On September 26, 2007 ABX sent a letter to DHL disputing DHL's claims. ABX asserted its strongly held view that in calculating the revenues for the purposes of determining whether the 10% threshold had been exceeded, expenses reimbursable by DHL, including but not limited to the fuel costs should be included, as has been the practice for so long as the Agreements have been in place. Accordingly, ABX believes it is yet to cross the 10% threshold. In addition, ABX disputed DHL's claims with respect to costs incurred by ABX as a result of ABX being a public company, which DHL has previously paid without objection, and as a result of the ASTAR Offer.

On October 31, 2007 the parties met to discuss the disputed issues, but were not able to reach any resolution. ABX believed that the companies would continue to follow the contractually prescribed process toward resolution.

However, on November 5, 2007, DHL notified ABX that it was reducing the weekly ACMI Agreement and Hub Agreement pre-funding amounts under these Agreements by $8.8 million comprised of DHL's estimated $4 million of overhead allocation for each of the second and third quarters of 2007, and $800,000 for costs related to the ASTAR Offer. According to this letter, DHL would deposit such amounts in a separate interest bearing bank account until the issues could be resolved through further discussion or arbitration. The letter did not contain a calculation supporting how the $8.8 million was derived.

On November 6, 2007 ABX responded to DHL by giving a notice of occurrence of event of default under the Agreements. It is ABX's position that under the Agreements, DHL was explicitly required to make all payments due to ABX regardless of whether it was disputing such amounts. To the extent DHL contested any such amount DHL could seek recovery in accordance with the general dispute resolution process under the Agreements only after it has paid and ABX has received the disputed amount. Moreover, ABX strongly disputes the validity of DHL's claims. Under each of the Agreements DHL had two business days to cure its breach by making the required payments. If DHL did not cure its breach during this period of time, ABX became entitled to terminate each of the Agreements. On November 8, 2007, DHL responded to ABX's notice of occurrence of event of default and claimed that DHL had no payment obligations with respect to the withheld amounts. As of the close of business on November 8, 2007, DHL had not cured its breach under either of the Agreements.

In addition, the refusal of DHL to pay the amounts due to ABX under the Agreements may cause ABX to be in default under certain of its credit facilities. Should this be the case, ABX will consider whether to seek reimbursement from DHL for any damages or liabilities ABX may incur as a result of any such default.

ABX intends to consider which of its options to exercise with respect to the dispute, including but not limited to terminating the Agreements, pursuing the dispute resolution process set forth in the Agreements, negotiating with DHL to resolve the disputed issues, or any other option available to ABX at law or in equity. In the meantime, ABX intends to continue to provide the same high quality services to DHL that it has provided to date.