate basis in the stock (including any fractional share for which cash is paid) would equal his adjusted basis in the note. The holder’s holding period for the stock would include the period during which he held the note. If the redemption does not qualify as a recapitalization, a U.S. Holder will generally recognize capital gain or loss equal to the difference between the amount realized by the U.S. Holder and the U.S. Holder’s adjusted tax basis in the note as described above.

Conversion of the Notes

A U.S. Holder who converts his note into common stock generally will not recognize any income, gain or loss, except to the extent the stock received is attributable to accrued interest. The U.S. Holder will also recognize gain to the extent that he receives cash in lieu of a fractional share as described above. The U.S. Holder’s aggregate adjusted basis in the common stock (including any fractional share for which cash is paid) will equal his adjusted basis in the note, and the U.S. Holder’s holding period for the stock will include the period during which he held the note.

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Dividends

If a U.S. Holder converts a note into common stock and we make a distribution (other than of our own stock) in respect of that stock, the distribution will be treated as a dividend, taxable to the U.S. Holder as ordinary income, to the extent it is paid from our current or accumulated earnings and profits. If the distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a nontaxable return of capital reducing the U.S. Holder’s adjusted tax basis in the U.S. Holder’s stock to the extent of the U.S. Holder’s adjusted tax basis in the U.S. Holder’s stock. Any remaining excess will be treated as capital gain. We are required to provide shareholders who receive dividends with an information return on Form 1099-DIV that states the extent to which the dividend is paid from our current or accumulated earnings and profits. If a U.S. Holder is a U.S. corporation, it will be able to claim the deduction allowed to U.S. corporations in respect of dividends received from other U.S. corporations equal to a portion of any dividends received subject to generally applicable limitations on that deduction.

The terms of the notes allow for changes in the conversion price of the notes in certain circumstances. A change in conversion price that allows U.S. Holders of notes to receive more shares of common stock on conversion may increase those noteholders’ proportionate interests in our earnings and profits or assets. In that case, those noteholders could be treated as though they received a dividend in the form of our stock. Such a constructive stock dividend could be taxable to those noteholders, although they would not actually receive any cash or other property. A taxable constructive stock dividend would result to U.S. Holders of notes, for example, if the conversion price were adjusted to compensate noteholders for distributions of cash or property to our shareholders. However, a change in conversion price to prevent the dilution of the noteholders’ interests upon a stock split or other change in capital structure, if made under a bona fide, reasonable adjustment formula, should not increase noteholders’ proportionate interests in our earnings and profits or assets and should not be treated as a constructive stock dividend. On the other hand, if an event occurs that dilutes the noteholders’ interests and the conversion price is not adjusted, the resulting increase in the proportionate interests of our shareholders could be treated as a taxable stock dividend to those shareholders. Any taxable constructive stock dividends resulting from a change to, or failure to change, the conversion price would be treated in the same manner as dividends paid in cash or other property. Such dividends would result in ordinary income to the recipient, to the extent of our current or accumulated earnings and profits, with any excess treated as a nontaxable return of capital or as capital gain as more fully described above.

Sale of Common Stock

A U.S. Holder will generally recognize capital gain or loss on a sale or exchange of common stock. The U.S. Holder’s gain or loss will equal the difference between the amount realized by the U.S. Holder and the U.S. Holder’s adjusted tax basis in the stock as described above in “—Conversion of the Notes” and “—Sale, Exchange or Redemption of the Notes”. Subject to the special market discount discussed above, the amount realized by the U.S. Holder will include the amount of any cash and the fair market value of any other property received for the stock. Gain or loss recognized by a U.S. Holder on a sale or exchange of stock will be long-term capital gain or loss if the holder held the stock for more than one year. Long-term capital gains of non-corporate taxpayers are taxed at lower rates than those applicable to ordinary income. The deductibility of capital losses is subject to certain limitations.

Backup Withholding and Information Reporting

The Code and U.S. Treasury Regulations require persons who make certain specified payments to report the payments to the IRS. Among the specified payments are interest, dividends, and proceeds paid by brokers to their customers. This reporting regime is reinforced by “backup withholding” rules. These rules require the payers to withhold tax from payments subject to information reporting if the recipient

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fails to provide his taxpayer identification number to the payer or furnishes an incorrect identification number, or if the recipient has been notified by the IRS that he has failed to report interest or dividends on his returns. The information reporting and backup withholding rules do not apply to payments to U.S. corporations.

Payments of interest or dividends to individual U.S. Holders of notes or common stock generally will be subject to information reporting, and generally will be subject to backup withholding, unless the U.S. Holder provides us or our paying agent with a correct taxpayer identification number.

Payments made to U.S. Holders by a broker upon a sale of notes or common stock generally will be subject to information reporting and backup withholding. If, however, the sale is made through a foreign office of a U.S. broker, the sale will be subject to information reporting but not backup withholding. If the sale is made through a foreign office of a foreign broker, the sale generally will not be subject to either information reporting or backup withholding. This exception will not apply, however, if the foreign broker is owned or controlled by U.S. persons, or is engaged in a U.S. trade or business.

Any amounts withheld from a payment to a U.S. Holder of notes or common stock under the backup withholding rules can be credited against any U.S. federal income tax liability of the U.S. Holder.

The preceding discussion of certain U.S. federal income tax considerations is for general information only. It is not tax advice. Each prospective investor should consult his own tax advisor regarding the particular U.S. federal, state, local and foreign tax consequences of purchasing, holding, and disposing of our notes or common stock, including the consequences of any proposed change in applicable laws.

DESCRIPTION OF CAPITAL STOCK

Airborne has 126,000,000 authorized shares of capital stock, consisting of 120,000,000 shares of common stock, $1.00 par value, and 6,000,000 shares of preferred stock. As of March 31, 2002, we had 48,307,185 shares of common stock (net of              treasury shares) and no shares of preferred stock outstanding.

The following is a summary of certain provisions of Delaware law and our certificate of incorporation and by-laws. This summary does not purport to be complete and is qualified in its entirety by reference to the corporate law of Delaware and our certificate of incorporation and by-laws.

Description of Common Stock

Holders of common stock are entitled to such dividends as our board of directors, in its discretion, may declare out of legally available funds, subject to any preference of the holders of any outstanding preferred stock. Dividends and other distributions are subject to certain restrictions under our existing revolving credit agreement. The shares of common stock are not redeemable, and holders of common stock have no preemptive or other rights to purchase any of our securities. If Airborne liquidates, holders of common stock will be entitled to receive pro rata, subject to any preference of the holders of any outstanding preferred stock, all remaining assets available for distribution to shareholders after payment of all our debts and other liabilities. Holders of common stock are entitled to cast one vote per share, except that they are entitled to cumulate votes in the election of directors.

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Preferred Stock

Our board of directors has the authority, without shareholder approval, to issue shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions of each series, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares in each series that is issued. The issuance of this preferred stock may have the effect of delaying, deferring or preventing a change in control of Airborne and may adversely affect the voting and other rights of the holders of our common stock.

Antitakeover Effects of Provisions of the Charter and By-laws

Shareholders’ rights and related matters are governed by Delaware law and our certificate of incorporation and by-laws. Certain provisions of Delaware law and our certificate of incorporation and by-laws, which are summarized below, may discourage or make more difficult a takeover attempt that a shareholder might consider in his interest. Such provisions may also adversely affect prevailing market prices for our common stock.

Staggered Board of Directors

Our certificate of incorporation provides that our board of directors is divided into three classes. Our by-laws provide that each director is elected for a three-year term. This provision could discourage a takeover attempt because at no time is a majority of the board of directors standing for re-election.

Advance Notice Requirements for Shareholder Proposals and Director Nominations

Our by-laws require a shareholder to provide advance notice if the shareholder wishes to submit a proposal or nominate candidates for directors at an annual meeting of shareholders. These procedures provide that notice of shareholder proposals and shareholder nominations for the election of directors at an annual meeting must be in writing and received by our secretary at least 45 days before the first anniversary of the date of mailing of our proxy statement in connection with the preceding annual meeting of shareholders. In the case of nominations for election as directors, the notice must set forth certain information about each nominee who is not an incumbent director.

Business Combination Provisions

We are subject to the provisions of Section 203 of the Delaware General Corporation Law. This statute prohibits a publicly held Delaware corporation like us from engaging in a business combination with an interested stockholder for a period of three years after the date of the transaction in which the stockholder became an interested stockholder, unless:

• prior to that date, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

• upon consummation of the transaction that resulted in that person becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding, for purposes of determining the number of shares outstanding, shares owned by directors who are also officers and by certain employee stock plans; or

• on or after the date the stockholder became an interested stockholder, the business combination is approved by our board of directors and authorized by the affirmative vote, and not by written

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consent, of at least two-thirds of the outstanding voting stock, excluding the stock owned by the interested stockholder.

A “business combination” includes a merger or consolidation, asset sale or other transaction resulting, directly or indirectly, in a financial benefit to the interested stockholder. An “interested stockholder” is a person, other than us and any direct or indirect majority owned subsidiary of ours, who:

• is the owner of 15% or more of any class of our outstanding voting stock or an affiliate or associate of such person; or

• is an affiliate or associate of ours and was the owner of 15% or more of any class of our outstanding voting stock at any time within the preceding three years including the affiliates or associates of that person.

Section 203 expressly exempts from the requirements described above any business combination by a corporation with an interested stockholder who became an interested stockholder at a time when the section did not apply to the corporation.

In addition, under Airborne’s certificate of incorporation, any “business combination” involving an “interested shareholder” must be approved by holders of 80% of the outstanding common stock (and of 80% of the voting power of all outstanding stock) unless our board of directors has approved the business combination (for purposes of such approval, the vote of certain directors affiliated with or representing the interested shareholders will not be counted) or certain minimum price and procedural requirements are met.

A “business combination” for purposes of our certificate of incorporation includes a merger or consolidation, asset sale or other transaction resulting, directly or indirectly, in a financial benefit to the interested shareholder or an affiliate or associate of an interested shareholder and a liquidation or dissolution of us proposed by or on behalf of an interested shareholder or an affiliate or associate of an interested shareholder.

An “interested shareholder” for purposes of our certificate of incorporation is a person, other than us or a corporation of which a majority of each class of equity security is owned, directly or indirectly, by us, who:

• is the beneficial owner, directly or indirectly, of more than 20% of the voting power of the outstanding voting stock;

• is a director of us and, at any time within the preceding two years of the date on which it is sought to be determined whether the person is an interested shareholder, was the beneficial owner, directly or indirectly, of more than 20% of the voting power of the then outstanding voting stock; or

• is an assignee of or has otherwise succeeded to the beneficial ownership of any shares of voting stock that were, at any time within the preceding two years of the date on which it is sought to be determined whether the person is an interested shareholder, beneficially owned by an interested shareholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act.

Limitation of Liability of Directors

Our certificate of incorporation provides that a director will not be personally liable to us or our shareholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to us or our shareholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful dividend payments, stock repurchases or stock redemptions, or (iv) for any transaction from which the director derived an improper personal benefit.

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SELLING SECURITY HOLDERS

We originally issued the notes in a private placement in March 2002. The initial purchasers of the notes have advised us that the notes were resold in transactions exempt from the registration requirements of the Securities Act to “qualified institutional buyers”, as defined in Rule 144A of the Securities Act. These subsequent purchasers, or their transferees, pledgees, donees or successors, may from time to time offer and resell any or all of the notes and/or shares of common stock issuable upon conversion of the notes pursuant to this prospectus.

The selling security holders may choose to sell notes and/or the shares of common stock issuable upon conversion of the notes from time to time. See “—Plan of Distribution”.

The following table, which is based on the information supplied to us by the selling security holders named in the table, sets forth:

• the name of each selling security holder who has provided us with notice, as of the date of this prospectus, pursuant to the registration rights agreement, of such security holder’s intent to sell or otherwise dispose of notes and/or shares of common stock issuable upon conversion of the notes pursuant to the registration statement;

• the principal amount of notes and the number of shares of our common stock issuable upon conversion of the notes that they may sell from time to time pursuant to the registration statement; and

• the amount of outstanding notes and our common stock beneficially owned by the selling security holder prior to the offering, assuming no conversion of the notes.

To our knowledge, no selling security holder or any affiliate of a selling security holder has held any position or office or has had any material relationship with us or our affiliates during the three years prior to the date of this prospectus.

A selling security holder may offer and resell all or a portion of the notes and shares of common stock issuable upon conversion of the notes. Accordingly, no estimate can be given as to the amount or percentage of the notes or our common stock that will be held by the selling security holders upon termination of sales pursuant to this prospectus. In addition, the selling security holders identified below may have sold, transferred or disposed of all or a portion of their notes since the date on which they provided the information regarding their holdings in transactions exempt from the registration requirements of the Securities Act.

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The information contained under the column “Shares of Common Stock That May Be Sold” assumes conversion of the full amount of the notes held by the holder at the initial rate of 42.7599 shares of common stock per each $1,000 principal amount of notes. This rate is subject to adjustment in certain circumstances, as provided for in the indenture. As a result, the amount of common stock issuable upon conversion of the notes may increase or decrease in the future.

Name(1)	Principal Amount of Notes Owned Before Offering	Principal Amount of Notes That May Be Sold	Common Stock Owned Before Offering	Shares of Common Stock That May Be Sold
[Details on selling security holders to be inserted]
Unknown (2)(3)

(1) The above table does not currently include all of the security holders of notes. We will use post-effective amendments to identify missing security holders before those security holders make any offers or resales of the subject securities, and we will use prospectus supplements if we are only making changes to the selling security holder table.

(2) Assumes that any other holders of notes, or any future transferees, pledgees, donees or successors of or from any such other holders of notes, do not beneficially own any common stock other than the common stock issuable upon conversion of the notes at the initial conversion rate.

(3) The name “Unknown” represents the remaining selling security holders. We are unable to provide the names of these security holders because these notes are currently evidenced by a global note which has been deposited with DTC and registered in the name Cede & Co., as DTC’s nominee.

If, after the date of this prospectus, a security holder notifies us pursuant to the registration rights agreement of its intention to dispose of the notes pursuant to the registration statement, we will file a post-effective amendment if we are making additions to the selling security holder table, and will file a prospectus supplement if we are making changes to the selling security holder table.

PLAN OF DISTRIBUTION

We are registering the notes and the shares of common stock issuable upon conversion of the notes to permit public secondary trading of these securities by the holders from time to time after the date of this prospectus. We will bear all expenses of registration incurred in connection with this offering, but all selling and other expenses incurred by the selling security holders will be borne by the selling security holders.

We will not receive any proceeds from the sale of notes or shares of common stock issuable upon conversion of the notes by the selling security holders. The notes and shares of common stock issuable upon conversion of the notes may be sold pursuant to this prospectus from time to time directly by any selling security holder or through underwriters, broker-dealers or agents who may receive compensation in the form of discounts, concessions or commissions from the selling security holders or the purchasers of the securities. If notes or shares of common stock issuable upon conversion of the notes are sold through underwriters or broker-dealers, the selling security holders will be responsible for underwriting discounts or commissions or agents’ commissions.

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The notes or shares of common stock issuable upon conversion of the notes may be sold in one or more transactions at:

• fixed prices,

• prevailing market prices at the time of sale,

• varying prices determined at the time of sale, or

• negotiated prices.

These sales may be effected in transactions by one or more of the following methods:

• block trades in which the broker or dealer so engaged will attempt to sell the notes or shares of common stock issuable upon conversion of the notes as agent but may position and resell a portion of the block as principal to facilitate the transaction;

• purchases by a broker or dealer as principal and resale by the broker or dealer for its own account pursuant to this prospectus;

• an exchange distribution in accordance with the rules of any stock exchange on which the notes or shares of common stock issuable upon conversion of the notes are listed;

• in privately negotiated transactions;

• through the distribution of notes or shares of common stock issuable upon conversion of the notes by any selling security holder to its partners, members or security holders;

• on any national securities exchange or quotation service on which the notes or shares of common stock issuable upon conversion of the notes may be listed or quoted at the time of sale, including the New York Stock Exchange in the case of the sale of the common stock;

• in the over-the-counter market;

• in transactions otherwise than on a national securities exchange or quotation service or in the over-the-counter market;

• through the writing of options; or

• any combination of the described methods.

These transactions may include block transactions or crosses. Crosses are transactions in which the same broker acts as an agent on both sides of the trade.

In connection with sales of the notes or shares of common stock issuable upon conversion of the notes or otherwise, any selling security holder may:

• enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the notes or shares of common stock issuable upon conversion of the notes in the course of hedging the positions they assume;

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• sell the notes and underlying common stock short and deliver notes or shares of common stock issuable upon conversion of the notes to close out the short positions; or

• lend or pledge notes or shares of common stock issuable upon conversion of the notes to broker-dealers that in turn may sell the securities.

In addition, any shares covered by this prospectus that qualify for sale pursuant to Rule 144, Rule 144A or any other available exemption from registration under the Securities Act may be sold under Rule 144, Rule 144A or any of the other available exemptions rather than pursuant to this prospectus.

Our common stock is listed on the New York Stock Exchange and the Pacific Exchange, Inc. under the symbol “ABF”. We have been advised by the initial purchasers of the notes that they intend to make a market in the notes. However, the initial purchasers are not obligated to do so, and market-making activity with respect to the notes may be discontinued at any time without notice. In addition, such market-making activity will be subject to limitations imposed by federal securities laws. There can be no assurance as to the development or liquidity of any market for the notes. We do not intend to apply for listing of the notes on any securities exchange or the Nasdaq Stock Market. Accordingly, we cannot assure that a trading market for the notes will develop or have any liquidity.

The selling security holders and any broker-dealers, agents or underwriters that participate with the selling security holders in the distribution of the notes or the shares of common stock issuable upon conversion of the notes may be deemed to be “underwriters” within the meaning of the Securities Act, in which event any commissions or discounts received by these broker-dealers, agents or underwriters and any profits realized by the selling security holder on the resale of the notes or the shares may be deemed to be underwriting compensation under the Securities Act. If the selling security holders are deemed to be underwriters, the selling security holders may be subject to certain statutory and regulatory liabilities, including liabilities imposed pursuant to Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange Act.

To our knowledge, there are currently no plans, arrangements, or understandings between any selling security holders and any underwriter, broker-dealer or agent regarding the sale of the notes and the underlying common stock by the selling security holders. We cannot assure investors that any selling security holder will sell any or all of the notes or shares of common stock issuable upon conversion of the notes described in this prospectus, and any selling security holder may transfer, devise or gift the securities by other means not described in this prospectus.

The selling security holders and any other person participating in such distribution will be subject to the Exchange Act and the rules thereunder. The Exchange Act rules include, without limitation, Regulation M, which may limit the timing of purchases and sales of any of the notes and the underlying common stock by the selling security holders and any other such person. In addition, Regulation M of the Exchange Act may restrict the ability of any person engaged in the distribution of the notes and the underlying common stock to engage in market-marking activities with respect to the particular notes and the underlying common stock being distributed for a period of up to five business days prior to the commencement of such distribution. This may affect the marketability of the notes and the underlying common stock and the ability of any person or entity to engage in market-marking activities with respect to the notes and the underlying common stock.

We originally sold the notes to the initial purchasers in March 2002 in a private placement. We agreed to indemnify and hold harmless each other against certain liabilities, including certain liabilities under the Securities Act. The registration rights agreement provides for us and the selling security holders to indemnify and hold harmless each other against certain liabilities, including certain liabilities under the Securities Act.

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LEGAL MATTERS

The validity of the notes, the shares of common stock issuable upon conversion of the notes, and the guarantees of the notes by the guarantor subsidiaries has been passed upon for Airborne by Riddell Williams P.S., 1001 Fourth Avenue, Suite 4500, Seattle, Washington. Stephen E. DeForest, a member of the firm, serves as a director and secretary of certain of the guarantor subsidiaries.

EXPERTS

The financial statements incorporated in this prospectus by reference from Airborne’s Current Report on Form 8-K dated May 9, 2002 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report which is incorporated by reference herein (which report expresses an unqualified opinion and includes an explanatory paragraph relating to a change in Airborne’s method of accounting for major engine overhaul costs), and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

Airborne files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document Airborne files at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings are also available to the public from the SEC’s web site at www.sec.gov.

We have filed with the SEC a registration statement on Form S-3 to register with the SEC the resale of the notes and shares of our common stock described in this prospectus. This prospectus is part of that registration statement, and provides you with a general description of the notes and shares of common stock being registered, but does not include all the information you can find in the registration statement or the exhibits. You should refer to the registration statement and its exhibits for more information about Airborne, the notes and the shares of common stock being registered.

INCORPORATION BY REFERENCE

The SEC allows us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to information in another document we have filed with the SEC. This information that we incorporate by reference is considered part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information.

We are incorporating by reference the following documents filed by us with the SEC:

• Our Annual Report on Form 10-K for the fiscal year ended December 31, 2001;

• Our proxy statement, including supplements, submitted to shareholders in connection with our 2002 annual meeting of shareholders;

• Our Current Report on Form 8-K filed with the SEC on March 15, 2002;

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• Our Current Report on Form 8-K filed with the SEC on March 25, 2002;

• Our Current Report on Form 8-K filed with the SEC on May 9, 2002; and

• The description of our common stock contained in the Registration Statement on Form 10 filed by our predecessor, Airborne Express, Inc., which the SEC declared effective on June 23, 1975, as amended.

We are also incorporating by reference any additional documents that we may file with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act before termination of this offering.

We will provide to you, without charge, a copy of any or all documents incorporated by reference into this prospectus (except exhibits to such documents, unless such exhibits are specifically incorporated by reference in such documents). You may obtain copies by requesting them in writing or by telephone from:

Airborne, Inc.

Attn: General Counsel

3101 Western Avenue

Seattle, Washington 98111

(206) 285-4600

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$150,000,000

AIRBORNE, INC.

5.75% Convertible Senior Notes Due April 1, 2007

and

Shares of Common Stock Issuable Upon Conversion of the Notes

PROSPECTUS

                        , 2002

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.    Other Expenses of Issuance and Distribution.

The following table sets forth an estimate of the expenses that will be incurred by Airborne in connection with the sale and distribution of the notes and the common stock issuable upon conversion of the notes being registered in this registration statement.

Securities and Exchange Commission registration fee	$	15,991
Printing and engraving expenses		*
Legal fees and expenses		*
Accounting fees and expenses		*
Transfer agent and trustee fees and expenses		*
Miscellaneous		*
Total	$	*

* To be specified in an amendment to this registration statement.

Item 15.    Indemnification of Directors and Officers.

Article Twelfth of the Restated Certificate of Incorporation of Airborne provides:

No director of the corporation shall be personally liable to the corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as a director; provided, however, that this Article Twelfth shall not eliminate or limit the liability of a director to the extent provided by applicable law (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware (or successor provision), or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article Twelfth shall apply to or have any effect on the liability or alleged liability of any director of the corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal.

The Restated Certificate of Incorporation of Airborne requires Airborne to indemnify its officers and directors from all expenses and liabilities to the full extent permitted by Delaware law, specifically providing for indemnities to any director, officer or former director or officer or any person who may have served at Airborne’s request as a director or officer of another corporation (including any heirs, personal representatives and estates of any indemnified parties), against all costs and expenses, including attorneys’ fees reasonably incurred by him/her or imposed on him/her in connection with any action, proceeding or investigation, whether civil, administrative or criminal (including any shareholder’s action and any other action in which Airborne is a party, plaintiff or defendant), in which he/she is or may be a party or is proceeded against or involved by any reason of any action alleged to have been taken by him/her or omitted by him/her in such action, proceeding or investigation, or sums paid in settlement or compromise thereof with the approval of the Board of Directors. The indemnification provisions do not apply unless the indemnified party acted in a manner reasonably believed by him/her to be in or not

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opposed to the best interests of the corporation, and do not apply if such person is found (1) to be guilty of willful misconduct, bad faith or gross negligence in the performance of his/her duties to the corporation, in a derivative action or one brought by the corporation, or (2) to be guilty of willful misconduct or bad faith, if such action or proceeding is brought by a third party.

Expenses incurred in defending such action, proceeding or investigation may be paid by Airborne in advance of the final disposition upon receipt of an undertaking by the indemnified party to repay such amount if it shall ultimately be determined that he/she is not entitled to be indemnified by Airborne.

In addition to the indemnification provision described above, Airborne maintains a directors and officers liability policy which insures its officers and directors against certain liabilities.

Item 16.    Exhibits.

The following exhibits are filed herewith unless otherwise indicated.

Exhibit Number	Description
4.1	Restated Certificate of Incorporation of Airborne, Inc. (incorporated by reference from Exhibit 3(a) to Airborne’s Form 10-K for the year ended December 31, 2000)
4.2	Bylaws of Airborne, Inc. (incorporated by reference from Exhibit 3(a) to Airborne’s Form 10-Q for the quarter ended June 30, 2001)
4.3	Form of Stock Certificate
4.4	Indenture dated March 25, 2002, among Airborne, Inc., as Issuer, Airborne Express, Inc., ABX Air, Inc., Sky Courier, Inc., Wilmington Air Park, Inc., Airborne FTZ, Inc., Aviation Fuel, Inc., and Sound Suppression, Inc., as Guarantors, and The Bank of New York, as Trustee, for the 5.75% Convertible Senior Notes due April 1, 2007
4.5	Registration Rights Agreement dated March 25, 2002, among Airborne, Inc., as Issuer, Airborne Express, Inc., ABX Air, Inc., Sky Courier, Inc., Wilmington Air Park, Inc., Airborne FTZ, Inc., Aviation Fuel, Inc., and Sound Suppression, Inc., as Guarantors, and Goldman, Sachs & Co. and First Union Securities, Inc., as Initial Purchasers of the 5.75% Convertible Senior Notes due April 1, 2007
4.6	Form of 5.75% Convertible Senior Notes due April 1, 2007 (included in Exhibit 4.4)
5.1	Opinion of Riddell Williams P.S.
8.1	Tax Opinion of Riddell Williams P.S.
12.1	Statements Regarding Computation of Ratios
23.1	Consents of Riddell Williams P.S. (included in Exhibit 5.1 and Exhibit 8.1)
23.2	Consent of Deloitte & Touche LLP
24.1	Powers of Attorney (included on signature pages)
25.1	Form T-1 Statement of Eligibility of Trustee for Indenture under the Trust Indenture Act of 1939

Item 17.    Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(a) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933 (the “Securities Act”);

(b) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which,

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individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission (the “Commission”) pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

(c) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

Provided, however, that paragraphs (a) and (b) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) that are incorporated by reference in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under section 305(b)(2) of that act.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Seattle, state of Washington, on May 10, 2002.

AIRBORNE, INC.
By:	/s/    CARL D. DONAWAY
	Carl D. Donaway, President and Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Carl D. Donaway and Lanny H. Michael, and each of them severally, such person’s true and lawful attorneys-in-fact and agents, with full power to act without the other and with full power of substitution and resubstitution, to execute in the name and on behalf of such person, individually and in each capacity stated below, any and all amendments and post-effective amendments to this registration statement, any and all supplements hereto, and any and all other instruments necessary or incidental in connection herewith, and to file the same with the Securities and Exchange Commission.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated below.

Signature	Title	Date
/s/    CARL D. DONAWAY         Carl D. Donaway	Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)	May 10, 2002
/s/    LANNY H. MICHAEL         Lanny H. Michael	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	May 10, 2002
/s/    ROBERT T. CHRISTENSEN         Robert T. Christensen	Chief Accounting Officer	May 10, 2002
/s/    JAMES H. CAREY         James H. Carey	Director	May 10, 2002
/s/    ANDREW B. KIM         Andrew B. Kim	Director	May 10, 2002
/s/    HAROLD M. MESSMER, JR.         Harold M. Messmer, Jr.	Director	May 10, 2002
/s/    RICHARD M. ROSENBERG         Richard M. Rosenberg	Director	May 10, 2002
/s/    WILLIAM SWINDELLS         William Swindells	Director	May 10, 2002
/s/    MARY AGNES WILDEROTTER         Mary Agnes Wilderotter	Director	May 10, 2002
/s/    ROSALIE J. WOLF         Rosalie J. Wolf	Director	May 10, 2002

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Seattle, state of Washington, on May 10, 2002.

AIRBORNE EXPRESS, INC.
By:	/s/    CARL D. DONAWAY
	Carl D. Donaway, President and Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints each of Carl D. Donaway and Lanny H. Michael such person’s true and lawful attorney-in-fact and agent, with full power to act without the other and with full power of substitution and resubstitution, to execute in the name and on behalf of such person, individually and in each capacity stated below, any and all amendments (including post-effective amendments) to this registration statement, and to file the same with all exhibits thereto, and any and all instruments or documents in connection therewith, with the Securities and Exchange Commission, and any such attorney-in-fact may make such changes and additions to this registration statement as such attorney-in-fact may deem necessary or appropriate.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated below.

Signature	Title	Date
/s/    CARL D. DONAWAY         Carl D. Donaway	Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)	May 10, 2002
/s/    LANNY H. MICHAEL         Lanny H. Michael	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	May 10, 2002
/s/    ROBERT T. CHRISTENSEN         Robert T. Christensen	Chief Accounting Officer	May 10, 2002
/s/    JAMES H. CAREY         James H. Carey	Director	May 10, 2002
/s/    ANDREW B. KIM         Andrew B. Kim	Director	May 10, 2002
/s/    HAROLD M. MESSMER, JR.         Harold M. Messmer, Jr.	Director	May 10, 2002
/s/    RICHARD M. ROSENBERG         Richard M. Rosenberg	Director	May 10, 2002
/s/    WILLIAM SWINDELLS         William Swindells	Director	May 10, 2002
/s/    MARY AGNES WILDEROTTER         Mary Agnes Wilderotter	Director	May 10, 2002
/s/    ROSALIE J. WOLF         Rosalie J. Wolf	Director	May 10, 2002

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Seattle, state of Washington, on May 10, 2002.

ABX AIR, INC.
By:	/s/    CARL D. DONAWAY
	Carl D. Donaway, Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints each of Carl D. Donaway and Lanny H. Michael such person’s true and lawful attorney-in-fact and agent, with full power to act without the other and with full power of substitution and resubstitution, to execute in the name and on behalf of such person, individually and in each capacity stated below, any and all amendments (including post-effective amendments) to this registration statement, and to file the same with all exhibits thereto, and any and all instruments or documents in connection therewith, with the Securities and Exchange Commission, and any such attorney-in-fact may make such changes and additions to this registration statement as such attorney-in-fact may deem necessary or appropriate.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated below.

Signature	Title	Date
/s/    CARL D. DONAWAY         Carl D. Donaway	Chief Executive Officer (Principal Executive Officer) and Director	May 10, 2002
/s/    QUINT TURNER         Quint Turner	Treasurer (Principal Financial and Accounting Officer)	May 10, 2002
/s/    JOE HETE         Joe Hete	Director	May 10, 2002

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Seattle, state of Washington, on May 10, 2002.

SKY COURIER, INC.
By:	/s/    CARL D. DONAWAY
	Carl D. Donaway, President

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints each of Carl D. Donaway and Lanny H. Michael such person’s true and lawful attorney-in-fact and agent, with full power to act without the other and with full power of substitution and resubstitution, to execute in the name and on behalf of such person, individually and in each capacity stated below, any and all amendments (including post-effective amendments) to this registration statement, and to file the same with all exhibits thereto, and any and all instruments or documents in connection therewith, with the Securities and Exchange Commission, and any such attorney-in-fact may make such changes and additions to this registration statement as such attorney-in-fact may deem necessary or appropriate.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated below.

Signature	Title	Date
/s/    CARL D. DONAWAY         Carl D. Donaway	President (Principal Executive Officer) and Director	May 10, 2002
/s/    LANNY H. MICHAEL         Lanny H. Michael	Treasurer (Principal Financial and Accounting Officer) and Director	May 10, 2002
/s/    DAVID C. ANDERSON         David C. Anderson	Director	May 10, 2002

II-7

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Wilmington, state of Ohio, on May 10, 2002.

WILMINGTON AIR PARK, INC.
By:	/s/    JOE HETE
	Joe Hete, President

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints each of Carl D. Donaway and Lanny H. Michael such person’s true and lawful attorney-in-fact and agent, with full power to act without the other and with full power of substitution and resubstitution, to execute in the name and on behalf of such person, individually and in each capacity stated below, any and all amendments (including post-effective amendments) to this registration statement, and to file the same with all exhibits thereto, and any and all instruments or documents connection therewith, with the Securities and Exchange Commission, and any such attorney-in-fact may make such changes and additions to this registration statement as such attorney-in-fact may deem necessary or appropriate.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated below.

Signature	Title	Date
/s/    JOE HETE         Joe Hete	President (Principal Executive Officer) and Director	May 10, 2002
/s/    QUINT TURNER         Quint Turner	Treasurer (Principal Financial and Accounting Officer)	May 10, 2002
/s/    CARL D. DONAWAY         Carl D. Donaway	Director	May 10, 2002

II-8

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Wilmington, state of Ohio, on May 10, 2002.

AIRBORNE FTZ, INC.
By:	/s/    JOE HETE
	Joe Hete, President

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints each of Carl D. Donaway and Lanny H. Michael such person’s true and lawful attorney-in-fact and agent, with full power to act without the other and with full power of substitution and resubstitution, to execute in the name and on behalf of such person, individually and in each capacity stated below, any and all amendments (including post-effective amendments) to this registration statement, and to file the same with all exhibits thereto, and any and all instruments or documents in connection therewith, with the Securities and Exchange Commission, and any such attorney-in-fact may make such changes and additions to this registration statement as such attorney-in-fact may deem necessary or appropriate.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated below.

Signature	Title	Date
/s/    JOE HETE         Joe Hete	President (Principal Executive Officer) and Director	May 10, 2002
/s/    QUINT TURNER         Quint Turner	Vice President and Treasurer (Principal Financial and Accounting Officer)	May 10, 2002
/s/    CARL D. DONAWAY         Carl D. Donaway	Director	May 10, 2002

II-9

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Wilmington, state of Ohio, on May 10, 2002.

AVIATION FUEL, INC.
By:	/s/    ROBERT HANKE
	Robert Hanke, President

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints each of Carl D. Donaway and Lanny H. Michael such person’s true and lawful attorney-in-fact and agent, with full power to act without the other and with full power of substitution and resubstitution, to execute in the name and on behalf of such person, individually and in each capacity stated below, any and all amendments (including post-effective amendments) to this registration statement, and to file the same with all exhibits thereto, and any and all instruments or documents in connection therewith, with the Securities and Exchange Commission, and any such attorney-in-fact may make such changes and additions to this registration statement as such attorney-in-fact may deem necessary or appropriate.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated below.

Signature	Title	Date
/s/    ROBERT HANKE         Robert Hanke	President (Principal Executive Officer) and Director	May 10, 2002
/s/    TAMMY VOSS         Tammy Voss	Controller (Principal Financial and Accounting Officer)	May 10, 2002
/s/    JOE PAYNE         Joe Payne	Director	May 10, 2002

II-10

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Wilmington, state of Ohio, on May 10, 2002.

SOUND SUPPRESSION, INC.
By:	/s/    AMIEL M. KULI
	Amiel M. Kuli, President

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints each of Carl D. Donaway and Lanny H. Michael such person’s true and lawful attorney-in-fact and agent, with full power to act without the other and with full power of substitution and resubstitution, to execute in the name and on behalf of such person, individually and in each capacity stated below, any and all amendments (including post-effective amendments) to this registration statement, and to file the same with all exhibits thereto, and any and all instruments or documents in connection therewith, with the Securities and Exchange Commission, and any such attorney-in-fact may make such changes and additions to this registration statement as such attorney-in-fact may deem necessary or appropriate.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated below.

Signature	Title	Date
/s/    AMIEL M. KULI         Amiel M. Kuli	President (Principal Executive Officer) and Director	May 10, 2002
/s/    QUINT TURNER         Quint Turner	Treasurer (Principal Financial and Accounting Officer) and Director	May 10, 2002
/s/    ROBERT HANKE         Robert Hanke	Director	May 10, 2002

II-11

EXHIBIT INDEX

Exhibit Number	Description
4.1	Restated Certificate of Incorporation of Airborne, Inc. (incorporated by reference from Exhibit 3(a) to Airborne’s Form 10-K for the year ended December 31, 2000)
4.2	Bylaws of Airborne, Inc. (incorporated by reference from Exhibit 3(a) to Airborne’s Form 10-Q for the quarter ended June 30, 2001)
4.3	Form of Stock Certificate
4.4	Indenture dated March 25, 2002, among Airborne, Inc., as Issuer, Airborne Express, Inc., ABX Air, Inc., Sky Courier, Inc., Wilmington Air Park, Inc., Airborne FTZ, Inc., Aviation Fuel, Inc., and Sound Supression, Inc., as Guarantors, and The Bank of New York, as Trustee, for the 5.75% Convertible Senior Notes due April 1, 2007
4.5	Registration Rights Agreement dated March 25, 2002, among Airborne, Inc., as Issuer, Airborne Express, Inc., ABX Air, Inc., Sky Courier, Inc., Wilmington Air Park, Inc., Airborne FTZ, Inc., Aviation Fuel, Inc., and Sound Suppression, Inc., as Guarantors, and Goldman, Sachs & Co. and First Union Securities, Inc., as Initial Purchasers of the 5.75% Convertible Senior Notes due April 1, 2007
4.6	Form of 5.75% Convertible Senior Notes due April 1, 2007 (included in Exhibit 4.4)
5.1	Opinion of Riddell Williams P.S.
8.1	Tax Opinion of Riddell Williams P.S.
12.1	Statements Regarding Computation of Ratios
23.1	Consents of Riddell Williams P.S. (included in Exhibit 5.1 and Exhibit 8.1)
23.2	Consent of Deloitte & Touche LLP
24.1	Powers of Attorney (included on signature pages)
25.1	Form T-1 Statement of Eligibility of Trustee for Indenture under the Trust Indenture Act of 1939

EX-4.3

                                                                     Exhibit 4.3

NUMBER                                                                    SHARES

 AB



AIRBORNE, INC. SEAL



 COMMON STOCK                                                      COMMON STOCK

PAR VALUE $1.00                                                  PAR VALUE $1.00



THIS CERTIFICATE IS TRANSFERABLE                        CUSIP 009269 10 1
    IN NEW YORK CITY, NY                     SEE REVERSE FOR CERTAIN DEFINITIONS



                                 AIRBORNE, INC.
              INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE


This Certifies that



is the owner of


   FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK OF AIRBORNE, INC.

transferable on the Books of the Corporation by the holder thereof in person or
by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.

Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.

Dated

COUNTERSIGNED AND REGISTERED:
                THE BANK OF NEW YORK

BY                      TRANSFER AGENT AND REGISTRAR,


                                   /s/ David C. Anderson    /s/ Robert S. Cline

           AUTHORIZED SIGNATURE           Secretary        Chairman of the Board



     The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

     TEN COM - as tenants in common
     TEN ENT - as tenants by the entireties
     JT TEN  - as joint tenants with right of
               survivorship and not as tenants in common

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

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

For Value received _______________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
    IDENTIFYING NUMBER OF ASSIGNEE
______________________________________


________________________________________________________________________________


________________________________________________________________________________
       (NAME AND ADDRESS OF TRANSFEREE SHOULD BE PRINTED OR TYPEWRITTEN)


________________________________________________________________________________


_________________________________________________________________________ Shares
represented by the within Certificate and do hereby irrevocably constitute and
appoint

_______________________________________________________________________ Attorney
to transfer the said stock on the books of the within-named Corporation, with
full power of substitution in the premises.

Dated_______________________

                                            ____________________________________
                                                       SIGNATURE

Signature(s) Guaranteed:

___________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED MEDALLION SIGNATURE GUARANTEE
PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S); AS
WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.

EX-4.4

                                                                     Exhibit 4.4


                       ___________________________________


                                 AIRBORNE, INC.,

                                    As Issuer

                             AIRBORNE EXPRESS, INC.

                                  ABX AIR, INC.

                                SKY COURIER, INC.

                            WILMINGTON AIR PARK, INC.

                               AIRBORNE FTZ, INC.

                               AVIATION FUEL, INC.

                            SOUND SUPPRESSION, INC.,

                                  As Guarantors

                                       TO

                              THE BANK OF NEW YORK,

                                   As Trustee

                              ____________________

                                    INDENTURE

                           Dated as of March 25, 2002

                              ____________________

                5.75% CONVERTIBLE SENIOR NOTES DUE APRIL 1, 2007


                     _______________________________________







                             CROSS-REFERENCE TABLE*



- ------------------------------------------------------------ ---------------------------------------------------------
                Trust Indenture Act Section                                     Indenture Section
                                                          
- ------------------------------------------------------------ ---------------------------------------------------------
ss.ss.310(a)(1)                                                                         6.9
- ------------------------------------------------------------ ---------------------------------------------------------
 (a)(2)                                                                                 6.9
- ------------------------------------------------------------ ---------------------------------------------------------
 (a)(3)                                                                           Not Applicable
- ------------------------------------------------------------ ---------------------------------------------------------
 (a)(4)                                                                           Not Applicable
- ------------------------------------------------------------ ---------------------------------------------------------
 (a)(5)                                                                                 6.9
- ------------------------------------------------------------ ---------------------------------------------------------
 (b)                                                                           6.8; 6.9; 6.10; 6.11
- ------------------------------------------------------------ ---------------------------------------------------------
 (c)                                                                              Not Applicable
- ------------------------------------------------------------ ---------------------------------------------------------
ss.311(a)                                                                               6.13
- ------------------------------------------------------------ ---------------------------------------------------------
 (b)                                                                                    6.13
- ------------------------------------------------------------ ---------------------------------------------------------
 (c)                                                                              Not Applicable
- ------------------------------------------------------------ ---------------------------------------------------------
ss.312(a)                                                                              15.1
- ------------------------------------------------------------ ---------------------------------------------------------
 (b)                                                                                   15.2(2)
- ------------------------------------------------------------ ---------------------------------------------------------
 (c)                                                                                   15.2(3)
- ------------------------------------------------------------ ---------------------------------------------------------
ss.313(a)                                                                              15.3(1)
- ------------------------------------------------------------ ---------------------------------------------------------
 (b)(1)                                                                           Not Applicable
- ------------------------------------------------------------ ---------------------------------------------------------
 (b)(2)                                                                                15.3(1)
- ------------------------------------------------------------ ---------------------------------------------------------
 (c)                                                                                1.6; 15.3(1)
- ------------------------------------------------------------ ---------------------------------------------------------
 (d)                                                                                   15.3(2)
- ------------------------------------------------------------ ---------------------------------------------------------
ss.314(a)                                                                              15.4
- ------------------------------------------------------------ ---------------------------------------------------------
 (b)                                                                              Not Applicable
- ------------------------------------------------------------ ---------------------------------------------------------
 (c)(1)                                                                                 1.2
- ------------------------------------------------------------ ---------------------------------------------------------
 (c)(2)                                                                                 1.2
- ------------------------------------------------------------ ---------------------------------------------------------
 (c)(3)                                                                           Not Applicable
- ------------------------------------------------------------ ---------------------------------------------------------
 (d)                                                                              Not Applicable
- ------------------------------------------------------------ ---------------------------------------------------------
 (e)                                                                                    1.2
- ------------------------------------------------------------ ---------------------------------------------------------
 (f)                                                                              Not Applicable
- ------------------------------------------------------------ ---------------------------------------------------------
ss.315 (a)                                                                              6.1; 6.3
- ------------------------------------------------------------ ---------------------------------------------------------
 (b)                                                                                    6.2
- ------------------------------------------------------------ ---------------------------------------------------------
 (c)                                                                                    6.1
- ------------------------------------------------------------ --------------------------------------------------------
 (d)                                                                                 6.7 (2)(3)
- ------------------------------------------------------------ ---------------------------------------------------------
 (e)                                                                                    5.14
- ------------------------------------------------------------ ---------------------------------------------------------
ss.316(a)(1)(A)                                                                         5.12
- ------------------------------------------------------------ ---------------------------------------------------------
ss.316(a)(1)(B)                                                                         5.13
- ------------------------------------------------------------ ---------------------------------------------------------
 (a)(2)                                                                           Not Applicable
- ------------------------------------------------------------ ---------------------------------------------------------
 (b)                                                                                    5.8
- ------------------------------------------------------------ ---------------------------------------------------------
ss.317 (a)(1)                                                                           5.3
- ------------------------------------------------------------ ---------------------------------------------------------
 (a)(2)                                                                                 5.4
- ------------------------------------------------------------ ---------------------------------------------------------
 (b)                                                                                   10.3
- ------------------------------------------------------------ ---------------------------------------------------------
ss.318 (a)                                                                              1.13
- ------------------------------------------------------------ ---------------------------------------------------------
 (b)                                                                              Not Applicable
- ------------------------------------------------------------ ---------------------------------------------------------
 (c)                                                                                    1.13
- ------------------------------------------------------------ ---------------------------------------------------------


* This Cross-Reference Table shall not, for any purpose, be deemed to be a part
  of the Indenture.



                                TABLE OF CONTENTS



                                                                                                                   Page
                                                                                                                   ----
                                                                                                                
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...............................................      2

     SECTION 1.1 Definitions ...................................................................................      2
     SECTION 1.2 Compliance Certificates And Opinions...........................................................     11
     SECTION 1.3 Form of Documents Delivered to the Trustee.....................................................     12
     SECTION 1.4 Acts of Holders of Securities..................................................................     12
     SECTION 1.5 Notices, Etc to the Trustee, the Company and the Guarantors....................................     14
     SECTION 1.6 Notice to Holders of Securities; Waiver........................................................     15
     SECTION 1.7 Effect of Headings and Table of Contents.......................................................     15
     SECTION 1.8 Successors and Assigns.........................................................................     15
     SECTION 1.9 Separability Clause............................................................................     16
     SECTION 1.10 Benefits of Indenture.........................................................................     16
     SECTION 1.11 Governing Law.................................................................................     16
     SECTION 1.12 Legal Holidays................................................................................     16
     SECTION 1.13 Conflict With Trust Indenture Act.............................................................     16

ARTICLE II SECURITY AND GUARANTEE FORMS.........................................................................     17

     SECTION 2.1 Form Generally ................................................................................     17
     SECTION 2.2 Form of Security...............................................................................     18
     SECTION 2.3 Form of Certificate of Authentication..........................................................     31
     SECTION 2.4 Form of Conversion Notice......................................................................     32
     SECTION 2.5 Form of Assignment.............................................................................     33
     SECTION 2.6 Form of Guarantee..............................................................................     34

ARTICLE III THE SECURITIES......................................................................................     39

     SECTION 3.1 Title and Terms................................................................................     39
     SECTION 3.2 Denominations .................................................................................     40
     SECTION 3.3 Execution, Authentication, Delivery and Dating.................................................     40
     SECTION 3.4 Global Securities; Non-global Securities; Book-entry Provisions................................     40
     SECTION 3.5 Registration; Registration of Transfer and Exchange; Restrictions on Transfer..................     42
     SECTION 3.6 Mutilated, Destroyed, Lost or Stolen Securities................................................     45
     SECTION 3.7 Payment of Interest; Interest Rights Preserved.................................................     46
     SECTION 3.8 Persons Deemed Owners..........................................................................     47
     SECTION 3.9 Cancellation ..................................................................................     48
     SECTION 3.10 Computation of Interest.......................................................................     48
     SECTION 3.11 CUSIP Numbers ................................................................................     48

ARTICLE IV SATISFACTION AND DISCHARGE...........................................................................     48

     SECTION 4.1 Satisfaction and Discharge of Indenture........................................................     48


                                      -i-



                                TABLE OF CONTENTS
                                  (continued)



                                                                                                                   Page
                                                                                                                   ----
                                                                                                                
     SECTION 4.2 Application of Trust Money.....................................................................     49

ARTICLE V REMEDIES..............................................................................................     50

     SECTION 5.1 Events of Default..............................................................................     50
     SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.............................................     52
     SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee................................     53
     SECTION 5.4 Trustee May File Proofs of Claim...............................................................     53
     SECTION 5.5 Trustee May Enforce Claims Without Possession of Securities....................................     54
     SECTION 5.6 Application of Money Collected.................................................................     54
     SECTION 5.7 Limitation on Suits............................................................................     55
     SECTION 5.8 Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert.......     55
     SECTION 5.9 Restoration of Rights and Remedies.............................................................     56
     SECTION 5.10 Rights and Remedies Cumulative................................................................     56
     SECTION 5.11 Delay or Omission Not Waiver..................................................................     56
     SECTION 5.12 Control by Holders of Securities..............................................................     56
     SECTION 5.13 Waiver of Past Defaults.......................................................................     57
     SECTION 5.14 Undertaking for Costs.........................................................................     57
     SECTION 5.15 Waiver of Stay, Usury or Extension Laws.......................................................     57

ARTICLE VI THE TRUSTEE..........................................................................................     58

     SECTION 6.1 Certain Duties and Responsibilities............................................................     58
     SECTION 6.2 Notice of Defaults.............................................................................     58
     SECTION 6.3 Certain Rights of Trustee......................................................................     58
     SECTION 6.4 Not Responsible for Recitals or Issuance of Securities.........................................     60
     SECTION 6.5 May Hold Securities, Act as Trustee under Other Indentures.....................................     60
     SECTION 6.6 Money Held in Trust............................................................................     60
     SECTION 6.7 Compensation and Reimbursement.................................................................     61
     SECTION 6.8 Disqualification; Conflicting Interests........................................................     61
     SECTION 6.9 Corporate Trustee Required; Eligibility........................................................     61
     SECTION 6.10 Resignation and Removal; Appointment of Successor.............................................     62
     SECTION 6.11 Acceptance of Appointment by Successor........................................................     63
     SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business...................................     63
     SECTION 6.13 Preferential Collection of Claims Against Company.............................................     64
     SECTION 6.14 Authenticating Agents.........................................................................     64

ARTICLE VII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE................................................     66

     SECTION 7.1 Company May Consolidate, Etc. Only on Certain Terms............................................     66
     SECTION 7.2 Successor Substituted..........................................................................     66


                                      -ii-



                               TABLE OF CONTENTS
                                  (continued)



                                                                                                                    Page
                                                                                                                    ----
                                                                                                                 
ARTICLE VIII SUPPLEMENTAL INDENTURES.................................................................................67

         SECTION 8.1 Supplemental Indentures Without Consent of Holders of Securities................................67
         SECTION 8.2 Supplemental Indentures with Consent of Holders of Securities...................................68
         SECTION 8.3 Execution of Supplemental Indentures............................................................69
         SECTION 8.4 Effect of Supplemental Indentures...............................................................69
         SECTION 8.5 Reference in Securities to Supplemental Indentures..............................................69
         SECTION 8.6 Notice of Supplemental Indentures...............................................................70

ARTICLE IX MEETINGS OF HOLDERS OF SECURITIES.........................................................................70

         SECTION 9.1 Purposes for Which Meetings May Be Called.......................................................70
         SECTION 9.2 Call, Notice and Place of Meetings..............................................................70
         SECTION 9.3 Persons Entitled to Vote at Meetings............................................................70
         SECTION 9.4 Quorum; Action..................................................................................71
         SECTION 9.5 Determination of Voting Rights; Conduct and Adjournment of Meetings.............................71
         SECTION 9.6 Counting Votes and Recording Action of Meetings.................................................72

ARTICLE X COVENANTS..................................................................................................73

         SECTION 10.1 Payment of Principal, Premium and Interest.....................................................73
         SECTION 10.2 Maintenance of Offices or Agencies.............................................................73
         SECTION 10.3 Money for Security Payments to Be Held in Trust................................................74
         SECTION 10.4 Existence......................................................................................75
         SECTION 10.5 Maintenance of Properties......................................................................75
         SECTION 10.6 Payment of Taxes and Other Claims..............................................................75
         SECTION 10.7 Registration and Listing.......................................................................76
         SECTION 10.8 Statement by Officers as to Default............................................................76
         SECTION 10.9 Delivery of Certain Information................................................................76
         SECTION 10.10 Resale of Certain Securities..................................................................77
         SECTION 10.11 Registration Rights...........................................................................77
         SECTION 10.12 Waiver of Certain Covenants...................................................................78
         SECTION 10.13 Guarantee of Securities by Material Subsidiaries..............................................78

ARTICLE XI REDEMPTION OF SECURITIES..................................................................................79

         SECTION 11.1 Right of Redemption............................................................................79
         SECTION 11.2 Applicability of Article.......................................................................79
         SECTION 11.3 Election to Redeem; Notice to Trustee..........................................................79
         SECTION 11.4 Selection by Trustee of Securities to Be Redeemed..............................................79
         SECTION 11.5 Notice of Redemption...........................................................................80
         SECTION 11.6 Deposit of Redemption Price....................................................................81
         SECTION 11.7 Securities Payable on Redemption Date..........................................................81


                                     -iii-



                               TABLE OF CONTENTS
                                 (continued)



                                                                                                                     Page
                                                                                                                     ----
                                                                                                                  
         SECTION 11.8 Conversion Arrangement on Call for Redemption................................................  82

ARTICLE XII CONVERSION OF SECURITIES...............................................................................  82

         SECTION 12.1 Conversion Privilege and Conversion Rate.....................................................  82
         SECTION 12.2 Exercise of Conversion Privilege.............................................................  83
         SECTION 12.3 Fractions of Shares..........................................................................  84
         SECTION 12.4 Adjustment of Conversion Rate................................................................  85
         SECTION 12.5 Notice of Adjustments of Conversion Rate.....................................................  89
         SECTION 12.6 Notice of Certain Corporate Action...........................................................  90
         SECTION 12.7 Company to Reserve Common Stock..............................................................  91
         SECTION 12.8 Taxes on Conversions.........................................................................  91
         SECTION 12.9 Covenant as to Common Stock..................................................................  91
         SECTION 12.10 Cancellation of Converted Securities........................................................  91
         SECTION 12.11 Provision in Case of Consolidation, Merger or Sale of Assets................................  91
         SECTION 12.12 Rights Issued in Respect of Common Stock....................................................  93
         SECTION 12.13 Responsibility of Trustee for Conversion Provisions.........................................  93

ARTICLE XIII GUARANTEE.............................................................................................  94

         SECTION 13.1 Guarantee....................................................................................  94
         SECTION 13.2 Execution and Delivery of Guarantees.........................................................  95
         SECTION 13.3 Guarantors May Consolidate, Etc., on Certain Terms...........................................  96
         SECTION 13.4 Release of Guarantors........................................................................  96
         SECTION 13.5 Limitation on Guarantor Liability............................................................  96

ARTICLE XIV REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER UPON A CHANGE IN CONTROL..........................  97

         SECTION 14.1 Right to Require Repurchase..................................................................  97
         SECTION 14.2 Conditions to the Company's Election to Pay the Repurchase Price in Common Stock.............  97
         SECTION 14.3 Notices; Method of Exercising Repurchase Right, Etc..........................................  98
         SECTION 14.4 Certain Definitions.......................................................................... 101
         SECTION 14.5 Consolidation, Merger, etc................................................................... 102

ARTICLE XV HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE.......................................... 103

         SECTION 15.1 Company to Furnish Trustee Names and Addresses of Holders.................................... 103
         SECTION 15.2 Preservation of Information.................................................................. 103
         SECTION 15.3 Reports by Trustee........................................................................... 104
         SECTION 15.4 Reports by Company........................................................................... 104


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                              TABLE OF CONTENTS
                                 (continued)



                                                                                                                     Page
                                                                                                                     ----
                                                                                                                 
ARTICLE XVI IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS........................................ 104

         SECTION 16.1 Indenture and Securities Solely Corporate Obligations........................................ 104


                                      -v-



     INDENTURE, dated as of March 25, 2002, among AIRBORNE, INC., a corporation
duly organized and existing under the laws of the State of Delaware, having its
principal office at 3101 Western Avenue, Seattle, Washington 98111-0662 (herein
called the "Company"), AIRBORNE EXPRESS, INC., a corporation duly organized and
existing under the laws of the State of Delaware, having its principal office at
3101 Western Avenue, Seattle, Washington 98111-0662 (herein called "Airborne
Express"), ABX AIR, INC., a corporation duly organized and existing under the
laws of the State of Delaware, having its principal office at 145 Hunter Drive,
Wilmington, Ohio 45177 (herein called "ABX"), SKY COURIER, INC., a corporation
duly organized and existing under the laws of the State of Delaware, having its
principal office at 21240 Ridge Top Circle, Suite 160, Sterling, Virginia 20166
(herein called "Sky Courier"), WILMINGTON AIR PARK, INC., a corporation duly
organized and existing under the laws of the State of Ohio, having its principal
office at 145 Hunter Drive, Wilmington, Ohio 45177 (herein called "Wilmington"),
AIRBORNE FTZ, INC., a corporation duly organized and existing under the laws of
the State of Ohio, having its principal office at 145 Hunter Drive, Wilmington,
Ohio 45177 (herein called "FTZ"), AVIATION FUEL, INC., a corporation duly
organized and existing under the laws of the State of Ohio, having its principal
office at 145 Hunter Drive, Wilmington, Ohio 45177 (herein called "Fuel"), SOUND
SUPPRESSION, INC., a corporation duly organized and existing under the laws of
the State of Ohio, having its principal office at 145 Hunter Drive, Wilmington,
Ohio 45177 (herein called "Sound"), such other Persons who become Guarantors
pursuant to Section 10.13 after the date hereof, and THE BANK OF NEW YORK, a New
York banking corporation, as Trustee hereunder (herein called the "Trustee").

                   RECITALS OF THE COMPANY AND THE GUARANTORS

     The Company has duly authorized the creation of an issue of its 5.75%
Convertible Senior Notes due April 1, 2007 (herein called the "Securities") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.

     The Company, directly or indirectly, owns beneficially and of record 100%
of Airborne Express, ABX, Sky Courier, Wilmington, FTZ, Fuel and Sound; the
Company and the Guarantors are members of the same consolidated group of
companies and are engaged in related businesses; Airborne Express, ABX, Sky
Courier, Wilmington, FTZ, Fuel and Sound and each future Guarantor will derive
direct and indirect economic benefit from the issuance of the Securities;
accordingly, each of Airborne Express, ABX, Sky Courier, Wilmington, FTZ, Fuel
and Sound have, and each future Guarantor will have, duly authorized the
execution and delivery of this Indenture to provide for the guarantee by it with
respect to the Securities as set forth in this Indenture.

     All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder, the valid and
legally binding obligations of the Company, to make each Guarantee, when
executed by the applicable Guarantor and endorsed on the Securities, the valid
obligations of such Guarantor, and to make this Indenture a valid and legally
binding agreement of the Company and each of the Guarantors, in accordance with
their and its terms, have been done. Further, all things necessary to duly
authorize the issuance of the Common

                                      -1-



Stock of the Company issuable upon the conversion of the Securities, and to duly
reserve for issuance the number of shares of Common Stock issuable upon such
conversion, have been done.

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:

                                    ARTICLE I
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.1   Definitions.
              -----------

     For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:

     (1) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;

     (2) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and

     (3) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.

     "Act", when used with respect to any Holder of a Security, has the meaning
specified in Section 1.4.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

     "Agent Member" means any member of, or participant in, the Depositary.

     "Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of DTC or any successor Depository, in each case to the extent
applicable to such transaction and as in effect from time to time.

                                      -2-



     "Authenticating Agent" means any Person authorized pursuant to Section 6.14
to act on behalf of the Trustee to authenticate Securities.

     "Board of Directors" means, with respect to the Company, either the board
of directors of the Company or any duly authorized committee of that board and,
with respect to a Guarantor, either the board of directors of such Guarantor or
any duly authorized committee of that board.

     "Bankruptcy Code" means the U.S. Bankruptcy Code of 1978, as amended, 11
U.S.C.(S)(S)101-1330.

     "Board Resolution" means, with respect to the Company, a resolution duly
adopted by the Board of Directors, a copy of which, certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, shall have been delivered to the Trustee and, with respect to a
Guarantor, a resolution duly adopted by the Board of Directors, a copy of which,
certified by the Secretary or an Assistant Secretary of such Guarantor to have
been duly adopted by the Board of Directors and to be in full force and effect
on the date of such certification, shall have been delivered to the Trustee.

     "Business Day", when used with respect to any Place of Payment, Place of
Conversion or any other place, as the case may be, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in such Place of Payment, Place of Conversion or other place, as the case may
be, are authorized or obligated by law or executive order to close.

     "Change in Control" has the meaning specified in Section 14.4(2).

     "Closing Price Per Share" means, with respect to the Common Stock, for any
day, (i) the last reported sale price regular way per share or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices regular way per share, in either case, on the New York Stock
Exchange or, (ii) if the Common Stock is not listed on the New York Stock
Exchange, the last reported sale price regular way per share or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices regular way per share, in either case, on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading or, (iii) if the Common Stock is not listed on the New York Stock
Exchange or listed or admitted to trading on any national securities exchange,
the last reported sale price regular way per share or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
prices regular way per share, in either case, on the Nasdaq National Market or,
(iv) if the Common Stock is not listed on the New York Stock Exchange or listed
or admitted to trading on any national securities exchange or quoted on the
Nasdaq National Market, the average of the closing bid and asked prices per
share in the over-the-counter market as furnished by any New

                                      -3-



York Stock Exchange member firm selected from time to time by the Company for
that purpose. Closing Price Per Share shall be determined without reference to
extended after hours trading.

     "Code" has the meaning specified in Section 2.l.

     "Commission" means the United States Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.

     "Common Stock" means the Common Stock, par value $1.00 per share, of the
Company authorized at the date of this instrument as originally executed or as
such stock may be constituted from time to time. Subject to the provisions of
Section 12.11, shares issuable on conversion or repurchase of Securities shall
include only shares of Common Stock or shares of any class or classes of common
stock resulting from any reclassification or reclassifications thereof;
provided, however, that if at any time there shall be more than one such
resulting class, the shares so issuable on conversion of Securities shall
include shares of all such classes, and the shares of each such class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.

     "common stock" includes any stock of any class of capital stock which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the issuer
thereof and which is not subject to redemption by the issuer thereof.

     "Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.

     "Company Notice" has the meaning specified in Section 14.3.

     "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by (i) its Chairman of the Board, its Chief
Executive Officer, its President, an Executive Vice President, a Senior Vice
President or a Vice President, and by (ii) its principal financial officer,
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.

     "Consolidated" means the consolidation of accounts in accordance with U.S.
generally accepted accounting principles as in effect from time to time.

     "Constituent Person" has the meaning specified in Section 12.11.

                                      -4-



     "Conversion Agent" means any Person authorized by the Company to convert
Securities in accordance with Article XII. The Company has initially appointed
the Trustee as its Conversion Agent pursuant to Section 10.2 hereof.

     "Conversion Price" has the meaning specified in Section 14.4(3).

     "Conversion Rate" has the meaning specified in Section 12.1.

     "Corporate Trust Office" means the office of the Trustee at which at any
particular time the trust created by this Indenture shall be principally
administered (which at the date of this Indenture is located at 101 Barclay
Street, New York, New York 10286, Attention: Corporate Trust Administration
(Airborne, Inc., 5.75% Convertible Senior Notes due April 1, 2007)).

     "corporation" means a corporation, company, association, joint-stock
company or business trust.

     "Defaulted Interest" has the meaning specified in Section 3.7.

     "Depositary" means, with respect to any Securities (including any Global
Securities), a clearing agency that is registered as such under the Exchange Act
and is designated by the Company to act as Depositary for such Securities (or
any successor securities clearing agency so registered).

     "Domestic Subsidiary" means a Subsidiary that is organized under the laws
of any political subdivision of the United States.

     "Distribution Date" shall mean the "Distribution Date" as such term is
defined in the Registration Rights Agreement.

     "Dollar" or "U.S. $" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.

     "DTC" means The Depository Trust Company, a New York corporation.

     "Effective Failure" has the meaning specified in Section 2.2.

     "Effectiveness Period" has the meaning specified in Section 2.2.

     "Event of Default" has the meaning specified in Section 5.1.

     "Exchange Act" means the United States Securities Exchange Act of 1934 (or
any successor statute), as amended from time to time.

     "Global Security" means a Security that is registered in the Security
Register in the name of a Depositary or a nominee thereof.

                                      -5-



     "Guarantee" means a guarantee by a Guarantor on the terms set forth in
Article XIII.

     "Guarantor" means, unless released from their respective Guarantees as
permitted by Section 13.4 of this Indenture, Airborne Express, ABX, Sky Courier,
Wilmington, FTZ, Fuel, Sound and any Person that becomes a Guarantor pursuant to
Section 10.13 and their respective successors.

     "Holder" means the Person in whose name the Security is registered in the
Security Register.

     "Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively.

     "Initial Purchasers" mean Goldman, Sachs & Co. and First Union Securities,
Inc.

     "Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.

     "Issue Date" means March 25, 2002.

     "Liquidated Damages" has the meaning specified in Section 2.2.

     "Material Subsidiary" of a Person means each Domestic Subsidiary of such
Person to which as of the end of any fiscal quarter is attributed 5% of more of
the Consolidated total revenues or sales or assets of such Person and its
Subsidiaries, as shown on the Consolidated financial statements of such Person
and its Subsidiaries for such fiscal quarter or, in the case of any Subsidiary
of such Person that is acquired or is merged with or into any other Subsidiary
of such Person, determined by reference to the pro forma Consolidated financial
statements of such Person and its Subsidiaries prepared in accordance with U.S.
generally accepted accounting principles, as then in effect, as of the most
recent fiscal quarter of such Person, giving effect to such acquisition or
merger as if such transaction had been consummated as of the first day of such
fiscal quarter.

     "Maturity", when used with respect to any Security, means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, exercise of the repurchase right set forth in Article XIV or
otherwise.

     "Non-electing Share" has the meaning specified in Section 12.11.

     "Notice Date" has the meaning specified in Section 2.2.

     "Notice of Default" has the meaning specified in Section 5.1.

                                      -6-



     "Officers' Certificate" means, with respect to the Company, a certificate
signed by (i) the Chairman of the Board, the Chief Executive Officer, the
President, an Executive Vice President, a Senior Vice President or a Vice
President of the Company and by (ii) the principal financial officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee and, with respect to any Guarantor, a
certificate signed by (i) the Chairman of the Board, the Chief Executive
Officer, the President, an Executive Vice President, a Senior Vice President or
a Vice President of such Guarantor and by (ii) the principal financial officer,
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of such Guarantor, and delivered to the Trustee. One of the Officers signing an
Officers' Certificate given pursuant to Section 10.8 shall be the principal
executive, financial or accounting officer of the Company.

     "Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company.

     "Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:

          (i)     Securities theretofore canceled by the Trustee or delivered to
                  the Trustee for cancellation;

          (ii)    Securities for the payment or redemption of which money in the
                  necessary amount has been theretofore deposited with the
                  Trustee or any Paying Agent (other than the Company or the
                  Guarantors) in trust or set aside and segregated in trust by
                  the Company (if the Company shall act as its own Paying Agent)
                  for the Holders of such Securities, provided that if such
                  Securities are to be redeemed, notice of such redemption has
                  been duly given pursuant to this Indenture or provision
                  therefor satisfactory to the Trustee has been made;

          (iii)   Securities which have been paid pursuant to Section 3.6 or in
                  exchange for or in lieu of which other Securities have been
                  authenticated and delivered pursuant to this Indenture, other
                  than any such Securities in respect of which there shall have
                  been presented to the Trustee proof satisfactory to it that
                  such Securities are held by a bona fide purchaser in whose
                  hands such Securities are valid obligations of the Company;
                  and

          (iv)    Securities converted into Common Stock pursuant to Article
                  XII;

provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of Holders
of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any Guarantor or any other obligor upon the Securities or any
Affiliate of the Company or any Guarantor or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such determination as
to the presence of a quorum or upon any such request, demand, authorization,

                                      -7-



direction, notice, consent or waiver, only Securities which a Responsible
Officer of the Trustee has been notified in writing to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee is not the Company or any Guarantor or
any other obligor upon the Securities or any Affiliate of the Company or any
Guarantor or such other obligor, and the Trustee shall be protected in relying
upon an Officer's Certificate to such effect.

     "Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company and, except
as otherwise specifically set forth herein, such term shall include the Company
if it shall act as its own Paying Agent. The Company has initially appointed the
Trustee as its Paying Agent pursuant to Section 10.2 hereof.

     "Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.

     "Place of Conversion" has the meaning specified in Section 3.1.

     "Place of Payment" has the meaning specified in Section 3.1.

     "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

     "Purchase Agreement" means the Purchase Agreement, dated as of March 19,
2002, among the Company, the Guarantors and the Initial Purchasers, as such
agreement may be amended from time to time.

     "Qualified Institutional Buyer" shall mean a "qualified institutional
buyer" as defined in Rule 144A.

     "Press Release" means any press release issued by the Company and
disseminated to Reuters Business News Services and Bloomberg News Services.

     "Record Date" means any Regular Record Date or Special Record Date.

     "Record Date Period" means the period from the close of business of any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date.

     "Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.

                                      -8-



     "Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.

     "Registrable Securities" has the meaning specified in Section 10.11.

     "Registration Default" has the meaning specified in Section 2.2.

     "Registration Rights Agreement" means the Registration Rights Agreement,
dated as of March 25, 2002, among the Company, the Guarantors and the Initial
Purchasers, as such agreement may be amended from time to time.

     "Regular Record Date" for interest payable in respect of any Security on
any Interest Payment Date means the March 15 or September 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.

     "Repurchase Date" has the meaning specified in Section 14.1.

     "Repurchase Price" has the meaning specified in Section 14.1.

     "Responsible Officer", when used with respect to the Trustee, means any
officer within the Corporate Trust Office of the Trustee with direct
responsibility for the administration of this Indenture and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge and familiarity with the particular
subject.

     "Restricted Global Security" has the meaning specified in Section 2.1.

     "Restricted Securities" means all Securities required pursuant to Section
3.5(3) to bear any Restricted Securities Legend. Such term includes the
Restricted Global Security.

     "Restricted Securities Legend" means, collectively, the legends
substantially in the forms of the legends required in the form of Security set
forth in Section 2.2 to be placed upon each Restricted Security.

     "Rule 144" means Rule 144 under the Securities Act (or any successor
provision), as it may be amended from time to time.

     "Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.

     "Rule 144A Information" has the meaning specified in Section 10.9.

     "Securities" has the meaning ascribed to it in the first paragraph under
the caption "Recitals of the Company".

                                      -9-



     "Securities Act" means the United States Securities Act of 1933 (or any
successor statute), as amended from time to time.

     "Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5.

     "Shelf Registration Statement" has the meaning specified in Section 10.11.

     "Significant Subsidiary" means, with respect to any Person, a Subsidiary of
such Person that would constitute a "significant subsidiary" as such term is
defined under Rule 1-02 of Regulation S-X under the Securities Act and the
Exchange Act.

     "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Company pursuant to Section 3.7.

     "Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.

     "Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock or other similar
interests in the corporation which ordinarily has or have voting power for the
election of directors, or persons performing similar functions, whether at all
times or only so long as no senior class of stock or other interests has or have
such voting power by reason of any contingency.

     "Successor Security" of any particular Security means every Security issued
after, and evidencing all or a portion of the same debt as that evidenced by,
such particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

     "Surrender Certificate" means a certificate substantially in the form set
forth in Annex B.

     "Trading Day" means (i) if the Common Stock is listed or admitted for
trading on any national or regional securities exchange, days on which such
national or regional securities exchange is open for business, (ii) if the
Common Stock is quoted on the Nasdaq National Market or any other system of
automated dissemination of quotations of securities prices, days on which trades
may be effected through such system, or (iii) if the Common Stock is not listed
on a national or regional securities exchange or quoted on the Nasdaq National
Market or any other system of automated dissemination of quotation of securities
prices, days on which the Common Stock is traded regular way in the
over-the-counter market and for which a closing bid and a closing asked price
for the Common Stock are available.

                                      -10-



     "Trust Indenture Act" means the Trust Indenture Act of 1939, and the rules
and regulations thereunder, as in force at the date as of which this instrument
was executed, provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939, and the rules
and regulations thereunder, as so amended.

     "Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.

     "United States" means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction (its "possessions" including Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).

     "Unrestricted Securities Certificate" means a certificate substantially in
the form set forth in Annex A.

SECTION 1.2     Compliance Certificates And Opinions.
                ------------------------------------

     Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.

     Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (including certificates provided for in
Section 10.8) shall include:

     (1)   a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;

     (2)   a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

     (3)   a statement that, in the opinion of such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

     (4)   a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.

                                      -11-



SECTION 1.3    Form of Documents Delivered to the Trustee.
               ------------------------------------------

     In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

     Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company or any other Person
stating that the information with respect to such factual matters is in the
possession of the Company or such other Person, unless such counsel knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

     Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

 SECTION 1.4   Acts of Holders of Securities.
               -----------------------------

     (1) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders of Securities may be embodied in and evidenced by (A) one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent or proxy duly appointed in writing by such Holders or (B) the record
of Holders of Securities voting in favor thereof, either in person or by proxies
duly appointed in writing, at any meeting of Holders of Securities duly called
and held in accordance with the provisions of Article IX. Such action shall
become effective when such instrument or instruments or record is delivered to
the Trustee and, where it is hereby expressly required, to the Company. The
Trustee shall promptly deliver to the Company copies of all such instruments and
records delivered to the Trustee. Such instrument or instruments and records
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders of Securities signing such instrument or
instruments and so voting at such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent or proxy, or of the holding
by any Person of a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company if made in the manner provided in this Section. The record of any
meeting of Holders of Securities shall be proved in the manner provided in
Section 9.6.

                                      -12-



     (2)  The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.

     (3)  The principal amount and serial number of any Security held by any
Person, and the date of his holding the same, shall be proved by the Security
Register.

     (4)  The fact and date of execution of any such instrument or writing and
the authority of the Person executing the same may also be proved in any other
manner which the Trustee deems sufficient; and the Trustee may in any instance
require further proof with respect to any of the matters referred to in this
Section 1.4.

