Keith Todd Esq
ICL ple Post Office Counters Ltd
26 Finsbury Sq
London
EC2A 1DS
24 May 1999
Dear Mr Todd
POCL AUTOMATION PROJECT
POCL, ICL Pathway, ICL and DSS have been negotiating, with the assistance
of HM Treasury, the withdrawal of DSS from further involvement in the
Project and certain material amendments to the existing contracts between the
parties.
Most recently, negotiations have proceeded on the basis that the Project will
be amended to introduce a new service, the Benefits Payment Service or BPS,
and the draft Heads of Agreement dated May 1999 between POCL, ICL
Pathway and ICL (document reference 207738/10582 CA991020.027 JRT
060599.2352) (the “Heads”) reflect that position.
Ministers have decided that the Project will be scaled down and completed on
the basis that the claims of each party against the others will be settled on the
following terms:
it The Heads as amended by Schedule 1 to this letter take effect from the
date hereof.
2. ICL Pathway will complete its obligations under the Related
Agreements, as the same are amended by the Heads, and as the Related
Agreements and the Heads are further amended by this letter.
3. POCL will pay ICL Pathway the sums set out in Schedule 2 to this
letter in the manner and at the times set out in Schedule 2.
4. ICL Pathway will provide services under the Related Agreements (as
amended) until 31 March 2005 (notwithstanding any later date that
may appear in the Related Agreements or the Heads). On cessation of
Post Office Counters Led
King Edward Building
King Edward Streec
London
ECIA IAA
Telephone 0171 776
Facsimile 0171 776
Poe: Of Courat Led Reger io Erne
[No 11S4840 Regstred Ofte King Eber Bulg
ing EduedSerget London SHA TAA
FUJ00079116
FUJ00079116
the services, POCL will have the option, subject to due payment of all
sums payable up to that date, to purchase from ICL Pathway for the
sum of £1 the Project Assets (using the definition of that term in the
Heads which is expressed to be “ICL’s view”), such Project Assets to
be sold “as is”, free of encumbrances including perpetual royalty free
licences of all IPRs in accordance with the Related Agreements but
with all express or implied warranties and conditions excluded to the
full extent permitted by law.
In parallel with performance of ICL Pathway’s obligations under 2
above, and following our discussions with you, we wish to confirm our
desire to use the Core System for network banking and the provision
of services (via smart cards) for Modern Government. We will
therefore work with you to revive and continue the discussions on the
Public Private Partnership which we have previously considered. It is
hoped that we can together develop a business strategy in these areas
which we can deliver through appropriate arrangements under a Public
Private Partnership in order to leverage the use of the Core System and
develop to the full its potential for the delivery of electronic business
services.
ICL Pathway shall provide such services as may be agreed by ICL
Pathway and POCL for Royal Mail, DVLA, NAS, Girobank and the
Co-Op (and other POCL clients as may be agreed) at marginal running
costs.
This letter agreement will come into effect on signature and will
remain binding on all parties unless and until replaced by a
comprehensive codification of the relevant terms of the Related
Agreements, the Heads and this letter (a “Codified Agreement”) which
is agreed between all the parties thereto. The parties will use
reasonable endeavours to produce and agree such a codification by 16
July 1999. This provision shall be without prejudice to any change to
this letter, the Heads or the Related Agreements which is agreed
between the relevant parties in accordance with the terms of the
document in question.
In the event of any disagreement concerning the terms to be included
in the Codified Agreement, POCL and ICL Pathway will negotiate in
good faith to reach a resolution of the matter in question. If the
Managing Director of POCL (or any equivalent executive) and the
Commercial Director of ICL are unable to reach resolution of the
matter at their initial meeting to discuss the same they shall invite an
expert to give guidance and act as a facilitator. Where the matter in
question is of a programme or technical nature, the expert shall be
Peter Copping of PA Consulting Group (or, if he is not available, a
person chosen in accordance with paras. 6.2 and 6.3 of Schedule 6 to
the Heads). Where the matter is of any other nature the expert shall be
an independent City solicitor to be agreed between ICL Pathway and
POCL within 7 days of the date of this letter or, in default of
agreement, to be appointed at the request of either of them by the
President for the time being of the Law Society. ICL Pathway and
FUJ00079116
FUJ00079116
POCL do not expect that the identification and notification of the”
disagreement, reference of the disagreement to the expert and
obtaining his guidance should take longer than 7 days.
If the parties have used all reasonable endeavours to agree the terms of
the Codified Agreement, including pursuing the dispute resolution
procedure above, but by 16 July 1999 material issues still remain
unresolved, POCL shall have the right (to be exercised by a written
notice served on ICL Pathway by 30 July 1999) to terminate the
agreement contained in this letter including, for the avoidance of
doubt, the Heads and the Related Agreements as amended. Where
POCL does not exercise this right of termination this letter shall
continue in force. However, this shall not prevent POCL and ICL
Pathway from agreeing to replace this letter in its entirety with an
incomplete Codified Agreement which incorporates those matters
which have been agreed and, as regards matters which have not been
agreed, carries forward the relevant parts of the agreement contained in
this letter. In the event that POCL does exercise its right of
termination pursuant to this paragraph, it will make a payment of £150
million to ICL Pathway less the sum of £68 million referred to in
Schedule 2, paragraph I if, at the date of such termination, the sum of
£68 million has already been paid to ICL Pathway.
9 The terms of this letter shall be in full and final settlement of all claims
and counterclaims which any of POCL, ICL and ICL Pathway (the
“Parties”) may have against any other of them under or in connection
with the Related Agreements arising from or in connection with acts or
events which occurred or should have occurred, or statements that
were made on or prior to the date of this letter (whether or not such
have been made the subject of a claim or counterclaim at the date
hereof). Each of the parties hereby waives any rights whatsoever
which it might have against any other Party arising from or in
connection with such acts, events or statements.
Words defined directly or by reference in the Heads bear the same meaning in
this letter, unless the context otherwise requires. In the event of any conflict
between the terms of this letter (including its schedules), the Heads, and any of
the Related Agreements, the order of precedence shall be as follows (and so
that the document listed earlier prevails over the document listed later);
This letter (including its schedules)
The Heads
The Related Agreements
Any amendment to this letter shall, to be valid, be made in writing under the
hands of the signatories hereto or persons holding equivalent positions in the
department, agency or company in question
In the event of any disagreement concerning the terms of, or arising under this
letter, the Heads or the Related Agreements, the Parties or such of them as are
in disagreement, shall negotiate in good faith to reach an amicable resolution
of the matter in question, but in default of resolution within a reasonable
FUJ00079116
FUJ00079116
period any relevant Party (that is a Party having a direct interest in the matter
in question) may apply to the Courts of England & Wales for the matter to be
resolved in accordance with English law. This provision shall be without
prejudice to the specific provision for the resolution of disputes relating to
Acceptance which is contained in the Heads and the provision in paragraph 8
as to the resolution of disagreements concerning terms to be included in the
Codified Agreement.
For the sake of completeness please confirm your agreement to the above
matters by signing the attached photocopy.
Yours sincerely
On original:
Signed for and on behalf of the
Post Offi
By:
Name: t
Title: Were poe due
On photocopy:
We hereby. dodectfle terms of the above letter
‘For aid on baball OT ICE Badiwway Limited
FUJ00079116
FUJ00079116