Volume Purchase Agreement - AT&T Corp. and NCR Corp.
GA 3638
CONTRACT NO. G18173D
VOLUME PURCHASE AGREEMENT
THIS Volume Purchase Agreement ("Agreement") dated November 20, 1996 is
between AT&T Corp., a New York corporation ("AT&T"), and NCR Corporation, a
Maryland corporation ("NCR").
WHEREAS, the Board of Directors of AT&T has determined that it is in
the best interests of AT&T and its shareholders to separate AT&T's existing
businesses into three independent businesses;
WHEREAS, in furtherance of the foregoing, AT&T and NCR will, on or
before January 1, 1997, execute and deliver a Distribution Agreement, by and
between AT&T and NCR (the "Distribution Agreement").
WHEREAS, this Agreement is one of the NCR Ancillary Agreements (as such
term is defined in the Distribution Agreement) contemplated by the Distribution
Agreement; and
WHEREAS, in anticipation of NCR's spin-off , AT&T and NCR desire to
memorialize and formalize the volume, prices, and other terms and conditions
under which AT&T will buy products and services from NCR in 1997 and thereafter.
NOW THEREFORE, AT&T and NCR agree as follows:
1. TERM OF AGREEMENT. (a) Except as otherwise expressly provided herein or in a
subsequent agreement between the parties, the terms and conditions of this
Agreement and the General Agreement between the parties of even date herewith
shall govern all of AT&T's purchases of products and services from NCR for the
five-year period beginning as of January 1, 1997 and ending December 31, 2001,
unless this Agreement is terminated sooner as permitted by Section 1(b).
(b) Upon at least 90 days' prior written notice, either party may
terminate this Agreement for its convenience, without requirement of cause,
provided that the effective date of such termination is after expiration of the
Purchasing Period described in Section 2.
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2. COMMITMENT
(a) Under the terms and conditions of this Agreement, during the period
beginning January 1, 1997 and ending December 31, 1999 ("Purchasing Period")
AT&T contractually commits to purchase not less than $350 million of products
and services from NCR or any present or future subsidiaries or affiliates of NCR
(collectively "NCR Entities") ("Commitment"), unless the Commitment is reduced
or terminated as provided in Section 7. AT&T may satisfy this Commitment by
purchasing the entire Commitment amount of products or services in any of the
three years or cumulatively over the three years. If AT&T fails to satisfy the
Commitment, the adjustment described in Section 9 shall apply. Subject to the
clause in Article VI of the General Agreement entitled SCOPE OF AGREEMENT, any
purchases of Eligible Products, as hereinafter defined, by any present or future
subsidiary or other affiliate of AT&T (collectively, the "AT&T Entities") during
the Purchasing Period shall be included in the calculation of whether the
Commitment has been satisfied.
(b) Upon written notice to NCR, AT&T may, at its option, extend the
Purchasing Period until December 31, 2000 and/or December 31, 2001, subject to
Sections 9(a) and 9(b).
3. PRODUCTS AND SERVICES. The NCR products and services which the AT&T Entities
may purchase in satisfaction of the Commitment ("Eligible Products") include all
present and future products and services of any NCR Entity except products that
are exclusive to the Personal Computer, Retail, and/or Financial product lines.
Eligible Products include, but are not limited to, the following: Professional
Services; Customer Support Services (including without limitation Large Systems
Support and Software Support; repair and replacement parts and technical
support; and all products and services purchased in support of AT&T's
self-maintenance activities, including any parts purchased in the fourth quarter
of 1996 in contemplation of NCR's spin-off, systems infrastructure and customer
engineer education); Servers; Massively Parallel Processors; Software; and
Networking Products. The AT&T Entities may purchase Eligible Products for their
own internal use or (pursuant to the terms of a separate written agreement) for
resale worldwide (but with the applicable AT&T Entity additionally responsible
for any customs, duties, or local country taxes incurred by NCR by providing
products and services outside the United States), provided that the applicable
AT&T Entity's resale of NCR products and services is part of a sale of AT&T
products or services to a customer ("Solutions Sale"), and provided further that
if the AT&T Entity receives written notice that NCR has
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entered into an exclusive distribution agreement with a third party in a given
foreign country, that AT&T Entity will not be authorized hereunder to resell NCR
products and services in that foreign country without obtaining NCR's prior
written consent, which consent will not be unreasonably withheld or delayed if
the resale can be accomplished without violation of such exclusive distribution
agreement. Subsidiaries acquired by Supplier after the effective date of this
Agreement shall have their products and services added to this Agreement at
mutually agreeable discount rates.
