EXHIBIT 99.2
MANAGED SERVICE AGREEMENT
THIS AGREEMENT made as of the lst day of January 1996 (the "Effective
Date"), between INTERNATIONAL BUSINESS MACHINES CORPORATION, a New York
corporation, having its principal office at Xxxxxx, Xxx Xxxx 00000 (hereinafter
called "IBM") and Axiom Real Estate Management, Inc., a Delaware corporation,
having an office in Pittsburgh, PA (hereinafter called "Contractor").
W I T N E S S E T H:
WHEREAS, IBM owns, leases and occupies buildings in North America; and
WHEREAS, Contractor is an independent contractor furnishing real estate
property and facilities management services; and
WHEREAS, IBM and Contractor agree that Contractor shall furnish such real
estate property and facilities management services for the Premises.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements hereinafter set forth, it is hereby agreed as follows:
ARTICLE 1
DEFINITIONS
Where used in this Agreement, the following terms shall have the meaning
attributed to them hereafter unless the context indicates otherwise:
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1.1 "Agreement" shall mean and include this Agreement with its Addenda,
Attachments and Amendments, and the Statements of Work with their
Addenda, Attachments and Amendments:
1.2 "Approved Annual Budget" shall mean the operating and capital budget for
each Site, for a particular year, as approved by IBM.
1.3 "Cancellation Charges" shall mean charges related to the cancellation of
contractual obligations on account of purchase orders placed and
commitments with suppliers or subcontractors made prior to receipt by
Contractor of a notice of cancellation of a Site, as well as actual and
reasonable cancellation charges of leases for space, equipment, furniture
and fixtures used by Contractor for the performance of this Agreement.
1.4 "Competitor" means any entity that (a) is, or has any affiliate that is,
engaged in the business of developing, manufacturing, selling, leasing or
servicing information processing hardware and has, together with all
affiliates thereof, annual revenues for the most recently completed
fiscal year in excess of $1 billion from such activities or (b) is, or
has any affiliate that is, engaged in the business of developing,
producing, licensing or selling software or services related to
information processing and has, together with all affiliates thereof,
annual revenues for the most recently completed fiscal year in excess of
$100 million from such activities.
1.5 "Costs" shall mean the aggregate of the Management Fee, the reimbursable
expenses listed in Section 6.1., taxes and any other costs related to
this Agreement as agreed to by the parties.
1.6 "Premises" shall mean all Sites that are and include any properties,
owned, leased, subleased or occupied by IBM that become subject to this
Agreement;
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1.7 "Site" shall mean either a single IBM address or an aggregate of IBM
addresses in the same vicinity, as determined by IBM.
1.8 "Statement of Work" shall mean the statements, which are or become
attached to this Agreement, that describe, for each Site, the details of
the Work, the duration of the Work and other terms required to fully
describe the Work to be performed by Contractor hereunder, as determined
by IBM, provided that the Work on any Site which is part of the Agreement
shall not exceed the levels and types of services provided by property
management companies for buildings comparable in nature, age and use in
the local marketplace in such a way that substantially increases the non-
reimbursable costs and/or non-reimbursable management time of Contractor
without additional compensation to Contractor therefor as negotiated
between Contractor and IBM.
1.9 "Work" shall mean all real estate property and facilities management
functions including, but not limited to, facilities operations
(maintenance, engineering, facilities planning and construction),
security, shipping and receiving, site support services, mail and
reprographic services, and any other related services, as more fully
described in each Statement of Work.
1.10 "Severance Payments" shall mean the payments made by Contractor to its
labor force that was performing Work related directly to a cancelled Site
on account of termination of employment. These payments will be
consistent with Contractor's personnel policy relative to severance
payments as set forth in Attachment L as updated from time to time.
1.11 "Confidential Information" means oral or written information which
relates to the past, present or future research, development or business
activities of IBM or its direct and indirect subsidiaries identified as
IBM Confidential Information. It does not include information which is
or becomes publicly available without breach of this Contract. The
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of any reports prepared by Contractor hereunder shall also be treated as
Confidential Information.
1.12 "Environmental Loss" shall mean any damages, costs, or expenses arising
out of, or related to, any violation of a federal, state, local, or other
environmental law or regulation. Expenses associated with a violation
under this definition shall include, but not be limited to, cleanup,
disposal, transportation, government fees, fines, sanctions, and legal
fees associated with the defense of any alleged or actual violation of
such laws or regulations.
1.13 For the purpose of this Agreement, the term "Rentable Square Foot" shall
have the meaning ascribed to it in the American National Standard Method
for Measuring Floor Area in Office Buildings, ANSI Z65.1 - 1980
(reaffirmed 1989), approved June 21, 1989.
ARTICLE 2
PURPOSE
2.1 IBM is retaining the services of Contractor hereunder because of the
specific covenants and undertakings of Contractor, it being understood
that Contractor will not assign this Agreement or the Work except as
specifically provided herein.
2.2 Contractor shall perform all real estate property and facilities
management functions described herein and in each Statement of Work in
accordance with and within the limits set forth in the Approved Annual
Budget and in accordance with the provisions of this Agreement. Such
functions will generally include, without limitation, the obligation to
manage, advise, supervise, direct, and coordinate the maintenance,
repair, cleaning, and operation of the Premises and equipment therein, in
compliance with all laws, rules and regulations and in accordance with
the standards for the management, operation, maintenance, and repair for
buildings comparable in nature, age, and use in the local
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marketplace, to purchase all services and building supplies, equipment,
tools, materials and parts, to hire and discharge Contractor's employees
and all subcontractors, suppliers, materialmen, laborers and others, and
to comply with the provisions of the Statements of Work. Contractor
shall provide all other services, labor and materials to adequately
perform the Work and shall perform additional real estate property and
facilities management services in connection with the Premises as the
parties may agree upon from time to time. All contracts entered into by
Contractor pursuant to this Agreement shall be subject to the terms and
provisions of this Agreement and be cancelable with no more than ninety
(90) days notice.
2.3 Contractor shall be solely responsible for maintaining control,
direction, and supervision of its employees, including without
limitation, assigning daily work, supervising assigned work, hiring,
terminating, and disciplining Contractor's employees, and handling labor
relations and employee matters. Contractor will be solely and
exclusively responsible for setting wage rates and employee benefits of
its employees and all other matters relating to its employees.
2.4 Personnel supplied through Contractors or employees of Contractor will
not for any purpose be considered employees or agents of IBM. Contractor
assumes full responsibility for the actions of its employees while
performing services hereunder, and shall have contracts with other
contractors under which such other Contractors will be responsible for
the supervision, daily direction and control, payment of salary
(including withholding of income taxes and social security), workers'
compensation, disability benefits and the like of their employees.
2.5 Contractor is an independent contractor and any provisions in the
Agreement which may appear to give IBM the right to direct Contractor as
to the details of the doing of any Work performed by Contractor shall be
deemed to mean, and shall mean that Contractor shall follow the desire of
IBM in the results of the Work only and not in the means whereby said
Work is to be accomplished.
