**EXHIBIT10(f)**

 

TRADEMARK SECURITY AGREEMENT

THIS TRADEMARK SECURITY AGREEMENT (as amended, modified,or supplemented from time to time, this "Agreement"), made effectiveJune 29, 2001, by and between AIRBORNE EXPRESS, INC., a Delaware corporation,having a place of business at 3101 Western Avenue, Seattle, Washington  98121 (the "Debtor"), and WACHOVIABANK, N.A., a national banking association (the "Collateral Agent"),having offices located at 191 Peachtree Street, Atlanta, GA  30303.

PRELIMINARY STATEMENTS:

(1)                                      Except as otherwise defined herein, capitalized terms usedherein and defined in the Credit Agreement (as defined below) shall be usedherein as therein defined. Certain terms used herein are defined in Section 1hereof.  

(2)                                      This Agreement is one of the "Collateral Documents" describedin, and is made pursuant to, that certain Amended and Restated Credit Agreementdated as of the Closing Date by and among Airborne Express, Inc., a Delawarecorporation ("Express") and formerly known as Airborne Freight Corporation, aDelaware corporation ("AFC"), ABX Air, Inc., a Delaware corporation ("ABX" andExpress, each, a "Borrower" and together, jointly and severally, the"Borrowers"), Airborne, Inc., a Delaware corporation, as the "Parent," thefinancial institutions named as lenders therein (together with their respectivesuccessors and assigns, the "Lenders" and, each individually, a "Lender"), andWachovia Bank, N.A., a national banking association ("Wachovia"), as theAdministrative Agent for the Lenders under the agreement and as CollateralAgent, which agreement amends and restates that certain Credit Agreement datedas of July 27, 2000, by and among AFC, the Lenders, and Wachovia asAdministrative Agent and Collateral Agent as amended by that certain First Amendmentto Credit Agreement dated as of April 20, 2001, by and among Airborne, Inc., aDelaware corporation ("Airborne"), the Lenders, and Wachovia as AdministrativeAgent, as further amended by that certain Second Amendment to Credit Agreementdated as of May 31, 2001, by and among Airborne, the Lenders, and Wachovia asAdministrative Agent(collectively,together with any and all concurrent or subsequent exhibits, schedules,extensions, supplements, amendments or modifications thereto, the "CreditAgreement").  Pursuant to a JoinderAgreement dated as of December 26, 2000, Airborne assumed AFC's obligations as"Borrower" under the Credit Agreement, and AFC was released from itsobligations as "Borrower" under the Credit Agreement.

(3)                                      The Credit Agreement provides for, among other things, loansor advances, the issuance of letters of credit, and other extensions of creditto or for the benefit of the Borrowers of up to $275,000,000, with such loansor advances being evidenced by promissory notes (the "Facility Notes").

(4)                                      AFC entered into an Indenture dated as of December 15, 1992,as supplemented by that certain First Supplemental Indenture dated as ofSeptember 15, 1995, relating to the Express' 7.35% Notes due 2005, as furthersupplemented by that certain Second Supplemental Indenture Relating to AFC's8-7/8% Notes Due 2002 dated February 12, 1997, and as further supplemented bythat certain Third Supplemental Indenture dated as of the Closing Date (herein,as amended or otherwise modified, restated, supplemented or replaced from timeto time, the "Indenture"), pursuant to which Express, formerly known as AFC,(i) may issue and sell its debentures, notes, or other evidences ofindebtedness and (ii) has, prior to the date hereof, issued and sold to certainpurchasers (the "Noteholders," such term to include their successors andassigns) (A) $100,000,000 aggregate original principal amount of its "7.35%Notes Due September 15, 2005" (the "1995 Notes") and (B) $100,000,000 aggregateoriginal principal amount of its "8-7/8% Notes Due December 15, 2002" (the"1992 Notes," and together with the 1995 Notes, the "Indenture Debt," such termto include all debentures, notes, or other evidences of indebtedness issuedpursuant to the Indenture in addition to, issued in exchange for, or issued inreplacement of any Indenture Debt existing on the date hereof).  Express, in its capacity as issuer of theIndenture Debt, together with its successors and assigns, shall be referred toherein as the "Indenture Debt Issuer."