4. INDIRECT PURCHASES. Subject to the clause in Article VI of the General
Agreement entitled SCOPE OF AGREEMENT, if the AT&T Entities purchase Eligible
Products from any of NCR's authorized Value Added Resellers ("VARs") or
Independent Software Vendors ("ISVs") or from a third party NCR exclusive
distributor in a given foreign country, NCR will credit towards AT&T's
Commitment hereunder, the price paid by the AT&T Entities to the VAR, ISV or
third party foreign distributor for components produced by NCR.
5. PRICES. Unless the parties otherwise mutually agree, and except as required
by Section 6, NCR prices to the AT&T Entities for the Purchasing Period shall be
determined as follows:
(a) For all NCR products and services for which NCR has published a
Manufacturer's Suggested Reference Price ("MSRP"), the price to the AT&T
Entities shall be the MSRP reduced by a Discount calculated in accordance with
Section 5(b). NCR has furnished AT&T with a list of MSRPs for all such products
and services and thereafter shall provide AT&T not less than 30 days' prior
written notice of any changes to the MSRP list. For United States Customer
Support Services, any increase in the MSRP for Customer Support Services (or any
component thereof) shall not exceed the percentage increase in the Consumer
Price Index -- All Urban Wage Earners and Clerical Workers, as issued by the
Bureau of Labor Statistics of the United States Department of Labor ("CPI")
relative to the CPI that was in effect on the later of January 1, 1996 or the
date the previous list price became effective.
(b) For each category of NCR product or service, the Discount shall be
a percentage equal to the effective discount off MSRP that was available as of
January 1, 1996 under the lowest NCR prices regularly offered to any AT&T
business unit. The formula for calculating the Discount, using MSRP and
discounted price in effect as of January 1, 1996 is as follows:
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(1/1/96 MSRP - 1/1/96 discounted price)
---------------------------------------- x 100 = Discount (%)
1/1/96 MSRP
Based on this formula, NCR and AT&T will establish the percentage amount of the
Discount for each product or service category by mutual written agreement.
(c) For all NCR products and services for which NCR has not published
an MSRP, NCR and AT&T shall negotiate prices in good faith. Such prices shall
yield margins to NCR not greater than the margins realized on comparable
products and services priced in accordance with Section 5(a).
(d) In order for NCR to comply with all applicable laws and
regulations, NCR's prices for products and services which the AT&T Entities
purchase indirectly through VARs and ISVs will be NCR's standard prices in
effect with such VARs and ISVs, and NCR's prices for products which the AT&T
Entities purchase for Solution Sales in which title to the NCR product passes to
an AT&T customer will be NCR's standard resale prices or such prices as the
parties may separately negotiate ("Indirect and Resale Prices").
(e) In the event that NCR redefines its pricing strategy in a
manner that would make the current model pricing obsolete, the AT&T Entities
shall have the option to move to this new pricing paradigm in its entirety
through the remaining term of this Agreement. Should a new pricing paradigm
occur, only new products/service transactions would be impacted through this
change.
(f) NCR may, from time to time, offer AT&T to substitute upgraded or
later-developed items of equipment, components or parts for the products
purchased herein. In such event, NCR will allow a trade-in credit for the
equipment being traded-in toward the purchase of the upgraded or later-developed
equipment. The trade-in credit shall be in accordance with mutually agreed upon
allowances in effect at the time of such trade-in.
