EXHIBIT 10.12
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IBM GLOBAL SERVICES NATIONAL
AGREEMENT
BETWEEN
ALLIED HOLDINGS, INC. AND INTERNATIONAL BUSINESS MACHINES CORPORATION
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This IBM Global Services National Agreement, dated as of April 1, 2001 (the
"Effective Date") is between the Parties set forth below.
This Agreement is written and was negotiated in English, is the complete and
exclusive agreement between the Parties regarding the subject matter of this
Agreement, and replaces any prior oral or written communications between the
Parties with respect to the subject matter of this Agreement.
By signing below, the Parties agree to be bound by the terms of this Agreement.
Agreed to: Agreed to:
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Allied Holdings, Inc. International Business Machines Corporation
By: By:
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Authorized Signature Authorized Signature
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Name and Title Name and Title
ROBERT J. RUTLAND JAMES H. KEEGAN
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER VICE PRESIDENT, TRAVEL AND TRANSPORTATION INDUSTRY
Address Address
160 Clairemont Ave. 3200 Windy Hill Road
Decatur, Georgia 30030 Atlanta, Georgia 30339
PAGE 1 OF 34
AGREEMENT BETWEEN ALLIED HOLDINGS AND IBM
TABLE OF CONTENTS AND SCHEDULES
This Agreement includes the following Sections and Schedules:
SECTION TITLE PAGE #
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1.0 DEFINITIONS..................................... 4
2.0 TERM............................................ 7
3.0 CONFLICTS....................................... 7
4.0 MANAGEMENT OF THIS AGREEMENT.................... 8
4.1 Project Executives............................ 8
4.2 Joint Advisory Committee...................... 8
4.3 Dispute Resolution............................ 8
4.4 Personnel..................................... 9
4.5 Procedures Manual............................. 10
4.6 Change........................................ 10
4.7 Reports....................................... 10
4.8 Meetings...................................... 11
5.0 SERVICES........................................ 11
5.1 Description of Services....................... 11
5.2 Transition of Services........................ 11
5.3 Software...................................... 11
5.4 Machines...................................... 11
5.5 Acquired Assets............................... 12
5.6 Contracts..................................... 12
5.7 Required Consents............................. 12
5.8 Efficient Use of Resources.................... 12
5.9 Adjustment of Service Levels.................. 13
6.0 CHARGES, CREDITS, AND PAYMENTS.................. 13
6.1 Charges....................................... 13
6.2 Credits....................................... 13
6.3 Payments...................................... 14
6.4 New Services.................................. 14
6.5 Taxes......................................... 15
7.0 RENEWAL AND TERMINATION......................... 15
7.1 Renewal....................................... 15
7.2 Termination for Convenience................... 16
7.3 Termination for Cause......................... 16
7.4 Temporary Extension of Services............... 16
7.5 Transfer Assistance........................... 17
7.6 Other Rights Upon Expiration or Termination... 17
8.0 CONFIDENTIAL INFORMATION........................ 18
9.0 INTELLECTUAL PROPERTY RIGHTS.................... 20
10.0 INDEMNIFICATION................................. 21
11.0 LIMITATION OF LIABILITY......................... 23
12.0 WARRANTY........................................ 25
13.0 GENERAL......................................... 26
13.1 Assignment and Binding Nature................. 26
13.2 Audits........................................ 26
13.3 Data Privacy.................................. 27
13.4 Environmental................................. 28
13.5 Facilities.................................... 28
13.6 Force Majeure................................. 29
13.7 Freedom of Action............................. 29
13.8 Geographic Scope of Services.................. 30
13.9 Governing Law And Jurisdiction................ 30
13.10 Interpretation................................ 30
13.11 Joint Verification............................ 30
13.12 Limitations Period............................ 30
13.13 Modifications................................. 30
13.14 Notifications and Approvals................... 31
13.15 Publicity..................................... 33
13.16 Relationship.................................. 33
13.17 Remarketing................................... 34
13.18 Risk of Loss.................................. 34
13.19 Services Recipients........................... 34
13.20 Severability.................................. 34
13.21 Survival...................................... 34
13.22 Third Party Beneficiaries..................... 34
13.23 Waiver........................................ 34
PAGE 2 OF 34
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SCHEDULES
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SCHEDULE TITLE
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A Services
Part 1: Support Services
Part 2: Mainframe Services
Part 3: Disaster Recovery Services
Part 4: Data Network Services
Part 5: Security
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B Service Levels
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C Charges
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D Transition
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E Projects
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F Software
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G Machines
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H Standards
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I Facilities
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J Contracts
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K Services Recipients
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L Employees
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M Acquired Assets
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N Trade Secrets
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1.0 DEFINITIONS
The following terms have the meanings set forth below. Capitalized terms used
but not defined in this Agreement have the respective meanings provided in
Section 2.0 (Definitions) of each of the Schedules.
A. ACQUIRED ASSETS means those machines, equipment and other goods,
attachments, features and accessories listed in Schedule M (Acquired
Assets).
B. ADDITIONAL RESOURCE CHARGE or ARC means the charge, as set forth in
Schedule C (Charges), to Allied Holdings if Allied Holdings' usage of
Resource Units is above the applicable Baseline.
C. AFFECTED EMPLOYEES means the individuals listed in Exhibit L-1
(Affected Employees) of Schedule L (Employees).
D. AFFILIATE means any entity controlling, controlled by, or under common
control with IBM or Allied Holdings. The term "Control" and its
correlative meanings, "controlling," "controlled by" and "under common
control with," mean the legal, beneficial or equitable ownership,
directly or indirectly, of more than fifty percent of the aggregate of
all voting equity interests in an entity.
E. AGREEMENT means this IBM Global Services National Agreement, dated as
of the Effective Date, between Allied Holdings and IBM and its
Attachments, all of which are incorporated herein by reference.
F. ALLIED HOLDINGS means Allied Holdings, Inc.
G. ALLIED HOLDINGS PERSONAL DATA means any information relating to an
identifiable individual (PERSONAL DATA) that IBM processes on behalf of
Allied Holdings in performing the Services. Allied Holdings Personal
Data excludes Personal Data:
1. processed by IBM for any reason other than IBM's performance
of the Services;
2. processed by IBM because of its relationship with its
customers (including Allied Holdings and its Affiliates)
generally; or
3. relating to employees of IBM, its Affiliates, and their
Subcontractors.
H. ALLIED HOLDINGS-PROVIDED PRODUCT means any equipment, system, program,
product, or business process provided to IBM by Allied Holdings under
this Agreement or used by Allied Holdings in conjunction with the
Services.
I. ALLIED HOLDINGS REGULATORY REQUIREMENTS means the laws applicable to
Allied Holdings.
J. ANNUAL SERVICES CHARGE or ASC means the recurring fixed charge to
Allied Holdings for the Services and includes the quantity of Resource
Units set forth in the Baselines.
K. APPLICATIONS SOFTWARE means the programs, including all supporting
documentation, source code, and media that are listed as Applications
Software in Schedule F, Section 4.0 (Allied Holdings Provided
Applications Software).
L. ARC INVOICE has the meaning set forth in Section 6.1 (Charges) of this
Agreement.
M. ASC INVOICE has the meaning set forth in Section 6.1 (Charges) of this
Agreement.
N. ATTACHMENTS means the Schedules and Exhibits, collectively.
O. BASELINE means the quantity of Resource Units included in the ASC, as
set forth in Schedule C (Charges).
P. BREACHING PARTY has the meaning set forth in Section 7.3 (Termination
for Cause) of this Agreement.
Q. CONFIDENTIAL INFORMATION has the meaning set forth in Section 8.0
(Confidential Information) of this Agreement.
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R. CONTRACTS means the ICC leases listed in Schedule J (Contracts).
S. CRITICAL SUCCESS FACTORS RESULTS means the report produced by Allied
Holdings that will be used to document the level of System Availability
Allied Holdings has achieved in the six months prior to the Effective
Date.
T. DEFENSE has the meaning set forth in Section 10.0 (Indemnification) of
this Agreement.
U. DEFENSE COSTS means reasonable attorneys' fees, court costs and costs
of investigation incurred by the Indemnified Party in connection with
defending a claim subject to indemnification under Section 10.0
(Indemnification) of this Agreement.
V. DERIVATIVE WORK means a work based on one or more preexisting works,
including a condensation, transformation, translation, modification,
expansion, or adaptation, that, if prepared without authorization of
the owner of the copyright of such preexisting work, would constitute a
copyright infringement under applicable law.
W. DISCLOSER has the meaning set forth in Section 8.0 (Confidential
Information) of this Agreement.
X. DISPUTE RESOLUTION PROCESS has the meaning set forth in Section 4.3
(Dispute Resolution) of this Agreement.
Y. ECONOMIC CHANGE ADJUSTMENT has the meaning set forth in Section 4.0 of
Schedule C (Charges) of this Agreement.
Z. EFFECTIVE DATE means 0000 hours Eastern Standard Time on the date
specified in the Preamble to this Agreement.
AA. EXHIBIT means an exhibit expressly referenced in and attached to a
Schedule.
BB. EXPIRATION DATE means 2359 hours Eastern Standard Time on March 31,
2006.
CC. EXTENSION PERIOD has the meaning set forth in Section 7.0 (Renewal and
Termination) of this Agreement.
DD. FACILITIES means any location:
1. owned, leased, rented, or used by Allied Holdings that IBM may
use in providing the Services; and
2. that is listed in Schedule I (Facilities).
EE. FORCE MAJEURE EVENT has the meaning set forth in Section 13.6 (Force
Majeure) of this Agreement.
FF. HAZARDOUS MATERIAL means any substance or material classified or
considered hazardous or toxic under applicable law.
GG. HIRED EMPLOYEES means the Affected Employees hired by IBM or its
Subcontractors pursuant to Schedule L.
HH. IBM means International Business Machines Corporation.
II. IBM PRODUCTS means hardware and software and other products provided by
IBM or its Affiliates to Allied Holdings or used by IBM in performing
the Services.
JJ. IBM REGULATORY REQUIREMENTS means the laws applicable to IBM.
KK. INDEMNIFIED PARTY has the meaning set forth in Section 10.0
(Indemnification) of this Agreement.
LL. INDEMNIFYING PARTY has the meaning set forth in Section 10.0
(Indemnification) of this Agreement.
MM. JOINT ADVISORY COMMITTEE has the meaning set forth in Section 4.2
(Joint Advisory Committee) of this Agreement.
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NN. JOINT VERIFICATION PERIOD has the meaning set forth in Section 13.11
(Joint Verification) of this Agreement.
OO. MATERIALS means expressions of literary works or other works of
authorship (such as programs, program listings, programming tools,
documentation, reports, drawings and similar works) that are developed
by IBM, or jointly by IBM and Allied Holdings, under this Agreement,
delivered by IBM to Allied Holdings as part of the Services, and are
not available under vendor software license agreements (including
license agreements for IBM Products). Materials do not include the
underlying literary works or other works of authorship upon which such
Materials are based.
PP. NEW SERVICES has the meaning set forth in Section 6.4 (New Services) of
this Agreement.
QQ. NONBREACHING PARTY has the meaning set forth in Section 7.0 (Renewal
and Termination) of this Agreement.
