Document:

<PAGE>
                                                                   EXHIBIT 10.11

                        SEVERANCE AND RELEASE AGREEMENT

         THIS SEVERANCE AND RELEASE AGREEMENT is made and entered into as of
the 17th day of April, 2001, to be effective as of the Effective Date (as
defined below), by and between A. MITCHELL POOLE, JR. ("Poole" or "Employee"),
and ALLIED HOLDINGS, INC., a Georgia corporation ("Allied" or "Company").

         WHEREAS, (i) Poole and Allied entered into that certain Employment
Agreement dated as of February 23, 2000 (the "Employment Agreement"), pursuant
to which Poole has been the Chief Executive Officer of Allied, and

         WHEREAS, the parties have agreed to compromise claims and defenses
they might assert against each other under this employment agreement and
otherwise.

         NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions herein contained, the receipt and sufficiency of which are hereby
acknowledged, Poole and Allied agree as follows:

         1.       DEFINITIONS

                  (a)      "Allied," to the extent this term is used in
                  relation to Poole releasing claims against Allied and his
                  Covenant of Nondisparagement, shall include Allied's parent
                  or subsidiary corporations, and the officers, directors,
                  attorneys and employees of each.

                  (b)      "Effective Date" shall be April 6, 2001.

                  (c)      "Termination Date" shall be April 6, 2001.

                  (d)      "Confidential Information" means information about
                  the Company and its Employees, Customers and/or Suppliers
                  which is not generally known outside of the Company, which
                  employee learns of in connection with Employee's employment
                  with the company, and which would be useful to competitors of
                  the Company. Confidential Information includes, but is not
                  limited to: (1) business and employment policies, marketing
                  methods and the targets of those methods, finances, business
                  plans, promotional materials and price lists; (2) the terms
                  upon which the Company obtains products from its vendors and
                  sells them to customers; (3) the nature, origin, composition
                  and development of the company's products; (4) the manner in
                  which the Company provides products and services to its
                  customers.

                  (e)      "Trade Secrets" means Confidential Information which
                  meets the additional requirements of the Uniform Trade
                  Secrets Act or similar state law.

                  (f)      "Business of Allied" means the transportation of new
                  and used automobiles and light trucks from the manufacturers
                  and related logistics and distribution services to the new
                  and used vehicle distribution market.

<PAGE>

         2.       PAYMENTS TO POOLE

         In full settlement, accord and satisfaction of all claims Poole has or
may have against Allied under his employment agreement or otherwise, Allied
will provide for the following compensation to Mr. Poole:

                  (a)      Starting on April 15, 2001, and continuing on the
                  first and fifteenth days of each successive month, 24
                  semi-monthly payments in the amount of $21,258.34 per
                  payment. These 24 payments will start on April 15, 2001, and
                  end on April 1, 2002, for a total amount of Five Hundred Ten
                  Thousand Two Hundred Dollars ($510,200).

                  (b)      Should Poole elect to exercise his COBRA rights,
                  Allied will make payments on behalf of Poole to extend
                  insurance subject to Poole's COBRA rights for a period of
                  twelve (12) months in conjunction with the semi-monthly
                  payments in the preceding paragraph.

                  (c)      Poole acknowledges and agrees that Allied shall
                  withhold applicable taxes and other withholdings as required
                  by law.

                  (d)      Poole agrees and acknowledges that the consideration
                  to be provided him by Allied pursuant to this Agreement is,
                  in significant and substantial part, separate from and in
                  addition to anything of value to which Poole is already or
                  would otherwise be entitled.