     (5)  The Company may set any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted by this Indenture to be given or taken by
Holders. Promptly and in any case not later than ten days after setting a record
date, the Company shall notify the Trustee and the Holders of such record date.
If not set by the Company prior to the first solicitation of a Holder made by
any Person in respect of any such action, or, in the case of any such vote,
prior to such vote, the record date for any such action or vote shall be the
30th day (or, if later, the date of the most recent list of Holders required to
be provided pursuant to Section 15.1) prior to such first solicitation or vote,
as the case may be. With regard to any record date, the Holders on such date (or
their duly appointed agents or proxies), and only such Persons, shall be
entitled to give or take, or vote on, the relevant action, whether or not such
Holders remain Holders after such record date. Notwithstanding the foregoing,
the Company shall not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any notice, declaration or direction
referred to in the next paragraph.

     Upon receipt by the Trustee from any Holder of (i) any notice of default or
breach referred to in Section 5.1(4), if such default or breach has occurred and
is continuing and the Trustee shall not have given such a notice to the Company,
(ii) any declaration of acceleration referred to in Section 5.2, if an Event of
Default has occurred and is continuing and the Trustee shall not have given such
a declaration to the Company, or (iii) any direction referred to in Section
5.12, if the Trustee shall not have taken the action specified in such
direction, then, with respect to clauses (ii) and (iii), a record date shall
automatically and without any action by the Company or the Trustee be set for
determining the Holders entitled to join in such declaration or direction, which
record date shall be the close of business on the tenth day (or, if such day is
not a Business Day, the first Business Day thereafter) following the day on
which the Trustee receives such declaration or direction, and, with respect to
clause (i), the Trustee may set any day as a record date for the purpose of
determining the Holders entitled to join in such notice of default. Promptly
after such receipt by the Trustee of any such declaration or direction referred
to in clause (ii) or (iii), and promptly after setting any record date with
respect to clause (i), and as soon as practicable thereafter, the Trustee

                                      -13-



shall notify the Company and the Holders of any such record date so fixed. The
Holders on such record date (or their duly appointed agents or proxies), and
only such Persons, shall be entitled to join in such notice, declaration or
direction, whether or not such Holders remain Holders after such record date;
provided that, unless such notice, declaration or direction shall have become
effective by virtue of Holders of the requisite principal amount of Securities
on such record date (or their duly appointed agents or proxies) having joined
therein on or prior to the 90th day after such record date, such notice,
declaration or direction shall automatically and without any action by any
Person be canceled and of no further effect. Nothing in this paragraph shall be
construed to prevent a Holder (or a duly appointed agent or proxy thereof) from
giving, before or after the expiration of such 90-day period, a notice,
declaration or direction contrary to or different from, or, after the expiration
of such period, identical to, the notice, declaration or direction to which such
record date relates, in which event a new record date in respect thereof shall
be set pursuant to this paragraph. In addition, nothing in this paragraph shall
be construed to render ineffective any notice, declaration or direction of the
type referred to in this paragraph given at any time to the Trustee and the
Company by Holders (or their duly appointed agents or proxies) of the requisite
principal amount of Securities on the date such notice, declaration or direction
is so given.

     (6)  Except as provided in Sections 5.12 and 5.13, any request, demand,
authorization, direction, notice, consent, election, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and
the Holder of every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.

     (7)  The provisions of this Section 1.4 are subject to the provisions of
Section 9.5.

SECTION 1.5   Notices, Etc to the Trustee, the Company and the Guarantors.
              -----------------------------------------------------------

     Any request, demand, authorization, direction, notice, consent, election,
waiver or other Act of Holders of Securities or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,

     (1)  the Trustee by any Holder of Securities or by the Company or by any
Guarantor shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing (which may be via facsimile) to or with a
Responsible Officer of the Trustee and received at its Corporate Trust Office,
Attention: Corporate Trust Administration (Airborne, Inc., 5.75% Convertible
Senior Notes due April 1, 2007).

     (2)  the Company or any Guarantor by the Trustee or by any Holder of
Securities shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing, mailed, first-class postage prepaid,
or telecopied and confirmed by mail, first-class postage prepaid, or delivered
by hand or overnight courier, in the case of the Company, addressed to the
Company at the address of its principal office specified in the first paragraph
of this instrument, Attention: Chief Financial Officer, or at any other address
previously furnished in writing to the Trustee by the

                                      -14-



Company and, in the case of a Guarantor, addressed to such Guarantor at the
address of its principal office specified in the first paragraph of this
instrument, Attention: President, or at any other address previously furnished
in writing to the Trustee by such Guarantor.

SECTION 1.6       Notice to Holders of Securities; Waiver.
                  ---------------------------------------

     Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event, such notice shall be
sufficiently given to Holders if in writing and mailed, first-class postage
prepaid or delivered by an overnight delivery service, to each Holder of a
Security affected by such event, at the address of such Holder as it appears in
the Security Register, not earlier than the earliest date and not later than the
latest date prescribed for the giving of such notice.

     Neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Security shall affect the sufficiency of
such notice with respect to other Holders of Securities. In case by reason of
the suspension of regular mail service or by reason of any other cause it shall
be impracticable to give such notice by mail, then such notification to Holders
of Securities as shall be made with the approval of the Trustee, which approval
shall not be unreasonably withheld, shall constitute a sufficient notification
to such Holders for every purpose hereunder.

     Such notice shall be deemed to have been given when such notice is
mailed.

     Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.

SECTION 1.7       Effect of Headings and Table of Contents.
                  ----------------------------------------

     The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

 SECTION 1.8      Successors and Assigns.
                  ----------------------

     All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not, and all covenants and
agreements in this Indenture by a Guarantor shall bind such Guarantor's
successors, whether so expressed or not.

                                      -15-



SECTION 1.9   Separability Clause.
              -------------------

     In case any provision in this Indenture, the Securities or the Guarantees
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

SECTION 1.10  Benefits of Indenture.
              ---------------------

     Except as provided in the next sentence, nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors and assigns hereunder and the Holders of
Securities, any benefit or legal or equitable right, remedy or claim under this
Indenture.

SECTION 1.11  Governing Law.
              -------------

     THIS INDENTURE, THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED
STATES OF AMERICA.

SECTION 1.12  Legal Holidays.
              --------------

     In any case where any Interest Payment Date, Redemption Date, Repurchase
Date or Stated Maturity of any Security or the last day on which a Holder of a
Security has a right to convert his Security shall not be a Business Day at a
Place of Payment or Place of Conversion, as the case may be, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of principal of, premium, if any, or interest on, or the payment of the
Redemption Price or Repurchase Price (whether the same is payable in cash or in
shares of Common Stock in the case of the Repurchase Price) with respect to, or
delivery for conversion of, such Security need not be made at such Place of
Payment or Place of Conversion, as the case may be, on or by such day, but may
be made on or by the next succeeding Business Day at such Place of Payment or
Place of Conversion, as the case may be, with the same force and effect as if
made on the Interest Payment Date, Redemption Date or Repurchase Date, or at the
Stated Maturity or by such last day for conversion; provided, however, that in
the case that payment is made on such succeeding Business Day, no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date, Redemption Date, Repurchase Date, Stated Maturity or last day for
conversion, as the case may be.

SECTION 1.13  Conflict With Trust Indenture Act.
              ---------------------------------

     If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
Until such time as this Indenture

                                      -16-



shall be qualified under the Trust Indenture Act, this Indenture, the Company
and the Trustee shall be deemed for all purposes hereof to be subject to and
governed by the Trust Indenture Act to the same extent as would be the case if
this Indenture were so qualified on the date hereof.

                                   ARTICLE II
                          SECURITY AND GUARANTEE FORMS

SECTION 2.1  Form Generally.
             --------------

     The Securities and the Guarantees to be endorsed thereon shall be in
substantially the form set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange, the Internal
Revenue Code of 1986, as amended, and regulations thereunder (the "Code"), or as
may, consistent herewith, be determined by the officers executing such
Securities or Guarantees, as the case may be, as evidenced by their execution
thereof. All Securities shall be in fully registered form.

     The Trustee's certificates of authentication shall be in substantially the
form set forth in Section 2.3.

     The Securities shall be endorsed with the Guarantees in substantially the
form set forth in Section 2.6.

     Conversion notices shall be in substantially the form set forth in Section
2.4.

     Repurchase notices shall be substantially in the form set forth in Section
2.2.

     The Securities and the Guarantees to be endorsed thereon shall be printed,
lithographed, typewritten or engraved or produced by any combination of these
methods or may be produced in any other manner permitted by the rules of any
automated quotation system or securities exchange (including on steel engraved
borders if so required by any securities exchange upon which the Securities may
be listed) on which the Securities may be quoted or listed, as the case may be,
all as determined by the officers executing such Securities or Guarantees, as
the case may be, as evidenced by their execution thereof.

     Upon their original issuance, Securities issued as contemplated by the
Purchase Agreement to Qualified Institutional Buyers in reliance on Rule 144A
shall be issued in the form of one or more Global Securities in definitive,
fully registered form without interest coupons and bearing the Restricted
Securities Legend. Such Global Security shall be registered in the name of DTC,
as Depositary, or its nominee and deposited with the Trustee, as custodian for
DTC, for credit by DTC to the respective accounts of beneficial owners of the
Securities represented thereby (or such other accounts as they may direct). Such
Global Security, together with its Successor Securities which are Global
Securities, are collectively herein called the "Restricted Global Security".

                                      -17-



SECTION 2.2  Form of Security.
             ----------------

                                 [FORM OF FACE]

     [THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED SECURITY:

THIS NOTE AND THE RELATED GUARANTEES AND ANY COMMON STOCK ISSUABLE UPON THE
CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE AND THE RELATED GUARANTEES IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THIS NOTE AND THE RELATED GUARANTEES AND ANY COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.

THIS NOTE, THE RELATED GUARANTEES, ANY SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS NOTE AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS NOTE, THE RELATED GUARANTEES AND ANY SUCH SHARES TO REFLECT
ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN
PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY.
THE HOLDER OF THIS NOTE, THE RELATED GUARANTEES AND ANY SUCH SHARES SHALL BE
DEEMED BY THE

                                      -18-



ACCEPTANCE OF THIS NOTE, THE RELATED GUARANTEES AND ANY SUCH SHARES TO HAVE
AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.]

     [THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A
NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND
ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE
INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.]

                                      -19-



                                 AIRBORNE, INC.,

                 5.75% CONVERTIBLE SENIOR NOTE DUE April 1, 2007
No.________________                                            $_______________

CUSIP NO. 009269AA9

         AIRBORNE, INC., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company", which term includes
any successor Person under the Indenture referred to on the reverse hereof), for
value received, hereby promises to pay to _________________, or registered
assigns, the principal sum of ________ United States Dollars (U.S.$______ ) [if
this Security is a Global Security, then insert -- (which principal amount may
from time to time be increased or decreased to such other principal amounts
(which, taken together with the principal amounts of all other Outstanding
Securities, shall not exceed $125,000,000 (plus, in the event that Goldman,
Sachs & Co. exercises its option to purchase up to $25,000,000 additional
principal amount of Securities pursuant to Section 2 of the Purchase Agreement,
such additional principal amount of Securities purchased by Goldman, Sachs &
Co., which shall not exceed $25,000,000) by adjustments made on the records of
the Trustee hereinafter referred to in accordance with the Indenture)] on April
1, 2007 and to pay interest thereon, from March 25, 2002, or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, semi-annually in arrears on April 1 and October 1 in each
year (each, an "Interest Payment Date"), commencing October 1, 2002, at the rate
of 5.75% per annum, until the principal hereof is due, and at the rate of 5.75%
per annum on any overdue principal and premium, if any, and, to the extent
permitted by law, on any overdue interest. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the March 15 or
September 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Except as otherwise provided in the Indenture, any
such interest not so punctually paid or duly provided for will forthwith cease
to be payable to the Holder on such Regular Record Date and may either be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Company, notice
whereof shall be given to Holders of Securities not less than 10 days prior to
the Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any automated quotation system or
securities exchange on which the Securities may be quoted or listed, and upon
such notice as may be required by such exchange, all as more fully provided in
the Indenture. Payments of principal shall be made upon the surrender of this
Security at the option of the Holder at the Corporate Trust Office of the
Trustee, or at such other office or agency of the Company as may be designated
by it for such purpose in the Borough of Manhattan, The City of New York, in
such lawful monies of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts,

                                      -20-



or at such other offices or agencies as the Company may designate, by United
States Dollar check drawn on, or wire transfer to, a United States Dollar
account (such a transfer to be made only to a Holder of an aggregate principal
amount of Securities in excess of U.S.$2,000,000 and only if such Holder shall
have furnished wire instructions in writing to the Trustee no later than 15 days
prior to the relevant payment date). Payment of interest on this Security may be
made by United States Dollar check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register, or, upon written
application by the Holder to the Security Registrar setting forth wire
instructions not later than the relevant Record Date, by transfer to a United
States Dollar account (such a transfer to be made only to a Holder of an
aggregate principal amount of Securities in excess of U.S. $2,000,000 and only
if such Holder shall have furnished wire instructions in writing to the Trustee
no later than 15 days prior to the relevant payment date).

     Except as specifically provided herein and in the Indenture, the Company
shall not be required to make any payment with respect to any tax, assessment or
other governmental charge imposed by any government or any political subdivision
or taxing authority thereof or therein.

     Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof or an Authenticating Agent by the
manual signature of one of their respective authorized signatories, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                      -21-



IN WITNESS WHEREOF, the Company has caused this Security to be duly executed.


                                           AIRBORNE, INC.,

                                           By:_________________________________
                                           Name:
                                           Title:

Attest:


By: _____________________________
Name:
Title:



TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to in the within-mentioned Indenture.

Dated:


THE BANK OF NEW YORK,
as Trustee


By:  _______________________________________
               Authorized Signatory

                                      -22-



                                [FORM OF REVERSE]

     This Security is one of a duly authorized issue of securities of the
Company designated as its "5.75% Convertible Senior Notes due April 1, 2007"
(herein called the "Securities"), limited in aggregate principal amount to U.S.
$125,000,000 (plus, in the event that Goldman, Sachs & Co. exercises its option
to purchase up to $25,000,000 additional principal amount of Securities pursuant
to Section 2 of the Purchase Agreement, such additional principal amount of
Securities purchased by Goldman, Sachs & Co., which shall not exceed
$25,000,000), issued and to be issued under an Indenture, dated as of March 25,
2002 (herein called the "Indenture"), among the Company, the Guarantors (as
defined therein) and The Bank of New York, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Guarantors, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. As provided in the Indenture and subject
to certain limitations therein set forth, Securities are exchangeable for a like
aggregate principal amount of Securities of any authorized denominations as
requested by the Holder surrendering the same upon surrender of the Security or
Securities to be exchanged, at the Corporate Trust Office of the Trustee. The
Trustee upon such surrender by the Holder will issue the new Securities in the
requested denominations.

     No sinking fund is provided for the Securities.

     The Securities are also subject to redemption at the option of the Company
at any time on or after April 1, 2005, in whole or in part, upon not less than
30 nor more than 60 days' notice to the Holders prior to the Redemption Date at
the Redemption Prices (expressed as percentages of the principal amount) as set
forth below for Securities redeemed during the following periods described
below:

                     PERIOD                        REDEMPTION PRICE
       ----------------------------------      -----------------------
          Beginning on April 1, 2005
          through March 31, 2006                       102.30%

          Beginning on April 1, 2006
          through March 31, 2007                       101.15%

and thereafter at a Redemption Price equal to 100% of the principal amount,
together, in each case, with accrued interest to, but excluding, the Redemption
Date; provided, however, that interest installments on Securities whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.

     In the event of a redemption of the Securities, the Company will not be
required (a) to register the transfer or exchange of Securities for a period of
15 days immediately preceding the date

                                      -23-



notice is given identifying the serial numbers of the Securities called for such
redemption or (b) to register the transfer or exchange of any Security, or
portion thereof, called for redemption.

     In any case where the due date for the payment of the principal of,
premium, if any, interest, or Liquidated Damages on any Security or the last day
on which a Holder of a Security has a right to convert his Security shall be, at
any Place of Payment or Place of Conversion as the case may be, a day on which
banking institutions at such Place of Payment or Place of Conversion are
authorized or obligated by law or executive order to close, then payment of
principal, premium, if any, interest, or Liquidated Damages, or delivery for
conversion of such Security need not be made on or by such date at such place
but may be made on or by the next succeeding day at such place which is not a
day on which banking institutions are authorized or obligated by law or
executive order to close, with the same force and effect as if made on the date
for such payment or the date fixed for redemption or repurchase, or by such last
day for conversion, and no interest shall accrue on the amount so payable for
the period after such date.

     Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at his option, at any time on or before the
close of business on the date of Maturity, or in case this Security or a portion
hereof is called for redemption or the Holder hereof has exercised his right to
require the Company to repurchase this Security or such portion hereof, then in
respect of this Security until the Business Day immediately preceding, but
(unless the Company defaults in making the payment due upon redemption or
repurchase, as the case may be) not after, the close of business on the Business
Day immediately preceding the Redemption Date or the Repurchase Date, as the
case may be, to convert this Security (or any portion of the principal amount
hereof that is an integral multiple of U.S.$1,000, provided that the unconverted
portion of such principal amount is U.S.$1,000 or any integral multiple of
U.S.$1,000 in excess thereof) into fully paid and nonassessable shares of Common
Stock of the Company at an initial Conversion Rate of 42.7599 shares of Common
Stock for each U.S.$1,000 principal amount of Securities (or at the current
adjusted Conversion Rate if an adjustment has been made as provided in the
Indenture) by surrender of this Security, duly endorsed or assigned to the
Company or in blank and, in case such surrender shall be made during the Record
Date Period (except if this Security or portion thereof has been called for
redemption on a Redemption Date or is repurchasable on a Repurchase Date
occurring, in either case, during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the close of
business on the second Business Day following such Interest Payment Date and, as
a result, the right to convert this Security would otherwise terminate in such
period if not exercised), also accompanied by payment in New York Clearing House
or other funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of this Security
then being converted, and also the conversion notice hereon duly executed, to
the Company at the Corporate Trust Office of the Trustee, or at such other
office or agency of the Company, subject to any laws or regulations applicable
thereto and subject to the right of the Company to terminate the appointment of
any Conversion Agent (as defined below) as may be designated by it for such
purpose in the Borough of Manhattan, The City of New York, or at such other
offices or agencies as the Company may designate (each a "Conversion Agent"),
provided, further, that if this Security or portion hereof has been called for
redemption on a Redemption Date or is repurchasable on a Repurchase Date

                                      -24-



occurring, in either case, during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the close of
business on the second Business Day following such Interest Payment Date, and as
a result, the right to convert this Security would otherwise terminate in such
period if not exercised and this Security is surrendered for conversion during
such period, then the Holder of this Security on such Regular Record Date will
be entitled to receive the interest accruing hereon from the Interest Payment
Date next preceding the date of such conversion to such succeeding Interest
Payment Date and the Holder of this Security who converts this Security or a
portion hereof during such period shall not be required to pay such interest
upon surrender of this Security for conversion. Subject to the provisions of the
preceding sentence and, in the case of a conversion after the close of business
on the Regular Record Date next preceding any Interest Payment Date and on or
before the close of business on such Interest Payment Date, to the right of the
Holder of this Security (or any Predecessor Security of record as of such
Regular Record Date) to receive the related installment of interest to the
extent and under the circumstances provided in the Indenture, no cash payment or
adjustment is to be made on conversion for interest accrued hereon from the
Interest Payment Date next preceding the day of conversion, or for dividends on
the Common Stock issued on conversion hereof. The Company shall thereafter
deliver to the Holder the fixed number of shares of Common Stock (together with
any cash adjustment, as provided in the Indenture) into which this Security is
convertible and such delivery will be deemed to satisfy the Company's obligation
to pay the principal amount of this Security. No fractions of shares or scrip
representing fractions of shares will be issued on conversion, but instead of
any fractional interest (calculated to the nearest 1/100th of a share) the
Company shall pay a cash adjustment as provided in the Indenture. The Conversion
Rate is subject to adjustment as provided in the Indenture. In addition, the
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party (other than a consolidation or merger that does not
result in any reclassification, conversion, exchange or cancellation of the
Common Stock) or the conveyance, transfer, sale or lease of all or substantially
all of the property and assets of the Company, the Indenture shall be amended,
without the consent of any Holders of Securities, so that this Security, if then
Outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, transfer, sale or lease by a holder of the number of shares of
Common Stock of the Company into which this Security could have been converted
immediately prior to such consolidation, merger, conveyance, transfer, sale or
lease (assuming such holder of Common Stock is not a Constituent Person or an
Affiliate of a Constituent Person, failed to exercise any rights of election and
received per share the kind and amount received per share by a plurality of
Non-electing Shares). No adjustment in the Conversion Rate will be made until
such adjustment would require an increase or decrease of at least one percent of
such rate, provided that any adjustment that would otherwise be made will be
carried forward and taken into account in the computation of any subsequent
adjustment.

     If this Security is a Registrable Security (as defined in this Indenture),
then the Holder of this Security [if this security is a global security, then
insert -- (including any Person that has a beneficial interest in this
Security)] and the Common Stock of the Company issuable upon conversion hereof
is entitled to the benefits of a Registration Rights Agreement, dated as of
March 25, 2002, executed by the Company and the Guarantors (the "Registration
Rights Agreement").

                                      -25-



Pursuant to the Registration Rights Agreement, the Company and the Guarantors
have agreed for the benefit of the Holders from time to time of the Registrable
Securities that they will, at their expense, (a) within 90 days after the Issue
Date file a shelf registration statement (the "Shelf Registration Statement")
with the Commission with respect to resales of the Registrable Securities, (b)
use their best efforts to cause such Shelf Registration Statement to be declared
effective by the Commission within 180 days after the Issue Date of the
Securities, provided, however, that the Company may, upon written notice to all
the Holders, postpone having the Shelf Registration Statement declared effective
for a reasonable period not to exceed 90 days if the Board of Directors of the
Company shall have determined in good faith that because of valid business
reasons (not including avoidance of the Company's obligations under the
Registration Rights Agreement), including the acquisition or divestiture of
assets, pending corporate developments and similar events, it is in the best
interests of the Company to postpone having the Shelf Registration Statement
declared effective, and (c) use their best efforts to maintain such Shelf
Registration Statement effective under the Securities Act of 1933, as amended,
until the earliest of two years after the effective date of the Shelf
Registration Statement, the expiration of the period referred to in Rule 144 (k)
of the Securities Act with respect to Registrable Securities held by
non-affiliates of the Company or until there are no outstanding Registrable
Securities (the "Effectiveness Period"). The Company will be permitted to
suspend the use of the prospectus which is part of the Shelf Registration
Statement during certain periods of time as provided in the Registration Rights
Agreement.

     If (i) on or prior to 90 days following the Issue Date, a Shelf
Registration Statement has not been filed with the Commission, or (ii) on or
prior to the 180th day following the Issue Date, such Shelf Registration
Statement is not declared effective (each, a "Registration Default"), additional
interest ("Liquidated Damages") will accrue on this Restricted Security from and
including the day following such Registration Default to but excluding the day
on which such Registration Default has been cured. Liquidated Damages will be
paid semi-annually in arrears, with the first semi-annual payment due on the
first Interest Payment Date, as applicable, in respect of the Restricted
Securities following the date on which such Liquidated Damages begin to accrue,
and will accrue at a rate per annum equal to one-quarter of one percent (0.25%)
of the principal amount of the Restricted Securities to and including the 90th
day following such Registration Default and at a rate per annum equal to
one-half of one percent (0.50%) thereof from and after the 91st day following
such Registration Default. Pursuant to the Registration Rights Agreement, in the
event that the Shelf Registration Statement ceases to be effective (or the
Holders of Registrable Securities are otherwise prevented or restricted by the
Company from effecting sales pursuant thereto) (an "Effective Failure") during
the Effectiveness Period for more than 30 days, whether or not consecutive,
during any 90-day period or for more than 90 days, whether or not consecutive,
during any 12-month period, then the interest rate borne by the Restricted
Securities shall increase by an additional one-half of one percent (0.50%) per
annum from the 31st day of the applicable 90-day period or the 91st day of the
applicable 12-month period until the earlier of (A) such time as the Effective
Failure is cured or (B) the Effectiveness Period expires.

     Whenever in this Security there is a reference, in any context, to the
payment of the principal of, premium, if any, or interest on, or in respect of,
any Security, such mention shall be deemed to include mention of the payment of
Liquidated Damages payable as described in the preceding

                                      -26-



paragraph to the extent that, in such context, Liquidated Damages are, were or
would be payable in respect of such Security and express mention of the payment
of Liquidated Damages (if applicable) in any provisions of this Security shall
not be construed as excluding Liquidated Damages in those provisions of this
Security where such express mention is not made.

     [If this Security is a Registrable Security and the Holder of this Security
[if this security is a global security, then insert -- (including any Person
that has a beneficial interest in this Security)] elects to sell this Security
pursuant to the Shelf Registration Statement then, by its acceptance hereof,
such Holder of this Security agrees to be bound by the terms of the Registration
Rights Agreement relating to the Registrable Securities which are the subject of
such election.]

     If a Change in Control occurs, the Holder of this Security, at the Holder's
option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that is at least $1,000 or an integral multiple of
$1,000 in excess thereof, provided that the portion of the principal amount of
this Security to be Outstanding after such repurchase is at least equal to
U.S.$1,000) at a Repurchase Price equal to 100% of the principal amount thereof
plus interest accrued to the Repurchase Date. At the option of the Company, the
Repurchase Price may be paid in cash or, subject to the conditions provided in
the Indenture, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price. For purposes of this paragraph, the fair market
value of shares of Common Stock shall be determined by the Company and shall be
equal to 95% of the average of the Closing Prices Per Share for the five
consecutive Trading Days immediately preceding and including the third Trading
Day prior to the Repurchase Date. Whenever in this Security there is a
reference, in any context, to the principal of any Security as of any time, such
reference shall be deemed to include reference to the Repurchase Price payable
in respect of such Security to the extent that such Repurchase Price is, was or
would be so payable at such time, and express mention of the Repurchase Price in
any provision of this Security shall not be construed as excluding the
Repurchase Price so payable in those provisions of this Security when such
express mention is not made; provided, however, that, for the purposes of the
second succeeding paragraph, such reference shall be deemed to include reference
to the Repurchase Price only to the extent the Repurchase Price is payable in
cash.

     [The following paragraph shall appear in each Global Security:

     In the event of a deposit or withdrawal of an interest in this Security,
including an exchange, transfer, redemption, repurchase or conversion of this
Security in part only, the Trustee, as custodian of the Depositary, shall make
an adjustment on its records to reflect such deposit or withdrawal in accordance
with the Applicable Procedures.]

     [The following paragraph shall appear in each Security that is not a Global
Security:

     In the event of redemption, repurchase or conversion of this Security in
part only, a new Security or Securities for the unredeemed, unrepurchased or
unconverted portion hereof will be issued in the name of the Holder hereof.]

                                      -27-



     If an Event of Default shall occur and be continuing, the principal of all
the Securities, together with accrued interest to the date of declaration, may
be declared due and payable in the manner and with the effect provided in the
Indenture. Upon payment (i) of the amount of principal so declared due and
payable, together with accrued interest to the date of declaration, and (ii) of
interest on any overdue principal and, to the extent permitted by applicable
law, overdue interest, all of the Company's obligations in respect of the
payment of the principal of and interest on the Securities shall terminate.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with either (a) the written consent of
the Holders of not less than a majority in principal amount of the Securities at
the time Outstanding, or (b) by the adoption of a resolution, at a meeting of
Holders of the Outstanding Securities at which a quorum is present, by the
Holders of at least 662/3% in aggregate principal amount of the Outstanding
Securities represented and entitled to vote at such meeting. The Indenture also
contains provisions permitting the Holders of specified percentages in principal
amount of the Securities at the time Outstanding, on behalf of the Holders of
all the Securities, to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued in exchange therefore or in lieu hereof
whether or not notation of such consent or waiver is made upon this Security or
such other Security.

     As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default, the Holders of not less
than 25% in principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity and the
Trustee shall not have received from the Holders of a majority in principal
amount of the Securities Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof, premiums if any, or interest (including
Liquidated Damages) hereon on or after the respective due dates expressed herein
or for the enforcement of the right to convert this Security as provided in the
Indenture.

     No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest (including Liquidated Damages) on this Security at the times, places
and rate, and in the coin or currency, herein prescribed or to convert this
Security as provided in the Indenture.

                                      -28-



     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable on the Security Register
upon surrender of this Security for registration of transfer at the Corporate
Trust Office of the Trustee or at such other office or agency of the Company as
may be designated by it for such purpose in the Borough of Manhattan, The City
of New York (which shall initially be an office or agency of the Trustee), or at
such other offices or agencies as the Company may designate, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder thereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees by the Security Registrar. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to recover any tax or
other governmental charge payable in connection therewith.

     Prior to due presentation of a Security for registration of transfer, the
Company, the Guarantors, the Trustee and any agent of the Company, the
Guarantors or the Trustee may treat the Person in whose name such Security is
registered, as the owner thereof for all purposes, whether or not such Security
be overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.

     No recourse for the payment of the principal (and premium, if any) or
interest on this Security and no recourse under or upon any obligation, covenant
or agreement of the Company in the Indenture or any indenture supplemental
thereto or in any Security, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer or director or subsidiary, as such, past, present or
future, of the Company or any Guarantor or of any successor corporation of the
Company or any Guarantor, either directly or through the Company or any
Guarantor or any successor corporation of the Company or any Guarantor, whether
by virtue of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of consideration for the issue hereof, expressly
waived and released.

     THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.

     All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

                                      -29-



                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription of the face of
this Security, shall be construed as though they were written out in full
according to applicable laws or regulations:

                                                                    
TEN COM     as tenant in common                         UNIF GIFT MIN ACT    ____ Custodian ____
TEN ENT     as tenants by the entireties (Cust)                                  (Cust)         (Minor)
JT TEN      as joint tenants with right of                                   under Uniform Gifts to
            survivorship and not as tenants in common                        Minors Act _____
                                                                                       (State)



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

                                      -30-



                    ELECTION OF HOLDER TO REQUIRE REPURCHASE

     (1) Pursuant to Section 14.1 of the Indenture, the undersigned hereby
elects to have this Security repurchased by the Company.

     (2) The undersigned hereby directs the Trustee or the Company to pay it or
______________ an amount in cash or, at the Company's election, Common Stock
valued as set forth in the Indenture, equal to 100% of the principal amount to
be repurchased (as set forth below), plus interest accrued to, but excluding,
the Repurchase Date, as provided in the Indenture.

Dated:

____________________________

____________________________
Signature(s)

Signature(s) must be guaranteed by an Eligible
Guarantor Institution with membership in an
approved signature guarantee program pursuant
to Rule 17Ad-15 under the Securities Exchange
Act of 1934.


____________________________
Signature Guaranteed

Principal amount to be repurchased (at least
U.S. $1,000 or an integral multiple of $1,000
in excess thereof): ___________________

Remaining principal amount following such
repurchase (not less than U.S. $1,000):

__________________

NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.

SECTION 2.3    Form of Certificate of Authentication.
               -------------------------------------

     The Trustee's certificate of authentication shall be in substantially the
following form:

     This is one of the Securities referred to in the within-mentioned
Indenture.

Dated: _______________

                                      -31-



                 THE BANK OF NEW YORK
                 as Trustee

                 By:___________________________________
                    Authorized Signatory

SECTION 2.4    Form of Conversion Notice.
               -------------------------

                                CONVERSION NOTICE

     The undersigned Holder of this Security hereby irrevocably exercises the
option to convert this Security, or any portion of the principal amount hereof
(which is U.S.$1,000 or an integral multiple of U.S.$1,000 in excess thereof,
provided that the unconverted portion of such principal amount is U.S. $1,000 or
any integral multiple of U.S. $1,000 in excess thereof) below designated, into
shares of Common Stock in accordance with the terms of the Indenture referred to
in this Security, and directs that such shares, together with a check in payment
for any fractional share and any Securities representing any unconverted
principal amount hereof, be delivered to and be registered in the name of the
undersigned unless a different name has been indicated below. If shares of
Common Stock or Securities are to be registered in the name of a Person other
than the undersigned, (a) the undersigned will pay all transfer taxes payable
with respect thereto and (b) signature(s) must be guaranteed by an Eligible
Guarantor Institution with membership in an approved signature guarantee program
pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934. Any amount
required to be paid by the undersigned on account of interest accompanies this
Security.

Dated:_____________     ________________________________________________________
                                               Signature(s)

If shares or Securities are to be registered in the
name of a Person other than the Holder, please
print such Person's name and address:

__________________________________
(Name)

__________________________________

__________________________________
(Address)

__________________________________

Social Security or other Identification
Number, if any

                                      -32-



Signature(s) must be guaranteed by an Eligible
Guarantor Institution with membership in an
approved signature guarantee program pursuant
to Rule 17Ad-15 under the Securities Exchange
Act of 1934.

__________________________________
Signature Guaranteed

If only a portion of the Securities is to be converted, please indicate:

1.   Principal amount to be converted: U.S. $ ___________

2.   Principal amount and denomination of Securities
     representing unconverted principal amount to be issued:

     Amount: U.S. $___________         Denominations: U.S. $____________

(U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof, provided
that the unconverted portion of such principal amount is U.S. $1,000 or any
integral multiple of U.S. $1,000 in excess thereof)

SECTION 2.5    Form of Assignment.
               ------------------

     For value received ________________ hereby sell(s), assign(s) and
transfer(s) unto ________________ (Please insert social security or other
identifying number of assignee) the within Security, and hereby irrevocably
constitutes and appoints ____________________as attorney to transfer the said
Security on the books of the Company, with full power of substitution in the
premises.


Dated:_________    _____________________________________________________________


                                  ________________________________
                                  Signature(s)

                                  Signature(s) must be guaranteed by an Eligible
                                  Guarantor Institution with membership in an
                                  approved signature guarantee program pursuant
                                  to Rule 17Ad - 15 under the Securities
                                  Exchange Act of 1934.

                                  ________________________________
                                  Signature Guaranteed

                                      -33-



SECTION 2.6    Form of Guarantee.
               -----------------

                                    GUARANTEE

     For value received, each of the Guarantors, jointly and severally with the
other Guarantors, hereby irrevocably and unconditionally guarantees to the
Holder of the Security upon which this Guarantee is endorsed, and to the Trustee
for itself and on behalf of such Holder, (i) the due and punctual payment of the
principal of (and premium, if any) and interest on, and any Redemption Price and
Repurchase Price in respect of, such Security when and as the same shall become
due and payable, whether at the Stated Maturity, by acceleration, call for
redemption, exercise of the repurchase right set forth in Article XIV of the
Indenture or otherwise, according to the terms thereof and of the Indenture
referred to therein and (ii) the performance of all other obligations of the
Company under the Indenture. In case of the failure of the Company punctually to
make any such payment, each of the Guarantors hereby agrees to cause such
payment to be made punctually when and as the same shall become due and payable,
whether at the Stated Maturity or by acceleration, call for redemption, exercise
of the repurchase right set forth in Article XIV of the Indenture or otherwise,
and as if such payment were made by the Company.

     Each of the Guarantors hereby agrees that its obligations hereunder shall
be as if it were a principal debtor and not merely a surety and shall be
absolute and unconditional, irrespective of the validity, regularity or
enforceability of such Security or the Indenture, the absence of any action to
enforce the same, the disallowance, under Section 502 of the Bankruptcy Code, of
all or any portion of the claims of the Trustee or any of the Holders for
payment of any of the Securities, any waiver or consent by the Holder of such
Security or by the Trustee or either of them with respect to any provisions
thereof or of the Indenture, the obtaining of any judgment against the Company
or any action to enforce the same or any other circumstances which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor. Each of the Guarantors hereby waives the benefits of diligence,
presentment, demand of payment, any requirement that at any time the Holder or
any other Person exhaust any right or take any action against the Company or any
other Person, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to such Security or the indebtedness
evidenced thereby and all demands whatsoever, and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in such Security and in this Guarantee. Each of the Guarantors hereby
agrees that, in the event of a default in payment of principal (or premium, if
any) or any interest on, and any Redemption Price or Repurchase Price in respect
of, such Security, whether at their Stated Maturity, by acceleration, call for
redemption, exercise of the repurchase right set forth in Article XIV of the
Indenture or otherwise, legal proceedings may be instituted by the Trustee on
behalf of, or by, the Holder of such Security, subject to the terms and
conditions set forth in the Indenture, directly against such Guarantor to
enforce this Guarantee without first proceeding against the Company. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, the Maturity of the obligations
guaranteed hereby may be accelerated as provided in Article V of this Indenture
for the purposes of this Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby. Each of the

                                      -34-



Guarantors agrees that if, after the occurrence and during the continuance of an
Event of Default, the Trustee or any of the Holders are prevented by applicable
law from exercising their respective rights to accelerate the maturity of the
Securities, to collect any interest on the Securities, or to enforce or exercise
any other right or remedy with respect to the Securities, such Guarantor agrees
to pay to the Trustee for the account of the Holders, upon demand therefor, the
amount that would otherwise have been due and payable had such rights and
remedies been permitted to be exercised by the Trustee or any of the Holders.