6. MOST FAVORED CUSTOMER STATUS.
(a) For the Purchasing Period, NCR agrees that all prices, except for
Indirect and Resale Prices and non-United States services prices, charged to the
AT&T Entities under this Agreement shall be as favorable as any prices offered
or charged by NCR during the preceding 12-month period to any other NCR customer
making a comparable purchasing commitment, in each case taking into account the
value of terms and conditions of sale. With respect to non-United States
services pricing, prices charged to the AT&T Entities in any given country
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shall be as favorable as any prices offered or charged by NCR during the
preceding 12-month period to any other NCR customer making a comparable
purchasing commitment for comparable services in that country, in each case
taking into account the value of terms and conditions of sale. For purposes of
this Section 6, the purchasing commitment made to NCR by Lucent Technologies
Inc., and the terms and conditions of sale applicable thereto, shall be deemed
comparable to those of the AT&T Entities under this Agreement and the General
Agreement. If NCR charges a more favorable price (other than an Indirect or
Resale Price) to any such NCR customer, NCR shall immediately reduce the AT&T
Entities price as necessary to comply with this Section 6; provided, however,
that AT&T's and the AT&T's Entities' sole remedy for NCR's unintentional breach
of this requirement shall be to recover from NCR the difference between what the
applicable AT&T Entity was actually charged and what should have been charged
had NCR complied with its obligations hereunder. Notwithstanding the foregoing,
NCR may offer or charge more favorable prices to other NCR customers without
lowering the prices to the AT&T Entities under this Agreement, provided any such
more favorable prices are offered or charged for the limited purpose of
initiating a new customer relationship, reestablishing a customer relationship
that has been discontinued for no less than six (6) months or expanding an
existing customer relationship by selling products or services of a type not
previously sold to that customer during the previous 12 months and provided
further that such more favorable prices are not offered or charged for more than
6 months.
(b) At AT&T's request, but not more frequently than once each calendar
year, NCR's compliance with its obligations under this Section 6 shall be
subject to an audit of reasonable scope by an independent auditing firm selected
by AT&T and reasonably satisfactory to NCR. AT&T will bear the auditing firm's
charges. The audit will be conducted in a manner that will minimize NCR's
inconvenience and expense in providing information necessary to perform the
audit. Prior to the auditor submitting findings to AT&T, NCR will be afforded a
reasonable opportunity to review and comment on any preliminary finding by the
auditor that NCR has failed to fulfill its obligations under this Section 6.
Prior to the commencement of each audit, the auditor will execute a
non-disclosure agreement reasonably acceptable to NCR which will require the
auditor to hold all information received from NCR in confidence, except such
information contained in the auditor's final report (which shall be disclosed to
AT&T only upon AT&T's entry into a non-disclosure agreement acceptable to NCR.)
Should the auditor determine that NCR has not fulfilled its obligations under
this Section 6, NCR will issue AT&T a credit (without interest) in the
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amount determined to be the difference between what AT&T paid and the price that
AT&T would have paid had NCR complied with its obligations hereunder. Such
credit may be reduced by the amount of any underbillings which may be disclosed
by the audit and substantiated with evidence reasonably satisfactory to AT&T.
7. ADJUSTMENTS TO COMMITMENT. The parties recognize that future events may make
it impractical or inequitable for the AT&T Entities to purchase NCR products and
services in the amounts contemplated by the Commitment. Accordingly, the
Commitment shall be reduced in amount, or terminated and extinguished in its
entirety, under the circumstances described in this Section 7.
(a) If an AT&T Competitor (as hereinafter defined) enters into a
relationship with NCR that would potentially enable the AT&T Competitor to
obtain AT&T (including its subsidiaries) proprietary or confidential
information, NCR will take all necessary steps to assure that the AT&T
Competitor does not have access to such information through NCR without AT&T's
express prior written consent. In addition, if at any time an AT&T Competitor
owns or controls shares representing a controlling interest in NCR, AT&T may, at
its option, terminate the Commitment at any time by giving written notice to
NCR. Upon any such termination, the Commitment shall be extinguished, AT&T's
obligation thereunder shall be deemed entirely fulfilled, and the Purchasing
Period shall terminate. For purposes of this Agreement, an AT&T Competitor is
any company, person, or other entity which, either directly or through an
affiliate, offers (or has announced future availability of) any product or
service that AT&T reasonably determines to be substantially competitive with a
product or service offered or announced by AT&T (including its subsidiaries);
provided, that a third party will not be deemed an AT&T Competitor unless AT&T
(including its subsidiaries) and such third party each have aggregate actual or
forecasted annual revenues from substantially competitive products and services
exceeding $250 MILLION for at least one year of the Purchasing Period.