         3.       LIFE INSURANCE

         Allied acknowledges that it is a party to (i) that certain
Split-Dollar Insurance Agreement between Allied and Rebecca C. Poole and Donna
D. Glenn, as Co-Trustees of the AMP Family Insurance Trust, dated May 3, 1994,
the subject of which is life insurance coverage on Poole's life, and (ii) that
certain Split-Dollar Insurance Agreement between Allied and Donna D. Glenn, as
Trustee of the AMP Family Insurance Trust, dated March 13, 1998, the subject of
which is life insurance coverage on the lives of Poole and Rebecca C. Poole
(hereinafter, such agreements are collectively referred to as the "Insurance
Agreements", and the life insurance policies that are the subject of the
Insurance Agreements are collectively referred to as the "Policies"). Poole and
Allied agree to work in good faith to determine if the Policies can be replaced
by other life insurance policies to lower the cost of the insurance coverage
without reducing the amount of coverage or diminishing the quality of the
underwriter of such life insurance coverage. Poole agrees that if such
replacement policies are identified and are approved by Poole (which approval
shall not be unreasonably withheld or delayed), Poole shall use his best
efforts to efforts to cause the trustees of the Poole Insurance Trust to agree,
in writing, and to cause the trustee of the AMP Family Insurance Trust to
agree, in writing, to make such changes and amend such agreement as will be
necessary to replace Policies with the approved replacement policies.

                                       2
<PAGE>

         4.       COVENANTS OF POOLE

         As conditions to the payments and benefits to be made and provided by
Allied to Poole as provided herein, Poole agrees as follows:

                  (a)      Duty of Confidentiality. For a period of five (5)
                  years following the Effective Date, Employee shall not
                  directly or indirectly divulge or make use of any
                  Confidential Information or Trade Secrets (so long as the
                  information remains a Trade Secret or remains confidential)
                  without prior written consent of the Company. Employee
                  further agrees that if Employee is questioned about
                  information subject to this agreement by anyone not
                  authorized to receive such information, Employee will
                  promptly notify Employee's supervisor(s) or an officer of the
                  Company. This Agreement does not limit the remedies available
                  under common or statutory law, which may impose longer duties
                  of non-disclosure.

                  (b)      Return of Property and Information. Allied is
                  currently holding a check from Poole, which Poole has
                  tendered to compensate Allied for his company-issued
                  computer, cellphone, pager, and personal digital assistant.
                  If Poole does not return these items by April 23, 2001,
                  Allied will cash this check as full compensation for these
                  items. Allied will not expect the return of any other
                  property which may have been purchased by Poole with company
                  funds or issued by the company. Poole warrants and covenants
                  that he does not have any documents or information relating
                  to Allied in his possession, either in hard copy or
                  electronic form. Should Poole subsequently discover that he
                  does possess such information, he will promptly return it to
                  the company. Poole further promises that he will permanently
                  delete from the company-provided computer he now has in his
                  possession any Allied-related information remaining on that
                  computer's hard drive (or stored on other media) no later
                  than April 23, 2001.

                  (c)      Non-Competition Covenant. Employee agrees that for a
                  period of 12 months following the Effective Date, Employee
                  will not compete with the Business of Allied by performing
                  activities of the type performed by Employee for the Company
                  within one year prior to Employee's termination. Likewise,
                  Employee will not perform activities of the type which in the
                  ordinary course of business would involve the utilization of
                  Confidential Information or Trade Secrets. This paragraph
                  restricts competition only within the 48 States of the
                  continental United States of America.

                  (d)      Non-Solicitation Covenant. Employee agrees that for
                  a period of 12 months following the Effective Date, Employee
                  will not directly or indirectly solicit or attempt to solicit
                  any business in competition with the Business of Allied from
                  any of the Company's customers or suppliers with whom
                  Employee had Material Contact during the last year of
                  Employee's employment with the Company.

                  (e)      Non-Recruitment of Company Employees. Employee
                  agrees that for a period of 18 months following the Effective
                  Date, employee will not directly or indirectly solicit or
                  attempt to solicit any employee of the Company for the
                  purpose of encouraging, enticing, or causing said employee to
                  terminate employment with the Company.

                                       3
<PAGE>

                  (f)      Remedies for Breach of Covenants. Should Poole
                  breach any of the covenants contained in this section, Allied
                  may discontinue any payments which may be due under this
                  agreement, in addition to any other remedies available to it,
                  including injunctive relief.