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2.6 Contractor is responsible, on a reasonable efforts basis, for use of up-
to-date techniques, sequences, scheduling and procedures in performing
the Work in order to achieve a high degree of cost efficiency while
maintaining quality performance as prescribed herein.
2.7 Contractor shall enforce strict discipline among its employees and
subcontractor's employees and shall require them to be clean, neat,
orderly and maintain good conduct.
2.8 Contractor shall perform the Work so as not to unreasonably interfere
with IBM's business operations.
2.9 Contractor will inform the IBM contract coordinator promptly of any claim
or demand in writing or lawsuit relative to the Site and provide
information as required. Contractor will use reasonable efforts to
inform IBM of the costs to be incurred with respect to legal matters not
already addressed in writing by IBM or addressed in the Approved Annual
Budget.
2.10 IBM shall appoint a technical coordinator(s) who shall be responsible for
maintaining liaison with Contractor's supervisor(s). IBM's technical
coordinator shall have no authority to amend or modify this Agreement or
make any commitment for or on behalf of IBM.
2.11 IBM shall appoint contract coordinator who shall be responsible for the
commitment of all IBM funds, implementation and administration of this
Agreement and issuance of all IBM purchase orders.
2.12 Contractor shall appoint a supervisor(s) who shall supervise and direct
the Work of Contractor's employees.
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2.13 Each party shall inform the other of the names of the coordinators and/or
supervisors appointed.
ARTICLE 3
TERM
3.1 This Agreement shall commence on January 1, 1996, and expire on December
31, 2000, unless sooner terminated in accordance with Article 12.
3.2 IBM may extend the term of this Agreement two (2) times for the period of
one (1) year upon the same terms and conditions contained herein and for
a Management Fee as set forth in Article 7.1, by giving Contractor notice
hereof at least three (3) months prior to the end of the term, and
thereupon the term shall, be so extended without any further action by
either party. The first extension of the term would commence on January
1, 2001 and expire on December 31, 2001 and the second extension would
commence on January 1, 2002 and expire on December 31, 2002.
ARTICLE 4
MANAGEMENT OF COSTS
4.1 This Agreement establishes a relationship of trust and confidence between
Contractor and IBM. Accordingly, Contractor shall use its first class
skills and judgment and perform its duties in such a way as to achieve a
high degree of cost efficiency and the savings proposed in the Approved
Annual Budgets while maintaining quality performance in accordance with
the Statements of Work (provided that the Work on any Site shall not
exceed the levels and types of services provided by property management
companies for buildings comparable in nature, age and use in the local
marketplace). Contractor shall purchase all supplies and materials
necessary to provide the services on the most favorable terms available,
taking advantage of all known discounts or of IBM's
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purchasing agreements, whichever is the most cost effective. In this
regard, IBM may provide the materials and supplies to Contractor if it is
the most cost effective.
4.2 In no event shall Contractor incur any capital expense exceeding in any
instance the sum of $10,000.00 without prior approval from IBM in
writing. Notwithstanding any other provision in this Agreement to the
contrary, in the event of any emergency, if the time required for
obtaining approval would cause the damage to increase or threaten injury
to persons or property or violate the law or an insurance requirement,
Contractor shall make emergency repairs without first obtaining IBM's
approval, provided that notice is given to IBM as soon as possible
thereafter, and IBM shall reimburse Contractor for actual costs.
4.3 If Contractor claims that any instruction from IBM involves extra cost
under this Agreement beyond the Costs set forth in the Approved Annual
Budget or the Costs otherwise approved in writing by IBM, it shall notify
IBM thereof in writing after the receipt of such instruction. Contractor
will not proceed to execute any work that will involve such extra costs,
without IBM's approval, except that this requirement is not applicable
when there are emergency situations as described in Section 4.2 above.
IBM shall not be liable for any claim for extra cost unless made in
accordance with this provision.
4.4 If Contractor determines that it will be unable to provide the levels of
service as set out herein within the limits of the Approved Annual Budget
("Overrun"), Contractor shall, without delay, provide IBM with a report
(a) detailing the reasons for the potential Overrun, (b) the impact on
the Approved Annual Budget and (c) proposing alternatives to minimize
such adverse impact. IBM shall, in consultation with Contractor, make
the final decision as to the actions to be taken. Such action plan shall
be documented and shall amend, when applicable, the Approved Annual
Budget or Statements of Work.
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4.5 If Contractor determines that it could reduce Costs further and provide
additional savings to IBM, Contractor shall, without delay, provide IBM
with a report detailing the measures to reduce Costs and the impact on
the Approved Annual Budget. IBM shall, in consultation with Contractor,
make the final decision as to the actions to be taken. Such action plan
shall be documented and amend, when applicable, the Approved Annual
Budget or Statements of Work.
ARTICLE 5
ANNUAL BUDGETS
5.1 During the third quarter of each year, Contractor shall furnish IBM with
a proposed operating and capital budget for the next calendar year in
sufficient detail as determined by Contractor unless IBM specifies a
particular format (which shall not be unreasonably onerous), in which
case IBM's format shall be used. It is agreed that the 1996 Approved
Annual Budget as set forth in Attachment J has been approved by IBM.
5.2 If Contractor determines that savings cannot be attained based on the
same level of service, Contractor shall propose alternatives in order to
attain the desired savings. IBM shall, after evaluating the proposed
alternatives in consultation with Contractor, select an alternative and,
if required, amend the Statements of Work accordingly.
5.3 If there is any dispute over any aspect of the budget, IBM shall make the
final determination in its sole discretion, provided that the budgeted
sums allow Contractor to manage and operate the Premises as required by
the terms hereof. IBM shall approve or reject the proposed budget on or
before November 15 of each year. If IBM rejects the proposed budget, IBM
shall provide Contractor with the reasons for such rejection and indicate
to Contractor areas for desired revisions, including further reductions.
Contractor will then make further proposals to IBM in order to attain the
savings. If IBM fails to approve the proposed budget before November 15
of each year, Contractor shall provide the services under the terms of
the previous Approved Annual Budget. If
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costs beyond the previous Approved Annual Budget are to be incurred in
order to provide the services, Contractor will escalate the matter in
accordance with the Management Process set forth in Article 27.
ARTICLE 6
REIMBURSABLES
6.1 IBM will reimburse Contractor, subject to compliance with Article 10 and
Article 11, for all of the following costs reasonably incurred by
Contractor in the performance of the Work.
1) Employee wages and benefits incurred in the performance of the
Statement of Work as defined in Attachment E and set forth in the
Approved Annual Budget. This includes applicable payroll taxes,
FICA, Workers' Compensation Insurance, contributions required by
law, any overtime authorized by IBM, Severance Payments, and any
payroll, compensation or related incentive, as set forth in the
Approved Annual Budget, and project management tasks as requested
by IBM in writing.
2) The invoiced cost of all materials, supplies, protective clothing,
tools, and equipment purchased, leased or rented by Contractor and
storage costs as stated in Section 11.2, including all applicable
sales and use taxes, net of realized discounts, rebates and other
incentives.