     No reference herein to the Indenture and no provision of this Guarantee or
of the Indenture shall alter or impair the Guarantee of any Guarantor, which is
absolute and unconditional, of the due and punctual payment of the principal
(and premium, if any) and any interest on, and any Redemption Price or
Repurchase Price in respect of, the Security upon which this Guarantee is
endorsed.

     Each of the Guarantors shall be subrogated to all rights of the Holder of
this Security against the Company in respect of any amounts paid by such
Guarantor on account of this Security pursuant to the provisions of its
Guarantee or the Indenture; provided, however, that such Guarantor shall not be
entitled to enforce or to receive any payments arising out of, or based upon,
such right of subrogation until the principal of (and premium, if any) and any
interest on, and any Redemption Price or Repurchase Price in respect of, this
Security and all other Securities issued under the Indenture shall have been
paid in full.

     This Guarantee shall remain in full force and effect and continue to be
effective should any petition be filed by or against the Company for liquidation
or reorganization, should the Company become insolvent or make an assignment for
the benefit of creditors or should a receiver or trustee be appointed for all or
any significant part of the Company's assets, and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Securities, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on the Securities, whether as a "voidable preference,"
"fraudulent transfer," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Securities shall, to the fullest
extent permitted by law, be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

     Each Guarantor, and by its acceptance of Securities, each Holder, hereby
confirms that it is the intention of all such parties that the Guarantee of such
Guarantor not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and
each of the Guarantors hereby irrevocably agree that the obligations of such
Guarantor under its Guarantee and Article XIII of the Indenture shall be limited
to the maximum amount as will, after giving effect to such maximum amount and
all other contingent and fixed liabilities of such Guarantor that are relevant
under such laws and after giving effect to any collections from, rights to
receive contributions from or payments made by or on behalf of any other
Guarantor in respect of the

                                      -35-



obligations of such other Guarantor under Article XIII under the Indenture, if
any, result in the obligations of such Guarantor under its Guarantee not
constituting a fraudulent transfer or conveyance.

     No past, present or future stockholder, officer, director, employer or
incorporator of any Guarantor, as such, shall have any personal liability under
this Guarantee by reason of his, her or its status as such stockholder, officer,
director, employer or incorporator.

     The Guarantors shall be released from this Guarantee upon the terms and
subject to the conditions provided in the Indenture.

     All terms used in this Guarantee which are defined in the Indenture
referred to in the Security upon which this Guarantee is endorsed shall have the
meanings assigned to them in such Indenture.

     This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Security upon which this Guarantee is
endorsed shall have been executed by the Trustee under the Indenture by manual
signature.

     Reference is made to Article XIII of the Indenture for further provisions
with respect to this Guarantee.

     THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.

     IN WITNESS WHEREOF, each of the Guarantors has caused this Guarantee to be
duly executed.

                                        AIRBORNE EXPRESS, INC.
                                            As Guarantor

                                        By: ________________________
                                            Name:
                                            Title:


                                        Attest:

                                        ____________________________
                                        Name:
                                        Title:


                                      -36-



                                 ABX AIR, INC.
                                     As Guarantor

                                 By: __________________________
                                     Name:
                                     Title:

                                 Attest:

                                 ______________________________
                                 Name:
                                 Title:


                                 SKY COURIER, INC.
                                     As Guarantor

                                 By: __________________________
                                     Name:
                                     Title:

                                 Attest:

                                 ______________________________
                                 Name:
                                 Title:


                                 WILMINGTON AIR PARK, INC.
                                     As Guarantor

                                 By: __________________________
                                     Name:
                                     Title:

                                 Attest:

                                 ______________________________
                                 Name:
                                 Title:


                                      -37-



                                     AIRBORNE FTZ, INC.
                                         As Guarantor

                                     By: ______________________________
                                         Name:
                                         Title:

                                     Attest:

                                     __________________________________
                                     Name:
                                     Title:


                                     AVIATION FUEL, INC.
                                         As Guarantor

                                     By: ______________________________
                                         Name:
                                         Title:

                                     Attest:

                                     __________________________________
                                     Name:
                                     Title:


                                     SOUND SUPPRESSION, INC.
                                         As Guarantor

                                     By: ______________________________
                                         Name:
                                         Title:

                                     Attest:

                                     __________________________________
                                     Name:
                                     Title:


                                      -38-



                                  ARTICLE III
                                 THE SECURITIES

SECTION 3.1    Title and Terms.
               ---------------

     The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is limited to U.S. $125,000,000 (plus, in the
event that Goldman, Sachs & Co. exercises its option to purchase up to
$25,000,000 additional principal amount of Securities pursuant to Section 2 of
the Purchase Agreement, such additional principal amount of Securities purchased
by Goldman, Sachs & Co., which shall not exceed $25,000,000), except for
Securities authenticated and delivered pursuant to Section 3.4, 3.5, 3.6, 8.5,
12.2 or 14.3(5) in exchange for, or in lieu of, other Securities previously
authenticated and delivered under this Indenture.

     The Securities shall be known and designated as the "5.75% Convertible
Senior Notes due April 1, 2007" of the Company. Their Stated Maturity shall be
April 1, 2007 and they shall bear interest on their principal amount from March
25, 2002, payable semi-annually in arrears on April 1 and October 1 in each
year, commencing October 1, 2002, at the rate of 5.75% per annum until the
principal thereof is due and at the rate of 5.75% per annum on any overdue
principal and, to the extent permitted by law, on any overdue interest;
provided, however, that payments shall only be made on a Business Day as
provided in Section 1.12.

     The principal of, premium, if any, and interest on the Securities shall be
payable as provided in the form of Securities set forth in Section 2.2, and the
Repurchase Price, whether payable in cash or in shares of Common Stock, shall be
payable at such places as are identified in the Company Notice given pursuant to
Section 14.3 (any city in which any Paying Agent is located being herein called
a "Place of Payment").

     The Registrable Securities are entitled to the benefits of a Registration
Rights Agreement as provided by Section 10.11 and in the form of Security set
forth in Section 2.2. The Securities are entitled to the payment of Liquidated
Damages as provided by Section 10.11.

     The Securities shall be redeemable at the option of the Company at any time
on or after April 1, 2005, in whole or in part, subject to the conditions and as
otherwise provided in Article XI and in the form of Security set forth in
Section 2.2.

     The Securities shall be convertible as provided in Article XII (any city in
which any Conversion Agent is located being herein called a "Place of
Conversion").

     The Securities shall have endorsed thereon, and the Holders of the
Securities shall have the benefit of, the Guarantees as provided in Article
XIII.

     The Securities shall be subject to repurchase by the Company at the option
of the Holders as provided in Article XIV.

                                      -39-



SECTION 3.2    Denominations.
               -------------

     The Securities shall be issuable only in registered form, without coupons,
in denominations of U.S.$1,000 and integral multiples of U.S.$1,000 in excess
thereof.

SECTION 3.3    Execution, Authentication, Delivery and Dating.
               ----------------------------------------------

     The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Chief Executive Officer, its President, one of its Executive
Vice Presidents, one of its Senior Vice Presidents or one of its Vice
Presidents, and attested by its Chief Financial Officer, its Secretary or one of
its Assistant Secretaries. Any such signature may be manual or facsimile.

     Securities bearing the manual or facsimile signature of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

     At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company and having
endorsed thereon the Guarantees executed by the Guarantors to the Trustee or to
its order for authentication, together with a Company Order for the
authentication and delivery of such Securities, with the Guarantees of the
Guarantors endorsed thereon, and the Trustee in accordance with such Company
Order shall authenticate and make available for delivery such Securities with
the Guarantees of the Guarantors endorsed thereon as in this Indenture provided.

     Each Security shall be dated the date of its authentication.

     No Security or Guarantee endorsed thereon shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose unless there
appears on such Security a certificate of authentication substantially in the
form provided for herein executed by the Trustee by manual signature of an
authorized signatory, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder.

SECTION 3.4    Global Securities; Non-global Securities; Book-entry Provisions.
               ---------------------------------------------------------------

     (1) Global Securities

         (i)  Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.

         (ii) Except for exchanges of Global Securities for definitive,
Non-global Securities at the sole discretion of the Company, no Global Security
may be exchanged in whole or

                                      -40-



in part for Securities registered, and no transfer of a Global Security in whole
or in part may be registered, in the name of any Person other than the
Depositary for such Global Security or a nominee thereof unless (A) such
Depositary (i) has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security or (ii) has ceased to be a
clearing agency registered as such under the Exchange Act or announces an
intention permanently to cease business or does in fact do so or (B) there shall
have occurred and be continuing an Event of Default with respect to such Global
Security. In such event, if a successor Depositary for such Global Security is
not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such ineligibility, the Company will execute, and the
Trustee, upon receipt of an Officers' Certificate directing the authentication
and delivery of Securities, will authenticate and deliver, Securities, in any
authorized denominations in an aggregate principal amount equal to the principal
amount of such Global Security in exchange for such Global Security.

         (iii) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Trustee, as Security Registrar, for exchange or cancellation,
as provided in this Article III. If any Global Security is to be exchanged for
other Securities or canceled in part, or if another Security is to be exchanged
in whole or in part for a beneficial interest in any Global Security, in each
case, as provided in Section 3.5, then either (A) such Global Security shall be
so surrendered for exchange or cancellation, as provided in this Article III, or
(B) the principal amount thereof shall be reduced or increased by an amount
equal to the portion thereof to be so exchanged or canceled, or equal to the
principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment made
on the records of the Trustee, as Security Registrar, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender or adjustment of a Global Security, the Trustee shall,
subject to Section 3.5(3) and as otherwise provided in this Article III,
authenticate and deliver any Securities issuable in exchange for such Global
Security (or any portion thereof) to or upon the order of, and registered in
such names as may be directed by, the Depositary or its authorized
representative. Upon the request of the Trustee in connection with the
occurrence of any of the events specified in the preceding paragraph, the
Company shall promptly make available to the Trustee a reasonable supply of
Securities that are not in the form of Global Securities. The Trustee shall be
entitled to rely upon any order, direction or request of the Depositary or its
authorized representative which is given or made pursuant to this Article III if
such order, direction or request is given or made in accordance with the
Applicable Procedures.

         (iv)  Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article III or otherwise, shall be
authenticated and delivered in the form of, and shall be, a registered Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof, in which case such
Security shall be authenticated and delivered in definitive, fully registered
form, without interest coupons.

                                      -41-



           (v) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture and the Securities, and owners of beneficial interests in a Global
Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members and
such owners of beneficial interests in a Global Security will not be considered
the owners or holders thereof.

     (2)   Non-global Securities. Securities issued upon the events described in
Section 3.4(l)(ii) shall be in definitive, fully registered form, without
interest coupons, and shall bear the Restricted Securities Legend if and as
required by this Indenture.

SECTION 3.5 Registration; Registration of Transfer and Exchange; Restrictions on
            --------------------------------------------------------------------
Transfer.
- --------

     (1)   The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office referred to as
the "Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Securities and
of transfers of Securities. The Trustee is hereby appointed "Security Registrar"
for the purpose of registering Securities and transfers and exchanges of
Securities as herein provided.

     Upon surrender for registration of transfer of any Security at an office or
agency of the Company designated pursuant to Section 10.2 for such purpose, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
any authorized denominations and of a like aggregate principal amount and
bearing such restrictive legends as may be required by this Indenture and each
such Security having the Guarantees endorsed thereon executed by the Guarantors.

     At the option of the Holder, and subject to the other provisions of this
Section 3.5, Securities may be exchanged for other Securities of any authorized
denomination and of a like aggregate principal amount and having the Guarantees
endorsed thereon executed by the Guarantors, upon surrender of the Securities to
be exchanged at any such office or agency. Whenever any Securities are so
surrendered for exchange, and subject to the other provisions of this Section
3.5, the Company shall execute, the Guarantors shall execute the Guarantees
endorsed thereon and the Trustee shall authenticate and deliver, the Securities
that the Holder making the exchange is entitled to receive. Every Security
presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company or the Security Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company, the Trustee and the Security Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.

     All Securities and the Guarantees endorsed thereon issued upon any
registration of transfer or exchange of Securities shall be the valid
obligations of the Company and the Guarantors, evidencing the same debt and
entitled to the same benefits under this Indenture as the Securities and the
Guarantees endorsed thereon surrendered upon such registration of transfer or
exchange.

                                      -42-



     No service charge shall be made to a Holder for any registration of
transfer or exchange of Securities except as provided in Section 3.6, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant to Section
3.4, 8.5, 12.2 or 14.3 (other than where the shares of Common Stock are to be
issued or delivered in a name other than that of the Holder of the Security) not
involving any transfer and other than any stamp and other duties, if any, which
may be imposed in connection with any such transfer or exchange by the United
States or any political subdivision thereof or therein, which shall be paid by
the Company.

     In the event of a redemption of the Securities, neither the Company nor the
Security Registrar will be required (a) to register the transfer of or exchange
Securities for a period of 15 days immediately preceding the date notice is
given identifying the serial numbers of the Securities called for such
redemption or (b) to register the transfer of or exchange any Security, or
portion thereof, called for redemption.

     (2) Certain Transfers and Exchanges. Notwithstanding any other provision of
         -------------------------------
this Indenture or the Securities, transfers and exchanges of Securities and
beneficial interests in a Global Security of the kinds specified in this Section
3.5(2) shall be made only in accordance with this Section 3.5(2).

          (i) Restricted Global Security to Restricted Non-global Security. In
              ------------------------------------------------------------
the event that Non-global Securities are to be issued pursuant to Section
3.4(1)(ii) in connection with any transfer of Securities, such transfer may be
effected only in accordance with the provisions of this Clause (2)(i) and
subject to the Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) a Company Order from the Company directing the Trustee, as
Security Registrar, to (x) authenticate and deliver one or more Securities of
the same aggregate principal amount as the beneficial interest in the Restricted
Global Security to be transferred, such instructions to contain the name or
names of the designated transferee or transferees, the authorized denomination
or denominations of the Securities to be so issued and appropriate delivery
instructions and (y) decrease the beneficial interest of a specified Agent
Member's account in a Restricted Global Security by a specified principal amount
not greater than the principal amount of such Restricted Global Security, and
(B) such other certifications, legal opinions or other information as the
Company or the Trustee may reasonably require to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act, then the Trustee, as
Security Registrar, shall decrease the principal amount of the Restricted Global
Security by the specified amount and authenticate and deliver Securities in
accordance with such instructions from the Company as provided in Section
3.4(1)(iii).

         (ii) Restricted Non-global Security to Restricted Global Security. If
              ------------------------------------------------------------
the Holder of a Restricted Security (other than a Global Security) wishes at any
time to transfer all or any portion of such Restricted Security to a Person who
wishes to take delivery thereof in the form of a beneficial interest in the
Restricted Global Security, such transfer may be effected only in accordance
with the provisions of this Clause (2)(ii) and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Security Registrar, of such
Restricted Security as provided in

                                      -43-



Section 3.5(1) and instructions from the Company directing that a beneficial
interest in the Restricted Global Security in a specified principal amount not
greater than the principal amount of such Security be credited to a specified
Agent Member's account, then the Trustee, as Security Registrar, shall cancel
such Restricted Security (and issue a new Restricted Security in respect of any
untransferred portion thereof) as provided in Section 3.5(1) and increase the
principal amount of the Restricted Global Security by the specified principal
amount as provided in Section 3.4(1)(iii).

          (iii)  Exchanges Between Global Security and Non-global Security. A
                 ---------------------------------------------------------
beneficial interest in a Global Security may be exchanged for a Security that is
not a Global Security only as provided in Section 3.4 or only if such exchange
occurs in connection with a transfer effected in accordance with Clause 2(i)
above, provided that, if such interest is a beneficial interest in the
Restricted Global Security, then such interest shall be exchanged for a
Restricted Security (subject in each case to Section 3.5(3)). A Security that is
not a Global Security may be exchanged for a beneficial interest in a Global
Security only if such exchange occurs in connection with a transfer effected in
accordance with Clause (2)(ii) above.

     (3)  Securities Act Legends. All Securities issued pursuant to this
          ----------------------
Indenture, and all Successor Securities, shall bear the Restricted Securities
Legend and shall be subject to the restrictions on transfer specified therein,
subject to the following:

          (i)    subject to the following Clauses of this Section 3.5(3), a
Security or any portion thereof which is exchanged, upon transfer or otherwise,
for a Global Security or any portion thereof shall bear the Restricted
Securities Legend borne by such Global Security for which the Security was
exchanged;

          (ii)   subject to the following Clauses of this Section 3.5(3), a new
Security that is not a Global Security and is issued in exchange for another
Security (including a Global Security) or any portion thereof, upon transfer or
otherwise, shall bear the Restricted Securities Legend borne by the Security for
which the new Security was exchanged;

          (iii)  any Securities that are sold or otherwise disposed of pursuant
to an effective registration statement under the Securities Act (including the
Shelf Registration Statement), together with their Successor Securities shall
not bear a Restricted Securities Legend; the Company shall inform the Trustee in
writing of the effective date of any such registration statement registering the
Securities under the Securities Act and shall notify the Trustee at any time
when prospectuses must be delivered with respect to Securities to be sold
pursuant to such registration statement. The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
aforementioned registration statement;

          (iv)   at any time after the Securities may be freely transferred
without registration under the Securities Act or without being subject to
transfer restrictions pursuant to the Securities Act, a new Security that does
not bear a Restricted Securities Legend may be issued in exchange for or in lieu
of a Security (other than a Global Security) or any portion thereof that bears
such a legend if the Trustee has received an Unrestricted Securities
Certificate, satisfactory to the Trustee and duly

                                      -44-



executed by the Holder of such Security bearing a Restricted Securities
Legend or his attorney duly authorized in writing, and after such date and
receipt of such certificate, the Trustee shall authenticate and deliver such new
Security in exchange for or in lieu of such other Security as provided in this
Article III;

         (v)  a new Security that does not bear a Restricted Securities Legend
may be issued in exchange for or in lieu of a Security or any portion thereof
that bears such a legend if, in the Company's judgment, placing such a legend
upon such new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at the
direction of the Company, shall authenticate and deliver such a new Security as
provided in this Article III; and

         (vi) notwithstanding the foregoing provisions of this Section 3.5(3), a
Successor Security of a Security that does not bear a Restricted Securities
Legend shall not bear such legend unless the Company has reasonable cause to
believe that such Successor Security is a "restricted security" within the
meaning of Rule 144, in which case the Trustee, at the direction of the Company,
shall authenticate and deliver a new Security bearing a Restricted Securities
Legend in exchange for such Successor Security as provided in this Article III.

     (4) Any stock certificate representing shares of Common Stock issued upon
conversion of the Securities shall bear the Restricted Securities Legend borne
by such Securities, to the extent required by this Indenture, unless such shares
of Common Stock have been sold pursuant to a registration statement that has
been declared effective under the Securities Act (and that continues to be
effective at the time of such transfer) or sold pursuant to Rule 144(k) of the
Securities Act, or unless otherwise agreed by the Company in writing with
written notice thereof to the transfer agent for the Common Stock. With respect
to the transfer of shares of Common Stock issued upon conversion of the
Securities that are restricted hereunder, any deliveries of certificates, legal
opinions or other instruments that would be required to be made to the Security
Registrar in the case of a transfer of Securities, as described above, shall
instead be made to the transfer agent for the Common Stock.

     (5) Neither the Trustee, the Paying Agent nor any of their agents shall (i)
have any duty to monitor compliance with or with respect to any federal or state
or other securities or tax laws or (ii) have any duty to obtain documentation on
any transfers or exchanges other than as specifically required hereunder.

SECTION 3.6   Mutilated, Destroyed, Lost or Stolen Securities.
              -----------------------------------------------

     If any mutilated Security is surrendered to the Trustee, the Company shall
execute, the Guarantors shall execute the Guarantees endorsed thereon and the
Trustee shall authenticate and deliver in exchange therefor a new Security of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.

                                      -45-



     If there be delivered to the Company and to the Trustee:

     (1)  evidence to their satisfaction of the destruction, loss or theft of
any Security, and

     (2)  such security or indemnity as may be satisfactory to the Company and
the Trustee to save each of them and any agent of either of them harmless, then,
in the absence of actual notice to the Company or the Trustee that such Security
has been acquired by a bona fide purchaser, the Company shall execute, the
Guarantors shall execute the Guarantees endorsed thereon and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

     In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security, upon satisfaction of the conditions set forth in the preceding
paragraph.

     Upon the issuance of any new Security under this Section 3.6, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto (other than any
stamp and other duties, if any, which may be imposed in connection therewith by
the United States or any political subdivision thereof or therein, which shall
be paid by the Company) and any other expenses (including the fees and expenses
of the Trustee) connected therewith.

     Every new Security, and the Guarantees endorsed thereon, issued pursuant to
this Section 3.6 in lieu of any mutilated, destroyed, lost or stolen Security
shall constitute an original additional contractual obligation of the Company
and the Guarantors, whether or not the mutilated, destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and such new Security shall
be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities duly issued hereunder.

     The provisions of this Section 3.6 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies of any Holder with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 3.7    Payment of Interest; Interest Rights Preserved.
               ----------------------------------------------

     Subject to the last paragraph of this Section, interest on any Security
that is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest.

     Any interest or Liquidated Damages on any Security that is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

                                      -46-



     (1)   The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security, the date of the
proposed payment and the Special Record Date, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Clause
provided. The Special Record Date for the payment of such Defaulted Interest
shall be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at such Holder's address as it
appears in the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following Clause (2).

     (2)   The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.

     Subject to the foregoing and following provisions of this Section and
Section 3.5, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.

     Interest on any Security that is converted in accordance with Section 12.2
during a Record Date Period shall be payable in accordance with the provisions
of Section 12.2.

SECTION 3.8     Persons Deemed Owners.
                ---------------------

     Prior to due presentment of a Security for registration of transfer, the
Company, the Guarantors, the Trustee, any Paying Agent and any agent of the
Company, the Guarantors, the Trustee or any Paying Agent may treat the Person in
whose name such Security is registered as the owner of such Security for the
purpose of receiving payment of principal of, premium, if any, and

                                      -47-



(subject to Section 3.7) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Guarantors, the Trustee, any Paying Agent nor any agent of the Company, the
Guarantors, the Trustee or any Paying Agent shall be affected by notice to the
contrary.

SECTION 3.9      Cancellation.
                 ------------

     All Securities surrendered for payment, redemption, repurchase,
registration of transfer or exchange or conversion shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee. All Securities so
delivered to the Trustee shall be canceled promptly by the Trustee (or its
agent). No Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section 3.9. The Trustee shall dispose
of all canceled Securities in accordance with applicable law and its customary
practices in effect from time to time.

SECTION 3.10     Computation of Interest.
                 -----------------------

     Interest on the Securities (including any Liquidated Damages) shall be
computed on the basis of a 360-day year of twelve 30-day months.

SECTION 3.11     CUSIP Numbers.
                 -------------

     The Company in issuing Securities may use "CUSIP" numbers (if then
generally in use) in addition to serial numbers; if so, the Trustee shall use
such CUSIP numbers in addition to serial numbers in notices of redemption and
repurchase as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such CUSIP numbers
either as printed on the Securities or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the serial or
other identification numbers printed on the Securities, and any such redemption
or repurchase shall not be affected by any defect in or omission of such CUSIP
numbers. The Company shall promptly notify the Trustee of any change in the
CUSIP numbers.

                                   ARTICLE IV
                           SATISFACTION AND DISCHARGE

SECTION 4.1      Satisfaction and Discharge of Indenture.
                 ---------------------------------------

     This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of conversion, or registration of transfer or
exchange, or replacement of Securities herein expressly provided for and any
right to receive Liquidated Damages as provided in Section 10.11 and in the form
of Securities set forth in Section 2.2 and the Company's obligations to the
Trustee pursuant to Section 6.7), and the Trustee, at the expense of the
Company, shall execute proper instruments in form and substance satisfactory to
the Trustee acknowledging satisfaction and discharge of this Indenture, when

                                      -48-



     (1)     either

              (i)  all Securities theretofore authenticated and delivered
(other than (A) Securities which have been destroyed, lost or stolen and that
have been replaced or paid as provided in Section 3.6 and (B) Securities for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 10.3) have been delivered to the Trustee
for cancellation; or

              (ii) all such Securities not theretofore delivered to the Trustee
or its agent for cancellation (other than Securities referred to in clauses (A)
and (B) of clause (1)(i) above)

                   (a) have become due and payable, or

                   (b) will have become due and payable at their Stated Maturity
within one year, or

                   (c) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company, and the Company
or any Guarantor, in the case of clause (a), (b) or (c) above, has deposited or
caused to be deposited with the Trustee as trust funds (immediately available to
the Holders in the case of clause (a)) in trust for the purpose an amount in
cash sufficient to pay and discharge the entire indebtedness on such Securities
not theretofore delivered to the Trustee for cancellation, for principal,
premium, if any, and interest (including any Liquidated Damages) to the date of
such deposit (in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;

     (2)     the Company or any Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company and the Guarantors; and

     (3)     the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.

     Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Company to any Authenticating Agent under Section 6.14, the obligation of
the Company to pay Liquidated Damages, if money shall have been deposited with
the Trustee pursuant to clause (1)(ii) of this Section 4.1, the obligations of
the Trustee under Section 4.2 and the last paragraph of Section 10.3 and the
obligations of the Company and the Trustee under Section 3.5 and Article XII
shall survive such satisfaction and discharge.

SECTION 4.2     Application of Trust Money.
                --------------------------

     Subject to the provisions of the last paragraph of Section 10.3, all money
deposited with the Trustee pursuant to Section 4.1 shall be held in trust for
the sole benefit of the Holders, and such

                                      -49-



monies shall be applied by the Trustee, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent, to the Persons entitled thereto, of the principal, premium, if
any, and interest for whose payment such money has been deposited with the
Trustee.

     All moneys deposited with the Trustee pursuant to Section 4.1 (and held by
it or any Paying Agent) for the payment of Securities subsequently converted
shall be returned to the Company upon Company Request.

     The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed or assessed against all money deposited with the Trustee
pursuant to Section 4.1 (other than income taxes and franchise taxes incurred or
payable by the Trustee and such other taxes, fees or charges incurred or payable
by the Trustee that are not directly the result of the deposit of such money
with the Trustee).

                                   ARTICLE V
                                    REMEDIES

SECTION 5.1      Events of Default.
                 -----------------

     "Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

     (1) default in the payment of the principal of or premium, if any, on any
Security at its Maturity; or

     (2) default in the payment of any interest (including any Liquidated
Damages) upon any Security when it becomes due and payable, and continuance of
such default for a period of 30 days; or

     (3) failure by the Company to give a Company Notice in accordance with
Section 14.3; or

     (4) default in the performance of any covenant of the Company or any
Guarantor in this Indenture (other than a covenant a default in the performance
of which is specifically dealt with elsewhere in this Section or any failure to
perform any covenant related to the registration rights granted to the Holders
under the Registration Rights Agreement (except for covenants requiring the
payment of Liquidated Damages by the Company)), and continuance of such default
for a period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Securities a
written notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or

                                      -50-



     (5) a default in the payment when due (either at its stated maturity or
upon acceleration thereof, and after expiration of any applicable grace period)
under any bonds, debentures, notes or other evidences of indebtedness for money
borrowed (or guarantee thereof) by the Company or any Significant Subsidiary (an
"Instrument") with an aggregate principal amount in excess of U.S. $10,000,000,
whether such indebtedness now exists or shall hereafter be created, and such
indebtedness is not discharged, or such acceleration is not rescinded or
annulled, within a period of 30 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities a written notice specifying such default and requiring
the Company to cause such indebtedness to be discharged or cause such default to
be cured or waived or such acceleration to be rescinded or annulled and stating
that such notice is a "Notice of Default" hereunder; or

     (6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any Significant
Subsidiary or any Guarantor in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company or any Significant
Subsidiary or any Guarantor a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Significant Subsidiary or any Guarantor
under any applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or any Significant Subsidiary or any Guarantor or of any substantial
part of the property of either, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 60 consecutive
days; or

     (7) the commencement by the Company or any Significant Subsidiary or any
Guarantor of a voluntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by either to the entry of a decree or order for relief in respect of the
Company or any Significant Subsidiary or any Guarantor in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against either, or the filing by either of a
petition or answer or consent seeking reorganization or similar relief under any
applicable Federal or State law, or the consent by either to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or any Significant Subsidiary or any Guarantor or of any substantial
part of the property of either, or the making by either of an assignment for the
benefit of creditors, or the admission by either in writing of its inability to
pay its debts generally as they become due, or the taking of corporate action by
the Company or any Significant Subsidiary or any Guarantor in furtherance of any
such action.

                                      -51-



SECTION 5.2    Acceleration of Maturity; Rescission and Annulment.
               --------------------------------------------------

     If an Event of Default (other than an Event of Default specified in Section
5.1(6) or 5.1(7) with respect to the Company) occurs and is continuing, then in
every such case the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities may declare the principal of all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal and all accrued interest thereon shall become
immediately due and payable. If an Event of Default specified in Section 5.1(6)
or 5.1(7) with respect to the Company occurs, the principal of, and accrued
interest on, all the Securities shall ipso facto become immediately due and
payable without any declaration or other Act of the Holders or any act on the
part of the Trustee.

     At any time after such declaration of acceleration has been made and before
a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article V provided, the Holders of a majority in
principal amount of the Outstanding Securities, by written notice to the Company
and the Trustee, may, on behalf of all Holders, rescind and annul such
declaration and its consequences if:

     (1)  the Company or any Guarantor has paid or deposited with the Trustee a
sum sufficient to pay

            (i)  all overdue interest on all Securities,

           (ii)  the principal of and premium, if any, on any Securities that
have become due otherwise than by such declaration of acceleration and any
interest thereon at the rate borne by the Securities,

          (iii)  to the extent permitted by applicable law, interest upon
overdue interest at a rate of 5.75% per annum, and

           (iv)  all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel;

     (2)  all Events of Default, other than the nonpayment of the principal of
and any premium and interest on, Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
5.13; and

     (3)  such rescission and annulment would not conflict with any judgment or
decree issued in appropriate judicial proceedings regarding the payment by the
Trustee to the Holders of the amounts referred to in 5.2(1).

     No rescission or annulment referred to above shall affect any subsequent
default or impair any right consequent thereon.

                                      -52-



SECTION 5.3    Collection of Indebtedness and Suits for Enforcement by Trustee.
               ---------------------------------------------------------------

     The Company and the Guarantors covenant that if:

     (1) default is made in the payment of any interest (including any
Liquidated Damages) on any Security when it becomes due and payable and such
default continues for a period of 30 days, or

     (2) default is made in the payment of the principal of or premium, if any,
on any Security at the Maturity thereof,

the Company and the Guarantors will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities the whole amount then due and
payable on such Securities for principal and interest (including any Liquidated
Damages) and interest on any overdue principal and premium, if any, and, to the
extent permitted by applicable law, on any overdue interest (including any
Liquidated Damages), at a rate of 5.75% per annum, and in addition thereto, such
further amount as shall be sufficient to cover the reasonable costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.

     If the Company and the Guarantors fail to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company and the Guarantors or any other obligor
upon the Securities and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Company or the Guarantors
or any other obligor upon the Securities, wherever situated.

     If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.

SECTION 5.4    Trustee May File Proofs of Claim.
               --------------------------------

     In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, any Guarantor or any other obligor
upon the Securities or the property of the Company, any Guarantor or of such
other obligor or the creditors of either, the Trustee (irrespective of whether
the principal of, and any interest on, the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company or the Guarantors
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,

     (1) to file and prove a claim for the whole amount of principal, premium,
if any, and interest owing and unpaid in respect of the Securities and take such
other actions, including

                                      -53-



participating as a member, voting or otherwise, of any official committee of
creditors appointed in such matter, and to file such other papers or documents,
in each of the foregoing cases, as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders of Securities allowed in such judicial
proceeding, and

     (2) to collect and receive any moneys or other property payable or
deliverable on any such claim and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder of
Securities to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders of
Securities to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel and any other amounts due the Trustee under Section 6.7.

     Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder of a Security in any such proceeding;
provided, however, that the Trustee may, on behalf of such Holders, vote for the
election of a trustee in bankruptcy or similar official.

SECTION 5.5    Trustee May Enforce Claims Without Possession of Securities.
               -----------------------------------------------------------

     All rights of action and claims under this Indenture or the Securities or
the Guarantees may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
judgment has been recovered.

SECTION 5.6    Application of Money Collected.
               ------------------------------

     Any money collected by the Trustee pursuant to this Article V shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium, if
any, or interest, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:

     FIRST: To the payment of all amounts due the Trustee under Section 6.7;

     SECOND: To the payment of the amounts then due and unpaid for principal of,
premium, if any, or interest (including Liquidated Damages, if any) on, the
Securities in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium, if any, and
interest (including Liquidated Damages, if any), respectively; and

                                      -54-



          THIRD: Any remaining amounts shall be repaid to the Company.

SECTION 5.7    Limitation on Suits.
               -------------------

     No Holder of any Security shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:

     (1) such Holder has previously given written notice to the Trustee of an
Event of Default that is continuing at the time of such institution;

     (2) the Holders of not less than 25% in principal amount of the Outstanding
Securities shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;

     (3) such Holder or Holders have offered to the Trustee, and if requested,
shall have provided, reasonable indemnity satisfactory to the Trustee against
the costs, expenses and liabilities to be incurred in compliance with such
request;

     (4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity (or if requested, receipt of indemnity) has failed to
institute any such proceeding; and

     (5) no direction inconsistent with such written request has been given to
the Trustee during such 60 day period by the Holders of a majority in principal
amount of the Outstanding Securities, it being understood and intended that no
one or more of such Holders shall have any right in any manner whatever by
virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all such Holders.

SECTION 5.8    Unconditional Right of Holders to Receive Principal, Premium and
               ----------------------------------------------------------------
               Interest and to Convert.
               -----------------------

     Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of, premium, if any, and (subject to Section 3.7)
interest (including Liquidated Damages, if any) on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repurchase, on the Redemption Date or Repurchase Date, as the case
may be), and to convert such Security in accordance with Article XII, and to
institute suit for the enforcement of any such payment and right to convert, and
such rights shall not be impaired without the consent of such Holder.

                                      -55-



SECTION 5.9    Restoration of Rights and Remedies.
               ----------------------------------

     If the Trustee or any Holder of a Security has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Guarantors, the Trustee and
the Holders of Securities shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee
and such Holders shall continue as though no such proceeding had been
instituted.

SECTION 5.10   Rights and Remedies Cumulative.
               ------------------------------

     Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
3.6, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders of Securities is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

SECTION 5.11   Delay or Omission Not Waiver.
               ----------------------------

     No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee or to the Holders of Securities may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or (subject to the
limitations contained in this Indenture) by the Holders of Securities as the
case may be.

SECTION 5.12   Control by Holders of Securities.
               --------------------------------

     Subject to Section 6.3, the Holders of a majority in principal amount of
the Outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that

     (1) such direction shall not be in conflict with any rule of law or with
this Indenture, and

     (2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and

     (3) the Trustee need not take any action that might involve it in personal
liability or be unjustly prejudicial to the Holders of Securities not
consenting.

                                      -56-



SECTION 5.13   Waiver of Past Defaults.
               -----------------------

     The Holders, either (i) through the written consent of not less than a
majority in principal amount of the Outstanding Securities or (ii) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of at least 662/3 % in principal
amount of the Outstanding Securities represented at such meeting, may on behalf
of the Holders of all the Securities waive any past default hereunder and its
consequences, except a default (A) in the payment of the principal of, premium,
if any, or interest (including Liquidated Damages) on any Security, or (B) in
respect of a covenant or provision hereof which under Article VIII cannot be
modified or amended without the consent of the Holder of each Outstanding
Security affected.

     Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.

SECTION 5.14   Undertaking for Costs.
               ---------------------

     All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or any suit against the Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 5.14 shall not apply to any suit instituted by
the Company, to any suit instituted by any of the Guarantors, to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or to any suit instituted by any Holder of any Security
for the enforcement of the payment of the principal of, premium, if any, or
interest on any Security on or after the respective Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption or
repurchase, on or after the Redemption Date or Repurchase Date, as the case may
be) or for the enforcement of the right to convert any Security in accordance
with Article XII.

SECTION 5.15   Waiver of Stay, Usury or Extension Laws.
               ---------------------------------------

     Each of the Company and the Guarantors covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, usury or
extension law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and each of the
Company and the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede by reason of such law the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                      -57-



                                   ARTICLE VI
                                   THE TRUSTEE

SECTION 6.1    Certain Duties and Responsibilities.
               -----------------------------------

     The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee 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 any of its rights or powers. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

SECTION 6.2    Notice of Defaults.
               ------------------

     Within 90 days after the occurrence of any default hereunder as to which a
Responsible Officer of the Trustee has received written notice, the Trustee
shall give to all Holders of Securities, in the manner provided in Section 1.6,
notice of such default, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
principal of, premium, if any, or interest on any Security the Trustee shall be
protected in withholding such notice if and so long as a trust committee of
directors or Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interest of the Holders; and provided,
further, that in the case of any default of the character specified in Section
5.1(4), no such notice to Holders of Securities shall be given until at least 60
days after the occurrence thereof or, if applicable, the expiration of the cure
period specified therein. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default.