         5.       MUTUAL RELEASE

                  (a)      Poole on the one hand (including his heirs,
                  successors and assigns) and Allied on the other (including
                  its successors and assigns) hereby release each other from
                  any and all claims, demands, actions, and causes of action,
                  and all liability whatsoever, whether known or unknown,
                  suspected or unsuspected, fixed or contingent relating to
                  Poole's employment or termination from employment from Allied
                  (including, without limitation, claims relating to Poole's
                  written employment contract), up to the date of the execution
                  of this Agreement. This includes but is not limited to claims
                  at law or equity or sounding in contract (express or implied)
                  or tort arising under federal, state, or local laws
                  anti-discrimination laws, and specifically includes, without
                  limitation, the Age Discrimination in Employment Act, and the
                  Older Workers' Benefits Protection Act.

                  (b)      Nothing contained in this Agreement shall affect or
                  limit Poole's rights under any pension, profit-sharing,
                  401(k) plan or similar qualified retirement plan currently in
                  effect, or his rights to elect continued health insurance
                  coverage under the Consolidated Omnibus Budget Reconciliation
                  Act ("COBRA"). Nothing in this Agreement shall be interpreted
                  to release any claims which arise under the terms of this
                  Agreement or after the effective date of this Agreement. Any
                  rights to indemnification which Poole may have under Allied's
                  Articles of Incorporation, Bylaws, insurance policies or
                  other applicable agreements remain in effect notwithstanding
                  this release.

         6.       NO ADMISSION OF LIABILITY

         The parties understand and agree that this Agreement shall not in any
way be construed as an admission by either party of any unlawful or wrongful
acts whatsoever against the opposing party or any other person, and both
parties specifically disclaim any liability to or wrongful acts against the
opposing party or any other person.

         7.       NONDISPARAGEMENT AND COOPERATION

         Poole agrees that he will not engage in any critical or disparaging
speech or conduct at any time in the future directed at Allied. Similarly,
Allied agrees that its Officers and Directors will not engage in any critical
or disparaging speech or conduct at any time in the future directed at Poole.
The parties acknowledge and agree that they must truthfully respond to
subpoenas or other lawful requests for information by government agencies, but
will notify the opposing party if such disclosures might tend to disparage the
opposing party so that the opposing party will have the opportunity to protect
his/its interests. Poole further agrees not to induce, incite, encourage or
assist others to pursue claims of any nature against Allied. Poole will make
himself available

                                       4
<PAGE>

upon reasonable notice to provide information and give a sworn statement if
requested about his knowledge of matters involving litigation or threatened
claims against Allied or its subsidiaries.

         8.       RESIGNATION AND NEUTRAL REFERENCE

         Poole agrees to resign his position as an officer and member of the
Board of Directors (Exhibit "A"), and will not seek to re-establish any
relationship with Allied as a Board Member, Employee, Director, Agent,
Contractor or otherwise. Upon a reference request for Mr. Poole, Allied will
respond with dates of employment, positions held, and compensation. Mr. Poole
agrees to direct all reference requests to: The Company's General Counsel,
currently Thomas M. Duffy, 160 Clairemont Avenue, Suite 200, Decatur, Georgia,
30030.

         9.    REMEDIES AND FORUM

         The parties agree that they will not file any action arising out of
this agreement other than in a state or federal court located in DeKalb County,
Georgia. The parties consent to personal jurisdiction and venue solely within
these forums and solely in DeKalb County, Georgia and waive all otherwise
possible objections thereto. The prevailing party shall be entitled to recover
its costs and attorney's fees in any such proceeding, except that claims by
Poole relating to age discrimination or the effect of this release on claims of
age discrimination shall not be subject to this costs and attorney's fees
provision. The existence of any claim or cause of action by Employee against
the Company, including any dispute relating to the termination of this
agreement, shall not constitute a defense to enforcement of the restrictive
covenants contained in Section 4 by injunction.