3) Local travel for Contractor's employees directly engaged in Work
to the extent approved by IBM in writing or in the Approved Annual
Budget at the then current reimbursement rate of Contractor or at
the then current IBM mileage reimbursement rate, whichever is
less.
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4) The cost of subcontracts entered into in accordance with the terms
of this Agreement.
5) The cost of IBM approved Technical Education required under the
Statement of Work.
6) All other expenditures made in conformity with the Approved Annual
Budget or made in connection with Contractor's management of the
Premises as first approved in writing by IBM.
7) The invoiced cost of utilities, taxes, mortgage and insurance for
the Premises unless IBM determines to pay such costs.
8) Insurance required to be carried by Article 8.
9) Legal fees related to obtaining zoning variances or permits
required in order for Contractor to provide services hereunder,
union matters, tax and zoning issues, and legal fees necessary for
Contractor to defend a legal claim against Contractor to the
extent such claim is based on IBM's failure to provide accurate
and complete information to Contractor.
In the event a lawsuit is filed against Contractor for a matter
which arises out of or is related to the services rendered by
Contractor under this Agreement, other than as set forth above and
other than as set forth under the Indemnification and Insurance
Articles herein, IBM agrees that it will, in good faith, assist
Contractor in reaching a satisfactory conclusion of the matter.
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NON-REIMBURSABLES
6.2 Contractor shall not be reimbursed for the following costs which
Contractor agrees are included in the Management Fee:
1) All salary costs of Contractor except those defined in Article
6.1.
2) Except as set forth in Article 6.1 any and all Contractor's
Corporate general and administrative overhead and expense of any
kind including, without limitation, legal fees, other professional
services, and travel expenses, unless previously approved by IBM
in writing or in the Approved Annual Budget.
3) Interest on all capital used by Contractor in performance of the
Work other than interest on funds advanced to and at the request
of IBM by Contractor, at Citibank prime rate.
4) Profit, bonus, incentives, or overhead or any other markup to
Contractor on sums paid to subcontractors and/or suppliers,
materialmen, and the like unless previously approved by IBM in
writing or in the Approved Annual Budget.
5) If any expenses to be incurred by Contractor are not listed in
Article 6, such expenses shall be treated as non-reimbursable Cost
under Section 6.2 unless previously approved by IBM in writing or
in the Approved Annual Budget.
ARTICLE 7
MANAGEMENT FEE
7.1 In full consideration for the Contractor's services rendered under this
Agreement from the effective date of this Agreement until December 31,
1997, IBM will pay Contractor a Management Fee set out in Attachment B
and Bl for the listed Premises. The
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Management Fee shall be paid on the first day of each month for that
month. From January 1, 1998 until December 31, 2000, IBM shall pay
Contractor a Management Fee, to be paid on the first day of each month,
for such month, to be determined as set forth herein. A competitive
assessment of the Contractor Management Fee will be conducted jointly by
IBM and Contractor during the third quarter of 1997, for the purpose of
establishing the Contractor Management Fee for the period from January 1,
1998 through December 31, 2000. IBM and Contractor agree that the
Contractor Management Fee for the period from January 1, 1998 through
December 31, 2000, will be at competitive rates (hereinafter "Competitive
Rates") in existence at the time the competitive assessment is conducted.
Competitive Rates shall be defined as those rates being offered by
recognized and reputable real estate property or facility management
companies which perform like services for like properties in the same
geographic area as are reflected in this Agreement. If the parties fail
to determine Competitive Rates for the period January 1, 1998 through
December 31, 2000 after good faith negotiations, then IBM reserves the
right to accept bids from other property management companies solely to
be used as additional market information in assisting the parties to
determine the Competitive Rates. If the Competitive Rates still cannot
be determined after this process, then either party may invoke Article
27.1B and 27.1C. Until the Competitive Rates are determined, IBM shall
pay Contractor the Management Fees set forth on Attachment B1. Once the
Competitive Rates have been determined by the parties, the Management Fee
for the period of January 1, 1998, through December 31, 2000 shall be
prorated to reflect the Competitive Rates and any money due by one party
to the other party shall be promptly paid to the other party. If IBM
extends this Agreement pursuant to Section 3.2 the Management Fee shall
be at Competitive Rates existing at the time of extension(s).
7.2 1. IBM may at its discretion and at any time, upon sixty (60) days
advance written notice to Contractor, cancel any Site as set forth
in Attachment B and B1 if and when all of the following occur.
IBM: (i) no longer owns such Site, and (ii) no longer uses such
Site, and (iii) no longer leases such Site.
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2. IBM may reduce a portion of the square footage of any Site as set
forth in Attachment B and B1 upon sixty (60) days advance written
notice to Contractor, if and when all of the following occur.
IBM: (i) no longer owns such Site, and (ii) no longer uses such
square footage of such Site and (iii) no longer leases such square
footage of such Site.
If IBM subleases a Site or portion of a Site as set forth in
Attachment B and B1 to an unrelated third party which is not a
majority owned subsidiary of IBM, and the terms of the sublease
require IBM to provide property management services, then
Contractor will continue to provide those services under this
Agreement. A Management Fee proportionate to the services
provided will be negotiated by the parties. If IBM subleases a
Site or portion of a Site as set forth in Attachment B and B1 to
an unrelated third party which is not a majority owned subsidiary
of IBM, and the terms of the sublease state that sublessee is to
obtain property management services, then the selection of a
managing Contractor is the sole discretion of the sublessee. In
the event that the unrelated third party sublessee obtains such
property management services from another Contractor, the
Management Fee shall be proportionally reduced or eliminated as of
the effective date of the sublease.
3. In the event that IBM cancels any Site or reduces the square
footage of any Site as set forth in Section 7.2.1 and 7.2.2, then,
the following shall apply:
a) If IBM cancels an entire Site pursuant to Section 7.2.1,
then IBM shall pay the Cancellation Charges and the
Severance Payments incurred by the Contractor in respect of
such Site but shall not be obligated to continue to pay the
Management Fee in respect of such Site on or after the
effective date of such cancellation.
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b) If IBM reduces a portion of a Site as set forth in Section
7.2.2, then IBM shall pay the Cancellation Charges and the
Severance Payments incurred by the Contractor as a result
of such reduction and the Management Fee shall be reduced
to an amount which is proportionate to the remaining square
feet of such Site thereafter under management by
Contractor.
4. If IBM cancels or reduces the square footage of any Site as set
forth in Attachment B and B1 for any reason other than as set
forth above in Section 7.2, IBM agrees to pay the Contractor the
following:
a) The Management Fee associated with the Site through the
term of this Agreement.
b) All Cancellation Charges and Severance Payments in respect
of such Site.
7.3 IBM may, at any time add additional Sites to this Agreement. These Sites
will be set out in Attachment K and will be added to the Agreement by an
Amendment. The Management Fee for these Sites will be negotiated at the
time each Site is added and vary from time to time based on the square
footage, and the Statement of Work, which may become attached to this
Agreement as Attachment E that describes the detail of the work. Any
variance in length of term, or terms and conditions to this Agreement
will be specified in the Amendment adding the Site to this Agreement.
