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SLAUGHTER AND MAY
35 Basinghall Street. London EC2V 5DB + Telephone +44 (0)I71 600 1200 + Fax +44 (0)I171 600 0289
Telex 883486 and 888926 » LDE and CDE Box No.1!
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FAX TRANSMISSION
Date 2nd September, 1999 Total pages (inc. this)
Our reference JRT : Writer's telephone
From Jeff Triggs “23082 si-2
To Keith Baines, POCL, London Receiving fax number
Copy to Dave Miller, POCL, London
Acceptance
As promised I have been giving some thought to the terms upon which POCL might
agree to treat Acceptance as having occurred later this month where it is not contractually
bound to do so.
T attach for your views a discussion draft of a possible agreement which:-
(a) _ records outstanding category (a) and (b) faults, categorising them into three
categories, as follows:-
(i) category (a) faults;
(ii) category (b) faults where a rectification plan/timetable is required upon
acceptance; and
(iii) category (b) Substantive New Faults where a rectification
plan/timetable is to be agreed by 15th November, under section 3.4 of
the First Supplemental Agreement;
(b) agrees that Acceptance and Rollout Authorisation have happened;
(c) obliges Pathway to meet detailed rectification plans/timetable(s) by reference
to a schedule (which I have not sought to provide at this stage);
(d) _ indemnifies POCL against the costs of remedying the faults, the consequences
of any failure to meet the agreed timctable(s) for rectification and any other
liabilities arising from any category (a) fault.
Alt of the partners and their professional qualifications is available for inspection at the above address.
‘The partners are either solicitors or registered foreign lawyers.
IF YOU DO NOT RECEIVE ALL THE PAGES, PLEASE TELEPHONE 444 (0171 710 4002
Document ruber CA9S2450.134
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The draft also raises the questions as to whether all or part of the £68 million should
be retained while the category (a) fault is remedied, and whether logically we should also ~
reserve the right to demand liquidated damages by reference to remedy of the outstanding
category (a) faults, rather than Acceptance, by 30th September,
Clearly the precise nature of any such deal will depend on what is outstanding by the
time we are asked to grant Acceptance (if indeed we are). For example one or more of the
categories of Acceptance Incident may not exist.
T look forward to your comments.
Regards
-GRO-
JR Triggs
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[ ‘Slaughter and May 03/08/99 LO:ue
DRAFT (JRT)
THIS SECOND SUPPLEMENTAL AGREEMENT, being Change Control Note
(CCN) [No.: ] is made the [ ] day of September, 1999
BETWEEN:
q) POST OFFICE COUNTERS LTD., whose registered office is at Gavrelle House,
2-14 Bunhill Row, London EC1Y 8HQ (“POCL’); and
(2) ICL PATHWAY LIMITED, whose registered office is at 26 Finsbury Square,
London EC2A 1DS (the “Contractor”).
WHEREAS:
(A) This Second Supplemental Agreement is supplemental to the Codified
Agreement between the parties dated 28th July, 1999 (the “Codified
Agreement”) and constitutes CCN [No. ] of that Codified Agreement.
(B)’ The Contractor and POCL have been carrying out the Operational Trial and the
other Acceptance Procedures in accordance with the Codified Agreement.
(C) By a Supplemental Agreement dated 20th August, 1999 (the “First
Supplemental Agreement”) the parties agreed that CSR Acceptance had not
been achieved at the end of the CSR Operational Trial Review Period.
(D) By the First Supplemental Agreement the parties agreed, inter alia, a
programme of work with a view to achieving Acceptance and Release
Authorisation by 24th September, 1999, and also agreed that only certain
elements of the Core System Release were required to be re-submitted for
testing in the Second CSR Acceptance Test and that only certain faults could be
raised as Acceptance Incidents in relation to the Second CSR Acceptance Test.
(E) As at the date of this Second Supplemental Agreement the following
Acceptance Incidents (in addition to those categorised as category (c) faults)
remain (in the opinion of at least one party) outstanding:-
169) Category (a) Faults
[to follow]
Gi) Category (b) Faults which are Substantive New Faults reported to the
Contractor after 3rd September, 1999 in respect of which no timetable
for resolution has been agreed
[to follow]
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Gil) Category (b) Faults not falling within recital (E) (ii) above
[to follow}
Itis Agreed as follows
1. Interpretation
1.1. Words and expressions defined in the Codified Agreement or the First
Supplemental Agreement shall bear the same meanings when used in this
Agreement.
1.2 References in this Agreement to Recitals are to Recitals to this Agreement.
2. CSR Acceptance
,2.1 The parties agree that CSR Acceptance shall be deemed to have been obtained
as at the date of this Agreement.
2.2 POCL acknowledges that the Release Authorisation Board has, in reliance on
the terms of this Agreement, authorised national rollout of the Core System
with effect from execution of this Agreement.
3. Remedy of Outstanding Faults
3.1 The Contractor undertakes to remedy each of the outstanding Acceptance
Incidents referred to in Recitals (E)(i) and (E)(iii) in accordance with the
rectification plan and timetable [for that Acceptance Incident] contained in the
Schedule hereto.
3.2 The provisions of clause 3.4 of the First Supplemental Agreement shall apply in
relation to Acceptance Incidents referred to in Recital (B)(il).
3.3 All work carried out (by either party) in remedying any of the Acceptance
Incidents referred to in Recital (E) shall be at the sole risk and expense of the
Contractor,
4. Indemnity
The Contractor shall indemnify and keep indemnified POCL (on an after tax
basis) against all costs, claims, charges, demands, expenses and liabilities which it may
suffer or incur, directly or indirectly:-
4.1 in connection with any work carried out for the purpose of remedying or testing
any of the Acceptance Incidents referred to in Recital (E); or
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44
5.
which it would nor have incurred but fo: y failure to resolve an Acceptance
Incident referred to in Recital (E)(i) or (iii) in accordance with the plan and
timetable [in relation thereto] set out in the Schedule hereto; or
which it would not have incurred but for any failure to resolve an Acceptance
Incident referred to in Recital (E) (ii) in accordance with any timetable and plan
established in relation thereto under clause 3.4 of the First Supplemental
Agreement; or
otherwise in connection with the Acceptance Incidents referred to in
Recital (E) (i).
Retention
(Retention of all or part of the £68 million until category (a) incidents resolved?)
: (Liquidated damages to apply if category (a) incidents not resolved by
30th September, 1999?)
6.
6.1
6.2
First Supplemental Agreement
Clauses 3.5, 3.6, 4.1 to 4.4 (inclusive), 5 and 7 of the First Supplemental
Agreement shall be superseded by this Agreement and shall cease to apply with
effect from the date hereof.
For the avoidance of doubt, clauses 3.4, 4.6 and 6 of the First Supplemental
Agreement shall continue to apply.
IN WITNESS WHEREOF this Second Supplemental Agreement has been
executed on behalf of the parties as follows:-
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SCHEDULE
Rectification Plans and Timetable for Remedying
Category (b) Faults
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Signed by )
for and on behalf of )
POST OFFICE COUNTERS LTD. )
in the presence of:- )
Signed by )
for and on behalf of )
ICL PATHWAY LIMITED )
in the presence of:- }
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