RR. NONPERFORMING PARTY has the meaning set forth in Section 13.6 (Force
Majeure) of this Agreement.
SS. OTHER PRODUCTS has the meaning set forth in Section 12.0 (Warranty) of
this Agreement.
TT. OWNER has the meaning set forth in Section 9.0 (Intellectual Property
Rights) of this Agreement.
UU. PARTY means either IBM or Allied Holdings, alternatively.
VV. PARTIES means IBM and Allied Holdings, collectively.
WW. PAYABLE DATE has the meaning set forth in Section 6.3 (Payments) of
this Agreement.
XX. PROCEDURES MANUAL means the manual (electronic or hard copy) describing
the operating processes and procedures governing the performance of the
Services. The Procedures Manual is Type II Materials.
YY. PROJECT EXECUTIVE has the meaning set forth in Section 4.1 (Project
Executives) of this Agreement.
ZZ. RECIPIENT has the meaning set forth in Section 8.0 (Confidential
Information) of this Agreement.
AAA REDUCED RESOURCE CREDIT or RRC means the credit, as set forth in
Schedule C (Charges), to Allied Holdings if Allied Holdings' usage of a
Resource Unit is less than the applicable Baseline.
BBB REQUEST FOR NEW SERVICES has the meaning set forth in Section 6.4 (New
Services) of this Agreement.
CCC REQUIRED CONSENTS means any consents or approvals required to give IBM,
its Affiliates and their Subcontractors the right or license to use as
necessary, any services, products, programs, materials, information, or
facilities that IBM may use or access in providing the Services under
this Agreement as more fully described in Section 5.7 (Required
Consents).
DDD RESIDUAL INFORMATION has the meaning set forth in Section 8.0
(Confidential Information) of this Agreement.
EEE RESOURCE UNIT or RU means a unit of resource for which IBM and Allied
Holdings have established a Baseline, as set forth in Schedule C
(Charges).
FFF SCHEDULES means the Schedules expressly referenced in and attached to
this Agreement. A Schedule includes the Exhibits expressly referenced
in and attached to that Schedule.
GGG SERVICES means the services and functions provided by IBM to Allied
Holdings and the Services Recipients pursuant to this Agreement, as
more fully described in Schedule A (Services).
HHH SERVICE LEVELS means the applicable service delivery criteria,
performance standards and specifications established for the Services,
as set forth in Schedule B (Service Levels).
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III SERVICES MACHINES means machines that are owned, leased, or rented by
IBM and used by IBM to provide the Services. Services Machines located
at the Facilities are listed as Services Machines in Schedule G
(Machines).
JJJ SERVICES RECIPIENTS means the entities receiving Services at Allied
Holdings' request and listed in Schedule K (Services Recipients) as of
the Effective Date or as it may be updated from time to time by Allied
Holdings.
KKK SOFTWARE means Applications Software and Systems Software,
collectively.
LLL SUBCONTRACTORS means contractors, vendors, agents, and consultants
selected and retained by IBM or Allied Holdings, respectively.
MMM SYSTEMS SOFTWARE means the programs, including all source code (if
applicable), supporting documentation and media that are listed as
Systems Software in Schedule F, Section 2.0 (Allied Holdings Provided
Systems Software, and Schedule F, Section 3.0 (IBM Provided Systems
Software)
NNN TEMPORARY EXTENSION OF SERVICES has the meaning set forth in Section
7.0 (Renewal and Termination) of this Agreement.
OOO TERM has the meaning set forth in Section 2.0 (Term) of this Agreement.
PPP TERMINATION CHARGES has the meaning set forth in Schedule C (Charges).
QQQ THIRD PARTY and THIRD PARTIES means any entity or person other than IBM
and Allied Holdings and their respective Affiliates, directors,
officers, and employees.
RRR TRADE SECRETS has the meaning set forth in Section 8.0(c).
SSS TRANSFER ASSISTANCE has the meaning set forth in Section 7.0 (Renewal
and Termination) of this Agreement.
TTT TRANSFER ASSISTANCE PERIOD has the meaning set forth in Section 7.0
(Renewal and Termination) of this Agreement.
UUU TRANSITION has the meaning set forth in Section 5.2 (Transition of
Services) of this Agreement.
VVV TRANSITION PERIOD has the meaning set forth in Section 5.2 (Transition
of Services) of this Agreement.
WWW TRANSITION PLAN has the meaning set forth in Section 5.2 (Transition of
Services) of this Agreement.
XXX TYPE I MATERIALS has the meaning set forth in Section 9.0 (Intellectual
Property Rights) of this Agreement.
YYY TYPE II MATERIALS has the meaning set forth in Section 9.0
(Intellectual Property Rights) of this Agreement.
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2.0 TERM
This Agreement begins on the Effective Date and expires on the Expiration Date,
except as earlier terminated or extended in accordance with the terms of this
Agreement. The period this Agreement is in effect is referred to herein as the
"Term".
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3.0 CONFLICTS
If there is a conflict among the terms in the various documents within and
constituting this Agreement:
a. to the extent the conflicting provisions can reasonably be interpreted
so that such provisions are consistent with each other, such consistent
interpretation will prevail; and
b. to the extent Section 3.0 (a) does not apply, the following order of
precedence will prevail:
1. an Exhibit will prevail over a conflicting term in the
Schedule to which it is an exhibit; and
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2. the Schedules will prevail over a conflicting term in the main
body of this Agreement.
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4.0 MANAGEMENT OF THIS AGREEMENT
4.1 PROJECT EXECUTIVES
a. IBM and Allied Holdings will each appoint an individual (collectively,
the PROJECT EXECUTIVES) who has the authority to represent and bind IBM
and Allied Holdings, respectively, in connection with all aspects of
this Agreement.
b. Before assigning an individual as a Project Executive, initially and
subsequently, IBM and Allied Holdings will:
1. introduce the individual to the other;
2. consistent with its personnel practices and subject to
applicable law, provide the other with any information
reasonably requested regarding the individual; and
3. discuss any reasonable objections the other may have to such
assignment.
c. IBM and Allied Holdings will provide each other with at least 30 days'
notice before assigning a new Project Executive, unless the Project
Executive:
1. resigns from employment;
2. is dismissed by his employer;
3. fails, in the employer's absolute discretion, to perform his
obligations; or
4. is unable to work.
d. Notwithstanding the foregoing provisions of this Section 4.0, Allied
Holdings reserves the right, in its reasonable discretion, to approve
any Project Executive or replacement Project Executive appointed by IBM
and to reasonably require the removal of any Project Executive or other
personnel upon at least 10 days notice to IBM.
4.2 JOINT ADVISORY COMMITTEE
a. IBM and Allied Holdings will create a committee (the JOINT ADVISORY
COMMITTEE) consisting of three authorized representatives from Allied
Holdings and its Affiliates and three authorized representatives from
IBM and its Affiliates to oversee the management of this Agreement.
Each Party's initial representatives to the Joint Advisory Committee
will be appointed within thirty (30) days of the Effective Date. Each
Party may remove and/or replace any of its representatives to the Joint
Advisory Committee upon ten (10) days notice to the other Party.
b. The Joint Advisory Committee will:
1. conduct annual reviews of the operating and strategic plans
prepared by the Project Executives;
2. upon IBM's or Allied Holdings' request, assist in resolving
any issues arising during the negotiation of an amendment to
this Agreement; and
3. participate in the Dispute Resolution Process.
4.3 DISPUTE RESOLUTION
a. If Allied Holdings and IBM have a dispute arising out of this
Agreement, Allied Holdings and IBM will follow the dispute resolution
process described in this Section (the DISPUTE RESOLUTION PROCESS).
Notwithstanding the foregoing, each Party reserves the right without
instituting the Dispute Resolution Process to bring an action in any
court of competent jurisdiction for injunctive or similar equitable
relief to the extent permitted by applicable law.
b. Procedure
1. Project Executives
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A dispute under this Agreement initially will be referred in
writing to the Project Executives.
2. Joint Advisory Committee If the Project Executives are unable
to resolve the dispute within ten business days of their
receipt of the written referral to the Project Executives, the
dispute will be referred in writing to the Joint Advisory
Committee.
3. Lead Executives
If the Joint Advisory Committee is unable to resolve the
dispute within 15 business days of its receipt of the written
referral to the Joint Advisory Committee, the dispute will be
referred in writing to the Sr. Vice President Information
Technology of Allied Holdings and the Vice President for the
Travel and Transportation Industry for IBM Global Services for
their review and resolution.
4. Allied Holdings and IBM will exercise reasonable, good faith
efforts to resolve the dispute throughout the Dispute
Resolution Process.
c. Except as expressly provided herein, IBM and Allied Holdings may not
initiate formal proceedings for the resolution of such dispute until
the earlier of:
1. the lead executives' joint written conclusion that amicable
resolution through continued negotiation is unlikely;
2. 30 days after the written referral to such lead executives was
made; or
3. 30 days before the limitations period governing any such cause
of action relating to such dispute would expire.
d. IBM and Allied Holdings:
1. expressly waive any right to a trial by jury in any proceeding
directly or indirectly arising under this Agreement;
2. agree that in any proceeding for breach of this Agreement, the
losing party shall pay the reasonable attorney fees of the
prevailing party;
3. agree that written or oral statements or offers of settlement
made in the course of the Dispute Resolution Process set forth
in this Section:
(a) will be Confidential Information,
(b) will not be offered into evidence, disclosed, or used
for any purpose other than the Dispute Resolution
Process, and
(c) will not constitute an admission or waiver of rights.
e. Continued Performance
Except where clearly prevented by the nature of the dispute or in the
event of Allied Holdings' nonpayment of any amounts due and owing to
IBM (other than amounts disputed by Allied Holdings in good faith
pursuant to Section 6.3(c), IBM and Allied Holdings agree to continue
performing their respective obligations under this Agreement while a
dispute is being resolved.
4.4 PERSONNEL
a. IBM will comply with Allied Holdings' reasonable rules and regulations
communicated in writing to IBM regarding personal and professional
conduct while at the Facilities.
b. IBM and Allied Holdings will each be responsible for the management,
direction, control, supervision, and compensation of its own employees.
c. The Services will be provided under the management, direction, control,
and supervision of IBM under this Agreement in accordance with the
terms and conditions hereof. IBM may choose in its
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reasonable discretion to perform its responsibilities under this
Agreement through its Affiliates or Subcontractors, provided that (i)
such Affiliates or Subcontractors are not competitors of Allied
Holdings in the business of providing logistics, transportation or
vehicle distribution services, (ii) IBM will not be relieved of its
obligations under this Agreement by the use of such Affiliates or
Subcontractors, and (iii) IBM agrees to give Allied Holdings at least
fifteen (15) days' prior notice before using any such Affiliate or
Subcontractor. Allied Holdings shall have the right to discuss with IBM
any objections or concerns it may have concerning any such Affiliate or
Contractor.
d. If Allied Holdings reasonably determines that it is not in Allied
Holdings' best interests for an employee of IBM, IBM's Affiliates or
their Subcontractors to continue performing the Services, Allied
Holdings will provide IBM with a written notice and explanation for
Allied Holdings' request that IBM remove such employee from providing
Services. Promptly after receiving such notice and explanation, IBM
will investigate the matter and take appropriate action, which will
include the removal of such employee if Allied Holdings reasonably
insists.