(b) If AT&T or a controlled United States subsidiary purchases any
information technology product or service from a third party ("Alternative IT
Supplier") because the available Eligible Products do not meet its needs (as
defined in this Section 7(b)), the amount of the Commitment shall be reduced by
the amount of each such purchase from the Alternative IT Supplier. For purposes
of this Section 7(b), failure to meet the needs of AT&T or such controlled
United States subsidiary means circumstances substantially similar to the
following:
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(i) NCR has discontinued an Eligible Product and has not replaced it
with a comparable, technologically compatible Eligible Product that
delivers equal or better performance, features, and value.
(ii) NCR is unable or unwilling to provide the delivery interval or
response time reasonably required by AT&T or such affected subsidiary
for an Eligible Product, or imposes unreasonable charges to do so.
(iii) Multiple units of an Eligible Product do not meet industry
standards or the reasonable requirements of AT&T or such affected
subsidiary for quality, performance, or reliability.
(iv) A substantial number of units of an Eligible Product have had an
excessive failure rate, or have performed below NCR's specifications.
(c) If AT&T or a controlled United States subsidiary purchases any
Information Technology product or service from an Alternative IT Supplier
because NCR has unreasonably refused to modify, extend, or adapt an Eligible
Product to offer functionality, features, performance, or interoperability
required by AT&T or such affected subsidiary, the Commitment may be reduced by a
mutually agreed amount (or absent such agreement, by an amount determined
pursuant to Article V DISPUTE RESOLUTION of the General Agreement , not to
exceed the amount of each such purchase from the Alternative IT Supplier). For
purposes of this Section 7(c), the extent to which NCR's refusal was reasonable
will be evaluated by considering such factors as (i) whether NCR possessed the
requisite know-how (and, if applicable, the production capability) to
accommodate AT&T's or such affected subsidiary's request, (ii) whether the new
Eligible Product could have been marketed to other customers in markets that NCR
is addressing now and new markets it may address in the future, (iii) whether
AT&T or such affected subsidiary has offered to pay a reasonable price for the
new Eligible Product, taking into account NCR's anticipated costs and the
potential for sales to other customers, and (iv) whether the development
requested by AT&T or such affected subsidiary is necessary to sustain the
utility, functionality, and value of other Eligible Products purchased by AT&T
or such affected subsidiary.
(d) Subject to the clause in Article VI of the General Agreement
entitled SCOPE OF AGREEMENT, if AT&T or a controlled United States subsidiary
cancels any order, terminates any service, or receives any refund or credit from
NCR due to delays, lateness (except for delays or lateness due to force majeure
conditions under the General Agreement), breach of warranty, breach of
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contract, or nonperformance by NCR, the amount of the Commitment shall be
reduced by the amount (included any related purchases) that AT&T or such
affected subsidiary would have spent but for such event.
(e) AT&T's spending forecast in effect as of January 1, 1997 sets forth
AT&T's initial estimate of its aggregate spending for information technology
products and services obtained from all sources during the Purchasing Period
("Initial Forecasted Spending"). If, after the date of this Agreement, AT&T
adopts a smaller aggregate budget for such information technology spending
during the Purchasing Period ("Revised Forecasted Spending"), the Commitment
will be proportionately reduced according to the following formula:
(Revised Forecasted Spending ) ( other adjustments )
(--------------------------- X $350 million ) - ( to Commitment ) = adjusted Commitment
(Initial forecasted Spending ) ( per section 7 )
Notwithstanding the foregoing, if AT&T's actual aggregate spending for
information technology Products and Services during the Purchasing Period
("Actual Spending") is less than Initial Forecasted Spending but exceeds Revised
Forecasted Spending, Actual Spending will be used instead of Revised Forecasted
Spending in the above formula; provided, however, that for purposes of the above
formula, the ratio of Revised Forecasted Spending (or Actual Spending, if
applicable) to Initial Forecasted Spending shall not exceed 1/1, and the
adjustment to Commitment described in this Section 7(e) shall not under any
circumstances be used to increase the amount of the Commitment. For purposes of
this Section 7(e), Revised Forecasted Spending and Actual Spending shall exclude
spending by (or on behalf of) any AT&T business organization that was not
included in the projection of Initial Forecasted Spending.