SECTION 6.3    Certain Rights of Trustee.
               -------------------------

     Subject to the provisions of Section 6.1:

     (1) the Trustee may conclusively rely, and shall be fully protected in
acting or refraining from acting, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon, other evidence of indebtedness or other paper or
document (whether in its original or facsimile form) (collectively, the
"Documents") believed by it to be genuine and to have been signed or presented
by the proper party or parties;

     (2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;

     (3) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;

                                      -58-



     (4)  the Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;

     (5)  the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders of Securities pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity satisfactory to it
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;

     (6)  the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the expense of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation;

     (7)  the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;

     (8)  the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;

     (9)  in the event the Trustee receives conflicting instructions, notices
and/or requests from the Company and/or any Guarantor under the terms of this
Indenture, the Trustee may apply for written instructions from the Company. Any
application by the Trustee for written instructions from the Company may, at the
option of the Trustee, set forth in writing any action proposed to be taken or
omitted by the Trustee under this Indenture and the date on and/or after which
such action shall be taken or such omission shall be effective. The Trustee
shall not be liable for any action taken by, or omission of, the Trustee in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than three Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted;

     (10) the Trustee shall not be deemed to have notice of any Default or Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture;

                                      -59-



     (11) the rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder;
and

     (12) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

SECTION 6.4    Not Responsible for Recitals or Issuance of Securities.
               ------------------------------------------------------

     The recitals contained herein and in the Securities and the Guarantees
endorsed thereon (except the Trustee's certificates of authentication) shall be
taken as the statements of the Company or the Guarantors, as the case may be,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture, of the Securities, of the Guarantees or of the
Common Stock issuable upon the conversion of the Securities. Neither the Trustee
nor any Authenticating Agent shall be accountable for the use or application by
the Company of Securities or the proceeds thereof.

SECTION 6.5    May Hold Securities, Act as Trustee under Other Indentures.
               ----------------------------------------------------------

     The Trustee, any Authenticating Agent, any Paying Agent, any Conversion
Agent or any other agent of the Company or any Guarantor or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 6.8 and 6.13, may otherwise deal with the Company and
any Guarantor or any other obligor upon the Securities with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent,
Conversion Agent or such other agent.

     The Trustee may become and act as trustee under other indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding in the same manner as if it were not
Trustee hereunder.

SECTION 6.6    Money Held in Trust.
               -------------------

     Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company or any Guarantor, as the case may be.

                                      -60-



SECTION 6.7  Compensation and Reimbursement.
             ------------------------------

     The Company agrees:

     (1) to pay to the Trustee from time to time such compensation as shall be
agreed to in writing from time to time between the Company and the Trustee for
all services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);

     (2) except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all expenses, disbursements and advances incurred or made
by the Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its own negligence or willful misconduct; and

     (3) to fully indemnify each of the Trustee or any predecessor Trustee for,
and to hold it harmless against, any and all loss, damages, claims, liability or
expense including taxes (other than taxes based upon, measured by or determined
by the income of the Trustee) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.

     The Trustee shall have a claim prior to the Securities as to all property
and funds held by it hereunder for any amount owing it or any predecessor
Trustee pursuant to this Section 6.7, except with respect to funds held in trust
for the benefit of the Holders of the Securities.

     When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 5.1(6) or Section 5.1(7), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of the
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.

     The provisions of this Section shall survive the termination of this
Indenture.

SECTION 6.8  Disqualification; Conflicting Interests.
             ---------------------------------------

     If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.

SECTION 6.9  Corporate Trustee Required; Eligibility.
             ---------------------------------------

     There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least U.S. $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or

                                      -61-



to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article Section 6.10.

SECTION 6.10 Resignation and Removal; Appointment of Successor.
             -------------------------------------------------

     (1) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.

     (2) The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 6.11 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee.

     (3) The Trustee may be removed at any time by an Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee, the Company and the Guarantors. If the instrument of acceptance by a
successor Trustee required by Section 6.11 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of removal, the removed
Trustee may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.

     (4) If at any time:

           (i) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company, any Guarantor or by any Holder who has been a
bona fide Holder of a Security for at least six months, or

          (ii) the Trustee shall cease to be eligible under Section 6.9 and
shall fail to resign after written request therefor by the Company, any
Guarantor or by any such Holder, or

         (iii) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,

then, in any such case (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.

                                      -62-



     (5) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee and shall
comply with the applicable requirements of this Section and Section 6.11. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company, the Guarantors, and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 6.11,
become the successor Trustee and supersede the successor Trustee appointed by
the Company. If no successor Trustee shall have been so appointed by the Company
or the Holders of Securities and accepted appointment in the manner required by
this Section and Section 6.11, any Holder of a Security who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.

         The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all Holders of
Securities in the manner provided in Section 1.6. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office. If
the instrument of acceptance by a successor Trustee required by Section 6.11
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

 SECTION 6.11 Acceptance of Appointment by Successor.
              --------------------------------------

     Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company, the Guarantors and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company, any Guarantor, or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder. Upon request of any
such successor Trustee, the Company and the Guarantors shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.

     No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.

SECTION 6.12  Merger, Conversion, Consolidation or Succession to Business.
              -----------------------------------------------------------

     Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the

                                      -63-



Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee, shall be the successor of
the Trustee hereunder, provided such corporation shall be otherwise qualified
and eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.

SECTION 6.13  Preferential Collection of Claims Against Company.
              -------------------------------------------------

     If and when the Trustee shall be or become a creditor of the Company or any
Guarantor (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Company and such Guarantor (or any such other obligor).

SECTION 6.14  Authenticating Agents.
              ---------------------

     The Trustee may appoint an Authenticating Agent or Agents with respect to
the Securities, which Authenticating Agent shall be authorized to act on behalf
of the Trustee to authenticate Securities issued upon exchange or substitution
pursuant to this Indenture.

     Securities authenticated by an Authenticating Agent shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder, and every reference in
this Indenture to the authentication and delivery of Securities by the Trustee
or the Trustee's certificate of authentication shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 6.14.

     Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an

                                      -64-



Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 6.14, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.

     An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company and to the Guarantors. The Trustee may
at any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and the Guarantors
and shall mail written notice of such appointment by first class mail, postage
prepaid, to all Holders of Securities of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section 6.14.

     The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section 6.14.

     If an Authenticating Agent is appointed with respect to the Securities
pursuant to this Section 6.14, the Securities may have endorsed thereon, in
addition to or in lieu of the Trustee's certification of authentication, an
alternative certificate of authentication in the following form:

     This is one of the Securities referred to in the within-mentioned
Indenture.

                                        THE BANK OF NEW YORK
                                        as Trustee

                                        By:
                                        _______________________________________
                                        As Authenticating Agent

                                        By:
                                        _______________________________________
                                        Authorized Signatory


                                      -65-



                                  ARTICLE VII
              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 7.1   Company May Consolidate, Etc. Only on Certain Terms.
              ---------------------------------------------------

     The Company shall not consolidate with or merge into any other Person or
convey, transfer, sell or lease all its properties and assets substantially as
an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer, sell or lease
such Person's properties and assets substantially as an entirety to the Company
unless:

     (1) the Person formed by such consolidation or into or with which the
Company is merged or the Person to which the properties and assets of the
Company are so conveyed, transferred, sold or leased shall be a corporation,
limited liability company, partnership or trust organized and validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia and, if other than the Company, shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of,
premium, if any, and interest (including Liquidated Damages, if any) on all of
the Securities as applicable, and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed or
observed and shall have provided for conversion rights in all material respects
in accordance with Article XII;

     (2) immediately after giving effect to such transaction, no Event of
Default, and no event that after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing; and

     (3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such transaction
have been complied with, together with any documents required under Section 8.3.

SECTION 7.2 Successor Substituted.
            ---------------------

     Upon any consolidation of the Company with, or merger of the Company into
any other Person or any conveyance, transfer or lease of all or substantially
all the properties and assets of the Company in accordance with Section 7.1, the
successor Person formed by such consolidation or into or with which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.

                                      -66-



                                  ARTICLE VIII
                             SUPPLEMENTAL INDENTURES

SECTION 8.1   Supplemental Indentures Without Consent of Holders of Securities.
              ----------------------------------------------------------------

     Without the consent of any Holders of Securities the Company, when
authorized by a Board Resolution, the Guarantors, when authorized by their
respective Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto for any of the
following purposes:

     (1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants and obligations of the Company
herein and in the Securities as permitted by Article VII of this Indenture; or

     (2) to add to the covenants of the Company for the benefit of the Holders
of Securities or to surrender any right or power herein conferred upon the
Company; or

     (3) to secure the Securities; or

     (4) to make provision with respect to the conversion rights of Holders of
Securities pursuant to Section 12.11 or to make provision with respect to the
repurchase rights of Holders of Securities pursuant to Section 14.5; or

     (5) to make any changes or modifications to this Indenture necessary in
connection with the registration of any Registrable Securities under the
Securities Act as contemplated by Section 10.11, provided such action pursuant
to this clause (5) shall not adversely affect the interests of the Holders of
Securities in any material respect; or

     (6) to comply with the requirements of the Trust Indenture Act or the rules
and regulations of the Commission thereunder in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act, as contemplated
by this Indenture or otherwise; or

     (7) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee; or

     (8) to evidence the guarantee by any Guarantor of the Securities pursuant
to Section 10.13 and Article XIII or the release of the guarantee by any
Guarantor of the Securities pursuant to Section 13.4; or

     (9) to cure any ambiguity, to correct or supplement any provision herein
that may be inconsistent with any other provision herein or that is otherwise
defective, or to make any other provisions with respect to matters or questions
arising under this Indenture as the Company and the Trustee may deem necessary
or desirable, provided such action pursuant to this clause (9) shall not
adversely affect the interests of the Holders of Securities in any material
respect.

                                      -67-



     Upon Company Request, accompanied by a Board Resolution authorizing the
execution of any such supplemental indenture, and subject to and upon receipt by
the Trustee of the documents described in Section 8.3 hereof, the Trustee shall
join with the Company in the execution of any supplemental indenture authorized
or permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained.

     Notwithstanding any other provision of the Indenture or the Securities, the
Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.

SECTION 8.2   Supplemental Indentures with Consent of Holders of Securities.
              -------------------------------------------------------------

     With either (i) the written consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities, by the Act of said
Holders delivered to the Company and the Trustee, or (ii) by the adoption of a
resolution, at a meeting of Holders of the Outstanding Securities at which a
quorum is present, by the Holders of at least 662/3% in principal amount of the
Outstanding Securities represented at such meeting, the Company, when authorized
by a Board Resolution, the Guarantors, when authorized by their respective Board
Resolutions, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent or affirmative vote of the Holder of each Outstanding Security
affected thereby,

     (1) change the Stated Maturity of the principal of, or any installment of
interest on, any Security, or reduce the principal amount of, or the premium, if
any, or the rate of interest payable thereon, or reduce the amount payable upon
a redemption or mandatory repurchase, or change the place or currency of payment
of the principal of, premium, if any, or interest on any Security (including any
payment of Liquidated Damages (except as may be effected through an amendment of
the Registration Rights Agreement in accordance with its terms) or Redemption
Price or Repurchase Price in respect of such Security) or impair the right to
institute suit for the enforcement of any payment in respect of any Security on
or after the Stated Maturity thereof (or, in the case of redemption or any
repurchase, on or after the Redemption Date or Repurchase Date, as the case may
be) or, except as permitted by Section 12.11, adversely affect the right of
Holders to convert any Security as provided in Article XII; or

     (2) reduce the requirements of Section 9.4 for quorum or voting, or reduce
the percentage in principal amount of the Outstanding Securities the consent of
whose Holders is required for any such supplemental indenture or the consent of
whose Holders is required for any waiver (of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture; or

     (3) modify the obligation of the Company to maintain an office or agency in
the Borough of Manhattan, The City of New York, pursuant to Section 10.2; or

                                      -68-



     (4) modify any of the provisions of this Section or Section 5.13 or 10.12,
except to increase any percentage contained herein or therein or to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security affected thereby; or

     (5) modify the ranking of the Securities in a manner adverse to the
Holders; or

     (6) modify the provisions of Article XI in a manner adverse to the Holders;

     (7) modify any of the provisions of Section 10.9; or

     (8) modify the provisions of Section 10.13 or Article XIII, or the terms of
the Guarantees, in a manner adverse to the Holders.

     It shall not be necessary for any Act of Holders of Securities under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

SECTION 8.3  Execution of Supplemental Indentures.
             ------------------------------------

     In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be provided with, and
(subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture, and that such supplemental indenture
has been duly authorized, executed and delivered by the Company and constitutes
a valid and legally binding obligation of the Company enforceable against the
Company in accordance with its terms. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

SECTION 8.4  Effect of Supplemental Indentures.
             ---------------------------------

     Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder appertaining thereto shall be bound thereby.

SECTION 8.5  Reference in Securities to Supplemental Indentures.
             --------------------------------------------------

     Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company and the Guarantors
shall so determine, new Securities so modified as to conform, in the opinion of
the Company, the Guarantors and the Trustee, to any such supplemental indenture
may be prepared and

                                      -69-




executed by the Company and the Guarantees endorsed thereon may be executed by
the Guarantors and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.

SECTION 8.6   Notice of Supplemental Indentures.
              ---------------------------------

     Promptly after the execution by the Company, the Guarantors and the Trustee
of any supplemental indenture pursuant to the provisions of Section 8.2, the
Company shall give notice to all Holders of Securities of such fact, setting
forth in general terms the substance of such supplemental indenture, in the
manner provided in Section 1.6. Any failure of the Company to give such notice,
or any defect therein, shall not in any way impair or affect the validity of any
such supplemental indenture.

                                   ARTICLE IX
                       MEETINGS OF HOLDERS OF SECURITIES

SECTION 9.1   Purposes for Which Meetings May Be Called.
              -----------------------------------------

     A meeting of Holders of Securities may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities.

SECTION 9.2   Call, Notice and Place of Meetings.
              ----------------------------------

     (1) The Trustee may at any time call a meeting of Holders of Securities for
any purpose specified in Section 9.1, to be held at such time and at such place
in the Borough of Manhattan, The City of New York, as the Trustee shall
determine. Notice of every meeting of Holders of Securities, setting forth the
time and the place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be given, in the manner provided in Section 1.6,
not less than 21 nor more than 180 days prior to the date fixed for the meeting.

     (2) In case at any time the Company, pursuant to a Board Resolution, or the
Holders of at least 10% in principal amount of the Outstanding Securities shall
have requested the Trustee to call a meeting of the Holders of Securities for
any purpose specified in Section 9.1, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 21 days after
receipt of such request or shall not thereafter proceed to cause the meeting to
be held as provided herein, then the Company or the Holders of Securities in the
amount specified, as the case may be, may determine the time and the place in
the Borough of Manhattan, The City of New York, for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in paragraph
(1) of this Section.

SECTION 9.3   Persons Entitled to Vote at Meetings.
              ------------------------------------

     To be entitled to vote at any meeting of Holders of Securities, a Person
shall be (i) a Holder of one or more Outstanding Securities, or (ii) a Person
appointed by an instrument in writing as

                                      -70-



proxy for a Holder or Holders of one or more Outstanding Securities by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the Persons entitled to vote at such
meeting and their counsel, any representatives of the Trustee and its counsel,
any representatives of the Company and its counsel and any representatives of
the Guarantors and their counsel.

SECTION 9.4   Quorum; Action.
              --------------

     The Persons entitled to vote a majority in principal amount of the
Outstanding Securities shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities, be dissolved. In any other
case, the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting (subject to repeated applications of this sentence). Notice of
the reconvening of any adjourned meeting shall be given as provided in Section
9.2(1), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the percentage of
the principal amount of the Outstanding Securities that shall constitute a
quorum.

     Subject to the foregoing, at the reconvening of any meeting adjourned for a
lack of a quorum, the Persons entitled to vote 25% in principal amount of the
Outstanding Securities at the time shall constitute a quorum for the taking of
any action set forth in the notice of the original meeting.

     At a meeting or an adjourned meeting duly reconvened and at which a quorum
is present as aforesaid, any resolution and all matters (except as limited by
the proviso to Section 8.2 and except to the extent Section 10.12 requires a
different vote) shall be effectively passed and decided if passed or decided by
the lesser of (i) the Holders of not less than a majority in principal amount of
Outstanding Securities and (ii) the Persons entitled to vote not less than
662/3% in principal amount of Outstanding Securities represented and entitled to
vote at such meeting.

     Any resolution passed or decisions taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities whether or not present or represented at the meeting. The
Trustee shall, in the name and at the expense of the Company, notify all the
Holders of Securities of any such resolutions or decisions pursuant to Section
1.6.

SECTION 9.5   Determination of Voting Rights; Conduct and Adjournment of
              ----------------------------------------------------------
Meetings.
- --------

     (1) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall

                                      -71-



deem appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner specified
in Section 1.4 and the appointment of any proxy shall be proved in the manner
specified in Section 1.4 or by having the signature of the Person executing the
proxy guaranteed by any bank, broker or other eligible institution participating
in a recognized medallion signature guarantee program.

     (2) The Trustee shall, by an instrument in writing, appoint a temporary
chairman (which may be the Trustee) of the meeting, unless the meeting shall
have been called by the Company or by Holders of Securities as provided in
Section 9.2(1), in which case the Company or the Holders of Securities calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Persons entitled to vote a majority in principal amount
of the Outstanding Securities represented at the meeting.

     (3) At any meeting, each Holder of a Security or proxy shall be entitled to
one vote for each U.S. $1,000 principal amount of Securities held or represented
by him; provided, however, that no vote shall be cast or counted at any meeting
in respect of any Security challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman of the meeting shall
have no right to vote, except as a Holder of a Security or proxy.

     (4) Any meeting of Holders of Securities duly called pursuant to Section
9.2 at which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in principal amount of the Outstanding Securities
represented at the meeting, and the meeting may be held as so adjourned without
further notice.

SECTION 9.6   Counting Votes and Recording Action of Meetings.
              -----------------------------------------------

     The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the principal amounts at Stated Maturity and serial numbers of the Outstanding
Securities held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record, at least in duplicate, of the proceedings
of each meeting of Holders of Securities shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more Persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was given as provided in
Section 9.2 and, if applicable, Section 9.4. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to the Company and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.

                                      -72-



                                   ARTICLE X
                                    COVENANTS

SECTION 10.1  Payment of Principal, Premium and Interest.
              ------------------------------------------

     The Company covenants and agrees that it will duly and punctually pay the
principal of and premium, if any, and interest (including Liquidated Damages, if
any) on the Securities in accordance with the terms of the Securities and this
Indenture. The Company will deposit or cause to be deposited with the Trustee or
its nominee, no later than the opening of business on the date of the Stated
Maturity of any Security or no later than the opening of business on the due
date for any installment of interest, all payments so due, which payments shall
be in immediately available funds on the date of such Stated Maturity or due
date, as the case may be.

SECTION 10.2  Maintenance of Offices or Agencies.
              ----------------------------------

     The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where the Securities may be surrendered for
registration of transfer or exchange or for presentation for payment or for
conversion, redemption or repurchase and where notices and demands to or upon
the Company or any Guarantor in respect of the Securities, the Guarantee of such
Guarantor endorsed thereon and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency not designated or appointed by the Trustee.
If at any time the Company or any Guarantor shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office or the office or agency of the Trustee in
the Borough of Manhattan, The City of New York.

     The Company may at any time and from time to time vary or terminate the
appointment of any such agent or appoint any additional agents for any or all of
such purposes; provided, however, that until all of the Securities have been
delivered to the Trustee for cancellation, or moneys sufficient to pay the
principal of, premium, if any, and interest on the Securities have been made
available for payment and either paid or returned to the Company pursuant to the
provisions of Section 10.3, the Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment and conversion, which shall initially be
The Bank of New York, an Affiliate of the Trustee, where Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company will give prompt written notice to the Trustee, and
notice to the Holders in accordance with Section 1.6, of the appointment or
termination of any such agents and of the location and any change in the
location of any such office or agency.

     The Company hereby initially designates the Trustee as Paying Agent,
Security Registrar and Conversion Agent, and each of the Corporate Trust Office
of the Trustee and the office or agency of the Trustee in the Borough of
Manhattan, The City of New York, located at 101 Barclay Street, New

                                      -73-



York, New York, 10286 attention: Corporate Trust Administration (Airborne, Inc.
5.75% Convertible Senior Notes due April 1, 2007) as one such office or agency
of the Company for each of the aforesaid purposes.

SECTION 10.3  Money for Security Payments to Be Held in Trust.
              -----------------------------------------------

     If the Company shall act as its own Paying Agent, it will, on or before
each due date of the principal of, premium, if any, or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, premium, if any, or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and the Company will promptly notify the Trustee of its
action or failure so to act.

     Whenever the Company shall have one or more Paying Agents, it will, no
later than the opening of business on each due date of the principal of,
premium, if any, or interest on any Securities, deposit with the Trustee a sum
in funds immediately payable on the payment date sufficient to pay the
principal, premium, if any, or interest so becoming due, such sum to be held for
the benefit of the Persons entitled to such principal, premium, if any, or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of any failure so to act.

     The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:

     (1) hold all sums held by it for the payment of the principal of, premium,
if any, or interest on Securities for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided;

     (2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal, premium,
if any, or interest; and

     (3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held by
such Paying Agent.

     The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.

     Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Security and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured

                                      -74-



general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease.

SECTION 10.4  Existence.
              ---------

     Subject to Article VII, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
(charter and statutory) and franchises; provided, however, that the Company
shall not be required to preserve any such right or franchise if the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.

SECTION 10.5  Maintenance of Properties.
              -------------------------

     The Company will cause all properties used or useful in the conduct of its
business or the business of any Significant Subsidiary to be maintained and kept
in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Significant Subsidiary and not
disadvantageous in any material respect to the Holders.

SECTION 10.6  Payment of Taxes and Other Claims.
              ---------------------------------

     The Company will pay or discharge, or cause to be paid or discharged,
before the same may become delinquent, (i) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Significant
Subsidiary or upon the income, profits or property of the Company or any
Significant Subsidiary, (ii) all claims for labor, materials and supplies which,
if unpaid, might by law become a lien or charge upon the property of the Company
or any Significant Subsidiary, and (iii) subject to Sections 12.8 and 14.3(2),
all stamps and other duties, if any, which may be imposed by the United States
or any political subdivision thereof or therein in connection with the issuance,
transfer, exchange or conversion of any Securities or with respect to this
Indenture; provided, however, that, in the case of clauses (i) and (ii), the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Company and
its subsidiaries taken as a whole, or (B) if the amount, applicability or
validity is being contested in good faith by appropriate proceedings.

                                      -75-



SECTION 10.7   Registration and Listing.
               ------------------------

     The Company will effect all registrations with, and obtain all approvals
by, all governmental authorities that may be necessary under any United States
Federal or state law (including the Securities Act, the Exchange Act and state
securities and Blue Sky laws) before the shares of Common Stock issuable upon
conversion of Securities are issued and delivered, and qualified or listed as
contemplated under the Registration Rights Agreement.

     Nothing in this Section will limit the application of Section 10.11.

SECTION 10.8   Statement by Officers as to Default.
               -----------------------------------

     The Company and the Guarantors shall deliver to the Trustee, within 120
days after the end of each fiscal year of the Company ending after the date
hereof, an Officers' Certificate, stating whether or not to the best knowledge
of the signers thereof the Company or the Guarantors is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company or the Guarantors shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge.

     The Company and the Guarantors will deliver to the Trustee, forthwith, and
in any event within 5 Business Days, upon becoming aware of any default or any
Event of Default under the Indenture, an Officers' Certificate specifying with
particularity such default or Event of Default and further stating what action
the Company and the Guarantors have taken, are taking or propose to take with
respect thereto. For the purpose of this Section, the term "default" means any
event which is, or after notice or lapse of time or both would become, an Event
of Default.

     Any notice required to be given under this Section 10.8 shall be delivered
to the Trustee at its Corporate Trust Office.

SECTION 10.9   Delivery of Certain Information.
               -------------------------------

     At any time when required pursuant to subsection (d)(4)(i) of Rule 144A
under the Securities Act, upon the request of a Holder of a Restricted Security
or the holder of shares of Common Stock issued upon conversion thereof, the
Company and the Guarantors will promptly furnish or cause to be furnished Rule
144A Information (as defined below) to such Holder of Restricted Securities or
such holder of shares of Common Stock issued upon conversion of Restricted
Securities, or to a prospective purchaser of any such security designated by any
such Holder or holder, as the case may be, to the extent required to permit
compliance by such Holder or holder with Rule 144A under the Securities Act (or
any successor provision thereto) in connection with the resale of any such
security; provided, however, that the Company and the Guarantors shall not be
required to furnish such information in connection with any request made on or
after the date that is two years from the later of (i) the date such a security
(or any such predecessor security) was last acquired from the Company or any
Guarantor or (ii) the date such a security (or any such predecessor security)
was last acquired from an "affiliate" of the Company or any Guarantor within the
meaning of Rule 144 under

                                      -76-



the Securities Act (or any successor provision thereto). "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).

SECTION 10.10  Resale of Certain Securities.
               ----------------------------

     During the period beginning on the last date of original issuance of the
Securities and ending on the date that is two years from such date (or such
shortened period under Rule 144(k) under the Securities Act or any successor
rule), the Company will not, and will not permit any of its subsidiaries or
other "affiliates" (as defined under Rule 144 under the Securities Act or any
successor provision thereto) to, resell (i) any Securities that constitute
"restricted securities" under Rule 144 or (ii) any securities into which the
Securities have been converted under this Indenture that constitute "restricted
securities" under Rule 144, that in either case have been reacquired by any of
them. The Trustee shall have no responsibility in respect of the Company's
performance of its agreement in the preceding sentence.

SECTION 10.11  Registration Rights.
               -------------------

     Each of the Company and the Guarantors agrees that the Holders from time to
time of Registrable Securities (as defined below) are entitled to the benefits
of a Registration Rights Agreement, dated as of March 25, 2002 (the
"Registration Rights Agreement"), executed by the Company and the Guarantors as
it may be amended from time to time in accordance with its terms.

     Whenever in this Indenture or in the Securities or in the Guarantees there
is mentioned, in any context, the payment of the principal of, premium, if any,
or interest on, or in respect of, any Security, such mention shall be deemed to
include mention of the payment of Liquidated Damages provided for in this
Section to the extent that, in such context, Liquidated Damages are, were or
would be payable in respect thereof pursuant to the provisions of this Section
and express mention of the payment of Liquidated Damages (if applicable) in any
provisions hereof shall not be construed as excluding Liquidated Damages in
those provisions hereof where such express mention is not made.

     For the purposes of the Registration Rights Agreement, "Registrable
Securities" means all or any portion of the Securities issued from time to time
under this Indenture in registered form and the shares of Common Stock issuable
upon conversion, repurchase or redemption of such Securities; provided, however,
that a security ceases to be a Registrable Security when it is no longer a
Restricted Security.

     If a Security, or the shares of Common Stock issuable upon conversion of a
Security, is a Registrable Security, and the Holder thereof elects to sell such
Registrable Security pursuant to the Shelf Registration Statement then, by its
acceptance thereof, the Holder of such Registrable Security will have agreed to
be bound by the terms of the Registration Rights Agreement relating to the
Registrable Securities which are the subject of such election.

                                      -77-



     For the purposes of the Registration Rights Agreement, the term "Holder"
includes any Person that has a beneficial interest in any Restricted Global
Security or any beneficial interest in a global security representing shares of
Common Stock issuable upon conversion of a Security.

     If Liquidated Damages are payable under the Registration Rights Agreement,
the Company shall deliver to the Trustee a certificate to that effect stating
(i) the amount of Liquidated Damages that is payable and (ii) the date on which
Liquidated Damages are payable. Unless and until a Responsible Officer of the
Trustee receives at the Corporate Trust Office such a certificate, the Trustee
may assume without inquiry that no Liquidated Damages are payable. If Liquidated
Damages have been paid by the Company directly to the persons entitled to them,
the Company shall deliver to the Trustee a certificate setting forth the
particulars of such payment.

SECTION 10.12  Waiver of Certain Covenants.
               ---------------------------

     The Company may omit in any particular instance to comply with any covenant
or condition set forth in Sections 10.4 (other than with respect to the
existence of the Company (subject to Article VII)), 10.5 and 10. 6, inclusive
(other than a covenant or condition which under Article VIII cannot be modified
or amended without the consent of the Holder of each Outstanding Security
affected), if before the time for such compliance the Holders shall, through (i)
the written consent of not less than a majority in principal amount of the
Outstanding Securities or (ii) the adoption of a resolution at a meeting of
Holders of the Outstanding Securities at which a quorum is present by the
Holders of not less than 662/3 % in principal amount of the Outstanding
Securities represented at such meeting, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee or any Paying or
Conversion Agent in respect of any such covenant or condition shall remain in
full force and effect.

SECTION 10.13  Guarantee of Securities by Material Subsidiaries.
               ------------------------------------------------

     The Company, promptly and in any event within 10 days of either (1) the
formation or acquisition of any new Material Subsidiary by the Company or any of
its Subsidiaries or (2) the preparation of Consolidated financial statements of
the Company for any fiscal quarter that indicate that a Subsidiary of the
Company that was not prior to such time a Guarantor has become a Material
Subsidiary of the Company, shall cause such new Material Subsidiary to duly
execute and deliver to the Trustee a Guarantee in substantially the form set
forth in Section 2.6, together with such documents as the Trustee may request
evidencing corporate action taken to authorize such execution and delivery, the
incumbency and signatures of officers of such Material Subsidiary and a signed
copy of a favorable opinion, addressed to the Trustee, of counsel for the
Company reasonably acceptable to the Trustee as to such Guarantee being a legal,
valid and binding obligation of such Material Subsidiary, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization and other similar laws of general application relating
to or affecting creditors' rights and to general principles of equity.

                                      -78-



     The Company and the Trustee may execute one or more indentures supplemental
hereto to confirm the addition of Guarantors pursuant to this Section, but such
supplemental indenture shall not be required for the effectiveness of such
Guarantee.

                                   ARTICLE XI
                            REDEMPTION OF SECURITIES

SECTION 11.1   Right of Redemption.
               -------------------

     The Securities may be redeemed in accordance with the provisions of the
form of Securities set forth in Section 2.2.

SECTION 11.2   Applicability of Article.
               ------------------------

     Redemption of Securities at the election of the Company or otherwise, as
permitted or required by any provision of the Securities or this Indenture,
shall be made in accordance with such provision and this Article XI.

SECTION 11.3   Election to Redeem; Notice to Trustee.
               -------------------------------------

     The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of
any of the Securities, the Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date.

SECTION 11.4   Selection by Trustee of Securities to Be Redeemed.
               -------------------------------------------------

     If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected by the Trustee within five Business
Days after it receives the notice described in 11.3, from the Outstanding
Securities not previously called for redemption, by lot or by such other method
as the Trustee may deem fair and appropriate.

     If any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed (so far as
may be) to be the portion selected for redemption. Securities which have been
converted during a selection of Securities to be redeemed may be treated by the
Trustee as Outstanding for the purpose of such selection. The Trustee shall
promptly notify the Company and each Security Registrar in writing of the
securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.

     For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.

                                      -79-



SECTION 11.5   Notice of Redemption.
               --------------------

     Notice of redemption shall be given in the manner provided in Section 1.6
to the Holders of Securities to be redeemed not less than 30 nor more than 60
days prior to the Redemption Date, and such notice shall be irrevocable. The
Company shall, concurrently with the giving of such notice, publish a Press
Release including the information required to be included in such notice of
redemption hereunder.

     All notices of redemption shall state:

     (1) the Redemption Date,

     (2) the Redemption Price, and accrued interest (including Liquidated
Damages, if any), if any, to, but excluding, the Redemption Date,

     (3) if less than all Outstanding Securities are to be redeemed, the
aggregate principal amount of Securities to be redeemed and the aggregate
principal amount of Securities which will be outstanding after such partial
redemption,

     (4) that on the Redemption Date the Redemption Price, and accrued interest
(including Liquidated Damages, if any), if any, to, but excluding, the
Redemption Date, will become due and payable upon each such Security to be
redeemed, and that interest thereon shall cease to accrue on and after said
date,

     (5) the Conversion Rate, the date on which the right to convert the
Securities to be redeemed will terminate and the places where such Securities
may be surrendered for conversion,

     (6) the applicable CUSIP numbers and

     (7) the place or places where such Securities are to be surrendered for
payment of the Redemption Price and accrued interest (including Liquidated
Damages, if any), if any, to, but excluding, the Redemption Date.

     In case of a partial redemption, the notice shall specify the serial and
CUSIP numbers (if any) and the portions thereof called for redemption and that
transfers and exchanges may occur on or prior to the Redemption Date.

     Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request, by
the Trustee in the name of and at the expense of the Company. Notice of
redemption of Securities to be redeemed at the election of the Company received
by the Trustee shall be given by the Trustee to each Paying Agent in the name of
and at the expense of the Company.

                                      -80-



SECTION 11.6   Deposit of Redemption Price.
               ---------------------------

     On or prior to the Redemption Date, the Company shall deposit with the
Trustee (or, if the Company is acting as its own Paying Agent, segregate and
hold in trust as provided in Section 10.3) an amount of money (which shall be in
immediately available funds on such Redemption Date) sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest (including Liquidated Damages, if any) to the
Redemption Date on, all the Securities which are to be redeemed on that date
other than any Securities called for redemption on that date which have been
converted prior to the date of such deposit.

     If any Security called for redemption is converted, any money deposited
with the Trustee or so segregated and held in trust for the redemption of such
Security shall (subject to any right of the Holder of such Security or any
Predecessor Security to receive interest as provided in the last paragraph of
Section 3.7) be paid to the Company on Company Request or, if then held by the
Company, shall be discharged from such trust.

SECTION 11.7   Securities Payable on Redemption Date.
               -------------------------------------

     Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price, including accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
Security for redemption in accordance with said notice such Security shall be
paid by the Company or the Guarantors at the Redemption Price together with
accrued and unpaid interest (including Liquidated Damages, if any) to the
Redemption Date; provided, however, that installments of interest on Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such on the relevant Record Date according to their terms and the
provisions of Section 3.7.

     If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal amount of, premium, if any, and, to the
extent permitted by applicable law, accrued interest on such Security shall,
until paid, bear interest from the Redemption Date at a rate of 5.75% per annum
and such Security shall remain convertible until the Redemption Price of such
Security (or portion thereof, as the case may be) shall have been paid or duly
provided for.

     Any Security that is to be redeemed only in part shall be surrendered at
the Corporate Trust Office or an office or agency of the Company designated for
that purpose pursuant to Section 10.2 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, the
Guarantors shall execute their Guarantees to be endorsed thereon and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.

                                      -81-



SECTION 11.8  Conversion Arrangement on Call for Redemption.
              ---------------------------------------------

     In connection with any redemption of Securities, the Company may arrange
for the purchase and conversion of any Securities by an agreement with one or
more investment bankers or other purchasers (the "Purchasers") to purchase such
securities by paying to the Trustee in trust for the Holders, on or before the
Redemption Date, an amount not less than the applicable Redemption Price,
together with interest (including any Liquidated Damages) accrued to the
Redemption Date, of such Securities. Notwithstanding anything to the contrary
contained in this Article XI, the obligation of the Company to pay the
Redemption Price, together with interest accrued to the Redemption Date, shall
be deemed to be satisfied and discharged to the extent such amount is so paid by
such Purchasers. If such an agreement is entered into (a copy of which shall be
filed with the Trustee prior to the close of business on the Business Day
immediately prior to the Redemption Date), any Securities called for redemption
that are not duly surrendered for conversion by the Holders thereof may, at the
option of the Company, be deemed, to the fullest extent permitted by law, and
consistent with any agreement or agreements with such Purchasers, to be acquired
by such Purchasers from such Holders and (notwithstanding anything to the
contrary contained in Article XII) surrendered by such Purchasers for
conversion, all as of immediately prior to the close of business on the
Redemption Date (and the right to convert any such Securities shall be extended
through such time), subject to payment of the above amount as aforesaid. At the
direction of the Company, the Trustee shall hold and dispose of any such amount
paid to it by the Purchasers to the Holders in the same manner as it would
monies deposited with it by the Company for the redemption of Securities.
Without the Trustee's prior written consent, no arrangement between the Company
and such Purchasers for the purchase and conversion of any Securities shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Securities between the Company and such
Purchasers, including the costs and expenses, including reasonable legal fees,
incurred by the Trustee in the defense of any claim or liability arising out of
or in connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.

                                  ARTICLE XII
                            CONVERSION OF SECURITIES

SECTION 12.1  Conversion Privilege and Conversion Rate.
              ----------------------------------------

     Subject to and upon compliance with the provisions of this Article, at the
option of the Holder thereof, any Security may be converted into fully paid and
nonassessable shares (calculated as to each conversion to the nearest 1/100th of
a share) of Common Stock of the Company at the Conversion Rate, determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall commence on the initial issuance date of the Securities and expire at the
close

                                      -82-



of business on the date of Maturity, subject, in the case of conversion of any
Global Security, to any Applicable Procedures. In case a Security or portion
thereof is called for redemption at the election of the Company or the Holder
thereof exercises his right to require the Company to repurchase the Security,
such conversion right in respect of the Security, or portion thereof so called,
shall expire at the close of business on the Business Day immediately preceding
the Redemption Date or the Repurchase Date, as the case may be, unless the
Company defaults in making the payment due upon redemption or repurchase, as the
case may be (in each case subject as aforesaid to any Applicable Procedures with
respect to any Global Security).