Any Site added to this Agreement by Amendment can be cancelled or
decreased in size or scope without any further obligations to Contractor,
upon the notice set forth in the Amendment or if none, then upon 60 days
advance written notice, except, that if IBM cancels or reduces in size or
scope any of the Sites set forth on Attachment K, then IBM shall pay
Severance Payments and Cancellation Charges solely for such Sites.
7.4 Contractor may provide construction management services in accordance
with IBM's plans and specifications when requested by IBM. Contractor
shall receive, for the performance of such management services, a
construction management fee based on the
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actual cost of the Work in accordance with the schedule of fees provided
in Attachment G.
7.5 If called upon by IBM, Contractor may provide services at any time to
furnish leasing, management, advisory, consultative, supervisory or other
services in addition to those to be provided by the Contractor hereunder.
The Contractor fees for such additional services shall be determined by
the rates then in effect for the manager or officer rendering the
service, or on a lump sum basis, as the parties may determine in each
instance.
ARTICLE 8
INSURANCE
8.1 Contractor shall provide and keep in full force and effect during the
term of this Agreement the following kinds and minimum amounts of
insurance covering the services provided in this Agreement in the
state(s) in which the Work is to be performed.
a. Worker's Compensation Insurance in statutory amounts;
b. Employer's Liability Insurance with a limit of not less than
$500,000 per accident.
c. Commercial General Liability with a combined single limit of
$1,000,000 for bodily injury including death; and property damage
including Premise Operations coverage; Products and Completed
Operations coverage, for at least two years following expiration
or termination of this Agreement; and Contractual Liability
coverage for the liability assumed by Contractor under the section
entitled Indemnification.
d. Business Auto Liability coverage for a combined single limit of
$1,000,000.
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In addition, unless otherwise approved in writing by IBM, Contractor will
require subcontractors to maintain Commercial General Liability Insurance
in the amount of One Million ($1,000,000) Dollars, combined single limit,
covering both bodily injury (including death) and property damage.
Subcontractors shall include coverage for the indemnity set forth in
Article 9.
8.2 IBM will maintain Commercial General Liability insurance in an amount not
less than Five Million ($5,000,000) dollars covering IBM as the owner of
the Premises and Contractor as an additional insured on IBM's policy
while acting as real estate manager. IBM will also maintain, where
applicable, Comprehensive Automobile Liability insurance with limits of
$250,000 per person, $500,000 per occurrence for personal injury and
$200,000 per occurrence for property damage for owned, non-owned, and
hired vehicles used under this Agreement. IBM will require any fire and
General Liability insurance carrier covering the Premises to waive any
right of subrogation against Contractor and Contractor's suppliers
arising out of the performance of the work under this Agreement to the
extent of any fire insurance or Commercial General Liability insurance
proceeds paid thereunder except for the applicable deductibles under
IBM's All Risks Property Insurance policies which will remain the
responsibility of IBM.
8.3 Certificates in the customary form, evidencing that such insurance is in
force, shall be delivered to each party upon request of the other party.
Within fifteen (15) days prior to the expiration of such insurance, new
certificates shall be delivered, as aforesaid, evidencing the renewal of
such insurance. All certificates must provide that if such policies are
cancelled or changed during the periods of coverage as stated therein, in
such a manner as to affect the insurance, insurer shall attempt to
provide written notice to IBM and Contractor at least ten (10) days prior
to such cancellation or change. Such certificates must name IBM as an
additional insured under items (c) and (d) of Section 8.l. Such
certificates must also name Contractor as an additional insured under
Section 8.2.
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ARTICLE 9
INDEMNIFICATION
9.1 Contractor will indemnify and hold IBM, its directors, officers,
employees, agents, representatives, successors and assigns harmless from
any and all claims, demands, charges, actions or causes of action
(collectively "claims") (i) arising out of the services provided under
this Agreement for acts of gross negligence or omissions or willful
misconduct of Contractor or its officers, directors, or employees except
with respect to the types of risks that have been agreed to be insured
hereunder by IBM naming Contractor as an additional named insured while
acting as real estate manager provided, however, that this
indemnification shall not be limited by policy limits stated in Section
8.3; (ii) made or brought by Contractor's employees or their
representatives arising from or connected to such employees' employment
with Contractor, including by way of description but not by way of
limitation any claims arising out of or related to (x) any violation of
applicable laws or regulations, including without limitations Title VII
of the Civil Rights Act of 1964, as amended, any federal, state, or local
law prohibiting discrimination in employment, and any common law claims
for wrongful or retaliatory discharge, and (y) any negligent act or
omission, willful misconduct, or promise by Contractor, or its officers,
directors or employees; or (iii) arising out of or with respect to any
"employees benefit plan" within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
that covers Contractor's employees or employees of any person performing
services for Contractor in connection with this Agreement.
9.2 IBM will indemnify and hold Contractor, its directors, officers,
employees, agents, representatives, successors and assigns harmless from
any and all claims, demands, charges, actions or causes of actions
(collectively "claims") (i) arising out of this Agreement for acts of
gross negligence or omission or willful misconduct of IBM, its
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officers, directors or employees; (ii) made or brought by IBM's employees
or their representatives arising from or connected to such employees'
employment with IBM, including by way of description but not by way of
limitation any claims arising out of or related to (x) any violation of
applicable laws or regulations, including without limitations Title VII
of the Civil Rights Act of 1964, as amended, any federal, state, or local
law prohibiting discrimination in employment, and any common law claims
for wrongful or retaliatory discharge, and (y) any negligent act or
omission, willful misconduct, or promise by IBM, or its officers,
directors or employees; or (iii) arising out of or with respect to any
"employees benefit plan" within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
that covers IBM employees.
9.3 Throughout the duration of any subcontract or any Work, Contractor shall
require, in writing, that each subcontractor indemnify and save harmless
IBM and Contractor and their respective officers, directors, agents,
employees, affiliates, partners, and subsidiaries from and against all
liability, claims and demands on account of injury to persons (including
death) and damage to property arising out of or resulting from the
performance of the subcontract work by the subcontractor or employees or
agents of the subcontractor or from subcontractor's property. The
subcontractor shall, at its expense, defend any and all suits or actions
against IBM and/or Contractor and shall pay all attorney fees and all
other expenses in connection therewith and promptly discharge any
judgments arising therefrom. These conditions shall also apply to any
work or operations subcontracted by the subcontractor.
9.4 Neither party shall be entitled to indirect, incidental, consequential or
punitive damages, including lost profits based on any breach or default
of the other party.
9.5 IBM will indemnify and hold Contractor, its directors, officers,
employees, agents, representatives, successors and assigns harmless from
any and all claims, demands,
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charges, actions or causes of actions (collectively "Claims") arising out
of or related to Environmental Loss except to the extent that such
Environmental Loss may be the result of the gross negligence or willful
misconduct or omission of Contractor's officers, directors, or employees.