(f) NCR acknowledges that AT&T's ability to fulfill the Commitment will
be impaired if companies engaged in equipment financing or leasing ("Financing
Companies") are unwilling to provide financing or leasing for NCR products on
terms as favorable as those offered for comparable non-NCR products ("Standard
Financing Terms"). Accordingly, the Commitment shall be adjusted in accordance
with this Section 7(f) if any of the following events occurs:
(i) If any Financing Company selected by a customer of AT&T or its
controlled United States subsidiaries (or by its agent, including
AT&T's AT&T Solutions business unit) refuses to provide financing or
leasing to or for that customer for any Eligible Product on Standard
Financing Terms,
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and if such refusal persists after NCR has had a reasonable opportunity
to address the reasons therefor, the Commitment shall be reduced by the
dollar amount of the purchases AT&T represents would have been made by
or for such customer from NCR (including related purchases) but for
such refusal.
(ii) If any four Major Financing Companies (as defined in Section
7(f)(iv)) selected by a dealer or distributor or reseller (or by any of
their respective agents) of AT&T or its controlled United States
subsidiary refuse to provide financing or leasing to such person for
any Eligible Product on Standard Financing Terms, and if such refusal
persists after NCR has had a reasonable opportunity (not to exceed 90
days) to address the reasons therefor, the Commitment shall be reduced
by the dollar amount of the purchases AT&T represents would have been
made by or for such dealer, distributor or reseller from NCR (including
related purchases) but for such refusal.
(iii) If any four Major Financing Companies selected by AT&T (including
its controlled United States subsidiaries) refuse to provide financing
or leasing to AT&T or such subsidiary for any Eligible Product on
Standard Financing Terms, and if such refusal persists after NCR has
had a reasonable opportunity (not to exceed 90 days) to address the
reasons therefor, AT&T may, at its option, terminate the Commitment at
any time by giving written notice to NCR. Upon any such termination,
the Commitment shall be extinguished, AT&T's obligation thereunder
shall be deemed entirely fulfilled, and the Purchasing Period shall
terminate.
(iv) As used in this Section 7(f), the term "Major Financing Companies"
includes the five Financing Companies having the greatest aggregate
dollar volume of current financing or leasing transactions with AT&T
(including its controlled United States subsidiaries), plus all other
Financing Companies that are among the 20 largest Financing Companies.
8. MONITORING AND REPORTING.
(a) At least once each calendar quarter, NCR shall furnish to AT&T a
written report of Commitment fulfilled by AT&T's direct purchases from NCR
during the preceding quarter. Each such report shall include a breakdown of
Eligible Products purchased, by product and service category, and shall
summarize the cumulative status of Commitment fulfillment.
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(b) At least once each calendar quarter, AT&T shall furnish to NCR a
written report of Eligible Products purchased by AT&T from NCR VARs and ISVs
both domestic and international during the preceding quarter. AT&T's report
shall also identify any adjustments to Commitment claimed by AT&T pursuant to
Section 7 as a result of events that became known to AT&T in that preceding
quarter.
(c) Within 90 days after the end of each calendar year of the
Purchasing Period, NCR and AT&T shall enter into a written agreement documenting
the amount of Commitment fulfillment achieved during that year and the remaining
balance of unfulfilled Commitment. If the parties are unable to reach agreement
during that 90-day interval, either party may initiate alternative dispute
resolution pursuant to Article V of the General Agreement .
(d) Each party shall afford the other party such documentation and
limited audit rights as may be reasonably necessary to enable verification of
the information reported pursuant to this Section 8.
