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THIRD AMENDMENT
TO
STORAGE AND DISTRIBUTION AGREEMENT
THIS THIRD AMENDMENT TO STORAGE AND DISTRIBUTION AGREEMENT is entered
into this 30th day of December 1997 by and between AIRBORNE LOGISTICS SERVICES,
a division of ABX Air, Inc. ("ALS") and MULTIPLE ZONES INTERNATIONAL, INC., a
Washington corporation ("MZI").
RECITALS
A. MZI and Airborne Freight Corporation ("Airborne") entered into that
certain Storage and Distribution Agreement dated September 28, 1992 (the
"Primary Agreement").
B. Airborne assigned all of its interest in and to the Agreement to ALS
(the "Assignment").
C. The term of the Primary Agreement was extended pursuant to that certain
Letter Agreement dated May 23, 1995 (the "Extension"). The Primary
Agreement was later amended by that certain First Amendment to Storage
and Distribution Agreement dated December 22, 1995 (the "First
Amendment"). The Primary Agreement was additionally amended by that
certain Second Amendment to Storage and Distribution Agreement dated
October 3, 1996 (the "Second Amendment"). The Primary Agreement, as
amended, was further amended pursuant to that certain Letter Agreement
dated October 10, 1997 (the "Second Extension"). The Primary Agreement,
the Assignment, the Extension, the First Amendment, the Second
Amendment, and the Second Extension, are referred to collectively herein
as the "Agreement."
D. The parties have agreed to modify the charges for services under the
Agreement and extend the Term of the Agreement, all in accordance with
this Amendment.
NOW THEREFORE, the parties agree to amend the Agreement as follows:
1. Except as specifically amended herein, the Agreement shall remain in
full force and effect.
2. For the term of this Third Amendment (4/1/98 - 3/31/99), the provisions
of the first paragraph of subparagraph 2.a and paragraph 3 of the First
Amendment are hereby superseded and replaced in their entirety by
Amendment 3, Schedule 1 ("Rates and Charges"), Schedule 1A
("Definitions"), Schedule 1B ("Terms and Conditions"), and Exhibit 1
("Revised Receiving, Inventory Control and Shipping Estimates") all of
which are attached hereto.
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3. PACKAGING CHARGES
A packaging charge of $.28 will be applied to each package
shipped. This charge will be applied in addition to all order
handling fees as well as all large order handling fees. In the
event of a price change by the manufacturer or delivery company,
the change in price (increase or decrease) will be passed on to
MZI. Any request for packaging not used in the current operation
may be priced separately.
4. STORAGE CHARGES
A $6.25 per sq. ft. per year charge will be assessed with a
minimum requirement of 84,480 sq. ft. The space will be in
building 10 and includes storage, processing and the required
common area to operate the MZI fulfillment operation. The charges
will be billed on a weekly basis in the fixed amount of $10,154.
4A. ADDITIONAL STORAGE CHARGES
Additional Storage in building 10 may be rented at a rate
negotiated at the time of the request from MZI. This space is
subject to availability and will be rented in a minimum 2 bay
quantity representing approximately 4,000 square feet (1 bay
represents approximately 2,000 square feet).
5. CONFIGURATIONS
Sales orders requiring configuration work will be separated from
non-configuration orders. These orders require additional
handling, control and labor compared to a nonconfiguration order.
This pricing assumes the configuration process in place at the
time of this agreement remains constant.
6. UPS ORDER FEE
Fee added to all UPS packages for additional handling and labor
requirements. Additional fees may be negotiated between ALS and
MZI if UPS services currently not utilized are required. Current
UPS services utilized include UPS Ground and Ground track.
7. SDS ORDER FEE
Fee added to all Airborne SDS packages for additional handling
and labor requirements.
8. OTHER CARRIER CHARGE
Additional work is required to prepare and fulfill orders not
processed through the SGA manifesting system. Such work may
include, but is not limited to, manual creation of shipping
label(s), preparation of required shipping documentation and
operation of multiple stand alone manifesting systems. At the
request of MZI additional carriers or services may be added in
the future. Any additions may be priced separately depending on
work requirements.
8A. INTERNATIONAL PAPERWORK
Fee for processing of international paperwork. MZI is responsible
for providing ALS accurate and complete information required for
International documentation. This fee is a processing fee only.