ARTICLE 10
WORKING FUND AND PAYMENTS
10.1 IBM will provide Contractor with a working fund to cover Contractor's
monthly reimbursement costs which after adjustment pursuant to Article
11, shall not be less than $5,000.00. The working fund may be increased
or decreased from time to time by IBM. The working fund shall be used
exclusively for the benefit of IBM and be deposited by Contractor in one
or more interest-bearing bank accounts opened for that specific purpose
and all funds so deposited and any interests shall be held for IBM, in
trust, and be disbursed in accordance with this Agreement. No other
funds shall be deposited in these accounts without prior IBM written
approval.
10.2 Contractor shall pay all expenses it incurs in the performance of this
Agreement on time, unless directed otherwise by IBM, and shall hold IBM
harmless from and defend IBM against any claim or liability on account of
nonpayment of such expenses (other than the expense itself), unless IBM
has directed Contractor in writing not to pay such expenses or there are
not sufficient funds in the working fund, in which case IBM shall
indemnify Contractor against any claim or liability as a result of such
non-payment. Upon demand, or at the expiration or earlier termination of
this Agreement, Contractor will pay over promptly to IBM any sums
belonging to IBM and shall submit an itemized accounting of all sums in
the working fund, together with supporting data as IBM may reasonably
require.
20
ARTICLE 11
RECORDS AND AUDITS
11.1 Contractor shall maintain written records (including but not limited to
invoices, statements, vouchers and other documents) showing in detail all
costs which it incurs in the performance of this Agreement. Each month,
Contractor shall submit to IBM an itemized statement listing the amount
and nature of all reimbursable costs incurred and a bank reconciliation
of the working fund shall be provided semi-annually to IBM or upon
notice. In addition to the itemized statement, Contractor shall submit
the operating costs in recapped form (which shall not be unreasonably
onerous) according to IBM direction. Submissions shall be made to the
IBM location designated in Attachment H, or such other address designated
in writing by IBM. Submissions shall be made to reach the above IBM
locations no later than fifteen (15) days after the accounting closing
date as determined by IBM and should include all transactions through the
above period, except that transactions for December shall include the
entire month. If however, after the delivery of the above designated
submissions to IBM, an audit by either party or their outside auditors of
the records and statements uncovers an error which effects monies
delivered or in the papers and documents, or of any claims, each party
will attempt to determine the amount of the error and make the necessary
payment(s) to correct it.
11.2 Such records shall be subject to the IBM Records Retention Plan as set
out in Attachment D, as well as reasonable audit and inspection by IBM
and its agents and representatives, during business hours, during the
term of this Agreement and for six (6) months after its expiration or
earlier termination, unless a longer period is required by law. Storage
cost of the records shall be borne by IBM and reimbursed to Contractor as
per Section 6.1. Within sixty (60) days of the termination of this
Agreement, IBM shall determine if it will retrieve all or some of the
records from Contractor. If IBM elects to retrieve all or some of the
records, IBM and Contractor will establish a schedule for such retrieval
and proceed, at IBM's expense, to retrieve the records. If IBM elects to
destroy all or some
21
of the records, IBM and Contractor will determine a process and schedule
for such destruction and proceed accordingly at IBM's expense.
11.3 Contractor shall, upon reasonable notice, permit and facilitate
inspection of the Work by IBM and its representatives and public
authorities at all times during business hours. Failure of IBM during
the progress of this Agreement to discover or reject unacceptable Work,
or Work not performed in accordance with this Agreement, shall not be
deemed an acceptance thereof nor a waiver of IBM's right to the proper
execution of the Work or any part of it by Contractor.
ARTICLE 12
TERMINATION AND CANCELLATION
12.1 IBM may terminate this Agreement without cause upon sixty (60) days prior
written notice to the Contractor. If cancellation of this Agreement by
IBM is without cause, IBM will pay Contractor the Management Fees as set
forth in Attachments B and B1 for the Premises as listed in Attachment A,
Cancellation Charges and Severance Payments.
12.2 Either party may terminate this Agreement in the event of a material
breach of this Agreement by the other party provided the party in breach
is given written notice and fails to commence actions to cure such breach
within thirty (30) days and completes such actions within ninety (90)
days; provided, however, that, in situations related to environmental
matters or sexual harassment, the party in breach will commence and
complete any action to cure the breach as quickly as reasonably possible;
time being of the essence. The party terminating this Agreement may
pursue any remedy available to it at law or in equity by reason of such
default.
12.3 IBM may terminate this Agreement immediately in the event of:
22
12.3.1 any proceeding, voluntary or involuntary, in bankruptcy,
insolvency, dissolution or liquidation by or against the
Contractor, other than an involuntary bankruptcy which is
dismissed in 60 days.
12.3.2 any assignment of substantially all of Contractor's assets for
benefit of creditors;
12.3.3 any transfer of substantially all of Contractor's business or
assets to a third party in violation of Article 21;
12.4 IBM will reimburse Contractor for items listed in Article 6.1 up until
the effective date of cancellation or reduction of square footage of the
Site.
12.5 IBM will reimburse Contractor for the Cancellation Charges incurred by
Contractor from its sub-contractors up until the effective date of
cancellation or reduction of square footage of the Site. Contractor will
make its best effort to avoid cancellation charges associated with the
termination of this Agreement.
12.6 IBM may terminate any/all Statements of Work or parts thereof, issued
under this Agreement without cause by giving Contractor sixty (60)
calendar days written notice.
ARTICLE 13
CONFIDENTIAL INFORMATION
13.1 In the performance of services hereunder, Contractor or Contractor's
employees may be exposed to or have access to IBM Confidential
Information while working on IBM premises. Contractor shall not use such
information or disclose it by publication or otherwise to any other
person during the term of this Agreement and for a period of three (3)
years thereafter except as required by law.
13.2 In the event IBM or Contractor need to disclose specific confidential
information to the other in order for Contractor to perform services
hereunder, such information shall only
23
be disclosed pursuant to the terms of an IBM Agreement for Exchange of
Confidential Information (AECI) executed by the parties.
13.3 Contractor warrants that no information disclosed by Contractor to IBM
(other than information disclosed pursuant to the AECI) is or will be
confidential and/or proprietary to Contractor or any third party.
13.4 Contractor shall have a written agreement with each of its employees and
subcontractors whose services are required for performance of this
Agreement sufficient to enable Contractor to comply with this Section 13.
ARTICLE 14
OWNERSHIP OF MATERIALS
14.1 Except as provided in Section 14.2, all reports, memoranda or other
materials in written, including machine readable form prepared by
Contractor pursuant to this Agreement and furnished to IBM by Contractor
hereunder shall become the sole property of IBM. Contractor may retain a
copy for its records.
14.2 Information disclosed to IBM or contained in any report, memorandum or
other materials in written, including machine readable, form provided to
IBM regarding cost savings measures, building performance (other than the
actual performance of the Premises), and market information regarding the
sale or lease of property other than property owned by IBM and its
affiliates shall be considered Confidential Information of Contractor
and/or its affiliates and the sole property of same except to the extent
that such information is publicly available in the form compiled by
Contractor and/or its affiliates and accessed by IBM. IBM shall have the
right to use such information internally; IBM shall also have the right
to compile information obtained from third-party sources, which
information shall not be considered Confidential information of
Contractor.