4.5 PROCEDURES MANUAL
a. Prior to the earlier of two months after the Effective Date or the date
on which the mainframe is removed from the Facilities, IBM will provide
Allied Holdings with a draft of the Procedures Manual which Procedures
Manual shall be acceptable to Allied Holdings in its reasonable
discretion. IBM will incorporate in the Procedures Manual any
reasonable comments proposed by Allied Holdings.
b. Within two months after the mainframe has been removed from the
Facilities, IBM will provide Allied Holdings with the revised
Procedures Manual. IBM will periodically update the Procedures Manual
to reflect changes in the operations or procedures mutually agreed to
by the Parties.
c. IBM will provide Allied Holdings access to the Procedures Manual during
the Term for Allied Holdings' use, review, and comment and Allied
Holdings shall have the right to keep for internal use the Procedures
Manual following termination of this Agreement for any reason. Allied
Holdings' internal use includes provision of service to Services
Recipients.
4.6 CHANGE
a. Except for changes made by IBM on an emergency basis, IBM will:
1. obtain Allied Holdings' approval before making any unplanned
changes;
2. schedule change activities with the goal of minimizing
unreasonable interruptions to Allied Holdings' business
operations; and
3. prepare a monthly schedule of planned and ongoing changes.
b. With respect to changes:
1. IBM will provide Allied Holdings with prompt notice of such
changes (along with an initial assessment of the impact of
such changes) and follow up with documentation of such changes
within five business days after such change was made.
4.7 REPORTS
a. During the sixty (60) days following the Effective Date, IBM will
provide Allied Holdings with the periodic reports pertaining to the
Services that Allied Holdings was providing immediately prior to the
Effective Date and will provide Allied Holdings with drafts of the
forms for the periodic standard reports IBM will provide Allied
Holdings during the Term, which reports shall be acceptable to Allied
Holdings in its reasonable discretion.
b. Within sixty (60) days thereafter, IBM will begin providing Allied
Holdings with such reports, that will include:
1. a monthly performance report documenting IBM's performance
with respect to the Service Levels;
PAGE 10 OF 34
2. a monthly report of the ongoing and planned changes to
machines, hardware, software, systems, and other changes
performed during the previous month; and
3. a monthly report summarizing Allied Holdings' usage of
Resource Units.
c. Following the Effective Date, IBM will provide Allied Holdings with
those certain periodic performance reports set forth in Schedule A,
Part 2, Section 10.
4.8 MEETINGS
a. As of the Effective Date, Allied Holdings and IBM will commence
periodic meetings between Allied Holdings and IBM, which meetings will
include, without limitation:
1. a weekly operations meeting to discuss daily performance and
planned or anticipated activities and changes;
2. a monthly management meeting to review the monthly reports and
other matters as appropriate; and
3. a quarterly senior management meeting to review appropriate
contractual, business, planning, or performance issues.
b. IBM will publish an agenda for each meeting sufficiently in advance to
allow meeting participants a reasonable opportunity to prepare, which
agenda shall be mutually agreeable to the Parties.
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5.0 SERVICES
5.1 DESCRIPTION OF SERVICES
IBM will provide the Services as set forth in this Agreement. Allied Holdings
will perform, at no charge to IBM, its obligations set forth in this Agreement
except as expressly set forth in this Agreement.
5.2 TRANSITION OF SERVICES
a. There will be a six-month transition period (the TRANSITION PERIOD)
beginning on the Effective Date. During the Transition Period, IBM will
migrate the services being performed by or for Allied Holdings and the
Services Recipients to Services performed by IBM (the TRANSITION). The
Transition Period may be extended upon IBM's and Allied Holdings'
mutual agreement.
b. During the initial 90 days of the Transition Period, Allied Holdings
and IBM will agree to a written plan (the TRANSITION PLAN) for the
Transition. Allied Holdings will cooperate with IBM in accomplishing
all aspects of the Transition, including providing the resources
necessary to perform Allied Holdings' responsibilities in the
Transition during the Transition Period.
c. During the Transition Period, IBM will be responsible for providing the
Services at a level of Systems Availability equal to that which Allied
Holdings had been achieving in the six months prior to the Effective
Date as documented by Critical Success Factors Results.
5.3 SOFTWARE
With respect to the Software used by IBM to provide the Services:
a. Allied Holdings represents and warrants that, during the Term, Allied
Holdings has the right to access and use such Software in the manner in
which it was using such Software as of the Effective Date.
b. Subject to the prior obtainment of any Required Consents, Allied
Holdings hereby grants to IBM, for IBM's provision of the Services, the
same rights to use such Software that Allied Holdings has with respect
to such Software.
c. Each Party will adhere to the terms set forth in the licenses for the
Software (Schedule F), such as the terms governing use and
confidentiality; and
d. Allied Holdings hereby authorizes IBM to administer the Software
(Schedule F) for which it has obtained Required Consents and will
promptly notify all appropriate vendors of such authorization.
5.4 MACHINES
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a. Services Machines
IBM retains all right, title and interest in and to all Services
Machines, subject to Section 7.6 (Other Rights Upon Expiration or
Termination) of this Agreement. IBM represents and warrants that IBM is
either the owner of the Services Machines or is authorized by its owner
to include it under this Agreement and use it in the performance of the
Services.
b. Additional or Replacement Machines
Additional or replacement Machines, including upgrades, may be added by
IBM as IBM determines necessary to perform the Services in accordance
with the Baselines and Service Levels. In the event such additional or
replacement machines will have leases that will extend beyond the
Expiration Date, Allied Holdings will have the right to approve such
Machines prior to installation. When IBM's ability to meet the Service
Levels is dependent on the installation of such Machines, and Allied
Holdings' withholds its approval, IBM will be relieved of its
obligation to pay Service Levels Credits to the extent the Service
Levels are affected. Financial responsibility for additional or
replacement Machines is set forth in Schedule C (Charges).
5.5 ACQUIRED ASSETS
a. On the Effective Date, IBM will purchase the Acquired Assets for the
price set forth in the bill of sale, and Allied Holdings will deliver
to IBM the signed bill of sale transferring title to IBM in the
Acquired Assets. The bill of sale is attached to Schedule M (Acquired
Assets). The Acquired Assets are being transferred by Allied Holdings
"AS IS, WHERE IS, WITH ALL FAULTS".
5.6 CONTRACTS
IBM will assume all obligations of Allied Holdings on and following the
Effective Date for the Contracts as stated in Schedule J, Section 2 (Contracts).
All obligations with respect to the Contracts accruing, or attributable to
periods, prior to the Effective Date will be the responsibility of Allied
Holdings.
5.7 REQUIRED CONSENTS
a. Allied Holdings will use its commercially reasonable efforts to obtain
and provide to IBM, with IBM's reasonable assistance, all Required
Consents.
b. IBM will pay any vendor fees required to obtain Required Consents for
the Systems Software identified in Schedule F, Section 3 (IBM Systems
Software) as being IBM's financial responsibility. Allied Holdings will
be responsible for any vendor fees required to obtain all other
Required Consents.
c. If any Required Consent is not obtained, Allied Holdings and IBM will
cooperate with each other in achieving a reasonable alternative
arrangement for IBM to continue to perform the Services with as minimal
interference to Allied Holdings' business operations as is reasonable
until such Required Consent is obtained.
5.8 EFFICIENT USE OF RESOURCES
a. IBM shall take commercially reasonable actions to efficiently use all
resources used in the performance of the Services pursuant to this
Agreement including, but not limited to:
1. making schedule adjustments (consistent with Allied Holdings'
priorities and schedule for Services and IBM's obligations to
meet the Service Levels); and
2. tuning or optimizing the systems used to perform the Services.
b. IBM agrees to take commercially reasonable actions, to the extent it
does not increase IBM's costs, to provide the Services to Allied
Holdings at a technological level that will enable Allied Holdings,
without an increase in charges, to take advantage of technological
advancements related to the Services without creating New Services. In
the event the Parties cannot agree whether an action constitutes part
of the Services or New Services, the dispute shall be resolved in
accordance with the Dispute Resolution Process. If IBM believes that
any action in implementing a technological advancement would benefit
Allied Holdings, but could result in an increase in price or in IBM not
meeting the
PAGE 12 OF 34
Service Levels, the Parties shall mutually agree upon the action to be
taken or agree to change the Service Levels.
5.9 ADJUSTMENT OF SERVICE LEVELS
a. The Parties anticipate that IBM will continuously improve upon the
accuracy, quality, completeness and responsiveness of the Services
throughout the Term through the implementation of new technology and
personnel training. Consequently the Parties anticipate that the
Service Levels will be refined from time to time. IBM's objective will
be to achieve best industry practices in the delivery of Services.
- --------------------------------------------------------------------------------
6.0 CHARGES, CREDITS, AND PAYMENTS
6.1 CHARGES
As set forth in Schedule C (Charges):
a. Annual Services Charge
IBM will invoice Allied Holdings each month of the Term, for the
current month and beginning on the Effective Date, for the Annual
Services Charge, prorated in equal monthly payments (the ASC INVOICE).
b. Additional Resource Charges
IBM will invoice Allied Holdings each month during the remainder of the
Term, beginning within 30 days after the Transition Period, for the
ARCs, if any, applicable for the prior month (the ARC INVOICE).
c. Economic Change Adjustment
IBM will invoice Allied Holdings for the Economic Change Adjustment.
d. Termination Charges
If Allied Holdings elects to terminate this Agreement for its
convenience, as set forth in Section 7.2 (Termination for Convenience)
of this Agreement, IBM will invoice Allied Holdings for the Termination
Charges and other termination fees, if any, set forth in Schedule C
(Charges).
e. Other Charges
1. IBM will invoice Allied Holdings for New Services, applicable
taxes (other than taxes based on IBM's taxable income), and
any other agreed upon charges.
6.2 CREDITS
a. Reduced Resource Credits
IBM will provide Allied Holdings with a credit against either the ARC
Invoice or the ASC Invoice for each month of the Term beginning within
30 days after the Transition Period for the RRCs, if any, applicable
for the prior month.
b. Acquired Assets Credit
IBM will provide Allied Holdings with a credit against the ASC Invoice
in an amount equal to the purchase price of the Acquired Assets, as set
forth in the bill of sale, prorated in one monthly credit against the
first ASC Invoice within 30 days after the Effective Date.
c. Prepayments and Refunds
1. Prepayments
(a) If Allied Holdings has prepaid any charges payable
under the Contracts that are attributable to periods
on or after the Effective Date, but before the
termination or expiration of this Agreement, IBM will
provide Allied Holdings with a credit against the ASC
Invoice for such
PAGE 13 OF 34
prepaid amounts prorated in three equal monthly
credits beginning within 30 days after the Effective
Date.
(b) If IBM has prepaid any charges under the Software
listed in Schedule F, Section 3.0 (IBM Provided
System Software) that are attributable to periods
after the expiration or termination of this
Agreement, Allied Holdings will pay such prepaid
amounts to IBM within 30 days following such
expiration or termination provided that Allied
Holdings approved such prepayments and any extensions
beyond the Expiration Date.