     The rate at which shares of Common Stock shall be delivered upon conversion
(herein called the "Conversion Rate") shall be initially 42.7599 shares of
Common Stock for each U.S.$1,000 principal amount of Securities. The Conversion
Rate shall be adjusted in certain instances as provided in this Article XII.

SECTION 12.2  Exercise of Conversion Privilege.
              --------------------------------

     In order to exercise the conversion privilege, the Holder of any Security
to be converted shall surrender such Security, duly endorsed in blank, at any
office or agency of the Company maintained for that purpose pursuant to Section
10.2, accompanied by a duly signed conversion notice substantially in the form
set forth in Section 2.4 stating that the Holder elects to convert such Security
or, if less than the entire principal amount thereof is to be converted, the
portion thereof to be converted. Each Security surrendered for conversion (in
whole or in part) during the Record Date Period shall (except in the case of any
Security or portion thereof which has been called for redemption on a Redemption
Date, or is repurchasable on a Repurchase Date, occurring, in either case,
within such Record Date Period and, as a result, the right to convert such
Security would otherwise terminate in such period if not exercised) be
accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of such Security (or part thereof,
as the case may be) being surrendered for conversion. The interest so payable on
such Interest Payment Date with respect to any Security (or portion thereof, if
applicable) that is surrendered for conversion during the Record Date Period
shall be paid to the Holder of such Security as of such Regular Record Date in
an amount equal to the interest that would have been payable on such Security if
such Security had been converted as of the close of business on such Interest
Payment Date. Interest payable on any Interest Payment Date in respect of any
Security surrendered for conversion on or after such Interest Payment Date shall
be paid to the Holder of such Security as of the Regular Record Date next
preceding such Interest Payment Date, notwithstanding the exercise of the right
of conversion. Except as provided in this paragraph and subject to the last
paragraph of Section 3.7, no cash payment or adjustment shall be made upon any
conversion on account of any interest accrued from the Interest Payment Date
next preceding the conversion date, in respect of any Security (or part thereof,
as the case may be) surrendered for conversion, or on account of any dividends
on the Common Stock issued upon conversion. The Company's delivery to the Holder
of the number of shares of Common Stock (and cash in lieu of fractions thereof,
as provided in this Indenture) into which a Security is convertible will be
deemed to satisfy the Company's obligation to pay the principal amount of the
Security.

                                      -83-



     Securities shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Securities for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and deliver to the Trustee, for delivery to the Holder (unless a
different Person is indicated on the Conversion Notice), a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 12.3.

     All shares of Common Stock delivered upon such conversion of Restricted
Securities shall bear restrictive legends substantially in the form of the
legends required to be set forth on the Restricted Securities pursuant to
Section 3.5 and shall be subject to the restrictions on transfer provided in
such legends. Neither the Trustee nor any agent maintained for the purpose of
such conversion shall have any responsibility for the inclusion or content of
any such restrictive legends on such Common Stock; provided, however, that the
Trustee or any agent maintained for the purpose of such conversion shall have
provided, to the Company or to the Company's transfer agent for such Common
Stock, prior to or concurrently with a request to the Company to deliver such
Common Stock, written notice that the Securities delivered for conversion are
Restricted Securities.

     In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in an aggregate principal amount equal to
the unconverted portion of the principal amount of such Security. A Security may
be converted in part, but only if the principal amount of such Security to be
converted is any integral multiple of U.S. $1,000 and the principal amount of
such security to remain Outstanding after such conversion is equal to U.S.
$1,000 or any integral multiple of $1,000 in excess thereof.

     If shares of Common Stock to be issued upon conversion of a Restricted
Security, or Securities to be issued upon conversion of a Restricted Security in
part only, are to be registered in a name other than that of the beneficial
owner of such Restricted Security, then such Holder must deliver to the
Conversion Agent a Surrender Certificate, dated the date of surrender of such
Restricted Security and signed by such beneficial owner, as to compliance with
the restrictions on transfer applicable to such Restricted Security. Neither the
Trustee nor any Conversion Agent, Security Registrar or transfer agent shall be
required to register in a name other than that of the beneficial owner, shares
of Common Stock or Securities issued upon conversion of any such Restricted
Security not so accompanied by a properly completed Surrender Certificate.

SECTION 12.3  Fractions of Shares.
              -------------------

     No fractional shares of Common Stock shall be issued upon conversion of any
Security or Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issuable upon conversion thereof shall be computed

                                      -84-



on the basis of the aggregate principal amount of the Securities (or specified
portions thereof) so surrendered. Instead of any fractional share of Common
Stock that would otherwise be issuable upon conversion of any Security or
Securities (or specified portions thereof), the Company shall calculate and pay
a cash adjustment in respect of such fraction (calculated to the nearest 1/100th
of a share) in an amount equal to the same fraction of the Closing Price Per
Share at the close of business on the day of conversion.

SECTION 12.4  Adjustment of Conversion Rate.
              -----------------------------

     The Conversion Rate shall be subject to adjustments from time to time as
follows:

     (1) In case the Company shall pay or make a dividend or other distribution
on shares of any class of capital stock payable in shares of Common Stock, the
Conversion Rate in effect at the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be increased by dividing such Conversion
Rate by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. If, after any such date
fixed for determination, any dividend or distribution is not in fact paid, the
Conversion Rate shall be immediately readjusted, effective as of the date the
Board of Directors determines not to pay such dividend or distribution, to the
Conversion Rate that would have been in effect if such determination date had
not been fixed. For the purposes of this paragraph (1), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.

     (2) In case the Company shall issue rights, options or warrants to all
holders of its Common Stock entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the current market price per
share (determined as provided in paragraph (8) of this Section 12.4) of the
Common Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than any rights, options or
warrants that by their terms will also be issued to any Holder upon conversion
of a Security into shares of Common Stock without any action required by the
Company or any other Person), the Conversion Rate in effect at the opening of
business on the day following the date fixed for such determination shall be
increased by dividing such Conversion Rate by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock that the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase at
such current market price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after

                                      -85-



the opening of business on the day following the date fixed for such
determination. If, after any such date fixed for determination, any such rights,
options or warrants are not in fact issued, or are not exercised prior to the
expiration thereof, the Conversion Rate shall be immediately readjusted,
effective as of the date such rights, options or warrants expire, or the date
the Board of Directors determines not to issue such rights, options or warrants,
to the Conversion Rate that would have been in effect if the unexercised rights,
options or warrants had never been granted or such determination date had not
been fixed, as the case may be. For the purposes of this paragraph (2), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Company will not issue any rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.

     (3) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Rate in effect at the opening of business
on the day following the day upon which such subdivision or combination becomes
effective shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.

     (4) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of any class
of capital stock or other property (including cash or assets or securities, but
excluding (i) any rights, options or warrants referred to in paragraph (2) of
this Section, (ii) any dividend or distribution paid exclusively in cash, (iii)
any dividend or distribution referred to in paragraph (1) of this Section and
(iv) any consideration distributed in any merger or consolidation to which
Section 12.11 applies), the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Conversion Rate in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (8) of this Section 12.4) of the Common
Stock on the date fixed for such determination less the then fair market value
(as determined by the Board of directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Trustee) of the
portion of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
distribution. If after any such date fixed for determination, any such
distribution is not in fact made, the Conversion Rate shall be immediately
readjusted, effective as of the date of the Board of Directors determines not to
make such distribution, to the Conversion Rate that would have been in effect if
such determination date had not been fixed.

                                      -86-



     (5) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock cash (excluding any cash that is distributed as part
of a distribution referred to in paragraph (4) of this Section or cash
distributed upon a merger or consolidation to which Section 12.11 applies) in an
aggregate amount that, combined together with (I) the aggregate amount of any
other all-cash distributions to all holders of its Common Stock made exclusively
in cash within the 365-day period preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to this paragraph
(5) has been made and (II) the aggregate of any cash plus the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration payable in
respect of any tender offer by the Company or any of its Subsidiaries for all or
any portion of the Common Stock concluded within the 365-day period preceding
the date of payment of such distribution and in respect of which no adjustment
pursuant to paragraph (6) of this Section 12.4 has been made (the "combined cash
and tender amount") exceeds 10% of the product of the current market price per
share (determined as provided in paragraph (8) of this Section 12.4) of the
Common Stock on the date for the determination of holders of shares of Common
Stock entitled to receive such distribution times the number of shares of Common
Stock outstanding on such date (the "aggregate current market price"), then, and
in each such case, immediately after the close of business on such date for
determination, the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by dividing the Conversion Rate in effect immediately
prior to the close of business on the date fixed for determination of the
stockholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the current market price per share
(determined as provided in paragraph (8) of this Section) of the Common Stock on
the date fixed for such determination less an amount equal to the quotient of
(x) the excess of such combined cash and tender amount over 10% of such
aggregate current market price divided by (y) the number of shares of Common
Stock outstanding on such date for determination and (ii) the denominator of
which shall be equal to the current market price per share (determined as
provided in paragraph (8) of this Section 12.4) of the Common Stock on such date
fixed for determination.

     (6) In case a tender offer made by the Company or any Subsidiary for all or
any portion of the Common Stock shall expire and such tender offer (as amended
upon the expiration thereof) shall require the payment to stockholders (based on
the acceptance (up to any maximum specified in the terms of the tender offer) of
Purchased Shares (as defined below)) of an aggregate consideration having a fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution) that combined together with
(I) the aggregate of the cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution), as of the expiration of such tender offer, of consideration
payable in respect of any other tender offer by the Company or any Subsidiary
for all or any portion of the Common Stock expiring within the 365-day period
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to this paragraph (6) has been made and (II) the aggregate
amount of any cash distributions to all holders of the Common Stock within
365-day period preceding the expiration of such tender offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section has been made (the
"combined tender and cash amount") exceeds 10% of the product of the current
market price per share of the Common Stock (determined as provided in paragraph
(8) of this Section 12.4) as of the last time (the "Expiration Time") tenders

                                      -87-



could have been made pursuant to such tender offer (as it may be amended) times
the number of shares of Common Stock outstanding (including any tendered shares)
as of the Expiration Time, then, and in each such case immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Conversion Rate immediately prior to close of
business on the date of the Expiration Time by a fraction (i) the numerator of
which shall be equal to (A) the product of (I) the current market price per
share of the Common Stock (determined as provided in paragraph (8) of this
Section 12.4) on the date of the Expiration Time multiplied by (II) the number
of shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time less (B) the combined tender and cash amount, and (ii) the
denominator of which shall be equal to the product of (A) the current market
price per share of the Common Stock (determined as provided in paragraph (8) of
this Section 12.4) as of the Expiration Time multiplied by (B) the number of
shares of Common Stock outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted up to any such maximum,
being referred to as the "Purchased Shares").

     (7) The reclassification of Common Stock into securities other than Common
Stock (other than any reclassification upon a consolidation or merger to which
Section 12.11 applies) shall be deemed to involve (a) a distribution of such
securities other than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be "the date fixed
for the determination of stockholders entitled to receive such distribution" and
"the date fixed for such determination" within the meaning of paragraph (4) of
this Section), and (b) a subdivision or combination, as the case may be, of the
number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall be
deemed to be "the day upon which such subdivision becomes effective" or "the day
upon which such combination becomes effective", as the case may be, and "the day
upon which such subdivision or combination becomes effective" within the meaning
of paragraph (3) of this Section 12.4).

     (8) For the purpose of any computation under paragraphs (2), (4), (5) or
(6) of this Section 12.4, the current market price per share of Common Stock on
any date shall be calculated by the Company and be the average of the daily
Closing Prices Per Share for the five consecutive Trading Days selected by the
Company commencing not more than 10 Trading Days before, and ending not later
than the earlier of the day in question and the day before the "ex" date with
respect to the issuance or distribution requiring such computation. For purposes
of this paragraph, the term "`ex' date", when used with respect to any issuance
or distribution, means the first date on which the Common Stock trades regular
way in the applicable securities market or on the applicable securities exchange
without the right to receive such issuance or distribution.

     (9) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(9)) would require an increase or decrease of at least one percent in such rate;
provided, however, that any adjustments which by reason of this paragraph (9)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case may be.

                                      -88-



     (10) The Company may make such increases in the Conversion Rate, for the
remaining term of the Securities or any shorter term, in addition to those
required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section 12.4, as
it considers to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for stock or
from any event treated as such for income tax purposes. The Company shall have
the power to resolve any ambiguity or correct any error in this paragraph (10)
and its actions in so doing shall, absent manifest error, be final and
conclusive.

     (11) Notwithstanding the foregoing provisions of this Section, no
adjustment of the Conversion Rate shall be required to be made (a) upon the
issuance of shares of Common Stock pursuant to any present or future plan for
the reinvestment of dividends or (b) because of a tender or exchange offer of
the character described in Rule 13e-4(h)(5) under the Exchange Act or any
successor rule thereto.

     (12) To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
the period is at least twenty (20) days, the increase is irrevocable during such
period, and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive; provided, however, that no such increase shall be taken
into account for purposes of determining whether the Closing Price Per Share of
the Common Stock equals or exceeds 105% of the Conversion Price in connection
with an event which would otherwise be a Change of Control pursuant to Section
14.4. Whenever the Conversion Rate is increased pursuant to the preceding
sentence, the Company shall give notice of the increase to the Holders in the
manner provided in Section 1.6 at least fifteen (15) days prior to the date the
increased Conversion Rate takes effect, and such notice shall state the
increased Conversion Rate and the period during which it will be in effect.

SECTION 12.5   Notice of Adjustments of Conversion Rate.
               ----------------------------------------

     Whenever the Conversion Rate is adjusted as herein provided:

     (1) the Company shall compute the adjusted Conversion Rate in accordance
with Section 12.4 and shall prepare a certificate signed by the Chief Financial
Officer of the Company setting forth the adjusted Conversion Rate and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall promptly be filed with the Trustee and with each Conversion
Agent; and

     (2) upon each such adjustment, a notice stating that the Conversion Rate
has been adjusted and setting forth the adjusted Conversion Rate shall be
required, and as soon as practicable after it is required, such notice shall be
provided by the Company to all Holders in accordance with Section 1.6.

                                      -89-



     Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours, and shall not be deemed to have knowledge of any adjustment in the
Conversion Rate unless and until a Responsible Officer of the Trustee shall have
received such a certificate. Until a Responsible Officer of the Trustee receives
such a certificate, the Trustee and each Conversion Agent may assume without
inquiry that the last Conversion Rate of which the Trustee has knowledge of
remains in effect.

SECTION 12.6   Notice of Certain Corporate Action.
               ----------------------------------

     In case:

     (1) the Company shall declare a dividend (or any other distribution) on its
Common Stock payable (i) otherwise than exclusively in cash or (ii) exclusively
in cash in an amount that would require any adjustment pursuant to Section 12.4;
or

     (2) the Company shall authorize the granting to all or substantially all of
the holders of its Common Stock of rights, options or warrants to subscribe for
or purchase any shares of capital stock of any class or of any other rights; or

     (3) of any reclassification of the Common Stock, or of any consolidation,
merger or share exchange to which the Company is a party and for which approval
of any stockholders of the Company is required, or of the conveyance, sale,
transfer or lease of all or substantially all of the assets of the Company; or

     (4) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company;

then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 10.2, and shall
cause to be provided to all Holders in accordance with Section 1.6, at least 20
days (or 10 days in any case specified in clause (1) or (2) above) prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights, options or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights, options or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, conveyance,
transfer, sale, lease, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, sale, lease, dissolution,
liquidation or winding up. Neither the failure to give such notice or the notice
referred to in the following paragraph nor any defect therein shall affect the
legality or validity of the proceedings described in clauses (1) through (4) of
this Section 12.6. If at the time the Trustee shall not be the conversion agent,
a copy of such notice shall also forthwith be filed by the Company with the
Trustee.

                                      -90-



         The Company shall cause to be filed at the Corporate Trust Office and
each office or agency maintained for the purpose of conversion of Securities
pursuant to Section 10.2, and shall cause to be provided to all Holders in
accordance with Section 1.6, notice of any tender offer by the Company or any
Subsidiary for all or any portion of the Common Stock at or about the time that
such notice of tender offer is provided to the public generally.

SECTION 12.7   Company to Reserve Common Stock.
               -------------------------------

         The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock then issuable upon the conversion of all Outstanding Securities.

SECTION 12.8   Taxes on Conversions.
               --------------------

         Except as provided in the next sentence, the Company will pay any and
all taxes and duties that may be payable in respect of the issue or delivery of
shares of Common Stock on conversion of Securities pursuant hereto. The Company
shall not, however, be required to pay any tax or duty that may be payable in
respect of (i) income of the Holder, or (ii) any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax or duty, or has established to the
satisfaction of the Company that such tax or duty has been paid.

SECTION 12.9   Covenant as to Common Stock.
               ---------------------------

         The Company agrees that all shares of Common Stock that may be
delivered upon conversion of Securities, upon such delivery, will have been duly
authorized and validly issued and will be fully paid and nonassessable and,
except as provided in Section 12.8, the Company will pay all taxes, liens and
charges with respect to the issue thereof.

SECTION 12.10  Cancellation of Converted Securities.
               ------------------------------------

         All Securities delivered for conversion shall be delivered to the
Trustee or its agent to be canceled by or at the direction of the Trustee, which
shall dispose of the same as provided in Section 3.9.

SECTION 12.11  Provision in Case of Consolidation, Merger or Sale of Assets.
               ------------------------------------------------------------

         In case of any consolidation or merger of the Company with or into any
other Person, any merger of another Person with or into the Company (other than
a merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company (other than a sale of all or substantially all of the assets of the
Company that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common

                                      -91-



Stock of the Company), the Person formed by such consolidation or resulting from
such merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then Outstanding shall have the right thereafter, during the
period such Security shall be convertible as specified in Section 12.1, to
convert such Security only into the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance, sale,
transfer or lease by a holder of the number of shares of Common Stock of the
Company into which such Security might have been converted immediately prior to
such consolidation, merger, conveyance, sale, transfer or lease, assuming such
holder of Common Stock of the Company (i) is not (A) a Person with which the
Company consolidated or merged with or into or which merged into or with the
Company or to which such conveyance, sale, transfer or lease was made, as the
case may be (a "Constituent Person"), or (B) an Affiliate of a Constituent
Person and (ii) failed to exercise his rights of election, if any, as to the
kind or amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease (provided that if the
kind or amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer, or lease is not the same for
each share of Common Stock of the Company held immediately prior to such
consolidation, merger, conveyance, sale, transfer or lease by others than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section 12.11 the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, sale, transfer
or lease by the holders of each Non-electing Share shall be deemed to be the
kind and amount so receivable per share by a plurality of the Non-electing
Shares). Such supplemental indenture shall provide for adjustments that, for
events subsequent to the effective date of such supplemental indenture, shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article. The above provisions of this Section 12.11 shall similarly apply
to successive consolidations, mergers, conveyances, sales, transfers or leases.
Notice of the execution of such a supplemental indenture shall be given by the
Company to the Holder of each Security as provided in Section 1.6 promptly upon
such execution.

         Neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or other securities or property or cash receivable by Holders of
Securities upon the conversion of their Securities after any such consolidation,
merger, conveyance, transfer, sale or lease or to any such adjustment, but may
accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, an Opinion of Counsel with respect thereto,
which the Company shall cause to be furnished to the Trustee upon request.

                                      -92-



SECTION 12.12  Rights Issued in Respect of Common Stock.
               ----------------------------------------

         Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"):

            (i)  are deemed to be transferred with such shares of Common Stock,

           (ii)  are not exercisable, and

          (iii)  are also issued in respect of future issuances of Common Stock

shall not be deemed distributed for purposes of Section 12.4(2) until the
occurrence of the earliest Trigger Event. In addition, in the event of any
distribution of rights or warrants, or any Trigger Event with respect thereto,
that shall have resulted in an adjustment to the Conversion Rate under Section
12.4(2), (1) in the case of any such rights or warrants that shall all have been
redeemed or repurchased without exercise by any holders thereof, the Conversion
Rate shall be readjusted upon such final redemption or repurchase to give effect
to such distribution or Trigger Event, as the case may be, as though it were a
cash distribution, equal to the per share redemption or repurchase price
received by a holder of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all holders
of Common Stock as of the date of such redemption or repurchase, and (2) in the
case of any such rights or warrants all of which shall have expired without
exercise by any holder thereof, the Conversion Price shall be readjusted as if
such issuance had not occurred.

SECTION 12.13  Responsibility of Trustee for Conversion Provisions.
               ---------------------------------------------------

         The Trustee, subject to the provisions of Section 6.1, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Conversion Rate, or with respect to the nature or extent
of any such adjustment when made, or with respect to the method employed, herein
or in any supplemental indenture provided to be employed, in making the same, or
whether a supplemental indenture need be entered into. Neither the Trustee,
subject to the provisions of Section 6.1, nor any Conversion Agent shall be
accountable with respect to the validity or value (or the kind or amount) of any
Common Stock, or of any other securities or property or cash, which may at any
time be issued or delivered upon the conversion of any Security; and it or they
do not make any representation with respect thereto. Neither the Trustee,
subject to the provisions of Section 6.1, nor any Conversion Agent shall be
responsible for any failure of the Company to make or calculate any cash payment
or to issue, transfer or deliver any shares of Common Stock or share
certificates or other securities or property or cash upon the surrender of any
Security for the purpose of conversion; and the Trustee, subject to the
provisions of Section 6.1, and any Conversion Agent shall not be responsible for
any failure of the Company to comply with any of the covenants of the Company
contained in this Article.

                                      -93-



                                  ARTICLE XIII
                                    GUARANTEE

SECTION 13.1   Guarantee
               ---------

         Each of the Guarantors, jointly and severally with the other
Guarantors, hereby irrevocably and unconditionally guarantees to each Holder of
a Security, and to the Trustee for itself and on behalf of such Holder, (i) the
due and punctual payment of the principal of (and premium, if any) and any
interest on, and any Redemption Price and Repurchase Price in respect of, such
Security when and as the same shall become due and payable, whether at the
Stated Maturity, by acceleration, call for redemption, exercise of the
repurchase right set forth in Article XIV or otherwise, in accordance with the
terms of such Security and of this Indenture and (ii) the performance of all
other obligations of the Company under this Indenture. In case of the failure of
the Company punctually to make any such payment, each of the Guarantors hereby
agrees to cause such payment to be made punctually when and as the same shall
become due and payable, whether at the Stated Maturity or by acceleration, call
for redemption, exercise of the repurchase right set forth in Article XIV or
otherwise, and as if such payment were made by the Company.

         Each of the Guarantors hereby agrees that its obligations hereunder
shall be as if it were a principal debtor and not merely a surety and shall be
absolute and unconditional, irrespective of the validity, regularity or
enforceability of such Security or this Indenture, the absence of any action to
enforce the same, any waiver or consent by the Holder of such Security or by the
Trustee with respect to any provisions thereof or of this Indenture, the
obtaining of any judgment against the Company or any action to enforce the same
or any other circumstances which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor.

         Each of the Guarantors hereby waives the benefits of diligence,
presentment, demand of payment, any requirement that at any time the Holder or
any other Person exhaust any right or take any action against the Company or any
other Person, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to such Security or the indebtedness
evidenced thereby and all demands whatsoever, and covenants that this Guarantee
will not be discharged in respect of such Security except by complete
performance of the obligations contained in such Security and in this Guarantee.
Each of the Guarantors hereby agrees that, in the event of a default in payment
of principal (or premium, if any) or any interest on, and any Redemption Price
or Repurchase Price in respect of, such Security, whether at their Stated
Maturity, by acceleration, call for redemption, exercise of the repurchase right
set forth in Article XIV or otherwise, legal proceedings may be instituted by
the Trustee on behalf of, or by, the Holder of such Security, subject to the
terms and conditions set forth in this Indenture, directly against each of the
Guarantors to enforce this Guarantee without first proceeding against the
Company. Each Guarantor further agrees that, as between the Guarantors, on the
one hand, and the Holders and the Trustee, on the other hand, the Maturity of
the obligations guaranteed hereby may be accelerated as provided in Article V of
this Indenture for the purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby. Each of the

                                      -94-



Guarantors agrees that if, after the occurrence and during the continuance of an
Event of Default, the Trustee or any of the Holders are prevented by applicable
law from exercising their respective rights to accelerate the maturity of the
Securities, to collect any interest on the Securities, or to enforce or exercise
any other right or remedy with respect to the Securities, such Guarantor agrees
to pay to the Trustee for the account of the Holders, upon demand therefor, the
amount that would otherwise have been due and payable had such rights and
remedies been permitted to be exercised by the Trustee or any of the Holders.

         Each of the Guarantors shall be subrogated to all rights of the Holders
of a Security against the Company in respect of any amounts paid by such
Guarantor on account of such Security pursuant to the provisions of its
Guarantee or this Indenture; provided, however, that either Guarantor shall be
entitled to enforce or to receive any payments arising out of, or based upon,
such right of subrogation until the principal of (and premium, if any) and any
interest on, and any Redemption Price and Repurchase Price in respect of, all
Securities shall have been paid in full.

         Each Guarantee shall remain in full force and effect and continue to be
effective should any petition be filed by or against the Company for liquidation
or reorganization, should the Company become insolvent or make an assignment for
the benefit of creditors or should a receiver or trustee be appointed for all or
any significant part of the Company's assets, and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Securities, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on the Securities, whether as a "voidable preference,"
"fraudulent transfer," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Securities shall, to the fullest
extent permitted by law, be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

         Each Guarantor shall have the right, subject to the provisions of this
Article, to seek contribution from any non-paying Guarantor so long as the
exercise of such right does not impair the rights of the Holders under any
Guarantee.

         No past, present or future stockholder, officer, director, employer or
incorporator of a Guarantor, as such, shall have any personal liability under
this Guarantee by reason of his, her or its status as such stockholder, officer,
director, employer or incorporator.

SECTION 13.2  Execution and Delivery of Guarantees.
              ------------------------------------

         The Guarantees to be endorsed on the Securities shall include the terms
of the Guarantee set forth in Section 13.1 and any other terms that may be set
forth in the form established pursuant to Section 2.1. Each Guarantor hereby
agrees to execute its Guarantee, in a form established pursuant to Section 2.1,
to be endorsed on each Security authenticated and delivered by the Trustee.

         The Guarantee shall be executed on behalf of each Guarantor by any one
of such Guarantor's Chairman of the Board, Chief Executive Officer, President,
Executive Vice Presidents, Senior Vice Presidents, and Vice Presidents and
attested by such Guarantor's Secretary or one of its Assistant Secretaries. Any
such signature may be manual or facsimile.

                                      -95-



         A Guarantee bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of a Guarantor shall bind such
Guarantor, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of the Security on
which such Guarantee is endorsed or did not hold such offices at the date of
such Guarantee.

         The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee endorsed
thereon on behalf of the Guarantors. Each of the Guarantors, jointly and
severally with the other Guarantors, hereby agrees that its Guarantee set forth
in Section 13.1 shall remain in full force and effect notwithstanding any
failure to endorse a Guarantee on any Security.

SECTION 13.3   Guarantors May Consolidate, Etc., on Certain Terms.
               --------------------------------------------------

         Except as set forth in Articles VII and X hereof, nothing contained in
this Indenture or in any of the Securities shall prevent any consolidation or
merger of a Guarantor with or into the Company or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Company.

SECTION 13.4   Release of Guarantors.
               ---------------------

         Concurrently with any consolidation, merger, sale or conveyance of a
Guarantor permitted by Section 13.3 hereof, and upon delivery by the Company to
the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect
that such consolidation, merger, sale or conveyance was made in accordance with
Section 13.3 hereof, the Trustee shall execute any documents reasonably required
in order to evidence the release of such Guarantor from its obligations under
its Guarantees endorsed on the Securities and under this Article XIII. If not
released from its obligations under its Guarantees endorsed on the Securities
and under this Article XIII, such Guarantor shall remain liable for the full
amount of principal of and premium (if any) and any interest on, and any
Redemption Price and Repurchase Price in respect of, the Securities under the
Indenture as provided in this Article XIII.

SECTION 13.5   Limitation on Guarantor Liability.
               ---------------------------------

         Each Guarantor, and by its acceptance of Securities, each Holder,
hereby confirms that it is the intention of all such parties that the Guarantee
of such Guarantor not constitute a fraudulent transfer or conveyance for
purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Guarantee. To effectuate the foregoing intention, the
Trustee, the Holders and each of the Guarantors hereby irrevocably agree that
the obligations of such Guarantor under its Guarantee and this Article XIII
shall be limited to the maximum amount as will, after giving effect to such
maximum amount and all other contingent and fixed liabilities of such Guarantor
that are relevant

                                      -96-



under such laws and after giving effect to any collections from, rights to
receive contributions from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this
Article XIII, if any, result in the obligations of such Guarantor under its
Guarantee not constituting a fraudulent transfer or conveyance.

                                   ARTICLE XIV
                  REPURCHASE OF SECURITIES AT THE OPTION OF THE
                         HOLDER UPON A CHANGE IN CONTROL

SECTION 14.1   Right to Require Repurchase.
               ---------------------------

     In the event that a Change in Control (as hereinafter defined) shall occur,
then each Holder shall have the right, at the Holder's option, but subject to
the provisions of Section 14.2, to require the Company to repurchase, and upon
the exercise of such right the Company shall repurchase, all of such Holder's
Securities not theretofore called for redemption, or any portion of the
principal amount thereof that is equal to U.S. $1,000 or any integral multiple
of U.S. $1,000 in excess thereof (provided that no single Security may be
repurchased in part unless the portion of the principal amount of such Security
to be Outstanding after such repurchase is equal to U.S. $1,000 or integral
multiples of U.S. $1,000 in excess thereof), on the date (the "Repurchase Date")
that is 45 days after the date of the Company Notice (as defined in Section
14.3) at a purchase price equal to 100% of the principal amount of the
Securities to be repurchased plus interest accrued but unpaid to, but excluding,
the Repurchase Date (the "Repurchase Price"); provided, however, that
installments of interest on Securities whose Stated Maturity is on or prior to
the Repurchase Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such on the relevant Record Date
according to their terms and the provisions of Section 3.7. Such right to
require the repurchase of the Securities shall not continue after a discharge of
the Company from its obligations with respect to the Securities in accordance
with Article IV, unless a Change in Control shall have occurred prior to such
discharge. At the option of the Company, the Repurchase Price may be paid in
cash or, subject to the fulfillment by the Company of the conditions set forth
in Section 14.2, by delivery of shares of Common Stock having a fair market
value equal to the Repurchase Price. Whenever in this Indenture (including
Sections 2.2, 3.1, 5.1(1) and 5.8) there is a reference, in any context, to the
principal of any Security as of any time, such reference shall be deemed to
include reference to the Repurchase Price payable in respect of such Security to
the extent that such Repurchase Price is, was or would be so payable at such
time, and express mention of the Repurchase Price in any provision of this
Indenture shall not be construed as excluding the Repurchase Price in those
provisions of this Indenture when such express mention is not made.

SECTION 14.2   Conditions to the Company's Election to Pay the Repurchase Price
               ----------------------------------------------------------------
               in Common Stock.
               ---------------

     The Company may elect to pay the Repurchase Price by delivery of shares of
Common Stock pursuant to Section 14.1 if and only if the following conditions
shall have been satisfied:

                                      -97-



     (1) The shares of Common Stock deliverable in payment of the Repurchase
Price shall have a fair market value as of the Repurchase Date of not less than
the Repurchase Price. For purposes of Section 14.1 and this Section 14.2, the
fair market value of shares of Common Stock shall be determined by the Company
and shall be equal to 95% of the average of the Closing Prices Per Share of the
Common Stock for the five consecutive Trading Days immediately preceding and
including the third Trading Day prior to the Repurchase Date;

     (2) The Repurchase Price shall be paid only in cash in the event any shares
of Common Stock to be issued upon repurchase of Securities hereunder (i) require
registration under any federal securities law before such shares may be freely
transferable without being subject to any transfer restrictions under the
Securities Act upon repurchase and if such registration is not completed or does
not become effective prior to the Repurchase Date, and/or (ii) require
registration with or approval of any governmental authority under any state law
or any other federal law before such shares may be validly issued or delivered
upon repurchase and if such registration is not completed or does not become
effective or such approval is not obtained prior to the Repurchase Date;

     (3) Payment of the Repurchase Price may not be made in Common Stock unless
such stock is, or shall have been, listed on a national securities exchange or
approved for quotation on the Nasdaq National Market, in either case, prior to
the Repurchase Date; and

     (4) All shares of Common Stock that may be issued upon repurchase of
Securities will be issued out of the Company's authorized but unissued Common
Stock and, will upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive or similar rights.

     If all of the conditions set forth in this Section 14.2 are not satisfied
in accordance with the terms thereof, the Repurchase Price shall be paid by the
Company only in cash.

 SECTION 14.3  Notices; Method of Exercising Repurchase Right, Etc.
               ---------------------------------------------------

     (1) Unless the Company shall have theretofore called for redemption all of
the Outstanding Securities, on or before the 30th day after the occurrence of a
Change in Control, the Company or, at the request and expense of the Company on
or before the 15th day after such occurrence, the Trustee, shall give to all
Holders of Securities, in the manner provided in Section 1.6, notice (the
"Company Notice") of the occurrence of the Change of Control and of the
repurchase right set forth herein arising as a result thereof and the Company
shall issue a Press Release including the information required to be included in
such Company Notice hereunder. The Company shall also deliver a copy of such
Company Notice to the Trustee.

     Each Company Notice shall state:

           (i)  the Repurchase Date,

           (ii) the date by which the repurchase right must be exercised,

                                      -98-



       (iii) the Repurchase Price, and whether the Repurchase Price shall be
paid by the Company in cash or by delivery of shares of Common Stock,

       (iv)  a description of the procedure that a Holder must follow to
exercise a repurchase right, and the place or places where such Securities are
to be surrendered for payment of the Repurchase Price and accrued interest
(including Liquidated Damages, if any), if any to the Repurchase Date,

       (v)   that on the Repurchase Date the Repurchase Price, and accrued
interest (including Liquidated Damages, if any), if any to the Repurchase Date,
will become due and payable upon each such Security designated by the Holder to
be repurchased, and that interest thereon shall cease to accrue on and after
said date,

       (vi)  the Conversion Rate then in effect, the date on which the right to
convert the principal amount of the Securities to be repurchased will terminate
and the place or places where such Securities may be surrendered for conversion,
and

       (vii) the place or places that the Security certificate with the Election
of Holder to Require Repurchase as specified in Section 2.2 shall be delivered,
and if the Security is a Restricted Securities Certificate the place or places
that the Surrender Certificate required by Section 14.3(9) shall be delivered.

     No failure of the Company to give the foregoing notices or defect therein
shall limit any Holder' s right to exercise a repurchase right or affect the
validity of the proceedings for the repurchase of Securities.

     If any of the foregoing provisions or other provisions of this Article XIV
are inconsistent with applicable law, such law shall govern.

     (2) To exercise a repurchase right, a Holder shall deliver to the Trustee
on or before the 30th day after the date of the Company Notice (i) irrevocable
written notice of the Holder's exercise of such right, which notice shall set
forth the name of the Holder, the principal amount of the Securities to be
repurchased (and, if any Security is to repurchased in part, the serial number
thereof, the portion of the principal amount thereof to be repurchased and the
name of the Person in which the portion thereof to remain Outstanding after such
repurchase is to be registered) and a statement that an election to exercise the
repurchase right is being made thereby, and, in the event that the Repurchase
Price shall be paid in shares of Common Stock, the name or names (with
addresses) in which the certificate or certificates for shares of Common Stock
shall be issued, and (ii) the Securities with respect to which the repurchase
right is being exercised. Such written notice shall be irrevocable, except that
the right of the Holder to convert the Securities with respect to which the
repurchase right is being exercised shall continue until the close of business
on the Business Day immediately preceding the Repurchase Date.

     (3) In the event a repurchase right shall be exercised in accordance with
the terms hereof, the Company shall pay or cause to be paid to the Trustee the
Repurchase Price in cash or shares of

                                      -99-



Common Stock, as provided above, for payment to the Holder on the Repurchase
Date or, if shares of Common Stock are to be paid, on the date that is 45 days
after the date of the Company's Notice, together with accrued and unpaid
interest to the Repurchase Date payable with respect to the Securities as to
which the repurchase right has been exercised; provided, however, that
installments of interest that mature on or prior to the Repurchase Date shall be
payable in cash to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Regular
Record Date.

     (4) If any Security (or portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the principal amount of such Security (or
portion thereof, as the case may be) shall, until paid, bear interest to the
extent permitted by applicable law from the Repurchase Date at the rate of 5.75%
per annum, and each Security shall remain convertible into Common Stock until
the principal of such Security (or portion thereof, as the case may be) shall
have been paid or duly provided for.