(5)                                      Subject to certain exceptions which are not applicable hereto,Section 1008 of the Indenture prohibits any Debtor from creating any securityinterests in certain of the Debtors' property unless the Indenture Debt isequally and ratably secured by such security interest.

(6)                                      The Debtor is the owner of certain trademarks and servicemarks more fully described in the Schedule annexed hereto and hereby made apart hereof (the "Schedule") and all signs and symbols associated therewith,together with the goodwill of the Debtor's business symbolized and representedby such trademarks and service marks and the proceeds thereof (hereincollectively the "Collateral").

(7)                                      This Agreement is made in favor of the Collateral Agent forthe benefit of the Lenders and the Noteholders (collectively the "SecuredCreditors") to equally and ratably secure the Secured Obligations (as definedherein).

(8)                                      It is a condition precedent to the making of Loans and theissuance of, and participation in, Letters of Credit under the Credit Agreementthat the Debtor shall have executed and delivered to the Collateral Agent thisAgreement.

(9)                                      The Debtor's desire to execute this Agreement to satisfy theconditions described in the preceding paragraphs (5) and (8).

NOW, THEREFORE, in consideration of the foregoing and othergood and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the Debtor hereby agrees as follows: 

1.                 The following terms shall have the meanings herein specifiedunless the context otherwise requires.Such definitions shall be equally applicable to the singular and pluralforms of the terms defined. 

"Collateral Agent" shall have the meaning provided in thefirst paragraph of this Agreement.

"Collateral Agent Expenses" shall mean (a) all costs orexpenses which any Debtor is required to pay or cause to be paid under thisAgreement or any other Collateral Document and which are paid or advanced bythe Collateral Agent pursuant to the provisions of the Collateral Documents;(b) all taxes and insurance premiums of every nature and kind which anyBorrower is required to pay or cause to be paid under this Agreement or anyother Collateral Document and which are paid or advanced by the CollateralAgent pursuant to the provisions of any Collateral Document; (c) all filing,recording, publication and search fees paid or incurred by the Collateral Agentin connection with the transactions contemplated by this Agreement or the otherCollateral Documents; (d) all costs and expenses paid or incurred by theCollateral Agent (with or without suit), to correct any default or enforce anyprovisions of any Collateral Document or in gaining possession of, maintaining,handling, preserving, storing, refurbishing, appraising, selling, preparing forsale and/or advertising to sell the Collateral, whether or not a sale isconsummated; (e) all costs and expenses of suit paid or incurred by theCollateral Agent in enforcing or defending this Agreement or any otherCollateral Document; and (f) attorneys' fees and expenses paid or incurred bythe Collateral Agent in advising, structuring, drafting, reviewing, amending,terminating, enforcing, defending or concerning this Agreement or any otherCollateral Document, whether or not suit is brought, and including any actionbrought in any Insolvency Proceeding.

"Credit Agreement" shall have the meaning provided in thePreliminary Statements of this Agreement.

"Facility Obligations" shall mean all "Obligations" assuch term is defined in the Credit Agreement.

"Indenture" shall have the meaning given such term in thePreliminary Statements of this Agreement.

"Indenture Debt" shall have the meaning provided in thePreliminary Statements of this Agreement.

"Indenture Documents" shall mean the Indenture, alldocuments or instruments evidencing the Indenture Debt and all other documentsnow or hereafter executed and delivered by the Indenture Debt Issuer, theParent, or any subsidiary, including and without limitation either of theBorrowers and the Debtor for the benefit of the Trustee or Noteholders.

"Insolvency Proceeding" shall mean any proceedingcommenced by or against any person or entity, under any provision of thefederal Bankruptcy Code, as amended, or under any other bankruptcy orinsolvency law, including, but not limited to, assignments for the benefit ofcreditors, formal or informal moratoriums, compositions or extensions with someor all creditors.

"Lender" and "Lenders" shall have the meaning provided inthe Preliminary Statements of this Agreement.

"Noteholder" shall have the meaning provided in the PreliminaryStatements of this Agreement.