2. Refunds
(a) If IBM receives any refund, credit, or other rebate
for a Contract that is attributable to a period prior
to the Effective Date, IBM will promptly notify
Allied Holdings of such refund, credit, or rebate and
will promptly provide Allied Holdings with a credit
for the amount of such refund, credit, or rebate on
the next applicable invoice.
(b) If Allied Holdings receives any refund, credit, or
other rebate for a Contract that is attributable to
periods on or after the Effective Date, but ending on
the expiration or termination of this Agreement,
Allied Holdings will promptly notify IBM of such
refund, credit, or rebate and will promptly pay to
IBM the amount of such refund, credit, or rebate.
d. Other Credits
IBM will pay any amounts due and owing to Allied Holdings pursuant to
this Agreement by either paying such amount to Allied Holdings or by
providing Allied Holdings with a credit against IBM's next invoice to
Allied Holdings under this Agreement.
6.3 PAYMENTS
a. Allied Holdings will pay IBM's invoices as set forth in this Agreement.
Allied Holdings will pay IBM's invoices on or before the date (the
PAYABLE DATE) below:
1. The Payable Date for the ASC Invoice will be the last day of
the calendar month in which Allied Holdings receives the ASC
Invoice from IBM, provided Allied Holdings receives such ASC
Invoice on or before the tenth day of the month. If Allied
Holdings receives the ASC Invoice after the tenth day of the
month, the Payable Date for such ASC Invoice will be 30 days
after Allied Holdings' receipt of such ASC Invoice.
2. The Payable Date for all invoices provided to Allied Holdings
by IBM under this Agreement, other than the ASC Invoice, will
be 30 days after Allied Holdings' receipt of such invoice.
b. Allied Holdings will pay each invoice by corporate check or other such
method as the Parties may mutually agree.
c. If any payments are not received by IBM within five business days after
the Payable Date (other than any non-ASC Invoices which are disputed by
Allied Holdings in good faith), Allied Holdings will also pay IBM a
late fee equal to the lesser of:
1. two percent of such payments per every thirty days or portion
thereof; or
2. the maximum amount permissible by the applicable law.
6.4 NEW SERVICES
If Allied Holdings requests that IBM perform services different from, or in
addition to, the Services (a REQUEST FOR NEW SERVICES), and if IBM agrees to
provide such different or additional services, then:
a. if the additional services require only those resources covered by an
existing charging methodology and do not require start up expenses,
Allied Holdings will pay the charges for such additional services
through such charging methodology; or
PAGE 14 OF 34
b. if the different or additional services require resources not covered
by an existing charging methodology or require start up expenses, then
such different or additional services will be considered NEW SERVICES.
Prior to performing New Services:
1. IBM will quote to Allied Holdings the charges for such New
Services; and
2. if Allied Holdings agrees to have IBM perform such New
Services, IBM and Allied Holdings will prepare and sign a
written amendment to this Agreement for such New Services.
6.5 TAXES
a. Allied Holdings will pay all:
1. applicable taxes (such as sales (including sales tax on
services), use, excise, value-added, and other
transaction-based taxes), duties and levies;
2. personal property, sales, value-added, and use taxes on Allied
Holdings' personal property;
3. telecommunication taxes for network lines and services;
4. taxes, assessments, and other levies on Allied Holdings'
owned, leased, rented, or purchased real property; and
5. applicable taxes based on Allied Holdings' taxable income.
b. IBM will pay all:
1. personal property, sales, value-added, and use taxes on IBM's
personal property;
2. taxes, assessments, and other levies on IBM's owned, leased,
rented, or purchased real property; and
3. applicable taxes based on IBM's taxable income.
c. Allied Holdings and IBM agree to cooperate reasonably with the other to
determine Allied Holdings' tax liability on IBM's charges.
d. IBM's invoices will state applicable taxes owed by Allied Holdings, if
any, by tax jurisdiction.
e. IBM and Allied Holdings will provide and make available to the other
any resale certificates, tax exemption certificates, information
regarding out-of-state sales or use of equipment, materials or
services, direct pay certificates and other exemption certificates.
- --------------------------------------------------------------------------------
7.0 RENEWAL AND TERMINATION
7.1 RENEWAL
a. Following expiration of the initial term of this Agreement, Allied
Holdings will have the right to renew this Agreement for two
additional, consecutive periods of two years each.
b. IBM will send Allied Holdings notice of expiration at least 13 months
prior to the Expiration Date. If Allied Holdings desires to renew this
Agreement, it will notify IBM in writing, at least 12 months prior to
the Expiration Date, of its desire to renew this Agreement. With
respect to Section 7.1(a) above, IBM will provide Allied Holdings,
within two months after such renewal request, with its proposed terms
for such renewal. Within 60 days after Allied Holdings' receipt of
IBM's proposed terms, Allied Holdings will notify IBM of:
1. Allied Holdings' agreement with IBM's proposed terms for such
renewal; or
2. any modifications Allied Holdings requests with respect to
IBM's proposed terms.
c. If Allied Holdings wishes to renew this Agreement, IBM and Allied
Holdings will negotiate in good faith regarding such renewal; provided
that either Allied Holdings or IBM has the right to end renewal
negotiations at any time, for any reason.
PAGE 15 OF 34
d. If Allied Holdings and IBM are unable to agree on the terms of the
renewal of this Agreement as of three months prior to the Expiration
Date, this Agreement will be extended at the then-current prices,
Baselines, charging methodology, and other applicable terms for a
period of six months beginning on the Expiration Date (the EXTENSION
PERIOD). During such Extension Period, Allied Holdings and IBM will
continue to negotiate in good faith regarding renewal of this
Agreement. If Allied Holdings and IBM are unable to reach agreement on
the renewal of this Agreement during the Extension Period, this
Agreement will terminate upon expiration of the Extension Period.
7.2 TERMINATION FOR CONVENIENCE
Allied Holdings may elect to terminate this Agreement for its convenience by:
a. providing IBM with a written notice stating Allied Holdings' election
to terminate this Agreement for its convenience and the effective date
of such termination. Such effective date will be:
1. no earlier than the third anniversary after the Effective
Date, and
2. no earlier than six months, and no later than 12 months, after
IBM's receipt of such notice; and
b. paying IBM the Termination Charges and other fees defined in this
Agreement, which IBM and Allied Holdings agree is Allied Holdings' sole
and exclusive liability for such termination for convenience.
7.3 TERMINATION FOR CAUSE
a. Allied Holdings or IBM (the NONBREACHING PARTY) may elect to terminate
this Agreement because of a material breach of this Agreement by the
other (the BREACHING PARTY) by following the process set forth in this
Section.
b. The Nonbreaching Party will provide the Breaching Party with written
notice of such material breach within 60 days after the material breach
or the date the Nonbreaching Party becomes aware of such material
breach, describing in detail the specific nature and dates of the
material breach, and will provide the Breaching Party with the
opportunity to cure the material breach as follows:
1. in the event of a failure to pay any amount due on the Payable
Date, ten days; and
2. in the event of any other material breach, 45 days. If the
nature of any nonmonetary breach is such that it would be
unreasonable to expect a cure within 45 days, an additional 15
days will be allowed provided that the Breaching Party
exercises all reasonable efforts to cure such material breach
within such additional 15 day period.
c. If the material breach is not cured during the applicable cure period
set forth above, the Nonbreaching Party may terminate this Agreement
for material breach by providing the Breaching Party with written
notice within 60 days after the expiration of the cure period specified
above, declaring termination of this Agreement for material breach
under this Section, effective on the later of the date stated in such
notice or five (5) days following completion of the Dispute Resolution
Process, if instituted. Such effective date will be no later than 90
days after the Breaching Party's receipt of such notice of termination
for material breach.
7.4 TEMPORARY EXTENSION OF SERVICES
a. If Allied Holdings is unable to complete the transition of Services as
of the expiration or termination of this Agreement, Allied Holdings may
elect once to extend this Agreement at the then-current prices,
Baselines, charging methodology, and other applicable terms for up to
six months beyond the then-effective date of the expiration or
termination of this Agreement (a TEMPORARY EXTENSION OF SERVICES) by
notifying IBM in writing of such election at least 90 days prior to
such effective date. Allied Holdings will pay IBM for the charges
otherwise due and owing under this Agreement, including the ASC. This
Agreement will terminate as of 2359 hours (according to the time zone
stated for the Expiration Date) on the last day of such Temporary
Extension of Services.
b. If IBM terminates this Agreement for Allied Holdings' material breach,
Allied Holdings will not have the right to elect a Temporary Extension
of Services.
PAGE 16 OF 34
c. There will be no adjustment to the Termination Charges as a result of a
Temporary Extension of Services.
7.5 TRANSFER ASSISTANCE
a. If Allied Holdings desires IBM's assistance in transferring Services
back to Allied Holdings, its Affiliates, or a Third Party upon
termination or expiration of this Agreement (TRANSFER ASSISTANCE), upon
Allied Holdings' written request, IBM will provide such Transfer
Assistance to Allied Holdings:
1. using its then-existing resources dedicated to providing the
Services under this Agreement, until expiration or termination
of this Agreement; and
2. for the period of time requested by Allied Holdings, which
period will end no later than six months after the effective
date of the expiration or termination of this Agreement (the
TRANSFER ASSISTANCE PERIOD).
b. If IBM's Transfer Assistance will require the use of different or
additional services or resources beyond that which IBM is then using to
provide the Services in accordance with the Baselines and Service
Levels, such request for Transfer Assistance will be considered a
Request for New Services.
c. During the Transfer Assistance Period, IBM will provide Allied
Holdings, its Affiliates, and their Third Parties, as necessary, with
reasonable access to the Machines and Software, provided:
1. any such access does not interfere with IBM's ability to
provide the Services or Transfer Assistance; and
2. such Third Parties and Allied Holdings' Affiliates comply with
IBM's security and confidentiality requirements, including
execution of a confidentiality agreement reasonably acceptable
to IBM.
d. Allied Holdings will allow IBM to use the Facilities as necessary to
enable IBM to effect an orderly transition of resources, for up to 60
days after the later of:
1. the expiration or termination of this Agreement; or
2. the last day of the Transfer Assistance Period.
e. IBM will not provide Transfer Assistance if such Transfer Assistance
will unreasonably interfere with IBM's ability to perform the Services.
f. If IBM terminates this Agreement for Allied Holdings' material breach,
IBM will provide Allied Holdings with Transfer Assistance only if IBM
agrees to provide such Transfer Assistance and Allied Holdings pays for
such Transfer Assistance in advance.
g. The applicable provisions of this Agreement will remain in full force
and effect during the Transfer Assistance Period.
