Marketing Alliance Agreement - KPMG LLP and FDX Corp.
CONTRACT #00-______
MARKETING ALLIANCE AGREEMENT
This MARKETING ALLIANCE AGREEMENT ("AGREEMENT") is made and entered
into this 12th of October, 1999, by and between KPMG LLP, a Delaware registered
limited liability partnership with an office located at 50 Front Street,
Memphis, Tennessee 38103 ("KPMG"), and FDX CORPORATION (which for purposes of
this Agreement shall mean FDX Corporation and its subsidiaries and affiliates
worldwide), having its executive offices at 942 South Shady Grove Road, Memphis,
Tennessee 38120 ("FDX").
RECITALS
1. KPMG is a professional advisory firm with a goal to turn
knowledge into value for the benefits of its Clients. It
provides, among other things, e-commerce and supply chain
consulting services.
2. FDX is a global provider of transportation and supply chain
consulting and services with global operational execution
expertise and advanced technology integration.
3. Through cooperation and the formation of an alliance relationship
as contemplated by this Agreement, FDX and KPMG intend to become
the pre-eminent suppliers of world class, next generation Supply
Chain, Customer Management and E-Commerce solutions (The
"Alliance").
FOR AND IN CONSIDERATION of the mutual covenants contained in this
Agreement, FDX and KPMG (the "Parties") agree as follows:
ARTICLE 1
DEFINITIONS
1. DEFINITIONS.
(a) "Alliance Partners" refers to FDX or KPMG or both.
(b) "Client" refers to the customers of the FDX/KPMG Alliance.
(c) "Solution" refers to the joint product(s) and service(s) offered by the
FDX/KPMG Alliance in an individual delivery project designed to meet the
Client's requirements.
(d) "FDX Systems" shall mean the existing FDX software and hardware as well as
any software to be developed by FDX or provided by third parties.
(e) "Project Manager" means the party designated by each Alliance Partner who
will be responsible for managing this Alliance.
1
<PAGE> 2
ARTICLE 2
STATEMENT OF PURPOSE
Section 2.01. Objectives. FDX through its alliance with KPMG intends to leverage
its existing global operational and technological expertise in conjunction with
KPMG's service offerings to become the acknowledged market leader in providing
Supply Chain Management (SCM) services. FDX's core competencies include global
operational execution expertise, advanced technology integration and deployment
of best practice Electronic Commerce and SCM solutions. KPMG's objective is to
leverage industry, functional and technical experience coupled with FDX
operational and technical competencies to become the acknowledged market leader
in the architecture and deployment of best practice SCM solutions. KPMG core
competencies include a large base of highly experienced personnel and an
extensive suite of methods and tools for selling, scoping and delivering
successful consulting engagements.
Section 2.02. Phases. Plans for the rollout of the FDX/KPMG Alliance include:
(a) The announcement of the Alliance is planned for the week of October 11,
1999, ("Alliance Announcement") to occur as part of the Gartner ITxpo/Symposium
in Lake Buena Vista, Florida from October 11 through October 15, 1999. This
announcement will primarily be focused upon internal communications within each
company, but will be accompanied by a press release announcing the Alliance, as
well as selected analyst briefings on the goals, objectives, and future plans of
the Alliance. Any press release shall be subject to the provisions of Section
5.03 of this Agreement. At this announcement the primary focus may be on:
(i) Description of initial FDX services to be promoted by the Alliance ("Tier 1
Services");
(ii) Description of subsequent FDX services to be promoted by the Alliance
("Tier 2 Services"); and
After the announcement, the Alliance intends to develop and announce 1-2 new
Tier 1 offerings quarterly.
(b) During the thirty (30) day period following the Alliance Announcement, the
parties shall develop more detailed plans concerning the Alliance including the
marketing plan, a teaming agreement and subcontract that will permit the
parties to team together in connection with the submission of proposals to
potential clients and to provide for the basis on which one party will act as a
subcontractor to the other in connection with client engagements. The parties
acknowledge that the arrangements for delivery of services to a client may vary
depending upon whether the Client desires to contract directly with one Alliance
Partner or maintain separate agreements with each.