"Trademark Proceeds" shall have the same meaning given theterm "proceeds" under the UCC or under other relevant law and, in any event,shall include, but not be limited to (i) any and all proceeds of any insurance,indemnity, warranty or guaranty payable to the Collateral Agent or a Debtorfrom time to time with respect to any of the Collateral, (ii) any and allpayments (in any form whatsoever) made or due and payable to a Debtor from timeto time in connection with any requisition, confiscation, condemnation, seizureor forfeiture of all or any part of the Collateral by any governmentalauthority (or any Person acting under color of governmental authority); (iii)any and all accounts, general intangibles, contract rights, inventory,equipment, money, drafts, instruments, deposit accounts, or other tangible andintangible property of the Debtor resulting from the sale (authorized orunauthorized) or other disposition of the Collateral, including, withoutlimitation, the net earnings of any lease, license, or other agreement relativeto the use of the Collateral, or any portion thereof, and any proceeds of suchproceeds; (iv) any and all other amounts from time to time paid or payableunder or in connection with any of the Collateral; and (v) proceeds from thesale, transfer, or other disposition of the Collateral by the Collateral Agent.

"Trustee" shall mean the trustee under the Indenture andincludes its successors and assigns.

2.                 The Debtor hereby pledges, mortgages, and grants a securityinterest in and to the Collateral Agent, for the ratable benefit of theLenders, all of its right, title and interest in and to the Collateral,together with all monies and claims for monies now or hereafter due or payablethereon or in respect thereof, to secure the payments and performances when dueof all the following (collectively, the "Secured Obligations"): 

(a)               the Borrowers' full and prompt payment when due (whether atthe stated maturity, by acceleration or otherwise), and the due performance, ofall Facility Obligations; and 

(b)              the full and prompt payment when due (whether at the statedmaturity, by acceleration or otherwise) of all principal of, and interest on,the Indenture Debt, and the due performance of all other obligations of theDebtor arising under or in connection with the Indenture Documents; and

(c)               all obligations and liabilities of the Debtor under thisAgreement, any Subsidiary Guaranty, Parent Guaranty, or any other Loan Documentto which the Debtor is a party; and

(d)              all obligations and liabilities of the Debtor under theIndenture Documents to which it is a party; and

(e)               all other obligations and liabilities owing by the Debtor toany of the Administrative Agent, the Collateral Agent, the Trustee, any Lender,or any Noteholder under this Agreement, the Credit Agreement or any other LoanDocument, or the Indenture Documents (including, without limitation,indemnities, fees and other amounts payable thereunder); and

(f)                the full and prompt payment when due of any and all CollateralAgent Expenses;

in all cases whether now existing, or hereafter incurredunder, arising out of, or in connection with, this Agreement, the CreditAgreement or any other Loan Document, or the Indenture Documents, including anysuch interest or other amounts which, but for any automatic stay under Section362(a) of the Bankruptcy Code, would become due.  It is acknowledged and agreed that the term "Secured Obligations"shall include, without limitation, extensions of credit and issuances ofsecurities of the types described above, whether outstanding on the date ofthis Agreement or extended or purchased from time to time after the date ofthis Agreement.

 

3.                 Subject to the provisions of Paragraph 6 hereof, it is theintention of the parties that the Debtor continue to have the use of theCollateral, including without limitation the above-described trademarks andservice marks and the goodwill of the business associated therewith andrepresented thereby to control the nature and quality of the goods manufacturedand sold under said trademarks and service marks, and, upon the payment andperformance in full of all of the Secured Obligations, as herein set forth, andthe cancellation of all of the Letters of Credit, the security interest of theCollateral Agent in the Collateral shall be released and thereafter theCollateral Agent shall no longer have any interest therein.

4.                 The Debtor will pay all filing fees with respect to thesecurity interest created hereby which the Collateral Agent may deem necessaryor advisable in order to perfect and continue perfected its security interestin the Collateral.