7.6 OTHER RIGHTS UPON EXPIRATION OR TERMINATION
a. IBM will provide the additional assistance set forth in this Section
upon expiration or termination of this Agreement (other than where IBM
terminates this Agreement for Allied Holdings' material breach).
b. Machines
Upon Allied Holdings' request, IBM will sell to Allied Holdings the
Services Machines that are owned by IBM and which on the date of
expiration or termination of this Agreement IBM is using on a dedicated
basis to perform the Services. Allied Holdings will pay IBM the fair
market value for such Services Machines, as determined by a mutually
agreed appraisal paid for by Allied Holdings.
c. Contracts
1. IBM will provide Allied Holdings with contracts transfer
assistance set forth in this subsection (Contracts), subject
to:
PAGE 17 OF 34
(a) Allied Holdings' written request;
(b) IBM's obtaining any required Third Party consents to
assign such contract; and
(c) Allied Holdings' assumption of all contractual
responsibility and liability under such contract
arising after such transfer, including payment of any
transfer fees, license fees, or other charges;
provided that IBM will continue to be responsible for
any contractual responsibility and liability under
such contracts arising prior to such transfer.
2. Contracts for Generally Available Software
For generally available software (including IBM Products)
which on the date of expiration or termination of this
Agreement IBM is using:
(a) solely to provide the Services to Allied Holdings,
IBM will assign its license, if any, to such software
to Allied Holdings or its designee upon Allied
Holdings' reimbursement to IBM of any initial,
one-time license or purchase charges in an amount
equal to the remaining unamortized value, if any, for
the software, depreciated over a five year life; and
(b) to provide Services to Allied Holdings and other
customers in a shared environment, IBM will provide
reasonable assistance to Allied Holdings in obtaining
licenses for such software.
3. Services Contracts
For any Third Party services which on the date of expiration
or termination of this Agreement IBM is using solely to
perform the Services (such as machine maintenance, disaster
recovery, or other Third Party services), IBM will assign the
contracts, if any, for such Third Party services to Allied
Holdings or its designee.
8.0 CONFIDENTIAL INFORMATION
a. IBM's and Allied Holdings' mutual objective under this Section is to
provide appropriate protection for Confidential Information while
maintaining IBM's and Allied Holdings' ability to conduct their
respective business activities. IBM and Allied Holdings agree that the
following terms apply when IBM or Allied Holdings (the DISCLOSER)
discloses Confidential Information or Trade Secrets to the other (the
RECIPIENT) under this Agreement.
b. CONFIDENTIAL INFORMATION means information provided by the Discloser to
the Recipient that:
1. is marked confidential;
2. if disclosed orally or not marked confidential, is identified
prior to disclosure as Confidential Information and is
confirmed as Confidential Information in a signed writing
promptly thereafter; or
3. contains the Discloser's customer lists, customer information,
account information, information regarding business planning
and business operations, and administrative, financial, or
marketing activities; provided:
(a) the Discloser treats such information as
confidential; and
(b) such information is reasonably considered
confidential based upon the nature of the
information.
c. Trade Secrets shall mean that information which is set forth on
Schedule N (Trade Secrets) which the Discloser has represented to be
trade secrets under applicable law and any other information which the
Discloser represents to be trade secrets under applicable law which is
added to Schedule N (Trade Secrets) from time to time by Discloser with
Recipient's consent, such consent not to be unreasonably withheld.
d. Obligations
1. The Recipient will protect the Confidential Information and
Trade Secrets residing on systems in accordance with the
obligations set forth in Schedule A (Services, Security).
Page 18 of 34
2. The Recipient will:
(a) use the same care and discretion to avoid disclosure,
publication, or dissemination of the Discloser's
Confidential Information and Trade Secrets as the
Recipient uses with its own similar information that
it does not wish to disclose, publish, or
disseminate; and
(b) use the Discloser's Confidential Information and
Trade Secrets only for the purpose for which it was
disclosed; and
(c) not use or disclose the Discloser's Confidential
Information and Trade Secrets except for the purposes
for which it was disclosed.
3. The Recipient may disclose Confidential Information and Trade
Secrets to:
(a) the Recipient's Affiliates and Subcontractors who
provide Services under this Agreement; and
(b) any other entity, provided the Recipient obtains the
Discloser's prior written consent. Prior to such
disclosure, the Recipient will obtain such
Affiliate's, Subcontractor's, or other entity's
written agreement to treat the Confidential
Information and Trade Secrets in accordance with the
applicable terms of this Agreement.
4. Allied Holdings and IBM will not disclose, publish, or
disseminate the terms of this Agreement without the prior
written consent of the other, except to the extent permitted
by this Section and Section 13.15 (Publicity) of this
Agreement; provided that Allied Holdings may disclose the
terms of this Agreement to its Affiliates and Services
Recipients and their respective officers and directors and as
required to comply with applicable securities, fiduciary duty
and other laws.
5. The Recipient will protect and not disclose Confidential
Information as set forth in this Section for a period of two
years following the date of disclosure of such Confidential
Information, unless otherwise provided by applicable law
without the possibility of contractual waiver or limitation.
Recipient will protect and not disclose Trade Secrets for as
long as and to the extent such information constitutes a trade
secret under applicable law. To the extent any Trade Secrets
disclosed to Recipient hereunder lose their status as trade
secrets under applicable law but otherwise constitute
Confidential Information, Recipient agrees to protect the same
as Confidential Information as provided in this Section 8.0.
e. Residual Information
1. The Recipient will not be liable for the disclosure,
publication, dissemination, and use of the ideas, concepts,
know-how, and techniques that are related to the Recipient's
business activities, retained in the memories of individuals,
but not intentionally memorized for the purposes of avoiding
Recipient's obligations under Section 8.0 of this Agreement,
and contained in the Discloser's Confidential Information or
developed, provided, or accessed by IBM or Allied Holdings,
individually or jointly, under this Agreement (RESIDUAL
INFORMATION), except to the extent such disclosure,
publication, dissemination, or use infringes the other's
patent rights, copyrights or Trade Secrets. The disclosure,
publication, dissemination, and use of Residual Information
described above will not be a breach of this Agreement.
2. Nothing contained in this Section gives the Recipient the
right to disclose, publish, disseminate, or use the
information described in Schedule N (Trade Secrets), the
source of Residual Information, the Discloser's financial,
statistical, or personnel data, or the Discloser's business
plans, other than as set forth in Section 8.0 (d) (2) (b) and
Section 8.0 (d) (3).
f. Exclusions
1. The Recipient may disclose, publish, disseminate, and use the
Discloser's Confidential Information that is:
(a) already in its possession without obligation of
confidentiality;
(b) developed independently;
Page 19 of 34
(c) obtained from a source other than the Discloser
without obligation of confidentiality;
(d) publicly available when received, or thereafter
becomes publicly available through no fault of the
Recipient; or
(e) disclosed by the Discloser to another entity without
obligation of confidentiality.
2. The Recipient may disclose Confidential Information to the
extent required by court order or similar legal process,
provided the Recipient gives the Discloser prompt written
notice of such legally-required disclosure to allow the
Discloser a reasonable opportunity to obtain a protective
order.
g. Limitation
1. Subject to IBM's performance of its obligations under this
Agreement with respect to communications and transmission of
data (including, without limitation, performance in accordance
with Service Levels and following any procedures set forth in
the Procedures Manual, the material breach of which may be
subject to certain liquidated damages as expressly set forth
in the Agreement), IBM is not responsible for the security of
data after it leaves IBM's possession or control and during
the transmission of such data via public communications
facilities and networks unless IBM intentionally or
negligently transmitted such data to an unauthorized person or
entity.
9.0 INTELLECTUAL PROPERTY RIGHTS
a. This Section specifies the ownership and license rights of Materials.
Materials are either Type I Materials or Type II Materials.
b. Type I Materials are Derivative Works of software for which the
preexisting copyright is owned by Allied Holdings. All Materials are
Type II Materials, except for Type I Materials.
c. Type I Materials
1. Ownership
TYPE I MATERIALS are owned by Allied Holdings. IBM will retain
one copy of Type I Materials during the Term solely for the
provision of the Services.
2. License Rights
Allied Holdings hereby grants to IBM, its Affiliates and
Subcontractors who are performing the Services the following
license to Type I Materials:
(a) a nonexclusive, worldwide, paid-up license to use,
execute, reproduce, display, perform, distribute
copies of, and modify (including creating Derivative
Works based on) Type I Materials but only for:
(i) IBM's internal use; and
(ii) for the purpose of IBM's provision of the
Services during the Term.
d. Type II Materials
1. Ownership
TYPE II MATERIALS are owned by IBM, its Affiliates or Third
Parties.
2. License Rights
IBM hereby grants to Allied Holdings and its Affiliates the
following license to Type II Materials:
(a) a nonexclusive, worldwide, paid-up license to use,
execute, reproduce, display, perform and distribute
copies of Type II Materials, but only for:
(i) Allied Holdings' internal use;
Page 20 of 34
(ii) for the purpose of Allied Holdings' receipt
of the Services during the Term; and
(iii) for Allied Holdings' sole benefit and
exclusive use, which includes provision of
service to Services Recipients, after
termination or expiration; provided that
such license will terminate upon IBM's
termination of this Agreement for Allied
Holdings' material breach, other than as
provided in Section 4.5 (c).
(b) Other than as provided in Section 4.5 (c), in the
event that IBM terminates this Agreement for Allied
Holdings' material breach, IBM will grant to Allied
Holdings and its Affiliates a nonexclusive,
worldwide, license to use, execute, reproduce,
display, perform and distribute copies of Type II
Materials under the same conditions stated in Section
9.d(2)(a)(i -iii) in return for Allied Holdings'
payment to IBM of a fee equal to the then-current
commercial rate for such license.
e. Items Developed by Allied Holdings
With respect to items developed by Allied Holdings, its Affiliates, or
their Subcontractors, and used in the performance of the Services, and
not under this Agreement, such items are owned by Allied Holdings, its
Affiliates, or their Subcontractors. Allied Holdings hereby grants to
IBM, its Affiliates and Subcontractors who are performing the Services
a license to such items as follows:
1. a nonexclusive, worldwide, paid-up license to use, execute,
reproduce, display, perform, distribute copies of, and modify
(including creating Derivative Works based on) such items, but
only:
(a) for IBM's internal use;
(b) for the purposes of IBM providing the Services; and
(c) during the Term.
f. The ownership and license rights granted in this Section are limited by
and subject to any patents and copyrights held by, applicable vendor
software providers (including IBM and its Affiliates).
g. To the extent all or any portion of the Materials may not, by operation
of law, be owned by the entity to which ownership is granted in this
Section (the OWNER), the other hereby assigns, to the extent that Party
has the right to do so, without further consideration, ownership in
such Materials to such Owner.
h. IBM and Allied Holdings grant only the licenses and rights specified in
this Agreement. No other licenses or rights (including licenses or
rights under patents) are granted.
i. Allied Holdings and IBM each agree to reproduce the copyright notice
and any other legend of ownership on the original and any copies made
under the licenses granted in this Section.