This fee does not include any duties, taxes, customs or related
transportation fees, or fees and various tariff charges
applicable to creating or processing such documents such as
Certificates of Origin, Consular Legalization and other similar
extra charge international documents.
9. RETURN TO VENDOR CHARGE (RTV)
Additional charge for preparation of all return to vendor
shipments.
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10. POSTAL MACHINE FEE
Allocation of postal machine lease rate plus rate updates and
supplies. Actual postage charges will be billed to MZI.
11. MANAGEMENT FEE
Weekly fee to cover cost of ALS management of MZI fulfillment
operations. The fee includes such expenses as administration,
management salary, billing costs, customer service, human
resources, supplies, security, employee safety and similar
overhead.
12. SPECIAL PROJECTS
Any task or activity requested by MZI, not included in the listed
item prices. Such activities include, but are not limited to
liquidation's, bulk moves and specified training events. Please
refer to the following schedule for specific labor charges
(travel and associated expenses would be in addition to labor):
a. Planned Projects: Specific times, dates, and requirements
must be agreed upon by MZI and ALS no later than 72 hours
prior to project start time. Regular time rates applicable
to work performed Monday - Saturday 0600 - 1800 only.
Labor (regular time) $ 15.00 hour
Labor (regular overtime) $ 22.50 hour
Labor (Sundays) $ 30.00 hour
b. Unplanned Projects: Projects requested with less than 72
hours notice.
Labor (regular time) $ 18.00 hour
Labor (regular over time)$ 27.00 hour
Labor (Sundays) $ 36.00 hour
c. Holiday rates will be provided upon request. Holidays
are defined by the Airborne Transportation Holiday
Schedule.
d. Normal management hours and responsibilities are included
in Overhead Charges. If additional management involvement
is required to supervise a project it will be billed at a
rate of $ 28.50 / hour. ALS and MZI will mutually agree
that additional management involvement is required prior to
assignment or billing.
13. PHYSICAL INVENTOR CHARGES
All Physical Inventory Counts are billed to MZI in the following
manner:
a. Labor (regular time) S 18.00 hour
Labor (over time) S 27.00 hour
Labor (Sunday) $ 36.00 hour
Labor (Supervisor) $ 28.50 hour
Holiday Pay Available upon request
b. Equipment Actual Cost as Needed
C. Management Fee 10% added to total labor cost
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14. SYSTEMS SUPPORT
ALS provides immediate on-site support of MZI systems when
necessary. This is charged by the hour and billed weekly. There
is a minimum charge of 30 minutes per occurrence.
a. Routine Maintenance: Price $30.00 / hour
Service Calls not requiring response within 30 minutes.
Times Available: 9:00 a.m. - 2:00 a.m. Eastern Standard
Time (M-F)
b. Urgent Support: Price $50.00 / hour
Service call will be made within 30 minutes of request.
Times Available: 9:00 a.m. - 2:00 a.m. Eastern Standard
Time (M-F)
C. Weekends/After Hours/Holiday Support: Price $80.00 /hour
After Hours: (2:01 a.m. - 8:59 a.m., 7 days per week)
Weekends (Saturday 2:01 a.m.- Monday 8:59 a.m.)
Holidays as defined by Airborne Transportation Holiday
Schedule.
15. WILL CALL FEE
There will be a $15.00 fee assessed to all Will Call orders.
This will be applied when a customer requests to pick the order
up at ALS between the 0600 - 2000, Monday-Saturday. Will Call
orders have special handling and staging requirements that
require additional labor and security measures.
16. NEW CAPITAL PURCHASE
If volumes or order characteristics change from the forecast
amounts as shown in exhibit 1, so that additional capital
equipment (non - replacement) is required to effectively run the
MZI operation, ALS may ▇▇▇▇ MZI the charges for such equipment.
The weekly charges to be billed to MZI will be negotiated between
ALS and MZI prior to the time of purchase.
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IN WITNESS WHEREOF, the parties have executed this Amendment on the date
first written above.
MULTIPLE ZONES INTERNATIONAL, INC. AIRBORNE LOGISTICS SERVICES,
a division of ABX Air, Inc.
By: [SIG] By: [SIG]
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Its: VP OPERATIONS Its: VICE PRESIDENT AND GENERAL MANAGER
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