5.                 The Debtor represents and warrants that the Debtor lawfullypossesses and owns the Collateral and that, except for the security interest infavor of the Collateral Agent granted hereby, the Collateral will be kept freefrom all liens, security interests, claims and encumbrances whatsoever; thatthe Debtor has not made or given any prior assignments or transfers of theCollateral or any prior security interests in the Collateral that have not beenfully released; that the Collateral is and will continue to be, in allrespects, in full force and effect; and that the Debtor has no knowledge of anyinfringements of the Collateral, except as expressly disclosed to the CollateralAgent.

6.                 If an "Event of Default" shall be in existence underthe Credit Agreement (as such term is defined in the Credit Agreement), thenthe Debtor shall be in default hereunder and the Collateral Agent shall haveall the rights and remedies of a secured party under the applicable UniformCommercial Code and any other applicable state or federal laws.  The Collateral Agent shall give the Debtorreasonable notice of the time and place of any public sale of the Collateral orthe time after which any private sale of the Collateral or any other intendeddisposition thereof is to be made.Unless otherwise provided by law, the requirement of reasonable noticeshall be met if such notice is mailed, postage prepaid, to the address of theDebtor shown herein at least 10 days before the date of such sale ofdisposition.  In addition to theforegoing and all other rights and remedies of the Collateral Agent, during theexistence of any default by the Debtor, the Collateral Agent shall thereuponhave the immediate right to transfer to itself, the Lenders or any one of themor to sell, assign and transfer to any other person:

(a)               all right, title and interest in and to the Collateral,including without limitation the trademarks and service marks specified in theSchedule, together with the goodwill of the Debtor's business symbolized andassociated with such trademarks and service marks; and

(b)              ownership of the Debtor's entire inventory of labels anddecals not then affixed to its products and ownership of the right to operate andcontrol the business under the marks specified in the Schedule.

A formal irrevocable power of attorney is being executedand delivered by the Debtor to the Collateral Agent to enable such rights to becarried out.  The Debtor agrees that, inthe event the Collateral Agent exercises said power in accordance with itsterms, after written notification of such exercise from the Collateral Agent tothe Debtor, unless the Collateral Agent shall otherwise consent, the Debtorshall never thereafter, without the written authorization of the owner orowners of the trademarks and service marks specified in the Schedule, use anyof the marks specified in the Schedule or any mark closely similar thereto, onor in connection with the same or any related goods either in the United Statesof America, its territories or possessions or in countries outside the UnitedStates.

7.                 Trademark Proceeds shall be applied in the same manner as"Proceeds" are applied pursuant to Section 5.4 of that certainSecurity Agreement dated as of the Closing Date by and among Airborne Express,Inc., ABX Air, Inc., Airborne, Inc., Wilmington Air Park, Inc., Sky Courier,Inc., Aviation Fuel, Inc., Sound Suppression, Inc., Airborne FTZ, Inc., andother parties which may from time to time be joined as Assignors thereunder,and Wachovia Bank, N.A., as Collateral Agent.The Debtor shall be liable for any deficiency.

8.                 The Debtor agrees to execute and deliver to the CollateralAgent any further documentation or papers, and take all such other actions, asare necessary to carry out the intent or purpose of this Agreement, without anycharge or expense to the Collateral Agent or the Lenders.  Moreover, Debtor agrees from time to time toexecute and deliver to the Collateral Agent any further documentation or papers,and take all such other actions, as are necessary to further document, attach,or perfect the Collateral Agent's security interest in any other of theDebtor's trademarks, tradenames, or service marks (regardless of whether suchtrademarks, tradenames, or service marks are listed on the Schedule orconstitute part of the Trademark Collateral described herein) as to which theCollateral Agent has a security interest under this or any other CollateralDocument.

9.                 The Debtor will defend at its own cost and expense any action,claims or proceeding affecting the Collateral or the interest of the CollateralAgent or the Lenders therein.  TheDebtor agrees to reimburse the Collateral Agent or the Lenders for all costs andexpenses incurred by the Collateral Agent or the Lenders in defending any suchaction, claim or proceeding.