         10.      RECITALS AND SEVERABILITY

         The recitals set forth above are true and correct and are incorporated
herein. Each provision of this Agreement is severable, and any provision of
this Agreement found to be prohibited or invalid by law shall be ineffective to
the extent of any such prohibition or invalidity without invalidating the
remaining provisions hereof.

         11.      ACKNOWLEDGEMENT AND REVOCATION PERIOD

         Poole certifies that he has fully read, has received an explanation
of, has negotiated and completely understands the provisions of this Agreement,
and that he has been advised by Allied that he should consult with an attorney
before signing this Agreement and that, in fact, he has been represented by
independent legal counsel in connection with the review and negotiation of this
Agreement. He further certifies that he has had adequate time to review and
consider the provisions of this Agreement and that he is signing this Agreement
knowingly, freely and voluntarily, without duress, coercion or undue influence.
Poole understands and acknowledges that he has twenty-one (21) days from the
receipt of this agreement to consider whether he wishes to sign it. Should he
choose to sign, he has an additional seven (7) calendar days following his
execution of this Agreement to revoke his acceptance of this Agreement (the
"Revocation Period"). This Agreement shall not become effective or enforceable
until the Revocation Period has expired. Revocation of this Agreement must be
made by delivering a written notice of revocation to Robert J. Rutland,
Chairman of Allied. For the revocation to be effective, written notice must be
received no later than the close of business on the seventh day after Poole
signs this Agreement. On the eighth day after Poole signs this Agreement, the

                                       5
<PAGE>

Agreement becomes binding and effective. In addition, Poole understands and
acknowledges that no monies will be paid under the terms of this Agreement
until the end of the Revocation Period; however, any payments which fell due
prior to the expiration of the Revocation Period will be paid promptly once the
Revocation Period expires.

         12.      ENTIRE AGREEMENT

         This Agreement and the applicable terms of the Employment Agreement
represent the entire agreement between Poole and Allied with respect to the
subject matter hereof and thereof and may not be modified or amended except by
an express written agreement between the parties hereto.

         13.      GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with,
the laws of the State of Georgia without reference to conflicts of law
principles.

         14.      NOTICES

         All notices or other communications under this Agreement shall be in
writing and shall be deemed to be given on the date of service if served
personally (by courier or nationally recognized overnight courier), or on the
third day after deposit in the U.S. Mail, certified, return receipt requested,
with adequate postage thereon, to the address set forth below the intended
recipient's signature.

         For Allied: Tommy Duffy, Allied Holdings, Inc., 160 Clairemont Avenue,
Suite 200, Decatur, Georgia, 30030.

         For Mr. Poole: A. Mitchell Poole, Jr., 3838 Markham Way, Atlanta,
Georgia, 30339.

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS AND CAUSES OF ACTION.

         IN WITNESS WHEREOF, Poole has hereunder set his hand and seal, and
Allied has caused this Agreement to be executed and delivered by its duly
authorized officers, all as of the date and year first above written.

                                                                        (SEAL)
-------------------------------     -----------------------------------
WITNESS                             A. MITCHELL POOLE, JR.

                                             Address:

                                             3838 Markham Way
                                             Atlanta, Georgia 30339

Attest:                             ALLIED HOLDINGS, INC.

                                    By:
-------------------------------        ----------------------------------------
Its ______ Secretary                   Robert J. Rutland, Chairman

[CORPORATE SEAL]                             Address:

                                             160 Clairemont Avenue, Suite 200
                                             Decatur, GA  30030

                                       6
<PAGE>

                                  RESIGNATION

         The undersigned hereby resigns, effective immediately, as an officer
and director of Allied Holdings, Inc. and the Affiliates (as defined in that
certain Employment Agreement, dated as of February 23, 2000, between Allied
Holdings, Inc. and the undersigned), and, to the extent applicable, from all
committees of which he is a member.