9. NONFULFILLMENT OF COMMITMENT.
(a) If AT&T has failed to fulfill its Commitment by December 31, 1999,
and elects to extend the Purchasing Period until December 31, 2000 pursuant to
Section 2(b), the remaining unfulfilled balance of the Commitment as of January
1, 2000 shall be increased by 5 percent, according to the following formulas:
( adjustments to ) ( Commitment ) ( unfulfilled )
$350 million - ( Commitment ) - ( fulfillment ) = ( Commitment )
( per Section 7 ) ( through 12/31/99 ) ( as of 1/1/00 )
( through 12/31/99 )
( unfulfilled )
( Commitment ) X 1.05 = Year 2000 Increased Commitment
( as of 1/1/00 )
(b) If AT&T has failed to fulfill its Increased Commitment by December
31, 2000 and elects to extend the Purchasing Period until December 31, 2001
pursuant to Section 2(b), the remaining unfulfilled balance of the Increased
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Commitment as of January 1, 2001 shall be increased by 10 percent, according to
the following formulas:
( adjustments to )
( Year ) ( Year )
( 2000 ) ( 2000 ) ( unfulfilled )
Year 2000 Commitment - ( Commitment ) - ( Commitment ) = ( Commitment )
( per Section 7 ) ( fulfillment ) ( as of 1/1/01 )
( from 1/01/00 ) ( through 12/31/00 )
( through 12/31/00 )
( unfulfilled )
( Commitment ) X 1.10 = Year 2001 increased Commitment
( as of 1/1/01 )
(c) At the conclusion of the Purchasing Period (as extended, should
AT&T so elect pursuant to Section 2(b)), if AT&T has not fully discharged the
Commitment, NCR shall, in January 2000 (or in January 2001 or 2002, if the
Purchasing Period has been extended), bill AT&T a carrying charge equal to the
shortfall at December 31, 1999, 2000 or 2001, as applicable, multiplied by the
prime rate plus two percent (2%). Thereafter, NCR shall, each month, bill AT&T a
carrying charge equal to the shortfall, if any, at the end of the preceding
month, multiplied by 1/12 multiplied by the prime plus two percent (2%).
(d) In the event AT&T meets or exceeds the Commitment as defined in
Section 2(a), NCR agrees to extend the prices described in this Agreement and
make them available to the AT&T Entities until December 31, 2000.
(e) NCR EXPRESSLY AGREES THAT THE REMEDY DESCRIBED IN SECTION 9(c)
SHALL BE NCR's SOLE AND EXCLUSIVE REMEDY FOR AT&T's FAILURE TO FULFILL THE
COMMITMENT. NCR HEREBY WAIVES ANY OTHER REMEDIES THAT ARE OR MAY BECOME
AVAILABLE, AND NCR HEREBY RELEASES AT&T (AND ASSOCIATED ENTITIES , AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS) FROM ANY AND ALL CLAIMS
IN EXCESS OF SUCH REMEDY, FOR AT&T's FAILURE TO FULFILL THE COMMITMENT.
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(f) UNDER NO CIRCUMSTANCES SHALL EITHER PARTY (OR A PARTY's AFFILIATES,
OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS) BE HEREUNDER
LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR
PUNITIVE DAMAGES (EVEN IF MADE AWARE OF THE POSSIBILITY OF SUCH DAMAGES), OR FOR
LOSS OF PROFITS OR REVENUE.
(g) THE LIMITATIONS OF REMEDIES AND LIABILITIES SET FORTH IN SECTIONS
9(e) THROUGH 9(f) SHALL APPLY REGARDLESS OF THE FORM OF ACTION, WHETHER IN
CONTRACT, TORT (INCLUDING NEGLIGENCE, WHETHER ACTIVE OR PASSIVE), OR OTHERWISE,
AND SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS AGREEMENT.
10. TERMS AND CONDITIONS GOVERNING PURCHASES. Contemporaneously with the
execution of this Agreement, AT&T and NCR are entering into a General Procedures
Agreement (hereinabove and below referred to as the "General Agreement"), to
establish terms and conditions governing AT&T's purchases of products and
services from NCR. In the event of any conflict between the terms and conditions
of this Agreement and those in the General Agreement, the terms and conditions
of this Agreement shall prevail and control.
11. COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER. (a) This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement, and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other party.
(b) This Agreement, including the documents incorporated by reference
herein, together with the General Agreement, contains the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
all previous agreements, negotiations, discussions, writings, understandings,
commitments, and conversations with respect to such subject matter.