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ARTICLE 15
TAXES
15.1 Contractor shall xxxx IBM for all applicable sales, use, and gross
receipts taxes unless IBM provides Contractor with appropriate exemption
certificates or a direct payment permit number. Contractor shall be
responsible to pay for taxes on its net income.
ARTICLE 16
TRADEMARK
16.1 Nothing in this Agreement grants either party any rights to use the other
party's trademarks or trade names, directly or indirectly, in connection
with any product, service, promotion or publication without the prior
written approval of the trademark owner.
ARTICLE 17
GIFTS AND GRATUITIES
17.1 Contractor shall not give or offer any gifts or gratuities of any type to
IBM's employees or members of their families.
17.2 IBM shall not give or offer any gifts or gratuities of any type to
Contractor's employees or members of their families.
ARTICLE 18
CONTRACTOR'S EMPLOYEES AND SUBCONTRACTORS
18.1 Prior to Contractor's assignment of any personnel to perform work
hereunder, Contractor agrees to take appropriate preventive steps that it
reasonably believes shall ensure that
25
such personnel shall not engage in inappropriate conduct while on the
Premises. Inappropriate conduct shall include, but is not limited to:
being under the influence of or affected by alcohol, illegal drugs or
controlled substances; the manufacture, use, distribution, sale or
possession of alcohol, illegal drugs or any other controlled substances,
except for approved medical purposes; the possession of a weapon of any
sort; and/or harassment, threats or violent behavior. Violation of this
provision may be considered a material breach of this Agreement.
Contractor shall furnish a letter prior to Closing which will describe
the actions Contractor will take to comply with this provision. This
letter shall be incorporated herein as Attachment I. IBM's objective is
to maintain a drug-free workplace. In order to do this, all vendors and
contractors should have a drug-free workforce. The most effective method
to ensure this is to implement drug testing during the selection process
where allowed by state or local law. Where state or local law does not
allow this, Contractor will use reasonable and prudent judgment in
deciding if specific actions need to be taken.
18.2 IBM may, at its sole discretion, but only to the extent permitted by
applicable law, have Contractor remove any specified employee of
Contractor from the Premises and request that such employee not be
reassigned to any of the Premises under this Agreement.
18.3 Contractor shall make reasonable inquiry of its employees regarding any
past employment with IBM and Contractor shall inform appropriate IBM
buyer of employee name and last IBM location worked before assigning any
known former IBM employee to perform work under this Agreement. IBM may
request that Contractor not make such assignment.
ARTICLE 19
WORK STOPPAGE
19.1 Contractor shall promptly notify IBM of any impending work stoppage,
strike or other similar interference with Contractor's performing
services hereunder. IBM shall have no
26
obligation to pay Contractor for services not performed due to such
interference. However, the Management Fee shall continue to be paid to
Contractor during the interference provided Contractor makes reasonable
efforts to provide the services. Contractor shall be granted reasonable
opportunity to correct any situation described above, time being of the
essence. If Contractor refuses or fails to correct the situation, IBM
may, at its sole discretion and without incurring any liability to
Contractor, acquire such services from others for the duration of the
interference.
19.2 NOTICE TO RECTIFY. Contractor shall not permit to arise or continue in
connection with any, services provided under this Agreement any Labor
Condition that unreasonably interferes with IBM business. IBM's
determination as to whether any Labor Condition unreasonably interferes
with IBM business shall be conclusive on Contractor so long as such
determination is not arbitrary or capricious and, upon notice from IBM
specifying such Labor Condition and requiring that such be rectified,
Contractor shall make reasonable efforts to, as permitted by law and
after consulting with IBM with respect to the cost, rectify the same as
soon as is reasonably possible. As used herein, "Labor Condition" shall
mean and include strikes, boycotts, picketing, work stoppages, slowdowns
or any other type of labor trouble, regardless of the employer of the
person involved or their employment status, if any.
NOTICE TO CEASE WORK. If Contractor or the subcontractor shall fail to
comply with the aforesaid notice (whether or not such failure is
Contractor's fault), IBM, by further notice to Contractor, may direct
Contractor to suspend all work being performed by or on behalf of
Contractor in connection with this Agreement, and Contractor shall
thereupon immediately do so. Actual and reasonable cancellation costs of
subcontracts attributed to the suspension of work shall be reimbursable
cost provided the cancellation is not due to the subcontractor's
violations of the agreement. When the Labor Condition shall be rectified
so that resumption of work would not result in interference with the
progress of other work at aforesaid, Contractor may resume work. The
Management Fee will continue to be paid during the Labor Condition.
27
PLAN. Contractor shall provide IBM with written self-sufficient back-up
plans in case of any interference. Such plan must be satisfactory to
IBM, within the limits of the low, and provided within ninety (90) days
after commencement of each Statement of Work.
ARTICLE 20
SOLICITATION AND DISTRIBUTION
20.1 No solicitation or distribution of any kind is permitted on the premises
except as permitted by law.
ARTICLE 21
ASSIGNMENT AND SUBCONTRACT
21.1 With the prior consent of IBM, which consent shall not be unreasonably
withheld, Contractor may sell, assign, merge, transfer or otherwise
dispose of all or substantially all of its stock or assets, including
this Agreement, assign its right or delegate or subcontract its duties or
obligations under this Agreement (a "Permitted Transfer"), to a third
party. Without the prior consent of IBM, Contractor may effect a
Permitted Transfer to a 51% or more owned subsidiary of Xxxxx & Xxxxx
Company.
21.2 IBM may assign its rights under this Agreement to any IBM Affiliate
without the prior written consent of Contractor. IBM may not assign its
rights under this Agreement to any person other than an IBM Affiliate
without the prior written consent of Contractor which consent may not be
unreasonably withheld. IBM Affiliate shall mean any entity whose voting
securities are more than fifty percent (50%) beneficially owned by IBM.
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ARTICLE 22
COMPLIANCE WITH LAWS
22.1 GENERAL
Contractor shall, at its own expense, comply with all governmental laws
and regulations applicable to Contractor as a real estate property and
facilities management organization and shall procure all licenses and pay
all fees and other charges required thereby.
22.2 OSHA
Contractor shall comply with the Occupational Safety and Health Act of
1970. Contractor shall notify IBM promptly in writing if a charge of
noncompliance with the Act has been filed against Contractor in
connection with Contractor's services performed hereunder on the
Premises.
22.3 EEO
There are incorporated in this Agreement the provisions of Executive
Order 11246 (as amended) of the President of the United States on Equal
Employment Opportunity and the Rules and Regulations issued pursuant
thereto, with which Contractor warrants that it will comply, unless
exempted.
22.4 Environmental
Contractor shall comply with the letter and spirit of all laws,
ordinances, codes, rules, regulations, license and permit provisions,
guidelines and directives of any local, state and/or federal governmental
authority having appropriate jurisdiction over environmental protection.