ARTICLE 3
TERM & TERMINATION
Section 3.01. Term. The term of this Agreement (the "Term") shall commence as of
October 11, 1999 ("Effective Date") and shall expire three (3) years thereafter
on October 10, 2002 ("Expiration Date"), unless earlier terminated or extended
by prior written amendment.
Section 3.02. Termination Without Cause. (a) Termination. Either party shall
have the unlimited right to terminate this Agreement without cause before the
Expiration Date by giving 30 days prior written notice to the other party. If
this Agreement is terminated without cause all then current client engagements
shall be completed in accordance with the governing Client Amendment.
2
<PAGE> 3
(b) External Communications Upon Termination. If this Agreement is
terminated for any reason, then FDX and KPMG shall mutually agree upon any
communication made to the marketplace and Clients.
(c) Obligations Upon Termination. Termination of this Agreement shall
not relieve either party from its obligations which have accrued hereunder
before termination, including but not limited to the confidentiality obligations
hereunder.
ARTICLE 4
CONTRIBUTIONS OF EACH PARTY
Section 4.01. Client Engagements. As joint development opportunities are
identified, a specific Client proposal will be developed and assessed in
accordance with the terms of the teaming agreement.
Section 4.02. Current Technology. All existing production-ready technology
developed by each company (solution components, products, services, tools,
processes, etc.) is available to the Alliance as potential components of
Alliance Solutions. However, none of this technology can be used directly by the
other party unless approved under separate agreement.
Section 4.03. Hardware and Equipment. Each party shall provide their own
equipment and hardware needed to support its portion of the Solution.
Section 4.04. Experience. Both FDX and KPMG will contribute their knowledge and
experience in supply chain management, international trade, marketing,
consulting and electronic commerce in furtherance of the Alliance to the extent
each deems necessary and appropriate. Each will make available, to the extent it
deems necessary and appropriate, business and technology personnel to meet on a
regular basis to review processes and products, benchmark and promote the
development of the Alliance.
ARTICLE 5
MARKETING RESPONSIBILITIES
Section 5.01. To provide for appropriate promotion and communication of the
Alliance, KPMG and FDX, to the extent each deems necessary and appropriate, will
assign resources from essential groups, including but not limited to:
o Graphics and professional writer staff members to produce
marketing collateral;
o Web site development group representatives to include Alliance
materials on internal and external web sites;
o Internal publications group representatives to include Alliance
materials in the appropriate internal publications; and
o Global and National Marketing departments to utilize their
existing resources in marketing the Alliance.
Section 5.02. Artwork. (a) Any advertising or promotional materials, or
references to either party or its subsidiaries or affiliates or their products,
services, trademarks, service marks, copyrighted material or other intellectual
property (collectively "Artwork") may not be used by the other party without
receiving such party's written approval as to form and content of the Artwork.
3
<PAGE> 4
(b) Nothing in this Agreement shall give either party any rights in the
other party's Artwork. All use of the Artwork shall inure to the benefit of the
party who owns such Artwork and the other party shall not make any claim, in
whole or in part, to any portion of the Artwork, nor take any action to
jeopardize, limit or interfere in any manner with such party's ownership rights
with respect to the Artwork.
Section 5.03. Press Release. FDX and KPMG will explore the appropriate form of
press release to announce the launch of the Alliance. Subject to FDX's and
KPMG's final approval, the announcement may either consist of a joint press
release or interviews with key industry analysts. Each Party shall in each
instance obtain the prior written approval of the other party concerning exact
text and timing of press releases, articles, brochures, advertisements, prepared
speeches and other information releases concerning the Alliance or this
Agreement.
ARTICLE 6
FEES
Section 6.01. Fees. Unless otherwise provided in the applicable teaming
agreement or subcontract, FDX will invoice and collect all fees and revenues for
FDX products, services and consulting in accordance with the teaming agreement
or subcontract. Unless otherwise provided in the applicable teaming agreement or
subcontract, KPMG will invoice and collect for all applicable KPMG billable
consulting hours and fees in accordance with the teaming agreement or
subcontract.