     (5) Any Security that is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.

     (6) Any issuance of shares of Common Stock in respect of the Repurchase
Price shall be deemed to have been effected immediately prior to the close of
business on the Repurchase Date and the Person or Persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such repurchase shall be deemed to have become on the Repurchase Date the
holder or holders of record of the shares represented thereby; provided,
however, that any surrender for repurchase on a date when the stock transfer
books of the Company shall be closed shall constitute the Person or Persons in
whose name or names the certificate or certificates for such shares are to be
issued as the record holder or holders thereof for all purposes at the opening
of business on the next succeeding day on which such stock transfer books are
open. No payment or adjustment shall be made for dividends or distributions on
any Common Stock issued upon repurchase of any Security declared prior to the
Repurchase Date.

     (7) No fractions of shares shall be issued upon repurchase of Securities.
If more than one Security shall be repurchased from the same Holder and the
Repurchase Price shall be payable in shares of Common Stock, the number of full
shares that shall be issuable upon such repurchase shall be computed on the
basis of the aggregate principal amount of the Securities so repurchased.
Instead of any fractional share of Common Stock that would otherwise be issuable
on the repurchase of any Security or Securities, the Company will deliver to the
applicable Holder its check for the current market value of such fractional
share. The current market value of a fraction of a share is determined by
multiplying the current market price of a full share by the fraction, and
rounding the result to the

                                     -100-



nearest cent. For purposes of this Section, the current market price of a
share of Common Stock is the Closing Price Per Share of the Common Stock on the
Trading Day immediately preceding the Repurchase Date.

     (8)  Any issuance and delivery of certificates for shares of Common Stock
on repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty that may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
for shares of Common Stock in a name other than that of the Holder of the
Securities being repurchased, and no such issuance or delivery shall be made
unless and until the Person requesting such issuance or delivery has paid to the
Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.

     (9)  If shares of Common Stock to be delivered upon repurchase of a
Security are to be registered in a name other than that of the beneficial owner
of such Security, then such Holder must deliver to the Trustee a Surrender
Certificate, dated the date of surrender of such Restricted Security and signed
by such beneficial owner, as to compliance with the restrictions on transfer
applicable to such Restricted Security. Neither the Trustee nor any Security
Registrar or transfer agent or other agents shall be required to register in a
name other than that of the beneficial owner shares of Common Stock issued upon
repurchase of any such Restricted Security not so accompanied by a properly
completed Surrender Certificate.

     (10) All Securities delivered for repurchase shall be delivered to the
Trustee to be canceled at the direction of the Trustee, which shall dispose of
the same as provided in Section 3.9.

SECTION 14.4     Certain Definitions.
                 -------------------

     For purposes of this Article XIV,

     (1)  the term "beneficial owner" shall be determined in accordance with
Rule 13d-3, as in effect on the date of the original execution of this
Indenture, promulgated by the Commission pursuant to the Exchange Act;

     (2)  a "Change in Control" shall be deemed to have occurred at the time,
after the original issuance of the Securities, of:

           (i) the acquisition by any Person (including any syndicate or group
deemed to be a "person" under Section 13(d)(3) of the Exchange Act) of
beneficial ownership, directly or indirectly, through a purchase, merger or
other acquisition transaction or series of transactions, of shares of capital
stock of the Company entitling such person to exercise 50% or more of the total
voting power of all shares of capital stock of the Company entitled to vote
generally in the elections of directors, other than any such acquisition by the
Company, any subsidiary of the Company or any employee benefit plan of the
Company; or

                                     -101-



     (ii) any consolidation of the Company with, or merger of the Company into,
any other Person, any merger of another Person into the Company, or any
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company to another Person (other than (a) any such transaction (x) that does
not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of capital stock of the Company and (y) pursuant to which the
holders of 50% or more of the total voting power of all shares of the Company's
capital stock entitled to vote generally in the election of directors
immediately prior to such transaction have the entitlement to exercise, directly
or indirectly, 50% or more of the total voting power of all shares of capital
stock entitled to vote generally in the election of directors of the continuing
or surviving corporation immediately after such transaction or (b) any
transaction which is effected solely to change the jurisdiction of incorporation
of the Company and results in a reclassification, conversion or exchange of
outstanding shares of Common Stock into solely shares of common stock);
provided, however, that a Change in Control shall not be deemed to have occurred
if (I) the Closing Price Per Share of the Common Stock for any five Trading Days
within the period of 10 consecutive Trading Days ending immediately after the
later of the date of the Change in Control or the date of the public
announcement of the Change in Control (in the case of a Change in Control under
clause (i) above) or the period of 10 consecutive Trading Days ending
immediately before the Change in Control (in the case of a Change in Control
under clause (ii) above) shall, in the case of each of such five Trading Days,
equal or exceed 105% of the Conversion Price of the Securities in effect on each
of such five Trading Days or (II) all of the consideration (excluding cash
payments for fractional shares and cash payments made pursuant to dissenters'
appraisal rights) in a merger or consolidation otherwise constituting a Change
of Control under clause (i) and/or clause (ii) above consists of shares of
common stock, depository receipts or other certificates representing common
equity interests traded on a national securities exchange or quoted on the
Nasdaq National Market (or will be so traded or quoted immediately following
such merger or consolidation) and as a result of such merger or consolidation
the Securities become convertible into such common stock, depository receipts or
other certificates representing common equity interests.

     (3)  the term "Conversion Price" shall equal U.S.$1,000 divided by the
Conversion Rate (rounded to the nearest cent); and

     (4)  for purposes of Section 14.4(2)(i), the term "person" shall include
any syndicate or group which would be deemed to be a "person" under Section
13(d)(3) of the Exchange Act, as in effect on the date of the original execution
of this Indenture.

SECTION 14.5  Consolidation, Merger, etc.
              --------------------------

     In the case of any merger, consolidation, conveyance, sale, transfer or
lease of all or substantially all of the assets of the Company to which Section
12.11 applies, in which the Common Stock of the Company is changed or exchanged
as a result into the right to receive shares of stock and other securities or
property or assets (including cash) which includes shares of Common Stock of the
Company or common stock of another Person that are, or upon issuance will be,
traded on a United States national securities exchange or approved for trading
on an established automated over-the-counter trading market in the United States
and such shares constitute at the time such change or

                                     -102-



exchange becomes effective in excess of 50% of the aggregate fair market value
of such shares of stock and other securities, property and assets (including
cash) (as determined by the Company, which determination shall be conclusive and
binding), then the Person formed by such consolidation or resulting from such
merger or combination or which acquires the properties or assets (including
cash) of the Company, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (which shall comply with the Trust Indenture
Act as in force at the date of execution of such supplemental indenture)
modifying the provisions of this Indenture relating to the right of Holders to
cause the Company to repurchase the Securities following a Change in Control,
including without limitation the applicable provisions of this Article XIV and
the definitions of the Common Stock and Change in Control, as appropriate, and
such other related definitions set forth herein as determined in good faith by
the Company (which determination shall be conclusive and binding), to make such
provisions apply in the event of a subsequent Change in Control to the common
stock and the issuer thereof if different from the Company and Common Stock of
the Company (in lieu of the Company and the Common Stock of the Company).

                                   ARTICLE XV
         HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE

SECTION 15.1   Company to Furnish Trustee Names and Addresses of Holders.
               ---------------------------------------------------------

     The Company will furnish or cause to be furnished to the Trustee:

     (1)  semi-annually, not more than 15 days after the Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Securities as of such Regular Record Date, and

     (2)  at such other times as the Trustee may reasonably request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished;

     provided, however, that no such list need be furnished so long as the
Trustee is acting as Security Registrar.

SECTION 15.2   Preservation of Information.
               ----------------------------

     (1)  The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 15.1 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list, if any, furnished to it as provided
in Section 15.1 upon receipt of a new list so furnished.

     (2)  After this Indenture has been qualified under the Trust Indenture Act,
the rights of Holders to communicate with other Holders with respect to their
rights under this Indenture or under the Securities, and the corresponding
rights, and duties of the Trustee, shall be as provided by the Trust Indenture
Act.

                                     -103-



     (3)  Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.

SECTION 15.3   Reports by Trustee.
               -------------------

     (1)  After this Indenture has been qualified under the Trust Indenture Act,
the Trustee shall transmit to Holders such reports concerning the Trustee and
its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.

     (2)  After this Indenture has been qualified under the Trust Indenture Act,
a copy of each such report shall, at the time of such transmission to Holders,
be filed by the Trustee with each stock exchange upon which the Securities are
listed, with the Commission and with the Company. The Company will notify the
Trustee when the Securities are listed on any stock exchange.

SECTION 15.4   Reports by Company.
               -------------------

     After this Indenture has been qualified under the Trust Indenture Act, the
Company shall file with the Trustee and the Commission, and transmit to Holders,
such information, documents and other reports, and such summaries thereof, as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with
the Trustee within 15 days after the same is so required to be filed with the
Commission. Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

                                  ARTICLE XVI
         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

SECTION 16.1   Indenture and Securities Solely Corporate Obligations.
               -----------------------------------------------------

     No recourse for the payment of the principal of or premium, if any, or
interest on any Security and no recourse under or upon any obligation, covenant
or agreement of the Company in this Indenture or in any supplemental indenture
or in any Security, or because of the creation of any indebtedness represented
thereby, shall be had against any past, present or future incorporator,
stockholder, employee, agent, officer, or director or subsidiary, as such, of
the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Securities.

                                     -104-



         This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

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

                                           AIRBORNE, INC.,
                                                as Issuer

                                           By:  /s/ Carl D. Donaway
                                                -------------------
                                                Name:  Carl D. Donaway
                                                Title:  CEO

                                           AIRBORNE EXPRESS, INC.,
                                                as Guarantor

                                           By:  /s/ Carl D. Donaway
                                                -------------------
                                                Name:  Carl D. Donaway
                                                Title:  CEO

                                           ABX AIR, INC.,
                                                as Guarantor

                                           By:  /s/ Joseph C. Hete
                                                ------------------
                                                Name:  Joseph C. Hete
                                                Title:  President & COO

                                           SKY COURIER, INC.,
                                                as Guarantor

                                           By:  /s/ Robert G. Brazier
                                                ---------------------
                                                Name:  Robert G. Brazier
                                                Title:  Vice President



                                         WILMINGTON AIR PARK, INC.,
                                              as Guarantor

                                         By:  /s/ Joseph C. Hete
                                              ------------------
                                              Name:  Joseph C. Hete
                                              Title:  President

                                         AIRBORNE FTZ, INC.,
                                              as Guarantor

                                         By:  /s/ Joseph C. Hete
                                              ------------------
                                              Name:  Joseph C. Hete
                                              Title:  President

                                         AVIATION FUEL, INC.,
                                              as Guarantor

                                         By:  /s/ Andrea McClain
                                              ------------------
                                              Name:  Andrea McClain
                                              Title:  Vice President

                                         SOUND SUPPRESSION, INC.,
                                              as Guarantor

                                         By:  /s/ Amiel M. Kuli
                                              -----------------
                                              Name:  Amiel M. Kuli
                                              Title:  President

                                         THE BANK OF NEW YORK,
                                              as Trustee

                                         By:  /s/ Michael Pitfick
                                              -------------------
                                              Name:  Michael Pitfick
                                              Title:  Assistant Vice President



             ANNEX A -- Form of Unrestricted Securities Certificate


                       UNRESTRICTED SECURITIES CERTIFICATE

    (For removal of Restricted Securities Legend pursuant to Section 3.5(3))


The Bank of New York
as Trustee
101 Barclay Street
New York, New York 10286

     RE: 5.75% CONVERTIBLE SENIOR NOTES DUE APRIL 1, 2007 OF AIRBORNE, INC.
(THE "SECURITIES")

               Reference is made to the Indenture, dated as of March 25, 2002
(the "Indenture"), from AIRBORNE, INC. (the "Company") and the Guarantors named
therein to THE BANK OF NEW YORK, as Trustee. Terms used herein and defined in
the Indenture or in Rule 144 under the U.S. Securities Act of 1933 (the
"Securities Act") are used herein as so defined.

               This certificate relates to U.S.$_______________ principal amount
of Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):

               CUSIP No. 009269AA9

               CERTIFICATE No(s). _________________

               The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.

               The Owner has requested that the Specified Securities be
exchanged for Securities bearing no Restricted Securities Legend pursuant to
Section 3.5(3) of the Indenture. In connection with such exchange, the Owner
hereby certifies that the exchange is occurring after a period of at least two
years has elapsed since the date the Specified Securities were acquired from the
Company or from an "affiliate" (as such term is defined in Rule 144) of the
Company, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company. The Owner also
acknowledges that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.

                                      A-1



               This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Purchasers.

Dated: ______________

(Print the name of the Undersigned, as such term is defined in the second
paragraph of this certificate.)

By:______________________________

Name:____________________________

Title:___________________________

(If the Undersigned is a corporation, partnership or fiduciary, the title of the
person signing on behalf of the Undersigned must be stated.)

                                      A-2



                    ANNEX B -- Form of Surrender Certificate

               In connection with the certification contemplated by Section 12.2
or 14.3(9) relating to compliance with certain restrictions relating to
transfers of Restricted Securities, such certification shall be provided
substantially in the form of the following certificate, with only such changes
thereto as shall be approved by the Company and Goldman, Sachs & Co.:

                                   CERTIFICATE

                                 AIRBORNE, INC.

                5.75% CONVERTIBLE SENIOR NOTES DUE APRIL 1, 2007

               This is to certify that as of the date hereof with respect to
U.S. $______ principal amount of the above-captioned securities surrendered on
the date hereof (the "Surrendered Securities") for registration of transfer, or
for conversion or repurchase where the securities issuable upon such conversion
or repurchase are to be registered in a name other than that of the undersigned
Holder (each such transaction being a "transfer"), the undersigned Holder (as
defined in the Indenture) certifies that the transfer of Surrendered Securities
associated with such transfer complies with the restrictive legend set forth on
the face of the Surrendered Securities for the reason checked below:

_________    The transfer of the Surrendered Securities complies with Rule 144A
             under the Securities Act; or

_________    The transfer of the Surrendered Securities complies with Rule 144
             under the United States Securities Act of 1933, as amended (the
             "Securities Act"); or

_________    The transfer of the Surrendered Securities has been made to an
             institution that is an "accredited investor" within the meaning of
             Rule 501(a)(1), (2), (3) or (7) under the Securities Act in a
             transaction exempt from the registration requirements of the
             Securities Act and a signed letter containing certain
             representations and agreements relating to restrictions on transfer
             of the Securities has been delivered (and if such transfer is for
             an aggregate principal amount less than $250,000 an opinion of
             counsel acceptable to the Company if requested by the Company, that
             such transfer is exempt from registration); or

_________    The transfer of the Surrendered Securities has been made pursuant
             to an exemption from registration under the Securities Act and an
             opinion of counsel has been delivered to the Company with respect
             to such transfer.

[Name of Holder]

Dated: ________________________________
*To be dated the date of surrender

                                      B-1

EX-4.5

                                                                     EXHIBIT 4.5

                                 Airborne, Inc.

                                5.75% Convertible
                         Senior Notes due April 1, 2007

                          Registration Rights Agreement
                          -----------------------------

                                                                 March 25, 2002
Goldman, Sachs & Co.,
First Union Securities, Inc.,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.

Ladies and Gentlemen:

         Airborne, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the Purchasers (as defined herein) upon the terms set forth in
the Purchase Agreement (as defined herein) its 5.75% Convertible Senior Notes
due April 1, 2007, which are unconditionally guaranteed by Airborne Express,
Inc., a Delaware corporation, ABX Air, Inc., a Delaware corporation, Sky
Courier, Inc., a Delaware corporation, Wilmington Air Park, Inc., an Ohio
corporation, Airborne FTZ, Inc., an Ohio corporation, Aviation Fuel, Inc., an
Ohio corporation, and Sound Suppression, Inc., an Ohio corporation. As an
inducement to the Purchasers to enter into the Purchase Agreement and in
satisfaction of a condition to the obligations of the Purchasers thereunder, the
Company agrees with the Purchasers for the benefit of Holders (as defined
herein) from time to time of the Registrable Securities (as defined herein) as
follows:

         1.     Definitions.

         (a)    Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Purchase Agreement. As used in this Agreement,
the following defined terms shall have the following meanings:

         "Act" or "Securities Act" means the United States Securities Act of
1933, as amended.

         "Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Closing Date" means the First Time of Delivery as defined in the
Purchase Agreement.



         "Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.

         "Common Stock" means the Company's common stock, par value $1.00 per
share.

         "DTC" means The Depository Trust Company.

         "Effective Date" has the meaning assigned thereto in Section 2(b)(i)
hereof.

         "Effective Failure" has the meaning assigned thereto in Section 7(b)
hereof.

         "Effectiveness Period" has the meaning assigned thereto in Section
2(b)(i) hereof.

         "Effective Time" means the time at which the Commission declares the
Shelf Registration Statement effective or at which the Shelf Registration
Statement otherwise becomes effective.

         "Electing Holder" has the meaning assigned thereto in Section 3(a)(iii)
hereof.

         "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.

         "Guarantor" has the meaning assigned thereto in the Indenture.

         "Holder" means any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security).

         "Indenture" means the Indenture, dated as of March 25, 2002, among the
Company, the Guarantors and The Bank of New York, as Trustee, as amended and
supplemented from time to time in accordance with its terms.

         "Liquidated Damages" has the meaning assigned thereto in Section 7(a)
hereof.

         "Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, conducted pursuant to Section 6 hereof.

         "NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.

         "Notice and Questionnaire" means a Notice of Registration Statement and
Selling Security Holder Questionnaire substantially in the form of Appendix A
hereto.

         The term "person" means an individual, partnership, corporation,
limited liability company, trust or unincorporated organization, or a government
or agency or political subdivision thereof.

         "Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon

                                       2



Rule 430A under the Act) included in the Shelf Registration Statement, as
amended or supplemented by any prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Shelf Registration Statement and by all other amendments and supplements to such
prospectus, including all material incorporated by reference in such prospectus
and all documents filed after the date of such prospectus by the Company under
the Exchange Act and incorporated by reference therein.

         "Purchase Agreement" means the purchase agreement, dated as of March
19, 2002, among the Purchasers, the Guarantors and the Company relating to the
Securities.

         "Purchasers" means Goldman, Sachs & Co. and First Union Securities,
 Inc.

         "Registrable Securities" means all or any portion of the Securities
issued from time to time under the Indenture in registered form and the shares
of Common Stock issuable upon conversion of such Securities; provided, however,
                                                             --------  -------
that a security ceases to be a Registrable Security when it is no longer a
Restricted Security.

         "Registration Default" has the meaning assigned thereto in Section 7(a)
hereof.

         "Restricted Security" means any Security or share of Common Stock
issuable upon conversion thereof except any such Security or share of Common
Stock that (i) has been effectively registered under the Securities Act and sold
in a manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k) of
such Rule 144 (or any successor provision thereto), or (iii) has otherwise been
transferred and a new Security or share of Common Stock not subject to transfer
restrictions under the Securities Act has been delivered by or on behalf of the
Company in accordance with Section 3.3 of the Indenture.

         "Rules and Regulations" means the published rules and regulations of
the Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.

         "Securities" means the 5.75% Convertible Senior Notes due April 1,
2007. Each Security is entitled to the benefit of the guarantees provided for in
the Indenture (the "Guarantees") and, unless the context otherwise requires, any
reference herein to a "Security" or a "Registrable Security" shall include a
reference to the related Guarantees.

         "Shelf Registration" means a registration effected pursuant to Section
2 hereof.

         "Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company pursuant to the
provisions of Section 2 of this Agreement, including the Prospectus contained
therein, any amendments and supplements to such registration statement,
including post effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.

                                       3



         "Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.

         The term "underwriter" means any underwriter of Registrable Securities
in connection with an offering thereof under a Shelf Registration Statement.

         (b)  Wherever there is a reference in this Agreement to a percentage of
the "principal amount" of Registrable Securities or to a percentage of
Registrable Securities, Common Stock shall be treated as representing the
principal amount of Securities that was surrendered for conversion or exchange
in order to receive such number of shares of Common Stock.

         2.   Shelf Registration.

         (a)  The Company and the Guarantors shall, no later than 90 calendar
days following the Closing Date, file with the Commission a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities by the
Holders from time to time in accordance with the methods of distribution elected
by such Holders and set forth in such Shelf Registration Statement and,
thereafter, shall use their best efforts to cause such Shelf Registration
Statement to be declared effective under the Act no later than 180 calendar days
following the Closing Date; provided, however, that the Company may, upon
written notice to all Holders, postpone having the Shelf Registration Statement
declared effective for a reasonable period not to exceed 90 days if the Board of
Directors of the Company shall have determined in good faith that because of
valid business reasons (not including avoidance of the Company's obligations
hereunder), including the acquisition or divestiture of assets, pending
corporate developments and similar events, it is in the best interests of the
Company to postpone having the Shelf Registration Statement declared effective;
provided, further, however, that no Holder shall be entitled to be named as a
selling security holder in the Shelf Registration Statement or to use the
Prospectus forming a part thereof for resales of Registrable Securities unless
such Holder is an Electing Holder.

         (b)  The Company and the Guarantors shall, subject to Section 2(c), use
their best efforts:

              (i)  to keep the Shelf Registration Statement continuously
         effective in order to permit the Prospectus forming a part thereof to
         be usable by Holders until the earliest of (1) the sale of all
         Registrable Securities registered under the Shelf Registration
         Statement; (2) the expiration of the period referred to in Rule 144(k)
         under the Act with respect to all Registrable Securities held by
         Persons that are not Affiliates of the Company; and (3) two years from
         the date (the "Effective Date") such Shelf Registration Statement is
         declared effective (such period being referred to herein as the
         "Effectiveness Period");

              (ii) after the Effective Time of the Shelf Registration Statement,
         promptly upon the request of any Holder of Registrable Securities that
         is not then an Electing Holder, to take any action reasonably necessary
         to enable such Holder to use the Prospectus forming a part thereof for
         offers and resales of Registrable Securities, including, without
         limitation, any action necessary to identify such Holder as a selling
         security holder in the Shelf Registration Statement; provided, however,
         that nothing in

                                       4



         this subparagraph shall relieve such Holder of the obligation to
         return a completed and signed Notice and Questionnaire to the Company
         in accordance with Section 3(a)(ii) hereof; and

              (iii) if at any time the Securities, pursuant to Article XII of
         the Indenture, are convertible into securities other than Common Stock,
         to cause, or to cause any successor under the Indenture to cause, such
         securities to be included in the Shelf Registration Statement no later
         than the date on which the Securities may then be convertible into such
         securities.

The Company shall be deemed not to have used its best efforts to keep the Shelf
Registration Statement effective during the requisite period if the Company or
any of the Guarantors voluntarily takes any action that would result in Holders
of Registrable Securities covered thereby not being able to offer and sell any
of such Registrable Securities during that period, unless such action is (A)
required by applicable law and the Company thereafter promptly complies with the
requirements of paragraph 3(j) below or (B) permitted pursuant to Section 2(c)
below.

         (c)  The Company may suspend the use of the Prospectus for a period not
to exceed 30 days in any 90-day period or an aggregate of 90 days in any 365-day
period if the Board of Directors of the Company shall have determined in good
faith that because of valid business reasons (not including avoidance of the
Company's obligations hereunder), including the acquisition or divestiture of
assets, pending corporate developments and similar events, it is in the best
interests of the Company to suspend such use, and prior to suspending such use
the Company provides the Holders with written notice of such suspension, which
notice need not specify the nature of the event giving rise to such suspension.

         3.   Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:

         (a) (i) Not less than 30 calendar days prior to the Effective Time of
the Shelf Registration Statement, the Company shall mail the Notice and
Questionnaire to the Holders of Registrable Securities. No Holder shall be
entitled to be named as a selling security holder in the Shelf Registration
Statement as of the Effective Time, and no Holder shall be entitled to use the
Prospectus forming a part thereof for offers and resales of Registrable
Securities at any time, unless such Holder has returned a completed and signed
Notice and Questionnaire to the Company by the deadline for response set forth
therein; provided, however, Holders of Registrable Securities shall have at
least 28 calendar days from the date on which the Notice and Questionnaire is
first mailed to such Holders to return a completed and signed Notice and
Questionnaire to the Company.

              (ii) After the Effective Time of the Shelf Registration Statement,
         the Company shall, upon the request of any Holder of Registrable
         Securities that is not then an Electing Holder, promptly send a Notice
         and Questionnaire to such Holder. The Company shall not be required to
         take any action to name such Holder as a selling security holder in the
         Shelf Registration Statement or to enable such Holder to use the
         Prospectus forming a part thereof for offers or resales of Registrable
         Securities until such Holder has returned a completed and signed Notice
         and Questionnaire to the Company.

                                       5



              (iii) The term "Electing Holder" shall mean any Holder of
         Registrable Securities that has returned a completed and signed Notice
         and Questionnaire to the Company in accordance with Section 3(a)(i) or
         3(a)(ii) hereof.

         (b)  The Company shall use its best efforts to reflect in the Shelf
Registration Statement and each amendment thereto and each amendment or
supplement, if any, to the Prospectus included therein, at the Effective Time or
when so filed with the Commission, as the case may be, such comments as such
Holders and their respective counsel reasonably may propose prior to the
Effective Time or the time of filing such amendment or supplement, as the case
may be.

         (c)  The Company shall promptly take such action as may be necessary so
that (i) each of the Shelf Registration Statement and any amendment thereto and
the Prospectus forming a part thereof and any amendment or supplement thereto
(and each report or other document incorporated therein by reference in each
case) complies in all material respects with the Securities Act and the Exchange
Act and the respective rules and regulations thereunder, (ii) each of the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) each of the Prospectus forming a part of the
Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not at any time during the Effectiveness Period include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the Company shall
not be required to take such action in respect of the Shelf Registration
Statement or any amendment thereto or of the Prospectus or any amendment or
supplement to the Prospectus if the Board of Directors of the Company has made a
determination pursuant to Section 2(c) for so long as the suspension pursuant to
Section 2(c) is continuing.

         (d)  The Company shall promptly advise each Electing Holder, and shall
confirm such advice in writing if so requested by any such Electing Holder:

              (i) when a Shelf Registration Statement or any post-effective
         amendment thereto has become effective, in each case making a public
         announcement thereof by release made to Reuters Economic Services and
         Bloomberg Business News;

              (ii) of any request by the Commission after the Effective Time for
         amendments or supplements to the Shelf Registration Statement or the
         Prospectus included therein or for additional information;

              (iii) of the issuance by the Commission of any stop order
         suspending the effectiveness of the Shelf Registration Statement or the
         initiation of any proceedings for such purpose;

              (iv) of the receipt by the Company of any notification with
         respect to the suspension of the qualification of the securities
         included in the Shelf Registration Statement for sale in any
         jurisdiction or the initiation of any proceeding for such purpose; and

                                       6



              (v) of the happening of any event or the existence of any state of
         facts that requires the making of any changes in the Shelf Registration
         Statement or the Prospectus included therein so that, as of such date,
         such Shelf Registration Statement and Prospectus do not contain an
         untrue statement of a material fact and do not omit to state a material
         fact required to be stated therein or necessary to make the statements
         therein (in the case of the Prospectus, in light of the circumstances
         under which they were made) not misleading (which advice shall be
         accompanied by an instruction to such Holders to suspend the use of the
         Prospectus until the requisite changes have been made).

         (e)  The Company shall use its best efforts to prevent the issuance,
and if issued to obtain the withdrawal at the earliest possible time, of any
order suspending the effectiveness of the Shelf Registration Statement.

         (f)  The Company shall furnish to each Electing Holder, without charge,
at least one copy of the Shelf Registration Statement and all post-effective
amendments thereto, including financial statements and schedules, and, if such
Electing Holder so requests in writing, all reports, other documents and
exhibits that are filed with or incorporated by reference in the Shelf
Registration Statement.

         (g)  The Company shall, during the Effectiveness Period, deliver to
each Electing Holder, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as such Electing Holder may
reasonably request; and the Company consents (except during the periods
specified in Section 2(c) above or during the continuance of any event described
in Section 3(d)(v) above) to the use of the Prospectus and any amendment or
supplement thereto by each of the Electing Holders in connection with the
offering and sale of the Registrable Securities covered by the Prospectus and
any amendment or supplement thereto during the Effectiveness Period.

         (h)  Prior to any offering of Registrable Securities pursuant to the
Shelf Registration Statement, the Company shall (i) register or qualify or
cooperate with the Electing Holders and their respective counsel in connection
with the registration or qualification of such Registrable Securities for offer
and sale under the securities or "blue sky" laws of such jurisdictions within
the United States as any Electing Holder may reasonably request, (ii) keep such
registrations or qualifications in effect and comply with such laws so as to
permit the continuance of offers and sales in such jurisdictions for so long as
may be necessary to enable any Electing Holder or underwriter, if any, to
complete its distribution of Registrable Securities pursuant to the Shelf
Registration Statement, and (iii) take any and all other actions necessary or
advisable to enable the disposition in such jurisdictions of such Registrable
Securities; provided, however, that in no event shall the Company or the
Guarantors be obligated to (A) qualify as a foreign corporation or as a dealer
in securities in any jurisdiction where it would not otherwise be required to so
qualify but for this Section 3(h) or (B) file any general consent to service of
process in any jurisdiction where it is not as of the date hereof so subject.

                                       7



         (i) Unless any Registrable Securities shall be in book-entry only form,
the Company and the Guarantors shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities sold pursuant to the Shelf Registration Statement, which
certificates, if so required by any securities exchange upon which any
Registrable Securities are listed, shall be penned, lithographed or engraved, or
produced by any combination of such methods, on steel engraved borders, and
which certificates shall be free of any restrictive legends and in such
permitted denominations and registered in such names as Electing Holders may
request in connection with the sale of Registrable Securities pursuant to the
Shelf Registration Statement.

         (j) Upon the occurrence of any fact or event contemplated by paragraph
3(d)(v) above, the Company shall promptly prepare a post-effective amendment to
any Shelf Registration Statement or an amendment or supplement to the related
Prospectus or file any other required document so that, as thereafter delivered
to purchasers of the Registrable Securities included therein, the Prospectus
will not include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company shall not be required to file such amendment, supplement or
document if the Board of Directors of the Company has made a determination
pursuant to Section 2(c) for so long as the suspension pursuant to Section 2(c)
is continuing. If the Company notifies the Electing Holders of the occurrence of
any fact or event contemplated by paragraph 3(d)(v) above and suspends use of
the Prospectus pursuant to Section 2(c), the Electing Holder shall suspend the
use of the Prospectus until the requisite changes to the Prospectus have been
made.

         (k) Not later than the Effective Time of the Shelf Registration
Statement, the Company shall provide a CUSIP number for the Registrable
Securities that are debt securities.

         (l) The Company shall use its best efforts to comply with all
applicable Rules and Regulations, and to make generally available to its
security holders as soon as practicable, but in any event not later than
eighteen months after (i) the effective date (as defined in Rule 158(c) under
the Securities Act) of the Shelf Registration Statement, (ii) the effective date
of each post-effective amendment to the Shelf Registration Statement, and (iii)
the date of each filing by the Company with the Commission of an Annual Report
on Form 10-K that is incorporated by reference in the Shelf Registration
Statement, an earning statement of the Company and its subsidiaries complying
with Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule 158).

         (m) Not later than the Effective Time of the Shelf Registration
Statement, the Company shall cause the Indenture to be qualified under the Trust
Indenture Act; in connection with such qualification, the Company shall
cooperate with the Trustee under the Indenture and the Holders (as defined in
the Indenture) to effect such changes to the Indenture as may be required for
such Indenture to be so qualified in accordance with the terms of the Trust
Indenture Act; and the Company shall execute, and shall use all reasonable
efforts to cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely manner.
In the event that any such amendment or modification referred to in this Section
3(m) involves the appointment of a new trustee under the Indenture, the Company
shall appoint a new trustee thereunder pursuant to the applicable provisions of
the Indenture.

                                       8



         (n) In the event of an underwritten offering conducted pursuant to
Section 6 hereof, the Company shall, if requested, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to the Shelf
Registration Statement such information as the Managing Underwriters reasonably
agree should be included therein and to which the Company does not reasonably
object and shall make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after it is notified of the
matters to be included or incorporated in such Prospectus supplement or
post-effective amendment.

         (o) The Company and the Guarantors shall enter into such customary
agreements (including an underwriting agreement in customary form in the event
of an underwritten offering conducted pursuant to Section 6 hereof) and take all
other appropriate action in order to expedite and facilitate the registration
and disposition of the Registrable Securities, and in connection therewith, if
an underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures substantially identical to those set
forth in Section 5 hereof with respect to all parties to be indemnified pursuant
to Section 5 hereof.

         (p) The Company shall:

             (i)(A) make reasonably available for inspection by the Electing
         Holders, any underwriter participating in any disposition pursuant to
         the Shelf Registration Statement, and any attorney, accountant or other
         agent retained by such Electing Holders or any such underwriter all
         relevant financial and other records, pertinent corporate documents and
         properties of the Company and its subsidiaries, and (B) cause the
         Company's officers, directors and employees to supply all information
         reasonably requested by such Electing Holders or any such underwriter,
         attorney, accountant or agent in connection with the Shelf Registration
         Statement, in each case, as is customary for similar due diligence
         examinations; provided, however, that all records, information and
         documents that are designated in writing by the Company, in good faith,
         as confidential shall be kept confidential by such Electing Holders and
         any such underwriter, attorney, accountant or agent, unless such
         disclosure is made in connection with a court proceeding or required by
         law, or such records, information or documents become available to the
         public generally or through a third party without an accompanying
         obligation of confidentiality; and provided further that, if the
         foregoing inspection and information gathering would otherwise disrupt
         the Company's conduct of its business, such inspection and information
         gathering shall, to the greatest extent possible, be coordinated on
         behalf of the Electing Holders and the other parties entitled thereto
         by one counsel designated by and on behalf of the Electing Holders and
         other parties;

             (ii)   in connection with any underwritten offering conducted
         pursuant to Section 6 hereof, make such representations and warranties
         to the Electing Holders participating in such underwritten offering and
         to the Managing Underwriters, in form, substance and scope as are
         customarily made by issuers to underwriters in primary underwritten
         offerings of equity and convertible debt securities and covering
         matters including, but not limited to, those set forth in the Purchase
         Agreement;

                                       9



             (iii) in connection with any underwritten offering conducted
         pursuant to Section 6 hereof, obtain opinions of counsel to the Company
         (which counsel and opinions (in form, scope and substance) shall be
         reasonably satisfactory to the Managing Underwriters) addressed to each
         Electing Holder participating in such underwritten offering and the
         underwriters, covering such matters as are customarily covered in
         opinions requested in primary underwritten offerings of equity and
         convertible debt securities and such other matters as may be reasonably
         requested by such Electing Holders and underwriters (it being agreed
         that the matters to be covered by such opinions shall include, without
         limitation, a statement by such counsel that it has no reason to
         believe that, as of the date of the opinion and as of the Effective
         Time of the Shelf Registration Statement or most recent post-effective
         amendment thereto, as the case may be, the Shelf Registration Statement
         or the Prospectus, including the documents incorporated by reference
         therein (other than the financial statements therein, as to which such
         counsel need express no opinion), contained or contains, as the case
         may be, an untrue statement of a material fact or omitted or omits, as
         the case may be, a material fact required to be stated therein or
         necessary to make the statements therein not misleading);

             (iv)  in connection with any underwritten offering conducted
         pursuant to Section 6 hereof, obtain "cold comfort" letters and updates
         thereof from the independent public accountants of the Company (and, if
         necessary, from the independent public accountants of any subsidiary of
         the Company or of any business acquired by the Company for which
         financial statements and financial data are, or are required to be,
         included in the Shelf Registration Statement), addressed to each
         Electing Holder participating in such underwritten offering (if such
         Electing Holder has provided such letter, representations or
         documentation, if any, required for such cold comfort letter to be so
         addressed) and the underwriters, in customary form and covering matters
         of the type customarily covered in "cold comfort" letters in connection
         with primary underwritten offerings; and

             (v)   in connection with any underwritten offering conducted
         pursuant to Section 6 hereof, deliver such documents and certificates
         as may be reasonably requested by any Electing Holders participating in
         such underwritten offering and the Managing Underwriters, if any,
         including, without limitation, certificates to evidence compliance with
         Section 3(j) hereof and with any conditions contained in the
         underwriting agreement or other agreements entered into by the Company.

         (q) The Company will use its best efforts to cause the Common Stock
issuable upon conversion of the Securities to be listed, subject to notice of
issuance, on the New York Stock Exchange or other stock exchange or trading
system on which the Common Stock primarily trades on or prior to the Effective
Time of the Shelf Registration Statement hereunder.