10.             This Agreement shall be in addition to all other present andfuture instruments, documents and agreements between the Debtor and theCollateral Agent; it shall not be deemed to affect, modify or limit any of thesame or any rights of the Collateral Agent thereunder, and all of theCollateral Agent's rights and remedies, hereunder, thereunder, at law or inequity are cumulative.  It is furtherunderstood and agreed that, in the event of default, the Collateral Agent shallhave no obligation to marshal any assets presently or hereafter pledged to theCollateral Agent or the Lenders by the Debtor, whether under this Agreement orotherwise.

11.             Any provision hereof contrary to, prohibited by or invalidunder, any laws or regulations shall be inapplicable and deemed omittedherefrom, but shall not invalidate the remaining provisions hereof.

12.             The benefits and burdens of this Agreement shall inure to thebenefit of and be binding upon the respective successors and the permittedassigns of the parties.

13.             The Debtor agrees that the validity, interpretation andenforcement of the Agreement and all rights hereunder shall be governed by thelaws of the State of Georgia.

14.             The Debtor and theCollateral Agent hereby irrevocably waives all right to a trial by jury in anyaction, proceeding or counterclaim arising out of or relating to this agreementor the transactions contemplated hereby.

[REMAINDER OF PAGEINTENTIONALLY BLANK]

IN WITNESS WHEREOF, the Debtor has caused this TrademarkSecurity Agreement to be duly executed, under seal, by its authorized officeras of the date first above written.

AIRBORNE EXPRESS, INC.                (SEAL)

 

 

By:      /s/Lanny H. Micheal

 

        Title:Senior Vice President and CFO__

 

Accepted at Atlanta, Georgia

 

WACHOVIA BANK, N.A., asCollateral Agent

 

 

By:  ___/s/Howard Kim__

 

Title:  __Senior VicePresident______

STATE OF __Washington_______            )

                                                            )  SS

COUNTY OF ___King_________    )

 

 

On __June 29,__, 2001, before me, the undersigned,a notary public in and for said State, personally appeared _Lanny H. Michael_______________,known to me to be the ____Senior Vice President and CFO____ of AirborneExpress, Inc., the corporation that executed the within instrument, and acknowledgedto me that such corporation executed the within instrument pursuant to itsby-laws or a resolution of its board of directors.

WITNESS my hand and official seal.

      _/s/ JanellCote_______

      Notary Public

 

STATE OF ___Georgia_______    )

                                                            )  SS

COUNTY OF ___Fulton____            )

 

 

On __June 29, 2001, before me, the undersigned, anotary public in and for said State, personally appeared _Howard Kim___________,known to me to be the ____Senior Vice President______ of Wachovia Bank,N.A., the corporation that executed the within instrument, and acknowledged tome that such corporation executed the within instrument pursuant to its by-lawsor a resolution of its board of directors.

WITNESS my hand and official seal.

 

 

      ___/s/Linda L. Walling_____

      Notary Public

SCHEDULE TO THE TRADEMARK SECURITY AGREEMENTBETWEENairborne express, inc.ANDwachovia bank, n.a., AS collateral AGENT

U.S. TRADEMARK AND SERVICE MARK REGISTRATIONS
|  

Mark

 

                                                                                                                                                               | Registration/

Application  No.                                                                                      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|
| Airborne@Home                                                                                                                                                                             | 2,375,004

                                                                                                     |
| Airborne & Design                                                                                                                                                                     | 1,093,416                                                                                                            |
|                                                                                                                                                                                      |                                                                                                                 |
| Airborne Express & Design

                                                                                                                                                      | 2,283,275                                                                                                            |
| Airborne Express                                                                                                                                                                          | 1,437,512                                                                                                            |
|                                                                                                                                                                                      |                                                                                                                 |
| Letter Express and Design                                                                                                                                                                 | 1,735,312                                                                                                            |
|  

Airborne Logistics Services

 

Airborne Global Post                                         

 

Express Pack

 

Airborne Letter Express

 

Letter Express |  

  2,228,008

 

  2,094,762

 

               1,083,949

 

  1,367,072

 

  1,735,312 |
|                                                                                                                                                                                      |                                                                                                                 |
|                                                                                                                                                                                           |                                                                                                                      |  |