ARTICLE 7
OWNERSHIP
Section 7.01. Ownership of Intellectual Property. The software, methodologies,
processes and other programming documentation originated and developed by FDX
prior to commencement of this Agreement shall remain the property of FDX (the
"FDX Materials"). Any and all enhancements and modifications to and derivative
works of, the FDX Materials, whether developed independently or jointly by FDX
or KPMG, shall be the sole and exclusive property of FDX and may not be used by
KPMG for any purpose except to the limited extent set forth in an amendment to
this Agreement. The software, methodologies, processes and other programming
documentation originated and developed by KPMG prior to commencement of this
Agreement shall remain the property of KPMG (the "KPMG Materials"). Any and all
enhancements and modifications to and derivative works of, the KPMG Materials,
whether developed independently or jointly by KPMG or FDX, shall be the sole and
exclusive property of KPMG and may not be used by FDX for any purpose except to
the limited extent set forth in an amendment to this Agreement. Any amendment to
this Agreement shall be executed prior to initiation of any development work.
Ownership of newly developed (stand-alone) products and interfaces, if any,
shall be addressed in a mutually acceptable amendment to this Agreement. Each
party shall enter into a mutual licensing agreement that provides for the other
party's use of certain intellectual property of such party.
4
<PAGE> 5
ARTICLE 8
CONFIDENTIALITY
Section 8.01. Confidentiality of Information. Except as otherwise provided in
this Agreement, the use and disclosure by one party of the other party's
Confidential Information shall be governed by and subject to the terms and
conditions of that certain Mutual Non-Disclosure Agreement between the KPMG and
FDX dated October 7, 1999 (the "MNDA").
ARTICLE 9
INDEMNIFICATION
Section 9.01. General Indemnification. The parties hereby release and agree to
indemnify and hold harmless the other party, their officers, agents and
employees from any and all liabilities, damages, losses, expenses, demands,
claims, suits or judgments out of claims, including all attorneys' fees, costs
and expenses incidental thereto, for death of or injuries to any person and for
the loss of, damage to or destruction of any tangible property in any manner
arising out of the negligent or intentional acts or omissions of the other
party, its agents, employees or subcontractors. Each party shall also indemnify
the other party against any liability or payment in connection with (i) federal,
state and local taxes or contributions imposed upon or required of such party
under unemployment insurance, social security, income tax and workers'
compensation statutes with respect to the services of the party providing
services and (ii) such parties failure to comply with Section 11.2 hereof. The
party entitled to indemnification (the "Indemnified Party") shall promptly
notify the party obligated to provide such indemnification (the "Indemnifying
Party") of any claim for which the Indemnified Party seeks indemnification
hereunder and the Indemnifying Party shall have the exclusive right and
authority to conduct the defense or settlement of any such claim at the
Indemnifying Party's sole expense and the Indemnified Party shall cooperate with
the Indemnifying Party in connection therewith.
Section 9.02. Infringement Indemnification. The Alliance Partner
providing materials ("Providing Party"), at its own expense, shall indemnify,
defend and hold harmless the other party ("Receiving Party"), its directors,
officers, employees, and agents (including their respective successors and
assigns), against any claims based on an allegation that any software, source
codes, documentation or other materials (collectively, the "Provider Materials")
furnished to the Receiving Party under this Agreement, or the use by, or sale
to, the Receiving Party of any of such Provider Materials delivered or to be
delivered under this Agreement, infringes any patent, copyright or other
proprietary right, and the Providing Party shall pay any royalties and other
costs related to its settlement of such claim, and the cost and damages,
including attorneys' fees, finally awarded as a result of any suit based on such
claim, provided the Receiving Party promptly notifies the Providing Party in
writing of any such claim and gives the Providing Party authority and such
assistance and information as is available to the Receiving Party for the
defense of such claim. Any such assistance or information which is furnished by
Receiving Party at the written request of the Providing Party shall be at the
expense of the Providing Party. Notwithstanding, (i) the Providing Party shall
have the complete control of the defense to any claim brought against Receiving
Party under which Receiving Party invokes the indemnity hereunder, including the
settlement of any such claim; and (ii) the Providing Party shall not consent to
any injunction decree, judgment or settlement which would have the effect of
preventing Receiving Party's use of any software, programming documentation, or
other materials without Receiving Party's prior written consent. The foregoing
provisions shall not apply to any infringement arising out of: (i) use of the
Provider Materials other than in accordance with applicable documentation or
instructions supplied by the Providing Party; (ii) any alteration, modification
or revision of the Provider Materials not expressly authorized in writing by the
Providing Party; or (iii) the combination of the Provider Materials with
materials not supplied by the Providing Party.