(c) AT&T represents on behalf of itself and each of its subsidiaries,
and NCR represents on behalf of itself and each of its subsidiaries, as follows:
(i) each such person has the requisite corporate or other power and
authority and has taken all corporate or other action necessary in
order to execute, deliver, and perform this Agreement and to consummate
the transactions contemplated hereby; and
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(ii) this Agreement has been duly executed and delivered by it and
constitutes a valid and binding agreement of it enforceable in
accordance with the terms thereof.
12. SUCCESSOR COMPANIES. The parties recognize that the ownership and
organization of their respective companies may change during the term of this
Agreement. Accordingly, the parties agree as follows:
(a) If a third party (including without limitation any present or
future NCR parent or affiliate) succeeds to any substantial portion of the
business of NCR with respect to any Eligible Product ("NCR Successor Company"),
NCR shall use reasonable efforts to continue making such Eligible Product
available to AT&T under this Agreement and the General Agreement. These efforts
may include, at NCR's option, arranging for NCR to resell the Eligible Product
to AT&T. Alternatively, NCR may obtain the NCR Successor Company's agreement to
join in the terms and conditions of this Agreement and of the General Agreement,
in which event the parties shall promptly amend the definitions of NCR in this
Agreement and in the General Agreement to include the NCR Successor Company. If
NCR is unable or unwilling to continue making the Eligible Product available to
AT&T under this Agreement and the General Agreement, NCR shall be deemed to have
failed to meet AT&T's needs for the Eligible Product, and any resulting AT&T
purchases from Alternative IT Suppliers shall reduce the Commitment in
accordance with Section 7(b).
(b) If AT&T notifies NCR that any third party has succeeded or will
succeed to any substantial portion of the business of AT&T ("AT&T Successor
Company"), the parties shall take the following steps:
(i) If the AT&T Successor Company directly or indirectly controls AT&T,
or if the AT&T Successor Company and AT&T are under substantial common
control, and if the AT&T Successor Company's spending for Information
Technology products and services is included in the aggregate AT&T
budget for information technology spending described in Section 7(e),
the parties (subject to the concurrence of the AT&T Successor Company)
will amend the definitions of AT&T in this Agreement and in the General
Agreement to include the AT&T Successor Company. Such amendments will
enable the AT&T Successor Company to purchase from NCR under the
prices, terms, and conditions of this Agreement and of the General
Agreement, and all such purchases by the AT&T Successor Company will be
deemed purchases by AT&T for purposes of Commitment fulfillment.
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(ii) If the AT&T Successor Company is an affiliate of AT&T but does not
control and is not under common control with AT&T, or if the AT&T
Successor Company's spending for information technology products and
services is not included in the aggregate AT&T budget for information
technology spending described in Section 7(e), NCR and AT&T (in
consultation with the AT&T Successor Company) will mutually determine
whether to amend this Agreement and the General Agreement in the manner
described in Section 12(b)(i). If NCR and AT&T fail to agree upon such
amendments within 60 days after AT&T's notice, AT&T may, at its option,
reduce the Commitment pursuant to Section 7(e) by excluding all future
purchases by the AT&T Successor Company from AT&T's Revised Forecasted
Spending and AT&T's Actual Spending.
(iii) If the AT&T Successor Company is neither a parent nor an
affiliate of AT&T, AT&T may, at its option, reduce the Commitment
pursuant to Section 7(e) by excluding all future purchases by the AT&T
Successor Company from AT&T's Revised Forecasted Spending and AT&T's
Actual Spending.
(iv) If AT&T elects to reduce the Commitment as permitted by Sections
12(b)(ii) or (iii), NCR will have no obligation to make the pricing
described in this Agreement available to the AT&T Successor Company,
and future purchases by the AT&T Successor Company will not count
toward Commitment fulfillment.
13. MISCELLANEOUS. The provisions of Article 8 of the Distribution Agreement are
specifically incorporated herein by reference.
AT&T Corp. NCR Corporation
By: By:
Name: ______________________________ Name:____________________________
Title:: ______________________________ Title:___________________________
Date: ______________________________ Date:____________________________
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