DHL Corporation and Subsidiaries - Page 95

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               The network fee was intended to compensate DHLI for central            
          facilities and services--including the air transportation                   
          network, clearinghouse hubs at air terminals, customs clearing              
          services, know-how, insurance, and advertising--that DHLI                   
          provided for the benefit of the local operating companies and               
          agents.  Although DHL was DHLI’s pickup and delivery agent in the           
          United States and DHLI was DHL’s pickup and delivery agent                  
          outside the United States, with extremely limited exceptions, no            
          fees or costs were paid for those services exchanged between them           
          until 1987.                                                                 
               Foreign operating companies and independent agents were                
          required to use the DHL trademark so as to be identified as part            
          of the DHL network.  A trademark license was included as part of            
          the agreements with the local operating companies and agents.               
          The agreements with foreign local operating companies and agents            
          generally did not require a separate payment for royalties.  On             
          occasion, it was necessary to include nominal royalty provisions            
          in agreements with local operating companies and agents in order            
          to comply with local law.  Sometimes the royalties were credited            
          against the network fee.  The network fee remitted to DHLI and              
          related corporations included payment for the capital                       
          infrastructure, operating expense, know-how, and sometimes a                
          nominal amount for use of the DHL name provided by the DHL                  

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Last modified: May 25, 2011