In addition, Contractor shall comply with all IBM procedures relating to
hazardous materials.
29
22.5 Sexual Harassment
Contractor shall distribute the notice on sexual harassment contained in
Attachment D, as amended from time to time, to all of its employees who
are assigned to work on the Premises.
22.6 Leased Employees
Contractor shall provide IBM any information about Contractor's personnel
that IBM is required by law to obtain, including information on "leased
employees" and "management services organization" as these terms are used
in Secs. 414(m), (n) and (o) of the Internal Revenue Code.
22.7 Immigration
Contractor shall comply with the Immigration Reform and Control Act of
1986 as amended.
22.8 Former DOD Employees
Contractor agrees to make reasonable inquiries of its employees regarding
past employment with the Department of Defense (DOD) and agrees that the
individual who: left DOD service on or after April 16, 1987; and served
in a civilian position for which the rate of pay is equal to or greater
than the minimum rate of pay for GS-13; or served in the Armed Forces in
a pay grade of 04 or higher; shall not be employed under this Agreement
within two (2) years after he/she left service in DOD, without the
specific written approval of IBM. If Contractor requests such approval,
Contractor agrees to provide IBM with any information needed to comply
with 10 USC 2937 (b) and (c).
22.9 Minority Suppliers
Contractor shall make reasonable efforts, consistent with the service
levels which are in compliance with law and as described herein, to
retain and grow the services of qualified minority suppliers to perform
work hereunder. Contractor shall comply with
30
IBM's procedures, as issued from time to time, with respect to the
procurement and payment for services provided by minority suppliers.
22.10 Contractor's failure to comply with any provisions of this Article may be
considered a material breach of this Agreement.
22.11 IBM acknowledges that Contractor is not an expert in legal, tax,
engineering, building code compliance, hazardous materials and areas of
expertise other than real estate property and facilities management.
Contractor agrees to cooperate with experts selected by IBM in reviewing
such matters related to the Sites. Contractor will notify IBM of any
problems in such areas of which Contractor has actual knowledge.
ARTICLE 23
MECHANICS LIENS
23.1 Contractor shall discharge by payment, bond or otherwise any mechanics'
lien filed against the Premises for work claimed to have been performed
at or furnished to the Premises for or on behalf of Contractor or IBM,
provided Contractor has been reimbursed by IBM for the cost of such work;
however, where permitted by law, Contractor shall pay no more than 90% of
such costs to anyone until discharge is effected. When the mechanics'
lien is filed by anyone employed directly by IBM, IBM shall discharge the
lien by payment, bond or otherwise.
ARTICLE 24
STORAGE AND OFFICE SPACE
24.1 IBM shall provide, without charge, a reasonable storage area for
Contractor's equipment, tools, materials, and supplies furnished or
consigned to Contractor by IBM or furnished by Contractor to IBM. The
designated storage area shall be maintained by Contractor in a clean,
orderly and safe condition at all times. However, IBM shall not
31
be responsible for Contractor's equipment and materials while on the
Premises. IBM reserves the right to make periodic inspections of the
storage area. Reasonable office space shall be provided by IBM to
Contractor for its personnel, at no charge.
ARTICLE 25
QUALITY/PERFORMANCE
25.1 Contractor agrees that all work performed under this Agreement shall meet
the requirements set forth in this Agreement and the Statements of Work.
Contractor will promptly initiate action to correct work deemed
unacceptable to IBM in accordance with the Statements of Work and
industry standards at Contractor's expense. If the deficiency is as a
result of work that IBM has not paid for, work can be completed at IBM's
expense provided no premium is charger for completing the Work.
25.2 Contractor shall submit to IBM a quality plan that demonstrates
continuous quality improvement with the proposed budget. IBM may audit
Contractor's quality improvement plan for conformance to these standards.
25.3 Contractor will be evaluated on two levels:
(1) Overall performance, and (2) specific performance against
established criteria at a site and national level.
A. Overall Performance. At a minimum, will include:
1). Financial
2). Business Controls
3). Customer Satisfaction
4). Quality
- with standards to be developed
32
B. Confidentiality awareness and control and compliance with
all security and confidentiality procedures.
C. Minority Payments
The contractor shall provide IBM with a formal plan, as
described below to demonstrate subcontracting by Contractor
to minority-owned businesses ("Minority Suppliers"). This
plan will be reviewed by IBM and is subject to IBM's
approval. The plan MUST include the following:
1. A goal of 5% to be paid to minority suppliers.
2. A breakdown, on a annual basis, of both the amount
of payments and percentages that Contractor will pay
to Minority Suppliers. Such breakdown shall also
detail the services to be provided by such Minority
suppliers.
3. IBM reserves the right to provide payment DIRECTLY
to Minority Suppliers.
The Contractor shall submit to the IBM Technical Coordinator(s),
on a quarterly basis, a report setting forth in reasonable detail
Contractor's actual level of adherence to the foregoing IBM
approved plan.
ARTICLE 26
PERFORMANCE EVALUATION OF COMPETITIVENESS
26.1 IBM conducted a competitive assessment of Contractor's services through
an IBM internal competitive evaluation during the fourth quarter of 1995.
This assessment considered Contractor's cost competitiveness compared to
the property management industry. IBM informed Contractor of the results
of the assessment and Contractor has established certain corrective
actions to be taken by Contractor and Contractor will confirm such
actions in writing.
33
26.2 In conjunction with Article 7.2.3, IBM will conduct a competitive
assessment of Contractor's services during the third quarter 1997,
through such means as benchmarking or other reasonable criteria as
selected by IBM. At such time as IBM is conducting this assessment,
Contractor shall provide IBM with Contractor's independent self-
assessment showing their competitive standing in the industry as it
applies to the services provided to IBM under this agreement.
Conclusions resulting from these activities will be used to assess
Contractor's competitive position. If required IBM and Contractor
together will establish any corrective actions to be taken by Contractor
within 60 days.
ARTICLE 27
MANAGEMENT PROCESS
27.1 If any disputes or disagreements between Contractor and IBM shall arise
relating to issues relative to the provisions stated in (d) below or in
any provisions that require or permit a party to invoke this Section, the
following procedures shall apply:
(a) if the issue is related to a specific Site, Contractor shall give
written notification of such dispute or disagreement to the IBM
Senior Location manager and a copy to IBM Procurement and IBM
shall give written notification of such dispute or disagreement to
the Contractor's Executive Management, with a copy to IBM
Procurement.
(b) if the issue is related to the Agreement generally, Contractor
shall give written notification of such dispute or disagreement to
both IBM Procurement and the IBM Executive for Real Estate Site
Operations and IBM Procurement shall give written notification of
such dispute or disagreement to the President of the Contractor;
34
(c) the representatives listed in (a) and (b) above shall communicate
with each other promptly with a view of resolving such dispute or
disagreement within sixty (60) days of commencing their
negotiations (or such extended period as they agree is
appropriate).