10.0 INDEMNIFICATION
a. Defense by IBM
IBM will defend Allied Holdings, its Affiliates, and their respective
employees, officers, and directors against any claim by a Third Party:
1. that an IBM Product provided to Allied Holdings by IBM under
this Agreement infringes such Third Party's patent, copyright
or other intellectual property rights under U.S. or Canadian
law;
2. that a contractual obligation expressly assumed or agreed to
be performed or complied with by IBM pursuant to Section 5.0
of this Agreement was not performed or complied with by IBM;
3. based on any representations, oral or written, made by IBM to
Allied Holdings' employees, including the Affected Employees,
regarding the employment of the Affected Employees with IBM or
its Subcontractors under this Agreement, unless such
representations were expressly authorized in writing by Allied
Holdings;
Page 21 of 34
4. based on claims by the Hired Employees to the extent the
timeframe referenced in such claim is on or after the date on
which said employee became employed by IBM;
5. for taxes, interest, or penalties against Allied Holdings that
are obligations of IBM pursuant to Section 6.5 (Taxes) of this
Agreement
6. for damages to property or injuries to persons (including
death) caused by IBM or its Affiliates or Subcontractors; and
7. arising out of any disclosure or use of Allied Holdings'
Confidential Information or Trade Secrets which is a breach of
Section 8.0 of this Agreement.
b. Defense by Allied Holdings
Allied Holdings will defend IBM, its Affiliates, and their respective
employees, officers, and directors against any claim by a Third Party:
1. that an Allied Holdings-Provided Product provided to IBM by
Allied Holdings infringes such Third Party's patent, copyright
or other intellectual property rights under U.S. or Canadian
law;
2. that a contractual obligation of Allied Holdings not expressly
assumed or agreed to be performed or complied with by IBM
pursuant to Section 5.0 of this Agreement was not performed or
complied with;
3. for taxes, interest, or penalties against IBM that are
obligations of Allied Holdings pursuant to Section 6.5 (Taxes)
of this Agreement;
4. based on any representations, oral or written, made by Allied
Holdings to Allied Holdings' employees, including the Affected
Employees, regarding the employment of the Affected Employees
with IBM or its Subcontractors under this Agreement, unless
such representations were expressly authorized in writing by
IBM;
5. based on claims from the Hired Employees to the extent the
timeframe referenced in such claim occurred during the
employee's tenure with Allied Holdings;
6. concerning liens or encumbrances on Acquired Assets existing
as of the Effective Date;
7. arising out of any disclosure or use of IBM's Confidential
Information or Trade Secrets which is a breach of Section 8.0
of this Agreement; and
8. for damages to property or injuries to persons (including
death) caused by Allied Holdings or its Affiliates or
Subcontractors.
c. If IBM or Allied Holdings (the Indemnifying Party) is obligated to
provide the defense in subsections (a) (Defense by IBM) or (b) (Defense
by Allied Holdings) above to the other (the Indemnified Party) subject
to subsection (e) (Indemnification Procedures), the Indemnifying Party
agrees to be responsible for and promptly pay all:
1. damages that a court finally awards to such Third Party for
such claim and any Defense Costs; or
2. the amount of any settlement agreed to by the Indemnifying
Party and any Defense Costs,
in each case ((1) and (2)), in proportion to the Indemnifying Party's
comparative fault in causing such amounts as determined by a court or
in accordance with the Dispute Resolution Mechanism.
d. Patent and Copyright Claims
1. The Indemnifying Party will have no obligation for patent or
copyright claims pursuant to subsections (a) (Defense by IBM)
or (b) (Defense by Allied Holdings) above to the extent such
claims are a result of:
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(a) modifications of the IBM Products or Allied
Holdings-Provided Products not made by the
Indemnifying Party or its Affiliates, Subcontractors
or agents, or the use of such products in other than
their specified operating environment; or
(b) the Indemnified Party's combination, operation, or
use of the IBM Products or Allied Holdings-Provided
Products with products, data, or apparatus not
provided by the Indemnifying Party;
unless such modification, combination, operation or use was at
the direction or request of, or in accordance with the
specifications provided by, the Indemnifying Party.
2. If a patent or copyright infringement claim is made or appears
likely to be made, the Indemnified Party agrees to permit the
Indemnifying Party to obtain the right for the Indemnified
Party to continue to use the IBM Product or Allied
Holdings-Provided Product, or to modify or replace it with one
that is at least functionally equivalent.
e. Indemnification Procedures
1. The Indemnifying Party's obligations under this Section are
subject to the Indemnified Party following the procedures set
forth in this subsection (e) (Indemnification Procedures).
2. The Indemnified Party will promptly notify the Indemnifying
Party in writing of a claim covered by this Section.
3. The Indemnifying Party will be entitled to take sole control
of the defense and investigation of the claim (collectively,
the DEFENSE) at its own expense, and to use attorneys of its
choice, by providing prompt written notice to the Indemnified
Party. The Indemnifying Party will not be liable to the
Indemnified Party for any Defense Costs incurred after such
notice, except for Defense Costs incurred at the Indemnifying
Party's request.
4. The Indemnified Party will cooperate in all reasonable
respects with the Indemnifying Party and its attorneys in the
Defense of such claim, and may reasonably participate at its
own expense, through its attorneys or otherwise, in such
Defense.
5. If the Indemnifying Party does not take sole control of the
Defense of a claim as provided in this subsection (e)
(Indemnification Procedures):
(a) the Indemnifying Party may participate in such
Defense, at its sole cost and expense; and
(b) the Indemnified Party will have the right to defend
the claim in such manner as it may deem appropriate;
and
(c) the Indemnifying Party will pay the Indemnified
Party's Defense Costs.
6. All settlements of claims subject to indemnification under
this Section will:
(a) be entered into only with the consent of the
Indemnified Party, which consent will not be
unreasonably withheld; and
(b) include an appropriate confidentiality agreement
prohibiting disclosure of the terms of such
settlement.
f. Subrogation
The Indemnifying Party will be subrogated to the rights and defenses of
the Indemnified Party to the extent of, and with respect to, the
Indemnifying Party's obligation to indemnify the Indemnified Party
under this Section 10.0 (Indemnification).
11.0 LIMITATION OF LIABILITY
a. General Intent
IBM's and Allied Holdings' and their respective Affiliates',
employees', officers', and directors' entire liability under this
Agreement, and their exclusive remedies, are set forth in this Section
and Section
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10.0 (Indemnification) of this Agreement. If IBM and Allied Holdings
have a dispute arising out of this Agreement, IBM and Allied Holdings
will follow the Dispute Resolution Process described in Section 4.3.
b. Damages
IBM's and Allied Holdings' and their respective Affiliates',
employees', officers' and directors' entire liability for actual,
direct damages under this Agreement, regardless of the basis on which
IBM or Allied Holdings is entitled to claim damages (including breach,
negligence, misrepresentation, or other contract or tort claim), will
be limited, to the extent permitted by applicable law, in the aggregate
for all claims and causes of actions to an amount equal to the amount
actually paid by Allied Holdings to IBM for the Services provided under
this Agreement during the twelve months prior to the occurrence of the
first claim or cause of action; provided that if the first claim or
cause of action occurs during the first 12 months of the Term, the
limit will be the actual amounts paid by Allied Holdings for the first
12 months of the Term.
c. The limitation of liability in subsection 11.0 (b) (Damages) above does
not apply to:
1. Either Party's failure to pay any amounts owing to the other
Party under this Agreement (including amounts owing for
Services rendered or services that would have been rendered
but for Allied Holdings' breach of this Agreement);
2. any damages for bodily injury (including death) and damage to
real property and tangible personal property;
3. Allied Holdings' or IBM's obligation to indemnify the other
under this Agreement, as provided in Sections 10.0 (a) and 10
(b) of this Agreement; and
4. any damages associated with either Party's infringement or
violation of the intellectual property rights of the other
Party or its Affiliates.
d. In no event will IBM, Allied Holdings, or their respective Affiliates,
employees, officers, and directors have any liability under this
Agreement, regardless of the basis on which IBM or Allied Holdings is
entitled to claim damages (including breach, negligence,
misrepresentation, or other contract or tort claim), for any special,
incidental, punitive, or indirect damages, or for any economic
consequential damages (including lost profits or savings), even if
foreseeable or even if Allied Holdings or IBM has been advised of the
possibility of such damages; provided that this subsection (d)
(indirect damages) does not apply to Allied Holdings' failure to pay
any amounts owing to IBM under this Agreement (including amounts owing
for Services rendered or services that would have been rendered but for
Allied Holdings' breach of this Agreement).
e. In no event will IBM, its Affiliates, or their respective employees,
officers, and directors have any liability for any damages to the
extent caused by Allied Holdings', its Affiliates', or their respective
employees', officers', or directors' failure to perform Allied
Holdings' obligations under this Agreement, nor will Allied Holdings,
its Affiliates, or their respective employees, officers, and directors
have any liability for any damages if to the extent caused by IBM's,
its Affiliates', or their respective employees', officers', or
directors' failure to perform IBM's obligations under this Agreement.
f. IBM, its Affiliates, and their respective employees, officers, and
directors will not be liable for loss of, or damage to, Allied
Holdings' records or data unless caused by IBM's or its Affiliates' or
Subcontractors' willful misconduct, negligence or breach of this
Agreement and then only if (i) Allied Holdings has not breached its
obligations under this Agreement in connection with such data loss;
(ii) Allied Holdings did not prevent IBM from performing its
obligations in connection with such data loss; or (iii) such data loss
was not caused by Allied Holdings' failure to implement practices or
procedures recommended by IBM. Any IBM liability for loss or damage to
Allied Holdings' records or data is subject to the provisions of
Section 11.0 (b) and 11.0 (d) of this Agreement. Notwithstanding the
foregoing, the parties agree that the disclaimer for data loss
contained in Section 1.10 of the IBM Customer Agreement between IBM and
Allied Industries under which Allied Holdings does business with IBM,
dated April 30, 1991 is not waived or modified. Section 1.10 of the IBM
Customer
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Agreement is incorporated by reference into this Agreement and applies
to IBM Products as defined in this Agreement.
12.0 WARRANTY
a. Authorization and Enforceability
IBM and Allied Holdings represent and warrant to the other that:
1. each has all requisite corporate power and authority to
execute, deliver and perform its obligations under this
Agreement;
2. its signing of and agreement to this Agreement has been duly
authorized by all requisite corporate actions;
3. each has signed and agreed to this Agreement; and
4. this Agreement is a valid and binding obligation, enforceable
against it in accordance with its terms (assuming the due
authorization, execution, and delivery by the other).
b. IBM Representations
IBM represents and warrants to Allied Holdings that:
1. The Services will be performed in a professional, workman like
manner and in accordance with industry standards and
applicable laws;
2. IBM, its Affiliates and Subcontractors have all necessary
Third Party and governmental and regulatory consents, approval
and permits necessary to perform the Services, except Third
Party consents to be obtained by Allied, as set forth in
Section 5.7 (Required Consents); and
3. All hardware and software used by IBM or its Affiliates or
Subcontractors in the performance of the Services (a) is
appropriate for performance of the Services; and (b) will be
maintained in accordance with the appropriate Software
licenses, industry standards and manufacturer recommendations.
c. Compliance with Laws and Obligations
1. IBM represents and warrants that it complies with the IBM
Regulatory Requirements to the extent that such IBM Regulatory
Requirements relate to the performance of its obligations
under this Agreement.
2. Allied Holdings represents and warrants that it complies with
the Allied Holdings Regulatory Requirements to the extent that
such Allied Holdings Regulatory Requirements relate to the
receipt or utilization of the Services, and will identify and
make interpretations of any Allied Holdings Regulatory
Requirements applicable to the performance or utilization of
the Services.
