FOURTH AMENDMENT
TO
STORAGE AND DISTRIBUTION AGREEMENT
THIS FOURTH AMENDMENT TO STORAGE AND DISTRIBUTION AGREEMENT is entered into
this 20th day of September, 1999 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 3rd, 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,
as amended, was further amended by that certain Letter Agreement dated
December 31, 1997 (the "Third Amendment"). The Primary Agreement, the
Assignment, the Extension, the First Amendment, the Second Amendment, the
Second Extension, and the Third Amendment 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 Fourth Amendment (9/01/99-8/31/00), the provisions of
the Third Amendment, Schedule 1 ("Rates and Charges"), Schedule 1A
("Definitions"), Schedule 1B ("Terms and Conditions"), and Exhibit 1
("Revised Receiving, Inventory Control and Shipping Estimates") are hereby
superseded and replaced in their entirety by the provisions of this Fourth
Amendment, 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.
3. For the term of this Fourth Amendment, the provisions of the Primary
Agreement, Section 7 (Standards and Requirements for Airborne's Operation
of the Management and Distribution of the Stock) paragraph 7.(a)(i),
7.(a)(ii), 7.(a)(iii), and 7.(a)(iii)(a), are hereby deleted in their
entirety and replaced with Amendment 4, Exhibit 2 "Limit of Inventory
Liability," and Exhibit 2 - Attachment A, "Multiple Zones International
Stock Adjustment Codes." These documents ("Limit of Inventory Liability"
and "Multiple Zones International Stock
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Adjustment Codes") will supersede any previous agreement between MZI and
ALS defining payment from ALS to MZI as a result of inventory shrinkage.
4. Item 6 in Amendment 1 as well as subparagraph 15 b. in the primary
agreement are both hereby deleted in their entirety.
5. The following Termination Clauses will be added for the term of this
Fourth Amendment:
a) Termination for Convenience:
MZI or ALS may terminate this agreement for purposes of convenience
with one-hundred eighty (180) day's prior written notice. In this
event, MZI shall have no more than 180 days to remove all MZI owned
inventory and property from the ALS Wilmington, Ohio, warehouse. If
termination for convenience is enacted, the terminating party shall pay
all labor and transportation costs associated with moving MZI owned
inventory and property from the Wilmington, Ohio, warehouse.
b) Termination for Breach:
Either MZI or ALS may terminate this agreement for material breach
thereof by giving the other party not less than 30 days written notice
of its intent to terminate and specifying in the notice the reason or
reasons for such termination. If the breach is not cured within the
time stated in the notice, the termination shall be effective on the
date specified in the notice. The party determined to be in breach,
shall pay all labor and transportation costs associated with moving MZI
owned inventory and property from the Wilmington, Ohio, warehouse.
6. Renewal Term
a. The schedule of dates and associated terms stated in that certain
letter ("The Second Extension") dated October 10, 1997 are hereby
deleted in their entirety and replaced with the schedule of dates and
associated terms listed below (item 6c).
b. Additionally, Paragraph 14 in Amendment 1 and Section 14 in the
Original Agreement are hereby deleted in their entirety.
c. ALS and MZI agree to enter into the following schedule of negotiations
no later than 5 months prior to expiration of this Fourth Amendment.
This following schedule of dates and listed terms will replace those
previously agreed upon prior to Amendment 4:
1) ALS shall notify MZI no later than April 1, 2000 of the rates it
intends to charge MZI for the contract term proceeding Amendment
Four.
2) MZI shall have until June 1, 2000 to accept or reject the pricing
provided by ALS.
3) If MZI accepts the pricing the rates shall become effective
September 1, 2000.
4) If MZI rejects the pricing, MZI shall have until October 31, 2000
to vacate the ALS warehouse in Wilmington, Ohio.
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Additionally, if MZI rejects the pricing and MZI desires to operate a
warehouse distribution facility within the Commerce Park in Wilmington, Ohio,
ALS agrees to pay all transportation costs for transporting the Stock (as
this term is defined in the Agreement) to such location designated by MZI. In
addition, ALS shall exercise best efforts and good faith in using its
influence with the developers of the Commerce Park to secure a commitment to
lease a warehouse facility to MZI in the Commerce Park from which MZI can
operate a distribution facility for its business, at a rental rate and on
terms and conditions comparable to rental rates and terms agreed to with
tenants of similar size in the Commerce Park (including competitors of MZI),
and with a lease term of not less than five (5) years from the expiration of
the Term, plus options to renew. If MZI is unable to secure a new warehouse
on the terms stated above prior to the expiration of the term, the agreement
shall terminate on the expiration date and MZI shall remove its inventory and
owned property from the Stock Exchange on or before October 31, 2000. MZI
shall pay the rates and charges in this agreement existing at the end of the
term.
In the event MZI and ALS extend this Agreement by mutual consent for one
additional year (expiration then being August 31, 2001, and vacancy date then
being October 31, 2001) the terms and conditions of Amendment 4 will likewise
be extended for the same one year period.
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