         (r) In the event that any broker-dealer registered under the Exchange
Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of the NASD Rules (or
any successor provision thereto)) of the Company or has a "conflict of interest"
(as defined in Rule 2720(b)(7) of the NASD Rules (or any successor provision
thereto)) and such broker-dealer shall underwrite, participate as a member of an
underwriting syndicate or selling group or assist in the distribution of any
Registrable Securities covered by the Shelf Registration Statement, whether

                                       10



as a Holder of such Registrable Securities or as an underwriter, a placement or
sales agent or a broker or dealer in respect thereof, or otherwise, the Company
shall assist such broker-dealer in complying with the requirements of the NASD
Rules, including, without limitation, by (A) engaging a "qualified independent
underwriter" (as defined in Rule 2720(b)(15) of the NASD Rules (or any successor
provision thereto)) to participate in the preparation of the registration
statement relating to such Registrable Securities, to exercise usual standards
of due diligence in respect thereto and to recommend the public offering price
of such Registrable Securities, (B) indemnifying such qualified independent
underwriter to the extent of the indemnification of underwriters provided in
Section 5 hereof, and (C) providing such information to such broker-dealer as
may be required in order for such broker-dealer to comply with the requirements
of the NASD Rules.

         (s) The Company and the Guarantors shall use their best efforts to take
all other steps necessary to effect the registration and facilitate the offering
and sale of the Registrable Securities covered by the Shelf Registration
Statement contemplated hereby.

         4.  Registration Expenses. Except as otherwise provided in Section 3,
the Company shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2, 3 and 6 hereof and shall bear
or reimburse the Electing Holders for the reasonable fees and disbursements of a
single counsel selected by a plurality of all Electing Holders who own an
aggregate of not less than 25% of the Registrable Securities covered by the
Shelf Registration Statement to act as counsel therefor in connection therewith.
Each Electing Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Electing
Holder's Registrable Securities pursuant to the Shelf Registration Statement.

         5.  Indemnification and Contribution.

         (a) Indemnification by the Company and the Guarantors. Upon the
registration of the Registrable Securities pursuant to Section 2 hereof, the
Company and the Guarantors, jointly and severally, shall indemnify and hold
harmless each Electing Holder and each underwriter, selling agent or other
securities professional, if any, which facilitates the disposition of
Registrable Securities, and each of their respective officers and directors and
each person who controls such Electing Holder, underwriter, selling agent or
other securities professional within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (each such person being sometimes referred
to as an "Indemnified Person") against any losses, claims, damages or
liabilities, joint or several, to which such Indemnified Person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Shelf Registration Statement, or any Prospectus contained
therein or furnished by the Company to any Indemnified Person, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company hereby
agrees to reimburse such Indemnified Person for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that neither
the Company nor the Guarantors shall be liable to any such Indemnified Person in
any such case to the extent that any such loss, claim, damage or liability
arises out of

                                       11



or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Shelf Registration Statement or Prospectus, or
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by such Indemnified Person expressly for
use therein.

         (b) Indemnification by the Electing Holders and any Agents and
Underwriters. Each Electing Holder agrees, as a consequence of the inclusion of
any of such Electing Holder's Registrable Securities in such Shelf Registration
Statement, and each underwriter, selling agent or other securities professional,
if any, which facilitates the disposition of Registrable Securities shall agree,
as a consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, the
Guarantors, their directors, officers who sign any Shelf Registration Statement
and each person, if any, who controls the Company or the Guarantors within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, against any losses, claims, damages or liabilities to which the Company or
the Guarantors or such other persons may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in such Shelf
Registration Statement or Prospectus, or any amendment or supplement, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Electing Holder, underwriter, selling agent or
other securities professional expressly for use therein, and (ii) reimburse the
Company, the Guarantors, their directors, officers who sign any Shelf
Registration Statement and each person, if any, who controls the Company or the
Guarantors within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such action
or claim as such expenses are incurred.

         (c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under this Section 5, notify such
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under this Section 5. In
case any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party under this
Section 5 for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which

                                       12



indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.

         (d) Contribution. If the indemnification provided for in this Section 5
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation (even if the Electing Holders or any underwriters, selling
agents or other securities professionals or all of them were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 5(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Electing Holders and any underwriters,
selling agents or other securities professionals in this Section 5(d) to
contribute shall be several in proportion to the percentage of principal amount
of Registrable Securities registered or underwritten, as the case may be, by
them and not joint.

         (e) Notwithstanding any other provision of this Section 5, in no event
will any (i) Electing Holder be required to undertake liability to any person
under this Section 5 for any amounts in excess of the dollar amount of the
proceeds to be received by such Holder from the sale of such Holder's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to the Shelf Registration Statement and (ii)
underwriter, selling agent or other securities professional be required to
undertake liability to any person hereunder for any amounts in excess of the
discount, commission or other compensation payable to such underwriter, selling
agent or other securities professional with respect to the Registrable
Securities underwritten by it and distributed to the public.

         (f) The obligations of the Company and the Guarantors under this
Section 5 shall be in addition to any liability which the Company and the
Guarantors may otherwise have to any Indemnified Person and the obligations of
any Indemnified Person under this Section 5 shall be

                                       13



in addition to any liability which such Indemnified Person may otherwise have to
the Company, the Guarantors, their directors, officers who sign any Shelf
Registration Statement and each person, if any, who controls the Company or the
Guarantors within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act. The remedies provided in this Section 5 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.

         6.  Underwritten Offering. Any Holder of Registrable Securities who
desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided that (i) the Electing Holders of at least
33-1/3% in aggregate principal amount of the Registrable Securities then covered
by the Shelf Registration Statement shall request such an offering and (ii) at
least $33,000,000 aggregate principal amount of Registrable Securities shall be
included in such offering; and provided further that the Company shall not be
obligated to cooperate with more than one underwritten offering during the
Effectiveness Period. Upon receipt of such a request, the Company shall provide
all Holders of Registrable Securities written notice of the request, which
notice shall inform such Holders that they have the opportunity to participate
in the offering. In any such underwritten offering, the investment banker or
bankers and manager or managers that will administer the offering will be
selected by, and the underwriting arrangements with respect thereto (including
the size of the offering) will be approved by, the holders of a majority of the
Registrable Securities to be included in such offering; provided, however, that
such investment bankers and managers and underwriting arrangements must be
reasonably satisfactory to the Company. No Holder may participate in any
underwritten offering contemplated hereby unless (a) such Holder agrees to sell
such Holder's Registrable Securities to be included in the underwritten offering
in accordance with any approved underwriting arrangements, (b) such Holder
completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such approved underwriting arrangements, and (c) if
such Holder is not then an Electing Holder, such Holder returns a completed and
signed Notice and Questionnaire to the Company in accordance with Section
3(a)(ii) hereof within a reasonable amount of time before such underwritten
offering. The Holders participating in any underwritten offering shall be
responsible for any underwriting discounts and commissions and fees and, subject
to Section 4 hereof, expenses of their own counsel. The Company shall pay all
expenses customarily borne by issuers in an underwritten offering, including but
not limited to filing fees, the fees and disbursements of its counsel and
independent public accountants and any printing expenses incurred in connection
with such underwritten offering. Notwithstanding the foregoing or the provisions
of Section 3(n) hereof, upon receipt of a request from the Managing Underwriter
or a representative of holders of a majority of the Registrable Securities to be
included in an underwritten offering to prepare and file an amendment or
supplement to the Shelf Registration Statement and Prospectus in connection with
an underwritten offering, the Company may delay the filing of any such amendment
or supplement for up to 90 days if the Board of Directors of the Company shall
have determined in good faith that the Company has a bona fide business reason
for such delay.

         7.  Liquidated Damages.

         (a) Pursuant to Section 2(a) hereof, the Company may, upon written
notice to all the Holders, postpone having the Shelf Registration Statement
declared effective for a reasonable period not to exceed 90 days if the Board of
Directors of the Company shall have determined in

                                       14



good faith that because of valid business reasons (not including avoidance of
the Company's obligations hereunder), including the acquisition or divestiture
of assets, pending corporate developments and similar events, it is in the best
interests of the Company to postpone having the Shelf Registration Statement
declared effective. Notwithstanding any such postponement, if (i) on or prior to
the 90th day following the Closing Date, a Shelf Registration Statement has not
been filed with the Commission or (ii) on or prior to the 180th day following
the Closing Date, such Shelf Registration Statement is not declared effective by
the Commission (each, a "Registration Default"), the Company shall be required
to pay liquidated damages ("Liquidated Damages"), from and including the day
following such Registration Default until such Shelf Registration Statement is
either so filed or so filed and subsequently declared effective, as applicable,
at a rate per annum equal to an additional one-quarter of one percent (0.25%) of
the principal amount of Registrable Securities, to and including the 90th day
following such Registration Default and one-half of one percent (0.5%) thereof
from and after the 91st day following such Registration Default.

         (b) In the event that the Shelf Registration Statement ceases to be
effective (or the Holders of Registrable Securities are otherwise prevented or
restricted by the Company from effecting sales pursuant thereto) (an "Effective
Failure") for more than 30 days, whether or not consecutive, in any 90-day
period, or for more than 90 days, whether or not consecutive, during any 365-day
period, then the Company shall pay Liquidated Damages at a rate per annum equal
to an additional one-half of one percent (0.5%) of the principal amount of
Registrable Securities from the 31st day upon which an Effective Failure occurs
in any 90-day period or from the 91st day upon which an Effective Failure occurs
in any 365-day period, as the case may be, until the earlier of (i) the time the
Shelf Registration Statement again becomes effective or the Holders of
Registrable Securities are again able to make sales under the Shelf Registration
Statement or (ii) the time the Effectiveness Period expires. For the purpose of
determining an Effective Failure, days on which the Company has been obligated
to pay Liquidated Damages in accordance with the foregoing in respect of a prior
Effective Failure within the applicable 90-day or 365-day period, as the case
may be, shall not be included. For purposes of this Section 7(b), the Company
shall not be required to pay Liquidated Damages in respect of any day upon which
an Effective Failure has not occurred.

         (c) Any amounts to be paid as Liquidated Damages pursuant to paragraphs
(a) or (b) of this Section 7 shall be paid semi-annually in arrears, with the
first semi-annual payment due on the first Interest Payment Date (as defined in
the Indenture) following (i) in the case of said paragraph (a), the date of such
Registration Default, or (ii) in the case of said paragraph (b), the 31st day
upon which an Effective Failure occurs in the 90-day period or the 91st day upon
which an Effective Failure occurs in the 365-day period, as the case may be.
Such Liquidated Damages will accrue (1) in respect of the Securities at the
rates set forth in paragraphs (a) or (b) of this Section 7, as applicable, on
the principal amount of the Securities and (2) in respect of the Common Stock
issued upon conversion of the Securities, at the rates set forth in paragraphs
(a) or (b) of this Section 7, as applicable, applied to the Conversion Price (as
defined in the Indenture) at that time.

         (d) Except as provided in Section 8(b) hereof, the Liquidated Damages
as set forth in this Section 7 shall be the exclusive monetary remedy available
to the Holders of Registrable Securities for such Registration Default or
Effective Failure. In no event shall the Company be required to pay Liquidated
Damages in excess of the applicable maximum amount of one-half of one percent
(0.5%) set forth above, regardless of whether one or multiple Registration
Defaults exist.

                                       15



         8.  Miscellaneous.

         (a) Other Registration Rights. The Company may grant registration
rights that would permit any person that is a third party the right to
piggy-back on any Shelf Registration Statement, provided that if the Managing
Underwriter of any underwritten offering conducted pursuant to Section 6 hereof
notifies the Company and the Electing Holders that the total amount of
securities which the Electing Holders and the holders of such piggy-back rights
intend to include in any Shelf Registration Statement is so large as to
materially threaten the success of such offering (including the price at which
such securities can be sold), then the amount, number or kind of securities to
be offered for the account of holders of such piggy-back rights will be reduced
to the extent necessary to reduce the total amount of securities to be included
in such offering to the amount, number and kind recommended by the Managing
Underwriter prior to any reduction in the amount of Registrable Securities to be
included in such Shelf Registration Statement.

         (b) Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Purchasers and the Holders from time to time
may be irreparably harmed by any such failure, and accordingly agree that the
Purchasers and such Holders, in addition to any other remedy to which they may
be entitled at law or in equity and without limiting the remedies available to
the Electing Holders under Section 7 hereof, shall be entitled to compel
specific performance of the obligations of the Company under this Registration
Rights Agreement in accordance with the terms and conditions of this
Registration Rights Agreement, in any court of the United States or any State
thereof having jurisdiction.

         (c) Amendments and Waivers. This Agreement, including this Section
8(c), may be amended, and waivers or consents to departures from the provisions
hereof may be given, only by a written instrument duly executed by the Company
and the holders of a majority in aggregate principal amount of Registrable
Securities then outstanding. Each Holder of Registrable Securities outstanding
at the time of any such amendment, waiver or consent or thereafter shall be
bound by any amendment, waiver or consent effected pursuant to this Section
8(c), whether or not any notice, writing or marking indicating such amendment,
waiver or consent appears on the Registrable Securities or is delivered to such
Holder.

         (d) Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Indenture.

         (e) Parties in Interest. The parties to this Agreement intend that all
Holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities which are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any Holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
Holder of Registrable Securities shall acquire Registrable

                                       16



Securities, in any manner, whether by gift, bequest, purchase, operation of law
or otherwise, such transferee shall, without any further writing or action of
any kind, be entitled to receive the benefits of and, if an Electing Holder, be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement to the aforesaid extent.

         (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         (g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         (h) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

         (i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

         (j) Survival. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such Holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Registrable Securities of such Holder.

                                       17



         Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and you.

                                               Very truly yours,

                                               Airborne, Inc.

                                               By: /s/ Carl D. Donaway
                                                   -------------------
                                                   Name:  Carl D. Donaway
                                                   Title: CEO


                                               Airborne Express, Inc.

                                               By: /s/ Carl D. Donaway
                                                   -------------------
                                                   Name:  Carl D. Donaway
                                                   Title: CEO


                                               ABX Air, Inc.

                                               By: /s/ Joseph C. Hete
                                                   ------------------
                                                   Name:  Joseph C. Hete
                                                   Title: President & COO


                                               Sky Courier, Inc.

                                               By: /s/ Robert G. Brazier
                                                   ---------------------
                                                   Name:  Robert G. Brazier
                                                   Title: Vice President

                                               Wilmington Air Park, Inc.

                                               By: /s/ Joseph C. Hete
                                                   ------------------
                                                   Name:  Joseph C. Hete
                                                   Title: President



                                         Airborne FTZ, Inc.

                                         By: /s/ Joseph C. Hete
                                             ------------------
                                             Name:  Joseph C. Hete
                                             Title: President


                                         Aviation Fuel, Inc.

                                         By: /s/ Andrea McClain
                                             ------------------
                                             Name:  Andrea McClain
                                             Title: Vice President


                                         Sound Suppression, Inc.

                                         By: /s/ Amiel M. Kuli
                                             -----------------
                                             Name:  Amiel M. Kuli
                                             Title: President


Accepted as of the date hereof:
Goldman, Sachs & Co.
First Union Securities, Inc.


By: /s/ Goldman, Sachs & Co.
    ------------------------
    (Goldman, Sachs & Co.)

      On behalf of each of the Purchasers



                                                                      Appendix A


                                 Airborne, Inc.


                         INSTRUCTION TO DTC PARTICIPANTS
                         -------------------------------

                               _____________, 2002

                     URGENT - IMMEDIATE ATTENTION REQUESTED

                             DEADLINE FOR RESPONSE:
                             ----------------------------

                  The Depository Trust Company ("DTC") has identified you as a
DTC Participant through which beneficial interests in the Airborne, Inc. (the
"Company") 5.75% Convertible Senior Notes due April 1, 2007 (the "Securities")
are held.

                  The Company is in the process of registering the Securities
under the Securities Act of 1933 for resale by the beneficial owners thereof. In
order to have their Securities included in the registration statement,
beneficial owners must complete and return the enclosed Notice of Registration
Statement and Selling Security Holder Questionnaire.

                  It is important that beneficial owners of the Securities
                  --------------------------------------------------------
receive a copy of the enclosed materials as soon as possible as their rights to
- ------------------------------------------------------------
have the Securities included in the registration statement depend upon their
returning the Notice and Questionnaire by __________. Please forward a copy of
the enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact General Counsel,
Airborne, Inc., P.O. Box 662, Seattle, Washington 98111-0662, (206) 285-4600.

                                      A-1



                                 Airborne, Inc.


                        Notice of Registration Statement
                                       and
                      Selling Security Holder Questionnaire
                      -------------------------------------


                               _____________, 2002

         Airborne, Inc. (the "Company") [has filed] [intends to file] with the
United States Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (the "Shelf Registration Statement") for the
registration and resale under Rule 415 of the United States Securities Act of
1933, as amended (the "Securities Act"), of the Company's 5.75% Convertible
Senior Notes due April 1, 2007 (the "Securities") and the shares of common
stock, par value $1.00 per share (the "Common Stock"), issuable upon conversion
thereof, in accordance with the Registration Rights Agreement, dated as of the
date of original issuance of the Securities (the "Registration Rights
Agreement"), among the Company, the guarantor subsidiaries named therein and the
Purchasers named therein. A copy of the Registration Rights Agreement is
attached hereto. All capitalized terms not otherwise defined herein shall have
the meanings ascribed thereto in the Registration Rights Agreement.

         In order to have Registrable Securities included in the Shelf
Registration Statement (or a supplement or amendment thereto), this Notice of
Registration Statement and Selling Security Holder Questionnaire ("Notice and
Questionnaire") must be completed, executed and delivered to the Company at the
address set forth herein for receipt ON OR BEFORE ________________. Beneficial
                                     ------------
owners of Registrable Securities who do not complete, execute and return this
Notice and Questionnaire by such date (i) will not be named as selling security
holders in the Shelf Registration Statement and (ii) may not use the Prospectus
forming a part thereof for resales of Registrable Securities.

         Certain legal consequences arise from being named as a selling security
holder in the Shelf Registration Statement and related Prospectus. Accordingly,
holders and beneficial owners of Registrable Securities are advised to consult
their own securities law counsel regarding the consequences of being named or
not being named as a selling security holder in the Shelf Registration Statement
and related Prospectus.

                                      A-2



         The term "Registrable Securities" is defined in the Registration Rights
                   ----------------------
Agreement to mean all or any portion of the Securities issued from time to time
under the Indenture in registered form and the shares of Common Stock issuable
upon conversion of such Securities; provided, however, that a security ceases to
                                    --------  -------
be a Registrable Security when it is no longer a Restricted Security. Each
Security is entitled to the benefit of the guarantees provided for in the
Indenture (the "Guarantees") and, unless the context otherwise requires, any
reference herein to a "Security" or a "Registrable Security" shall include a
reference to the related Guarantees.

         The term "Restricted Security" is defined in the Registration Rights
                   -------------------
Agreement to mean any Security or share of Common Stock issuable upon conversion
thereof except any such Security or share of Common Stock which (i) has been
effectively registered under the Securities Act and sold in a manner
contemplated by the Shelf Registration Statement, (ii) has been transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any
successor provision thereto), or (iii) has otherwise been transferred and a new
Security or share of Common Stock not subject to transfer restrictions under the
Securities Act has been delivered by or on behalf of the Company in accordance
with Section 3.3 of the Indenture.

                                    ELECTION

         The undersigned holder (the "Selling Security Holder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item (3).
The undersigned, by signing and returning this Notice and Questionnaire, agrees
to be bound with respect to such Registrable Securities by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement, including, without limitation, Section 5 of the Registration Rights
Agreement, as if the undersigned Selling Security Holder were an original party
thereto.

         Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement, the Selling Security Holder will be required to deliver
to the Company and the Trustee the Notice of Transfer (completed and signed) set
forth in Exhibit 1 to this Notice and Questionnaire.

         The Selling Security Holder hereby provides the following information
to the Company and represents and warrants that such information is accurate and
complete:

                                      A-3



                                  QUESTIONNAIRE

(1)  (a) Full Legal Name of Selling Security Holder:
         ______________________________________________________________________
     (b) Full Legal Name of Registered Holder (if not the same as in (a) above)
         of Registrable Securities Listed in Item (3) Below:
         ______________________________________________________________________
     (c) Full Legal Name of DTC Participant (if applicable and if not the same
         as (b) above) Through Which Registrable Securities Listed in Item (3)
         Below are Held:
         ______________________________________________________________________

(2)        Address for Notices to Selling Security Holder:


                                _______________________________________

                                _______________________________________

                                _______________________________________
           Telephone:
                                _______________________________________
           Fax:
                                _______________________________________
           Contact Person:
                                _______________________________________


(3)        Beneficial Ownership of Securities:

           Except as set forth below in this Item (3), the undersigned Selling
           Security Holder does not beneficially own any Securities or shares
           of Common Stock issued upon conversion of any Securities.

     (a)   Principal amount of Registrable Securities (as defined in the
           Registration Rights Agreement) beneficially owned:___________________

           CUSIP No(s). of such Registrable Securities: ________________________

           Number of shares of Common Stock (if any) issued upon conversion of
           Registrable Securities:_____________________________________________

     (b)   Principal amount of Securities other than Registrable Securities
           beneficially owned:__________________________________________________

           CUSIP No(s). of such other Securities:_______________________________

           Number of shares of Common Stock (if any) issued upon conversion of
           such other Securities:_______________________________________________

     (c)   Principal amount of Registrable Securities that the undersigned
           wishes to be included in the Shelf Registration Statement:___________

           _____________________________________________________________________

           CUSIP No(s). of such Registrable Securities to be included in the
           Shelf Registration Statement:________________________________________

                                      A-4



           Number of shares of Common Stock (if any) issued upon conversion of
           Registrable Securities that are to be included in the Shelf
           Registration Statement:______________________________________________

(4)        Beneficial Ownership of Other Securities of the Company:

           Except as set forth below in this Item (4), the undersigned Selling
           Security Holder is not the beneficial or registered owner of any
           shares of Common Stock or any other securities of the Company, other
           than the Securities and shares of Common Stock listed above in Item
           (3).

           State any exceptions here:



(5)        Relationships with the Company:

           Except as set forth below, neither the Selling Security Holder nor
           any of its affiliates, officers, directors or principal equity
           holders (5% or more) has held any position or office or has had any
           other material relationship with the Company (or its predecessors or
           affiliates) during the past three years.

           State any exceptions here:



(6)        Plan of Distribution:

           Except as set forth below, the undersigned Selling Security Holder
           intends to distribute the Registrable Securities listed above in Item
           (3) only as follows (if at all): Such Registrable Securities may be
           sold from time to time directly by the undersigned Selling Security
           Holder or, alternatively, through underwriters, broker-dealers or
           agents. Such Registrable Securities may be sold in one or more
           transactions at fixed prices, at prevailing market prices at the time
           of sale, at varying prices determined at the time of sale, or at
           negotiated prices. Such sales may be effected in transactions (which
           may involve crosses or block transactions) (i) on any national
           securities exchange or quotation service on which the Registrable
           Securities may be listed or quoted at the time of sale, (ii) in the
           over-the-counter market, (iii) in transactions otherwise than on such
           exchanges or services or in the over-the-counter market, or (iv)
           through the writing of options. In connection with sales of the
           Registrable Securities or otherwise, the Selling Security Holder may
           enter into hedging transactions with broker-dealers, which may in
           turn engage in short sales of the Registrable Securities in the
           course of hedging the positions they assume. The Selling Security
           Holder may also sell Registrable Securities short and deliver
           Registrable Securities to close out such short positions, or loan or
           pledge Registrable Securities to broker-dealers that in turn may sell
           such securities.

           State any exceptions here:

                                      A-5



                  Note: In no event may such method(s) of distribution take the
form of an underwritten offering of the Registrable Securities without the prior
agreement of the Company.

                  By signing below, the Selling Security Holder acknowledges
that it understands its obligation to comply, and agrees that it will comply,
with the prospectus delivery and other provisions of the Securities Act and the
Exchange Act and the rules and regulations thereunder, particularly Regulation
M.

                  In the event that the Selling Security Holder transfers all or
any portion of the Registrable Securities listed in Item (3) above after the
date on which such information is provided to the Company, the Selling Security
Holder agrees to notify the transferee(s) at the time of the transfer of its
rights and obligations under this Notice and Questionnaire and the Registration
Rights Agreement.

                  By signing below, the Selling Security Holder consents to the
disclosure of the information contained herein in its answers to Items (1)
through (6) above and the inclusion of such information in the Shelf
Registration Statement and related Prospectus. The Selling Security Holder
understands that such information will be relied upon by the Company in
connection with the preparation of the Shelf Registration Statement and related
Prospectus.

                  In accordance with the Selling Security Holder's obligation
under Section 3(a) of the Registration Rights Agreement to provide such
information as may be required by law for inclusion in the Shelf Registration
Statement, the Selling Security Holder agrees to promptly notify the Company of
any inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while the Shelf Registration Statement
remains in effect. All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing, by hand-delivery, first-class mail, or air
courier guaranteeing overnight delivery as follows:

                  To the Company:           Airborne, Inc.
                                            3101 Western Avenue
                                            P.O. Box 662
                                            Seattle, Washington 98111-0662
                                            Attention: General Counsel

                  Once this Notice and Questionnaire is executed by the Selling
Security Holder and received by the Company, the terms of this Notice and
Questionnaire, and the representations and warranties contained herein, shall be
binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Security Holder (with respect to the Registrable
Securities beneficially owned by such Selling Security Holder and listed in Item
(3) above). This Agreement shall be governed in all respects by the laws of the
State of New York.

                                      A-6



                  IN WITNESS WHEREOF, the undersigned, by authority duly given,
has caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.

Dated:_____________________________





                  ______________________________________________________________
                  Selling Security Holder
                  (Print/type full legal name of beneficial owner of Registrable
                  Securities)



                  By:___________________________________________________________
                  Name:
                  Title:



PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE __________, _____ TO THE COMPANY AT:

                       Airborne, Inc.
                       3101 Western Avenue
                       P.O. Box 662
                       Seattle, Washington 98111-0662
                       Attention: General Counsel

                                      A-7



                                                                       Exhibit 1
                                                                   to Appendix A

              NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

Airborne,Inc.
3101 Western Avenue
P.O. Box 662
Seattle, Washington 98111-0662
Attention: General Counsel

The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Administration
                  Re:      Airborne, Inc. (the "Company")
                           5.75% Convertible Senior Notes due April 1, 2007
                           (the "Notes")

Dear Sirs:

                  Please be advised that _____________________ has transferred
$___________ aggregate principal amount of the above-referenced Notes or shares
of the Company's common stock, issued upon conversion of Notes, pursuant to an
effective Registration Statement on Form S-3 (File No. 333-____) filed by the
Company.

                  We hereby certify that the prospectus delivery requirements,
if any, of the Securities Act of 1933, as amended, have been satisfied with
respect to the transfer described above and that the above-named beneficial
owner of the Notes or common stock is named as a selling security holder in the
Prospectus dated ____________, or in amendments or supplements thereto, and that
the aggregate principal amount of the Notes or number of shares of common stock
transferred are [a portion of] the Notes or shares of common stock listed in
such Prospectus as amended or supplemented opposite such owner's name.

Dated:

                                          Very truly yours,

                                          ___________________________
                                          (Name)

                                      By: ___________________________
                                          (Authorized Signature)

EX-5.1

                                                                     Exhibit 5.1

May 13, 2002


Airborne, Inc.
3101 Western Avenue
Seattle, Washington 98111

Ladies and Gentlemen:

We have acted as counsel for (i) Airborne, Inc., a Delaware corporation (the
"Company"), and (ii) Airborne Express, Inc., a Delaware corporation, ABX Air,
Inc., a Delaware corporation, Sky Courier, Inc., a Delaware corporation,
Wilmington Air Park, Inc., an Ohio corporation, Airborne FTZ, Inc., an Ohio
corporation, Aviation Fuel, Inc., an Ohio corporation, and Sound Suppression,
Inc., an Ohio corporation, each a direct or indirect wholly owned subsidiary of
the Company (collectively, the "Guarantors"), in connection with the
Registration Statement on Form S-3 (the "Registration Statement") filed by the
Company and the Guarantors with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), relating
to the resale by certain selling security holders of up to $150,000,000
aggregate principal amount of 5.75% Convertible Senior Notes due April 1, 2007
("the Notes"), an indeterminate number of shares of common stock, par value
$1.00 (the "Common Stock"), of the Company, issuable upon conversion of the
Notes (the "Conversion Shares"), and the guarantees by the Guarantors of the
Notes (the "Guarantees"). The Notes were issued under an Indenture (the
"Indenture") dated as of March 25, 2002 among the Company, the Guarantors and
The Bank of New York (the "Trustee").

The Notes were initially sold by the Company in reliance on Section 4(2) of the
Act and may be resold or delivered from time to time as set forth in the
Registration Statement, any amendment thereto and the prospectus contained
therein (the "Prospectus") pursuant to Rule 415 under the Act.

We have examined the Registration Statement, the Indenture, the global note
evidencing the Notes and a form of certificate for the Common Stock, copies of
which have been filed with the Commission as exhibits to the Registration
Statement. We also have examined the originals, or duplicates or certified or
conformed copies, of such records, agreements, instruments and other documents
and have made such other and further investigations as we have deemed relevant
and necessary in connection with the opinions expressed herein. As to questions
of fact material to this opinion, we have relied upon certificates of public
officials and of officers and representatives of the Company and the Guarantors.

In rendering the opinions set forth below, we have assumed the genuineness of
all signatures, the legal capacity of natural persons, the authenticity of all
documents



Airborne, Inc.
May 13, 2002
Page 2

submitted to us as originals, the conformity to original documents of all
documents submitted to us as duplicates or certified or conformed copies, and
the authenticity of the originals of such latter documents. We have also assumed
that the Indenture is the valid and legally binding obligation of the Trustee.

Based upon the foregoing, and subject to the qualifications and limitations
stated herein, we are of the opinion that:

1.   The Notes have been duly authorized, executed and issued by the Company
and, assuming that they have been duly authenticated by the Trustee, constitute
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms.

2.   The Conversion Shares have been duly authorized and, when issued and
delivered in accordance with the provisions of the Notes and the Indenture, will
be validly issued, fully paid and nonassessable.

3.   The Guarantees have been duly authorized, executed and issued by the
respective Guarantors and, assuming due authentication of the Notes by the
Trustee, constitute valid and legally binding obligations of the respective
Guarantors enforceable against the respective Guarantors in accordance with
their terms.

Our opinions set forth in paragraphs 1 and 3 above are subject to (i) the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether considered in a proceeding
in equity or at law) and (iii) an implied covenant of good faith and fair
dealing.

We are members of the Bars of the State of Washington and the State of New York,
and we do not express any opinion herein concerning any law other than the
Delaware General Corporation Law (including statutory provisions, all applicable
provisions of the Delaware Constitution and reported judicial decisions
interpreting the foregoing), the law of the State of Washington and the State of
New York and the federal law of the United States.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus. In giving such consent, we do not thereby admit that
we are in the category of persons whose consent is required under Section 7 of
the Act.

Sincerely,

/s/ Riddell Williams P.S.

RIDDELL WILLIAMS P.S.

EX-8.1

                                                                     Exhibit 8.1

May 13, 2002


Airborne, Inc.
3101 Western Avenue
Seattle, Washington 98111

Ladies and Gentlemen:

As special tax counsel to Airborne, Inc. (the "Company") in connection with the
Registration Statement on Form S-3 (the "Registration Statement") filed by the
Company and certain of its direct and indirect wholly owned subsidiaries with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Act"), relating to the resale by certain selling security holders
of up to $150,000,000 aggregate principal amount of 5.75% Convertible Senior
Notes due April 1, 2007 pursuant to the Prospectus which forms a part of the
Registration Statement, we hereby confirm to you that the discussion set forth
under the heading "Certain United States Federal Income Tax Consequences"
therein is our opinion, subject to the limitations set forth therein.

We hereby consent to the filing of this opinion as Exhibit 8.1 to the
Registration Statement and to the use of our name under the caption "Certain
United States Federal Income Tax Consequences" in the Prospectus. In giving such
consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Act.

Sincerely,

/s/ Riddell Williams P.S.

RIDDELL WILLIAMS P.S.

EX-12.1

                           AIRBORNE, INC. AND SUBSIDIARIES
                          RATIO OF EARNINGS TO FIXED CHARGES

                                     EXHIBIT 12.1
                                (Dollars in thousands)



                                                                 ACTUALS FOR THE YEAR ENDED DECEMBER 31,
                                                 1997            1998             1999           2000            2001
                                             ------------    ------------     ------------    -----------    -----------
                                                                                              
EARNINGS:
     Earnings (loss) before taxes              $197,465        $221,585         $147,388        $23,226       ($28,904)
     Fixed charges                               41,819          31,069           31,682         40,670         43,331
     Less: Capitalized interest expenses         (1,869)         (5,850)          (3,969)        (6,770)        (2,377)
                                             ------------    ------------     ------------    -----------    -----------
          Total earnings                       $237,415        $246,804         $175,101        $57,126        $12,050
                                             ============    ============     ============    ===========    ===========

CALCULATION OF FIXED CHARGES:
      Net interest expense                     $ 27,790        $ 12,882         $ 17,262        $23,425        $19,868
      Add: Capitalized interest expenses          1,869           5,850            3,969          6,770          2,377
      Add: Interest income                          105             169              232            371          1,696
                                             ------------    ------------     ------------    -----------    -----------
          Gross interest expense                 29,764          18,901           21,463         30,566         23,941

DISCOUNTS ON SALES OF RECEIVABLES                    -               -                -             96           9,293

AMORTIZATION OF DEBT EXPENSE                        520             383              377            452            800

RENTAL EXPENSE:
      Total                                     115,350         117,862           98,416         95,559         92,969
      Factor                                         10%             10%              10%            10%            10%
                                             ------------    ------------     ------------    -----------    -----------
           Net "interest" component              11,535          11,786            9,842          9,556          9,297
                                             ------------    ------------     ------------    -----------    -----------
      TOTAL FIXED CHARGES                      $ 41,819        $ 31,069         $ 31,682        $40,670        $43,331
                                             ============    ============     ============    ===========    ===========

RATIO OF EARNINGS TO FIXED CHARGES                 5.68            7.94             5.53           1.40             -
                                             ============    ============     ============    ===========    ===========

EX-23.2

                                                                    Exhibit 23.2

                          INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
Airborne, Inc. on Form S-3 of our report on the financial statements of the
Company as of December 31, 2001 and 2000 and for each of the three years in the
period ended December 31, 2001, dated February 22, 2002 (May 9, 2002 as to
Notes Q and R), appearing in the Current Report on Form 8-K dated May 9, 2002
(which report expresses an unqualified opinion and includes an explanatory
paragraph relating to a change in the Company's method of accounting for major
engine overhaul costs) and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.

                                                       /s/ DELOITTE & TOUCHE LLP

Seattle, Washington
May 13, 2002

EX-25.1

                                                                    Exhibit 25.1

================================================================================
                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|


                              THE BANK OF NEW YORK
               (Exact name of trustee as specified in its charter)

New York                                                  13-5160382
(State of incorporation                                   (I.R.S. employer
if not a U.S. national bank)                              identification no.)

One Wall Street, New York, N.Y.                           10286
(Address of principal executive offices)                  (Zip code)



                                 AIRBORNE, INC.
               (Exact name of obligor as specified in its charter)


Delaware                                                  91-2065027
(State or other jurisdiction of                           (I.R.S. employer
incorporation or organization)                            identification no.)

3101 Western Avenue
Seattle, Washington                                       98111
(Address of principal executive offices)                  (Zip code)

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

                5.75% Convertible Senior Notes due April 1, 2007
                       (Title of the indenture securities)

================================================================================



1.   General information. Furnish the following information as to the Trustee:

     (a)  Name and address of each examining or supervising authority to which
          it is subject.

- --------------------------------------------
        Name              Address
- --------------------------------------------

     Superintendent of Banks of the State of  2 Rector Street, New York,
     New York                                 N.Y. 10006, and Albany, N.Y. 12203

     Federal Reserve Bank of New York         33 Liberty Plaza, New York,
                                              N.Y.  10045

     Federal Deposit Insurance Corporation    Washington, D.C.  20429

     New York Clearing House Association      New York, New York   10005

     (b)  Whether it is authorized to exercise corporate trust powers.

     Yes.

2.   Affiliations with Obligor.

     If the obligor is an affiliate of the trustee, describe each such
     affiliation.

     None.

16.  List of Exhibits.

     Exhibits identified in parentheses below, on file with the Commission, are
     incorporated herein by reference as an exhibit hereto, pursuant to Rule
     7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
     229.10(d).

     1.   A copy of the Organization Certificate of The Bank of New York
          (formerly Irving Trust Company) as now in effect, which contains the
          authority to commence business and a grant of powers to exercise
          corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
          filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
          Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
          to Form T-1 filed with Registration Statement No. 33-29637.)

     4.   A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
          filed with Registration Statement No. 33-31019.)

     6.   The consent of the Trustee required by Section 321(b) of the Act.
          (Exhibit 6 to Form T-1 filed with Registration Statement No.
          33-44051.)

     7.   A copy of the latest report of condition of the Trustee published
          pursuant to law or to the requirements of its supervising or examining
          authority.

                                      -2-



                                    SIGNATURE

     Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of April, 2002.

                                           THE BANK OF NEW YORK


                                           By:    /s/  STACEY POINDEXTER
                                               ----------------------------
                                               Name:   STACEY POINDEXTER
                                               Title:  ASSISTANT TREASURER

                                      -3-