5
<PAGE> 6
ARTICLE 10
ESCALATION OF DISPUTES
Section 10. Dispute Procedure. (a) In the event of a controversy, claim or
dispute arising out of or relating to this Agreement, or the interpretation or
breach thereof, either party may initiate a dispute (a "Dispute") in accordance
with the procedures set forth in this Section 10. Exhaustion of these dispute
resolution procedures shall be a condition precedent to any lawsuit permitted
hereunder. Upon a party becoming aware of a Dispute or facts and circumstances
likely to give rise to a Dispute, such party shall notify the Project Manager
for the other party of the Dispute no later than three (3) business days after
becoming aware of the Dispute. The Project Managers shall use their reasonable
good-faith efforts to resolve the Dispute within five (5) business days after
notification thereof. If the Project Managers fail to resolve the Dispute within
such period, the Project Manager for the party raising the Dispute shall prepare
a memorandum setting forth the nature of the Dispute, the facts and
circumstances giving rise or relating to the Dispute and all other pertinent
information and submit such memorandum to the Project Manager for the other
party within three (3) business days. The Project Manager for the other party
shall prepare a memorandum setting forth the position of the other party with
respect to the Dispute and all other pertinent information and submit such
memorandum to the Project Manager for the party raising the Dispute within three
(3) business days.
(b) The memoranda prepared by the Project Managers shall then be
submitted to the KPMG Executive Sponsor and FDX Executive Sponsor identified in
Exhibit A, who shall use their reasonable good-faith efforts to resolve the
Dispute within five (5) business days.
(c) If the parties fail to resolve the Dispute after following the
foregoing procedures within thirty (30) days from the referral of the dispute to
the KPMG Executive Sponsor and the FDX Executive Sponsor, the parties will
attempt in good faith to resolve the controversy or claim through non-binding
mediation in accordance with the Center for Public Resources Model ADR
Procedures for the Mediations of Business Disputes in effect on the date of this
Agreement prior to initiating any legal proceedings, and/or FDX may, at its sole
option, terminate the Agreement. However, a party, without prejudice to the
above procedure, may file a complaint based upon the statute of limitations, or
seek a preliminary injunction or other provisional judicial relief, if, in its
sole judgment, such action is necessary to avoid irreparable damage or to
preserve the status quo.
ARTICLE 11
MISCELLANEOUS
Section 11.01. Independent Contractor Relationship. The parties intend that an
independent contractor relationship will be created under this Agreement.
Section 11.02. Compliance with Laws. The parties agree that they will comply
with all applicable federal, state, and local laws, regulations, and codes in
the performance of this Agreement. To the extent applicable, the parties agree
to comply with the affirmative action requirements applicable to contracts with
government contractors, as set forth in Title 41 of the Code of Federal
Regulations and incorporated into this Agreement by reference.
Section 11.03. Section Headings. All section headings and captions used in this
Agreement are purely for convenience or reference only, and shall not affect the
interpretation of this Agreement.
6
<PAGE> 7
Section 11.04. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Tennessee, exclusive of its
conflict of law principles.