3. Any modifications to the Services as a result of the Allied
Holdings Regulatory Requirements will be considered a Request
for New Services.
d. Disclaimer of Warranty for Year 2000 and EMU
1. IBM is not providing any year 2000 services (for example, year
2000 assessment, conversion or testing) or Economic Monetary
Union (EMU) or Euro denomination services under this
Agreement.
2. Under this Agreement, IBM is not responsible for:
(a) Allied Holdings' or its Affiliates' products;
(b) a Third Party's products; or
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(c) IBM Products not provided and selected by IBM under
this Agreement, provided that this clause will not
diminish any right of Allied Holdings under any
separate agreement with respect to such IBM Products;
((a), (b), and (c) collectively, OTHER PRODUCTS) to correctly
process or properly exchange accurate date data or data in the
EMU or Euro denomination.
3. IBM will be relieved of its obligations under this Agreement
(including meeting Service Levels) due to the inability of
such Other Products to correctly process or properly exchange
accurate date data or data in the EMU or Euro denomination.
4. Allied Holdings acknowledges that it is responsible for
assessing its current systems and taking appropriate action to
migrate to year 2000-ready, EMU-ready, or Euro-ready systems.
e. Other Disclaimers
1. IBM does not warrant uninterrupted or error-free operation of
any machines, software, products, or Services or that IBM will
find or correct all defects. The foregoing does not relieve
IBM of its obligation to provide Services in accordance with
the terms and conditions of this Agreement and the liquidated
damages set forth in Schedule B.
f. EXCEPT AS PROVIDED IN THIS SECTION 12.0 (WARRANTY) OF THIS AGREEMENT,
THERE ARE NO EXPRESS WARRANTIES, REPRESENTATIONS, UNDERTAKINGS, OR
CONDITIONS (STATUTORY OR OTHERWISE) BY IBM OR ALLIED HOLDINGS, AND
THERE ARE NO IMPLIED WARRANTIES, REPRESENTATIONS, UNDERTAKINGS, OR
CONDITIONS (STATUTORY OR OTHERWISE) BY IBM OR ALLIED HOLDINGS,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, IN THIS AGREEMENT.
13.0 GENERAL
13.1 ASSIGNMENT AND BINDING NATURE
a. IBM may not delegate its obligations, and Allied Holdings may not
assign its rights or delegate its obligations, under this Agreement,
without the prior written consent of the other, except that IBM may
delegate its obligations and Allied Holdings may assign its rights or
delegate its obligations to their respective Affiliates or
Subcontractors who are not competitors of the other Party, provided:
1. such Affiliate accepts such assignment and assumes such
obligations, in writing;
2. Allied Holdings or IBM, respectively, remains fully liable for
and is not relieved from the full performance of its
obligations; and
3. Allied Holdings and IBM provide the other with written notice,
together with a copy of the signed assignment, delegation, and
assumption agreement, within three business days of such
assignment, delegation, or both.
b. IBM may assign its rights to payments under this Agreement upon notice
to Allied Holdings.
c. IBM's and Allied Holdings' respective permitted successors and assigns
will be bound by this Agreement.
d. Any attempted assignment or delegation of all or any part of this
Agreement that does not comply with this Section is void.
13.2 AUDITS
a. IBM will provide Allied Holdings with commercially reasonable
assistance in meeting its audit requirements as set forth in this
Section.
b. IBM will provide access to all records and reports related to this
Agreement to enable Allied Holdings to conduct appropriate audits
(AUDITS) of IBM's operations relating to the performance of Services.
The Audits will be limited to verifying IBM's compliance with this
Agreement.
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c. Audits will:
1. apply only to the previous twelve months' activities;
2. occur no more than twice each calendar year, unless required
to meet Allied Holdings Regulatory Requirements;
3. not be permitted if it interferes with IBM's ability to
perform the Services in accordance with the Service Levels,
unless Allied Holdings relieves IBM from meeting the
applicable Service Levels;
4. be conducted expeditiously, efficiently, and at reasonable
business hours; and
5. be conducted upon reasonable prior written notice, which
normally will be at least 30 days, but may be less if IBM and
Allied Holdings agree in the Procedures Manual that certain
Audits, such as physical security Audits, may be conducted
upon shorter notice.
d. Allied Holdings and its auditors will not have access to IBM's or its
Affiliates' locations or proprietary data or to IBM's customer
locations or proprietary data, provided that Allied Holdings may have
access to appropriate portions of IBM's locations used primarily to
perform the Services
e. Allied Holdings may request that a mutually agreeable Third Party
auditor perform the Audit, at Allied Holdings' expense on a
noncontingent basis, provided such Third Party auditor executes a
confidentiality agreement reasonably acceptable to IBM.
f. A request for IBM to provide assistance with an Audit will be
considered a Request for New Services if such Audit assistance requires
the use of different or additional resources beyond that which IBM uses
to provide the Services in accordance with the Baselines and Service
Levels, such as audit software or additional employees or
Subcontractors.
g. If an Audit demonstrates that IBM's invoices for the Services for the
audited period were not correct, and IBM and Allied Holdings agree with
such Audit, IBM will promptly credit Allied Holdings for the amount of
any paid overcharges, or Allied Holdings will promptly pay IBM for the
amount of any undercharges.
13.3 DATA PRIVACY
a. General
1. IBM and Allied Holdings are each responsible for complying
with their respective obligations under the applicable data
protection laws governing Allied Holdings Personal Data.
2. Allied Holdings remains solely responsible for determining the
purposes and means of IBM's processing of Allied Holdings
Personal Data under this Agreement, including that such
processing will not place IBM in breach of the applicable data
protection laws.
3. Data protection laws are Allied Holdings Regulatory
Requirements with respect to Allied Holdings Personal Data,
except and only to the extent such data protection laws
regulate IBM's processing of Allied Holdings Personal Data in
IBM's performance of the Services. IBM and Allied Holdings
each acknowledge that it is not investigating the steps the
other is taking to comply with applicable data protection
laws. Nothing in this Agreement prevents IBM or Allied
Holdings from taking the steps it deems necessary to comply
with applicable data protection laws.
4. If Allied Holdings requests additional or different services
to comply with the applicable data protection laws, such
services will be deemed a Request for New Services.
b. Security
1. Allied Holdings acknowledges it is solely responsible for
determining that the security measures specified in this
Agreement constitute appropriate technical and organizational
measures to protect Allied Holdings Personal Data as required
by the applicable data protection laws. IBM is not required to
perform or adhere to any security measures concerning Allied
Holdings Personal Data other than those specified in this
Agreement.
Page 27 of 34
2. As a processor of Allied Holdings Personal Data, IBM will
process Allied Holdings Personal Data as specified in Schedule
A (Services, Security). Allied Holdings agrees that IBM may
perform such processing as IBM reasonably considers necessary
or appropriate to perform the Services, provided that it does
not violate applicable data protection laws.
c. Transborder Data Flows
1. IBM will not transfer any Allied Holdings Personal Data across
a country border unless IBM reasonably considers such transfer
appropriate or useful for IBM's performance of the Services or
obtains Allied Holdings prior written consent.
2. Allied Holdings is solely responsible for determining that any
transfer by IBM or Allied Holdings of Allied Holdings Personal
Data across a country border under this Agreement complies
with the applicable data protection laws.
d. Information
1. If Allied Holdings is required to provide information to an
individual regarding Allied Holdings Personal Data, IBM will
reasonably cooperate with Allied Holdings in providing such
information. Allied Holdings will reimburse IBM for its
reasonable charges for such assistance.
2. Upon IBM's or Allied Holdings' reasonable written request,
Allied Holdings or IBM will provide the other with such
information that it has regarding Allied Holdings Personal
Data and its processing that is necessary to enable the
requester to comply with its obligations under this Section
and the applicable data protection laws.
3. Nothing in this Section requires IBM to provide Allied
Holdings access to IBM's, its Affiliates', or any of their
Subcontractors' premises or systems or to information relating
to IBM's, its Affiliates', or their Subcontractors' other
customers.
13.4 ENVIRONMENTAL
a. Allied Holdings will ensure that the Facilities provide a safe working
environment, including complying with any applicable laws.
13.5 FACILITIES
a. Allied Holdings will provide IBM at no charge with:
1. the use of space, equipment, and support at the Facilities
reasonably necessary for the performance of the Services. This
includes all heat, light, power, air conditioning,
uninterruptible power supply and other similar utilities,
reasonable office space, furniture, secure storage space and
equipment staging facilities, office supplies, telephone
service, office support services (including security and
janitorial), coordination of Facility access security
requirements, and administrative support to be used by IBM in
support of the Services. Allied Holdings will provide IBM with
full and safe access to such Facilities, subject to Section
4.4 (a) (Personnel, facility rules) of this Agreement; and
2. the same or similar access to Allied Holdings' workplace
services, such as parking and cafeteria facilities, if any, as
Allied Holdings provides to its employees and Subcontractors.
b. Allied Holdings reserves the right to relocate the Facilities upon at
least ninety (90) days notice to IBM.
c. If Allied Holdings relocates a Facility, or the portion of a Facility
used by IBM to provide the Services, Allied Holdings will:
1. provide IBM with space and support in the new location that is
comparable to the space and support provided in the previous
location;
2. reimburse IBM for any one time or additional ongoing expenses
incurred as a result of the relocation; and
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3. if the relocation impacts IBM's ability to meet the Service
Levels, relieve IBM from the affected Service Levels until the
relocation is complete and the Service Levels are
appropriately adjusted.
d. IBM's use of the Facilities does not constitute or create a leasehold
interest.
13.6 FORCE MAJEURE
a. IBM and Allied Holdings will not be liable for any default or delay in
the performance of their respective obligations, to the extent that
such default or delay:
1. is caused, directly or indirectly, by an event beyond the
reasonable control of IBM or Allied Holdings, whichever is the
entity unable to perform (the NONPERFORMING PARTY), such as
fire, flood, earthquake, elements of nature, acts of war,
terrorism, riots, civil disorders, rebellions or revolutions,
strikes, lockouts or labor difficulties; and
2. could not have been prevented by commercially reasonable
precautions, alternative sources, workaround plans, or other
means. Such default or delay ((1) and (2), collectively) is a
FORCE MAJEURE EVENT.
b. The Nonperforming Party will be excused from any further performance of
the obligations affected by such Force Majeure Event for as long as
such Force Majeure Event continues and the Nonperforming Party
continues to use commercially reasonable efforts to recommence
performance. The Nonperforming Party will immediately notify the other
under this Agreement by telephone (to be confirmed in writing within
five days of the inception of such default or delay) and describe at a
reasonable level of detail the circumstances causing such Force Majeure
Event. If a Force Majeure Event substantially prevents, hinders, or
delays IBM's performance of the Services necessary for the operation of
Allied Holdings' Critical Functions, if any, for more than 4
consecutive days, then Allied Holdings may either:
1. procure such Services from an alternate provider until IBM is
able to provide the Services. Subject to Section 13.6 (d)
(Force Majeure, charges) below, IBM will reimburse Allied
Holdings for any reasonable payments to such alternate
provider for such Services, for the lesser of 180 days or the
remainder of the Term; or
2. terminate this Agreement by providing IBM with a written
notice of termination and paying IBM for any unrecovered
start-up costs, and any reasonable out-of-pocket expenses
associated with ramp-down costs.
c. This Section does not affect IBM's obligation to provide disaster
recovery Services, if any, to the extent set forth in Schedule A
(Services, Disaster Recovery Services), provided that such Force
Majeure Event does not also prevent IBM from providing such disaster
recovery Services.
d. During the Force Majeure Event, Allied Holdings will continue to pay
IBM's charges for the Services.