(d) The process described above shall apply to any dispute or
disagreement related to additional costs, budgets, Section 12.1,
Article 19 and any other item that the representatives of both
parties may agree to subject to this process.
ARTICLE 28
IBM PROCEDURES
28.1 Contractor shall comply with IBM's requirements and procedures as set out
in Attachment E. IBM may, from time to time, amend such requirements and
procedures or introduce new requirements or procedures provided they do
not increase Contractor's costs or workload or otherwise conflict with
the terms of this Agreement. Any increase in direct or indirect costs
shall be borne by IBM.
ARTICLE 29
NOTICES
29.1 Unless otherwise provided in this Agreement, all notices required or
permitted hereunder shall be in writing and shall be given by personal
service or sent by certified or express mail or reputable overnight
courier service with receipt confirmed; and shall be deemed received, if
sent as provided above, on the third business day after deposit in the
mail or upon confirmation in other cases:
35
To IBM: To Contractor:
International Business Axiom Real Estate Management, Inc.
Machines Corporation 2800 Two PNC Plaza
Procurement Manager Xxxxxxxxxx, XX 00000
000 Xxxxx Xxxx Xxxx: President
Xxxxxxxxxxxx, XX 00000
with a copy to: with a copy to:
International Business Xxxxx & Xxxxx
Machines Corporation One Xxxxxxxxxx Street
Office of Corporate Counsel Telesis Tower, 9th Floor
Xxxxxx, NY 10589 Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx Attn: Xxxxxx X. Xxxxxx
Corporate Counsel General Counsel
or to such other address as either party shall designate by
notice given to the other party.
ARTICLE 30
STATEMENTS OF WORK
30.1 IBM, in consultation with the Contractor, shall provide Statements of
Work for each Site. Each Statement of Work shall include the elements
listed in Section 1.8 hereof provided that the Work on any Site shall not
exceed the levels and types of services provided by property management
companies for buildings comparable in nature, age and use in the local
marketplace. If there is a dispute relative to the level or type of
service to be provided for any Site, either party may escalate the matter
in accordance with the Management Process as stated in Article 27.
36
ARTICLE 31
GENERAL
31.1 Neither party shall be responsible for failure to fulfill its obligations
under this Agreement due to fire, flood, war or other such cause beyond
its control and without its fault or negligence provided it promptly
notifies the other party.
31.2 The laws of the State of New York govern this Agreement.
31.3 Both parties agree to waive their right to a trial by jury in any dispute
arising out of this Agreement.
31.4 No delay or failure by either party to act in the event of a breach or
default hereunder shall be construed as a waiver of that or any
subsequent breach or default of any provisions of this Agreement.
31.5 The prevailing party in any legal action hereunder shall be entitled to
reimbursement by the other party of its expenses including, without
limitations, reasonable attorneys' fees.
31.6 Any terms of this Agreement which by their nature extend beyond their
expiration or termination shall remain in effect until fulfilled and
shall bind the parties and their legal representatives, successors,
heirs, and permitted assigns.
31.7 The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement.
37
ARTICLE 32
MODIFICATIONS
32.1 Except as specifically provided herein, this Agreement may not be amended
or modified except by a formal amendment signed by both parties.
ARTICLE 33
ENTIRE AGREEMENT AND ORDER OF PRECEDENCE
33.1 This Agreement supersedes the earlier Master Management Agreement dated
May 8, 1992, as amended ("the MMA") as of the Effective Date of this
Agreement, except that the rights and obligations of the parties arising
out of or related to events or transactions occurring prior to the
Effective Date of this Agreement in respect of Article 6 (Reimbursables),
Article 8 (Insurance), Article 9 (Indemnification ), Article 10 (Working
Fund and Payments), Article 15 (Taxes), and Article 23 (Mechanics Liens)
shall survive the termination of the MMA and shall be governed by the
MMA. All rights and obligations of the parties arising out of or
relating to events or transactions which occur on and after the Effective
Date shall be governed by this Agreement.
33.2 In the event of any inconsistency or conflict in the provisions of these
documents, the order of precedence shall be:
a) The foregoing terms and conditions;
b) Attachments referenced herein;
c) The provisions in the Statement of Work.
33.3 The following Attachments are included and form part of this Agreement:
Attachment A: Premises
Attachment B: Management Fee and Cost Base for 1/1/96-12/31/96
38
Attachment B1: Management Fee and Cost Base for 1/1/97-12/31/97
Attachment C: IBM Records Retention Plan
Attachment D: IBM Procedures
Attachment E: Statement of Work
Attachment F: Sample Statement of Work
Attachment G: Schedule of Construction Fee
Attachment H: IBM Location
Attachment I: Letter from Contractor relative to the action plan
for inappropriate conduct on the Premises
Attachment J: Approved Annual Budget - Letter
Attachment K: Additional Sites
Attachment L: Severance Policy of Contractor
AGREED: AGREED:
INTERNATIONAL BUSINESS AXIOM REAL ESTATE MANAGEMENT, INC.
MACHINES CORPORATION
BY: /s/ Xxxxxxxx X. XxXxxxxxxx BY: /s/ Xxx Xxxxxxx
-------------------------------- --------------------------------
NAME: Xxxxxxxx X. XxXxxxxxxx NAME: Xxx Xxxxxxx
----------------------------- --------------------------------
TITLE: National Site Services TITLE: Director
Procurement Manager --------------------------------
-----------------------------
DATE: January 19, 1996 DATE: January 19, 1996
----------------------------- --------------------------------
39
SIDE LETTER TO THE
MANAGEMENT SERVICES AGREEMENT DATED
AS OF JANUARY 1, 1996 BETWEEN
INTERNATIONAL BUSINESS MACHINES CORPORATION
AND AXIOM REAL ESTATE MANAGEMENT, INC. ("MSA")
International Business Machines Corporation ("IBM") and Axiom Real Estate
Management, Inc. ("Axiom") hereby agree to amend Section 12.1 of the MSA as
follows:
"12.1 TERMINATION AND CANCELLATION. IBM may terminate this Agreement
without cause upon sixty (60) days prior written notice to the Contractor. If
cancellation of this Agreement by IBM is without cause, IBM will pay Contractor
the Management Fees as set forth in Attachments B and B1 for the Premises as
listed in Attachment A, through December 31, 1997, and for the period January 1,
1998 through December 31, 2000, IBM will pay Contractor the Management Fees as
set forth in Section 7. In addition, IBM shall pay Contractor the Cancellation
Charges and Severance Payments."
ACCEPTED AND AGREED: ACCEPTED AND AGREED:
AXIOM REAL ESTATE INTERNATIONAL BUSINESS
MANAGEMENT, INC. MACHINES CORPORATION
BY: /s/ Xxxxxx X. Xxxxxx BY: /s/ Xxxxx X. Xxxxxxxx
------------------------ -------------------------
NAME: Xxxxxx X. Xxxxxx NAME: Xxxxx X. Xxxxxxxx
TITLE: Vice President TITLE: Staff Counsel
DATE: January 19, 1996 DATE: January 19, 1996
40