Section 11.05. Assignment. Neither this Agreement nor any other obligations of
the parties under this Agreement shall be assignable or delegable without the
prior written consent of the other party, such consent not to be unreasonably
withheld, provided however, FDX may assign this Agreement to any of its wholly
owned subsidiaries without consent of KPMG. This Agreement shall be binding upon
and inure to the benefit of the parties, their respective permitted successors,
assigns and legal representatives.
Section 11.06. Change of Control. In addition to such other rights as either
party may have, each party shall have the right to immediately terminate this
Agreement upon any change in the majority ownership or voting control of the
capital stock, business, or assets of the other party. Each party shall promptly
notify the other in writing of any such change in control.
Section 11.07. Further Assurances. Each party agrees that it will take such
actions, provide such documents, do such things and provide such further
assurances as may reasonably be requested by the other party during the Term of
this Agreement.
Section 11.08. Exhibits. All exhibits described in this Agreement shall be
deemed to be incorporated in and made a part of this Agreement, except that if
there is any inconsistency between this Agreement and the provisions of any
exhibit the provisions of this Agreement shall control. Terms used in an exhibit
and also used in this Agreement shall have the same meaning in the exhibit as in
this Agreement.
Section 11.09. Severability. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired.
Section 11.10. Waiver. The failure of either party at any time to require
performance by the other of any provision of this Agreement shall in no way
affect that party's right to enforce such provision, nor shall the waiver by
either party of any breach of any provision of this Agreement be taken or held
to be a waiver of any further breach of the same provision or any other
provision.
Section 11.11. Survival. The provisions of this Agreement which by their nature
extend beyond the expiration or earlier termination of the Agreement will
survive and remain in effect until all obligations are satisfied.
Section 11.12. Notices. Notices given under this Agreement shall be in writing
and shall be deemed to have been given and delivered when received, if sent by
the United States Mail, certified or registered mail, with postage prepaid and
addressed, or sent by way of Federal Express service:
if to FDX: FDX Corporation
10 FedEx Parkway, 2nd Floor
Collierville, Tennessee 38017
Attention: David Payton
with a copy to: FDX Corporation
30 FedEx Parkway,
1st Floor Vertical
Collierville, Tennessee
38017-9623
Managing Director - Legal
Technology Transactions
7
<PAGE> 8
if to KPMG: KPMG LLP
50 Front Street
Memphis, Tennessee 38103
Attention: Scott Rosenberger
or to such other address provided to the other party by written notification.
Section 11.13. Counterparts. This Agreement may be executed in any number of
counterparts and each fully executed counterpart shall be deemed an original.
Section 11.14. Work at Site. Each Alliance Partner agrees that when working at
the other Alliance Partner's sites, the visiting Alliance Partner, its agents,
employees and subcontractors will comply with all reasonable safety and security
requirements of the other Alliance Partner, including the wearing of
identification badges on the site provided notice thereof has been provided in
writing.
Section 11.15. Entire Agreement. This Agreement, together with any exhibits and
the MNDA, constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings. This Agreement may not be released,
discharged, changed or modified except by an instrument in writing signed by a
duly authorized representative of each of the parties. Nothing contained in this
Agreement shall be construed to (i) give either party the power to direct or
control the day-to-day activities of the other, (ii) constitute the parties as
partners, joint ventures, co-owners or otherwise as participants in a joint
undertaking, or (iii) allow either party to create or assume any obligation on
behalf of the other party for any purpose whatsoever. Each party acknowledges
that it has read this agreement, understands it, and agrees to be bound by its
terms.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the day and year first above written.
KPMG LLP FDX CORPORATION
/s/ THOMAS G. WILDE
By: Thomas G. Wilde By: /s/ [ILLEGIBLE]
---------------- --------------------
for Randolph C. Blazer
----------------------
Title: Executive Vice President
Title: Vice Chairman ------------------------
-------------- ("FDX")
("KPMG")
APPROVED
LEGAL DEPARTMENT
/s/ [ILLEGIBLE] 10/11/99
------------------------
8