13.7 FREEDOM OF ACTION
a. IBM may enter into similar agreements with others and develop and
provide hardware, software or services that are similar to or
competitive with the hardware, software, and Services provided under
this Agreement, except to the extent that such hardware, software or
services infringe Allied Holdings' or its Affiliates patent rights,
copyrights or other intellectual property rights under applicable law.
b. IBM personnel providing Services to Allied Holdings under this
Agreement may perform similar services for others and this Agreement
will not prevent IBM from using the personnel and equipment provided to
Allied Holdings under this Agreement for such purposes; provided,
however, that IBM agrees that selected Hired Employees will continue to
be used in the performance of the Services for a period of six months
following the Effective Date, unless such employee:
1. resigns from employment;
2. is dismissed by his employer;
Page 29 of 34
3. fails, in the employer's absolute discretion, to perform his
obligations; or
4. is unable to work.
13.8 GEOGRAPHIC SCOPE OF SERVICES
IBM is providing the Services under this Agreement in the United States.
13.9 GOVERNING LAW AND JURISDICTION
a. The laws of the State of Georgia will govern, construe, and enforce all
of the rights, duties, and obligations arising under, or relating in
any manner to, the subject matter of this Agreement, notwithstanding
any conflicts of law principles.
b. Any proceeding regarding the rights, duties, and obligations arising
under, or relating in any manner to, the subject matter of this
Agreement will be brought in the United States District Court for the
Northern District of Georgia, if jurisdiction cannot be maintained, in
the Georgia state courts located in Atlanta, Georgia. IBM and Allied
Holdings waive any objections to such jurisdiction, including venue and
inconvenient forum.
c. Nothing in this Agreement affects any statutory rights that cannot be
waived or limited by contract under applicable law.
13.10 INTERPRETATION
This Agreement will be interpreted according to the following rules of
construction:
a. the headings and parenthetical descriptions in references to the
Sections and subsections, Attachments, and table of contents are not to
be considered in the construction or interpretation of any provision;
b. references to a Section (such as "Section 13.1 (Assignment and Binding
Nature)") and to "this Section" mean the entire Section (for example,
Section 13.1) including all of its subsections; and
c. IBM and Allied Holdings drafted and negotiated this Agreement jointly,
and this Agreement will be construed neither against nor in favor of
either, but rather in accordance with its fair meaning.
13.11 JOINT VERIFICATION
During the six months after the Effective Date (the JOINT VERIFICATION PERIOD),
Allied Holdings and IBM reserve the right to inventory and validate any
information that is reflected in or omitted from this Agreement. If, during such
Joint Verification Period, Allied Holdings or IBM discovers inaccuracies in the
information contained in this Agreement or inaccuracies because of an omission
from this Agreement, IBM and Allied Holdings will amend this Agreement to
provide for an equitable adjustment to the charges, Baselines and other terms of
this Agreement affected by such inaccuracies. If Allied Holdings or IBM disputes
the inaccuracy or the equitable adjustment, Allied Holdings and IBM will submit
the matter to the Dispute Resolution Process. If the adjustment will result in
an increase to the Annual Services Charge of an amount equal to or greater than
twenty (20) percent, and the Dispute Resolution Process has not produced a
mutually agreeable resolution, Allied Holdings will have 30 days to exercise the
right to terminate this agreement upon satisfaction of :
1. reimbursement to IBM of IBM's start-up costs;
2. written notice to IBM.
13.12 LIMITATIONS PERIOD
Neither IBM nor Allied Holdings may bring a legal action, more than two years
after the cause of action arose or the date the Nonbreaching Party learned of
the cause of action (whichever is later), unless otherwise provided by
applicable law without the possibility of contractual waiver or limitation.
13.13 MODIFICATIONS
a. Modifications to this Agreement may be made only by a written amendment
signed by IBM and Allied Holdings.
b. Modifications in any other form are void.
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c. Any terms on any order or written notification that are not signed by
IBM and Allied Holdings are void.
13.14 NOTIFICATIONS AND APPROVALS
a. When IBM's performance of the Services requires or is contingent upon
Allied Holdings' performance of an obligation (including providing
approval or notification or taking a recommended corrective action)
under this Agreement, IBM will provide notice to Allied Holdings of
Allied Holdings' nonperformance of such obligation. If Allied Holdings
delays or withholds its performance beyond the agreed time period (or
beyond thirty days, if a time period is not specified), IBM will be
relieved of its obligation to perform such Services entirely or, if it
is reasonable for IBM to perform once Allied Holdings performs, until a
reasonable period following Allied Holdings' performance of its
responsibility. Allied Holdings will pay IBM for any additional
expenses incurred as a result of Allied Holdings' delay or
nonperformance.
b. IBM and Allied Holdings may communicate with each other by electronic
means. Such communication is acceptable as a signed writing to the
extent permissible under applicable law. An identification code (called
a user ID) contained in an electronic document will be deemed
sufficient to verify the sender's identity and the document's
authenticity.
c. Unless specified otherwise in this Agreement, when IBM or Allied
Holdings is required to provide notice to the other, such notice will
be deemed given upon the earlier of:
1. the day of receipt, if delivered in person or electronically;
2. one business day after being given to an express courier with
a reliable system for tracking delivery; or
3. three business days after the date of mailing, when using
local postal services, registered or certified mail, return
receipt requested, postage prepaid.
d. IBM and Allied Holdings will provide notifications under this Agreement
to the following:
1. For termination, breach or default:
If to IBM:
Vice President, Travel and Transportation Industry
IBM Global Services
James H. Keegan
3200 Windy Hill Road
Atlanta, Georgia 30339
Telephone: 770 835-6926
Facsimile: 770 835-8981
Page 31 of 34
With a copy to:
IBM Project Executive
Arnie Lundberg
1505 Windward Concourse
Alpharetta, GA 30005
Telephone: 770 663-9212
Facsimile: 770 663-9448
and
General Counsel, IBM Global Services
Route 100
Somers, New York 10589
Telephone: 914-766-4165
Facsimile: 914-766-8444
If to Allied Holdings:
Sr. Vice President Information Technology
John Goslin
160 Clairemont Ave, Suite 300
Decatur, GA 30030
Telephone: 404 687-5706
Facsimile: 404 370-4312
With a copy to:
Allied Holdings Project Executive
Assistant Vice President Information Technology
Joe Pritchett
160 Clairemont Ave, Suite 300
Decatur, GA 30030
Telephone: 404 687-5709
Facsimile 404 370-4312
and
Vice President Corporate Affairs and General Counsel
Tommy Duffy
160 Clairemont Ave, Suite 300
Decatur, GA 30030
Telephone: 404 370-4225
Facsimile: 404 370-4312
2. For all other notices:
Page 32 of 34
If to IBM:
IBM Project Executive
Arnie Lundberg
1505 Windward Concourse
Alpharetta, GA 30005
Telephone: 770 663-9212
Facsimile: 770 663-9448
If to Allied Holdings:
Allied Holdings Project Executive
Assistant Vice President Information Technology
Joe Pritchett
160 Clairemont Ave, Suite 300
Decatur, GA 30030
Telephone: 404 687-5709
Facsimile 404 370-4312
e. IBM or Allied Holdings may change its address, phone and facsimile
numbers for notification purposes by giving the other prior written
notice of the new information and its effective date.
13.15 PUBLICITY
a. IBM and Allied Holdings will obtain the other's prior written consent
before publicly using any advertising, written sales promotion, press
releases, or other publicity matters relating to this Agreement or in
which the other's name is used or may reasonably be inferred.
b. Upon written approval of the other Party, IBM and Allied Holdings may
include the other's name, and a factual description of the work
performed under this Agreement:
1. on employee bulletin boards;
2. in its list of references;
3. in the experience section of proposals;
4. in internal business planning documents;
5. in its annual report to stockholders; and
6. whenever necessary to comply with generally accepted
accounting principles or applicable laws.
13.16 RELATIONSHIP
This Agreement will not be construed as:
a. constituting Allied Holdings to be a partner of IBM;
b. creating any form of legal association between Allied Holdings and IBM
that would impose liability upon one for the act or failure to act of
the other, or any form of a fiduciary relationship or duty between IBM
and Allied Holdings; or
c. granting Allied Holdings or IBM the right, power, or authority (express
or implied) to create any duty or obligation for the other.
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13.17 REMARKETING
Allied Holdings may not remarket all or any portion of the Services, or make all
or any portion of the Services available to any entity, other than to the
Services Recipients.
13.18 RISK OF LOSS
Allied Holdings is responsible for risk of loss of and damage to equipment
owned, leased, or rented by IBM that is located on Allied Holdings' premises and
any loss of and damage to software owned by or licensed to IBM that is in Allied
Holdings' possession at the time of such loss or damage. IBM is responsible for
risk of loss of and damage to equipment owned, leased, or rented by Allied
Holdings that is located on IBM's premises and any loss of and damage to
software owned by or licensed to Allied Holdings that is in IBM's possession at
the time of such loss or damage.
13.19 SERVICES RECIPIENTS
a. IBM will provide Services to Services Recipients, subject to the terms
of this Section.
b. Allied Holdings will inform the Services Recipients to direct all
communications regarding this Agreement through and to Allied Holdings,
and not through or to IBM, except as set forth in the Procedures Manual
or as otherwise mutually agreed.
c. Allied Holdings is fully responsible for the performance of Allied
Holdings' obligations under this Agreement with respect to the Services
provided to such Services Recipients.
d. Nothing in this Section relieves Allied Holdings of its obligations or
expands IBM's obligations under this Agreement.
13.20 SEVERABILITY
If any provision of this Agreement is held to be invalid, illegal, or
unenforceable, the remaining provisions of this Agreement will not in any way be
affected or impaired, and the invalid, illegal, or unenforceable provision will
be restated to reflect the original intentions of Allied Holdings and IBM under
this Agreement as nearly as possible in accordance with applicable laws.
13.21 SURVIVAL
Any terms of this Agreement that by their nature extend beyond its expiration or
termination remain in effect until fulfilled, including Confidential
Information, governing law and jurisdiction, indemnification, intellectual
property rights, limitation of liability, limitations period, charges, credits
and payments, survival, third party beneficiaries, and warranty.
13.22 THIRD PARTY BENEFICIARIES
This Agreement does not create any benefits, rights, claims, obligations, or
causes of action in, to, or on behalf of, any person or entity (including
Affiliates, Services Recipients, Third Parties, or Subcontractors) other than to
Allied Holdings and IBM under this Agreement, except as set forth in Section
10.0 (Indemnification) and Section 11.0 (Limitation of Liability) of this
Agreement.
13.23 WAIVER
The exercise or waiver, in whole or in part, of any right, remedy, or duty
provided for in this Agreement will not constitute the waiver of any prior,
concurrent or subsequent right, remedy, or duty within this Agreement.
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