         Dated this 6th day of April, 2001.

                                             ----------------------------------
                                             A. Mitchell Poole, Jr.<PAGE>
                                                                   EXHIBIT 10.12

-------------------------------------------------------------------------------
                          IBM GLOBAL SERVICES NATIONAL
                                    AGREEMENT
                                     BETWEEN
      ALLIED HOLDINGS, INC. AND INTERNATIONAL BUSINESS MACHINES CORPORATION
-------------------------------------------------------------------------------

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.

<TABLE>
<S>                                                          <C>

Agreed to:                                                   Agreed to:

-----------------------------------------------------        --------------------------------------------------------
Allied Holdings, Inc.                                        International Business Machines Corporation

By:                                                          By:

----------------------------------------------------         --------------------------------------------------------
Authorized Signature                                         Authorized Signature

----------------------------------------------------         --------------------------------------------------------
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
</TABLE>

                                                                    PAGE 1 OF 34

<PAGE>

                    AGREEMENT BETWEEN ALLIED HOLDINGS AND IBM
                         TABLE OF CONTENTS AND SCHEDULES

This Agreement includes the following Sections and Schedules:

<TABLE>
<CAPTION>
SECTION               TITLE                                  PAGE #
-------               -----                                  ------
<S>   <C>  <C>                                               <C>
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
</TABLE>

                                                                    PAGE 2 OF 34

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------
                      SCHEDULES
-------------------------------------------------------
SCHEDULE       TITLE
-------------------------------------------------------
<S>            <C>
A              Services
               Part 1: Support Services
               Part 2: Mainframe Services
               Part 3: Disaster Recovery Services
               Part 4: Data Network Services
               Part 5: Security
-------------------------------------------------------
B              Service Levels
-------------------------------------------------------
C              Charges
-------------------------------------------------------
D              Transition
-------------------------------------------------------
E              Projects
-------------------------------------------------------
F              Software
-------------------------------------------------------
G              Machines
-------------------------------------------------------
H              Standards
-------------------------------------------------------
I              Facilities
-------------------------------------------------------
J              Contracts
-------------------------------------------------------
K              Services Recipients
-------------------------------------------------------
L              Employees
-------------------------------------------------------
M              Acquired Assets
-------------------------------------------------------
N              Trade Secrets
-------------------------------------------------------
</TABLE>

                                                                    PAGE 3 OF 34

<PAGE>

--------------------------------------------------------------------------------
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.

                                                                    PAGE 4 OF 34

<PAGE>

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.

                                                                    PAGE 5 OF 34

<PAGE>

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).

                                                                    PAGE 6 OF 34

<PAGE>

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".

--------------------------------------------------------------------------------
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

                                                                    PAGE 7 OF 34

<PAGE>

         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

                                                                    PAGE 8 OF 34

<PAGE>

                  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

                                                                    PAGE 9 OF 34

<PAGE>

         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

<PAGE>

         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.

--------------------------------------------------------------------------------
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

                                                                   PAGE 11 OF 34

<PAGE>

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

<PAGE>

         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.

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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

<PAGE>

                           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

<PAGE>

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.

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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

<PAGE>

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

<PAGE>

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

<PAGE>
                  (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
<PAGE>

         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
<PAGE>

                  (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
<PAGE>

                           (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
<PAGE>

         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:

                                                                   Page 22 of 34
<PAGE>

                  (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

                                                                   Page 23 of 34
<PAGE>

         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

                                                                   Page 24 of 34
<PAGE>

         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

                                                                   Page 25 of 34
<PAGE>

                  (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.

                                                                   Page 26 of 34
<PAGE>

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
<PAGE>

         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

                                                                   Page 28 of 34
<PAGE>

         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
<PAGE>

         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.

                                                                   Page 30 of 34
<PAGE>

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
<PAGE>

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
<PAGE>

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.

                                                                   Page 33 of 34
<PAGE>

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.

                                                                   Page 34 of 34

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