IRREVOCABLE POWER OF ATTORNEY

Airborne Express, Inc., a Delaware corporation (the"Debtor"), hereby grants to WACHOVIA BANK, N.A., a national bankingassociation, as Collateral Agent, the exclusive Irrevocable Power of Attorneyto transfer to WACHOVIA BANK, N.A., or to any designee of WACHOVIA BANK, N.A.,all trademarks, service marks, trademark and service mark registrations andtrademark and service mark applications listed on the Schedule attached to theTrademark Security Agreement dated as of June 29, 2001, between AirborneExpress, Inc., and WACHOVIA BANK, N.A., (a copy of which Schedule is attachedhereto) together with the goodwill of the business therein and the Debtor's entireinventory of labels and decals bearing such marks not affixed to its products,and the right to operate and control, sell, assign, and transfer the businessunder those marks under the following terms and conditions:

1.                 the Power of Attorney granted hereunder shall be effective asof the date hereof and shall last for as long as any now existing or hereafterarising indebtedness, liabilities or obligations of the Debtor to the Lendersfor which WACHOVIA BANK, N.A., is acting as Collateral Agent is outstanding;

2.                 the Power of Attorney granted herein shall be irrevocablethroughout the duration of its life as specified in Paragraph 1 hereinabove;

3.                 the Power of Attorney granted herein shall only be exercisableby WACHOVIA BANK, N.A., following the occurrence of a default as provided inthat certain Trademark Security Agreement dated as of June 29, 2001, betweenthe Debtor and WACHOVIA BANK, N.A., as Collateral Agent; and

4.                 WACHOVIA BANK, N.A., shall give the Debtor five (5) days priorwritten notice of the exercise of this power, and the waiver by WACHOVIA BANK,N.A., of any particular default referred to in Paragraph 3 hereinabove shallhave no force or effect unless in writing and signed by an authorized officerof WACHOVIA BANK, N.A.  Even then suchwaiver shall not constitute or be considered a waiver of any other default orevent of default then existing or thereafter arising, whether similar or not.

IN WITNESS WHEREOF the Debtor has caused this Power ofAttorney to be executed effective as of June 29, 2001.

AIRBORNE EXPRESS, INC.

 

 

By:  ___/s/Lanny H. Michael_________

 

        Title:_Senior Vice President and CFO

STATE OF __Washington_______            )

                                                            )  SS

COUNTY OF ___King_________    )

 

 

On __June 29,__, 2001, before me, the undersigned,a notary public in and for said State, personally appeared _Lanny H. Michael_______________,known to me to be the ____Senior Vice President and CFO____ of AirborneExpress, Inc., the corporation that executed the within instrument, andacknowledged to me that such corporation executed the within instrumentpursuant to its by-laws or a resolution of its board of directors.

WITNESS my hand and official seal.

      _/s/ JanellCote_______

      Notary Public

 

 

 

SCHEDULE TO THE TRADEMARK SECURITY AGREEMENTBETWEENairborne express, inc.ANDwachovia bank, n.a., AS collateral AGENT

U.S. TRADEMARK AND SERVICE MARK REGISTRATIONS
|  

Mark

 

                                                                                                                                                               | Registration/

Application  No.                                                                         |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|
| Airborne@Home                                                                                                                                                                             | 2,375,004

                                                                                        |
| Airborne & Design                                                                                                                                                                     | 1,093,416                                                                                               |
|                                                                                                                                                                                      |                                                                                                    |
| Airborne Express & Design

                                                                                                                                                      | 2,283,275                                                                                               |
| Airborne Express                                                                                                                                                                          | 1,437,512                                                                                               |
|                                                                                                                                                                                      |                                                                                                    |
| Letter Express and Design                                                                                                                                                                 | 1,735,312                                                                                               |
|  

Airborne Logistics Services

 

Airborne Global Post                                         

 

Express Pack

 

Airborne Letter Express

 

Letter Express |  

  2,228,008

 

  2,094,762

 

  1,083,949

 

  1,367,072

 

  1,735,312 |
|                                                                                                                                                                                      |                                                                                                    |
|                                                                                                                                                                                           |                                                                                                         |  |