Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Net 1 UEPS Technologies, Inc. - Exhibit 10.26

Exhibit 10.26 

SERVICE LEVEL AGREEMENT 

BETWEEN 

THE LIMPOPO PROVINCIAL GOVERNMENT IN ITS

DEPARTMENT OF HEALTH AND SOCIAL 
DEVELOPMENT

Represented by MR. MOFFAT MOGANE in his capacity as Acting
  Head of DEPARTMENT of Health and Social Development (Hereinafter referred to
  as “the DEPARTMENT”) and duly authorised by the Director-General of
  the Limpopo Provincial Government 

and 

CASH PAYMASTER SERVICES (NORTHERN) (PTY LTD 

Represented by DR. SERGE BELAMANT in his capacity as Chief
Executive Officer (hereinafter referred to as “the SERVICE PROVIDER”) and duly
authorised. 

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	1. 	
      PREAMBLE

Whereas the DEPARTMENT has been necessitated to enter into an
urgent interim agreement following the court order setting aside the contract
for the payment of social security grants between the DEPARTMENT and Cash
Paymaster Services (Northern) Proprietary Limited, and having given due
consideration to all alternatives to remedy the emergency situation that has
arisen within the Province - 

	1.1 	
      The DEPARTMENT wishes to enter into a service level
      agreement with the SERVICE PROVIDER to ensure that the beneficiaries’
      constitutional right to social assistance is not violated.

	 	 
	1.2 	
      The SERVICE PROVIDER agrees to render payment services to
      the beneficiaries of pensions and grants on behalf of the DEPARTMENT at
      Pay Points and / or Participating Merchants.

	 	 
	1.3 	
      Payments of pensions and grants currently made by the
      South African Post Office and Banks are excluded.

	 	 
	1.4 	
      The number of beneficiaries currently serviced is
      923,704, allocated to 2 135 Pay Points.

THEREFORE the PARTIES wish to record in writing their agreement
relating to the aforementioned and matters incidental thereto. 

	2. 	
      INTERPRETATION AND
DEFINITIONS

In this Agreement and in the annexures hereto- 

	2.1 	
      clause headings are for convenience and are not to be
      used in their interpretation;

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	2.2 	
      unless the context indicates a contrary intention, but
      not limited to, an expression which denotes-

	 	 
	2.2.1 	
      any gender includes the other gender;

	 	 
	2.2.2 	
      a natural person includes a juristic person and vice
      versa;

	 	 
	2.2.3 	
      the singular includes the plural and vice
  versa;

DEFINITIONS 

	“account” 	
      means smart card based account that does not require the
      maintenance of any minimum balance therein and free of any bank charges or
      costs, opened by the SERVICE PROVIDER in the name of each grant
      beneficiary; 

	  	
       

	Act” 	
      means Social Assistance Act 1992 (Act 59 of 1992) as
      amended or substitute legislation; 

	  	
       

	“AFIS” 	
      means Automated Fingerprint Identification System;
  

	  	
       

	“Agreement” and 	
       

	this Agreement” 	
      means this agreement and its annexures; 

	  	
       

	“Biometric identification” 	
      means the identification of a person by using Automated
      Fingerprint Identification System (AFIS) computer technology to identify
      each beneficiary; 

	  	
       

	“Biometric verification” 	
      means the verification of each beneficiary at the Pay
      Points by using computer technology to verify the relationship between a
      beneficiary and his / her 

	SLA V 0.1 06/05/08 	Page 3 of 49 

		 fingerprints already captured previously
        during bulk enrolment; 

	  	  

	“Biometric Identification and Verification Software
      and Procedures” 
		 means the procedures that are used to verify
        that a beneficiary’s or procurator’s fingerprints match those
        that have been stored on the smart card issued to the beneficiary or his
        / her procurator during bulk or on-going registration and the software
        developed by the SERVICE PROVIDER that allows verification to take place,
        namely, the reading of a fingerprint template from the smart card, the
        forwarding of this template to the fingerprint reader selected by the
        SERVICE PROVIDER and the response from the reader, which indicates the
        acceptance or the rejection of the template submitted. Proprietary matching
        algorithms that belong to the manufacturer of the selected reader and
        any other non-related software are excluded; 

	  	  

	“Business day” 	 means any day other than Saturday or Sunday
        or Official public holiday; 

	  	  

	“Completion date” 	 the date on which this contract terminates,
        being 31 December 2006 or any later date, to coincide with the implementation
        of the National tender; 

	  	  

	“Confidential Information” 	 means all confidential data whether of a
        historical, current or future nature irrespective of whether it is stored,
        recorded or embodied in a hand written, printed, visual, electronic, audible
        or other format or medium, and belonging to, created by, in the possession
        or under the control of the PARTIES 

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      individually. For the purpose of this agreement
      “information” shall include, without limiting its ordinary meaning, data,
      codes, letters, telefaxes, telegrams, faxes, agreements, specifications
      and strategic plans; 

	  	
       

	“Contract Manager” 	
      means a designated employee of each party, whose
      responsibility is to ensure that each party complies with its contractual
      obligations in terms of this Agreement and who is responsible to develop
      the service level reports; 

	  	
       

	“Disclose” 	
      means the direct or indirect use, dissemination,
      publication, transference or transmission of confidential information, in
      any manner or form whatsoever, and “disclosure” has a corresponding
      meaning; 

	  	
       

	“District and sub-district” 	
      means the pension district more fully described in
      Annexure “A” hereto; 

	  	
       

	“District officer” 	
      means a person appointed by the DEPARTMENT as a district
      pension officer for a particular district and / or as district allowance
      officer for a particular district; 

	  	
       

	“Commencement date” 	
      24 March 2006; 

	  	
       

	“Head of Department” 	
      means the Head of the Department of Health and Social
      Development, or the acting Head of the Department of Health and Social
      Development, as the case may be; 

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	“Identity Number” 	
      means 13 (thirteen) digit, bar coded number for personal
      identification issued by the Department of Home Affairs’ 

	  	
       

	“Month” 	
      means a period of one calendar month commencing with the
      first day of that month; 

	  	
       

	“Merchant Acquiring” 	
      the alternative payment solution whereby social grant
      beneficiaries can utilise their smart cards at Participating Merchants to
      load their grants, spend and / or make cash withdrawals; 

	  	
       

	“Participating Merchants” 	
      merchant stores appointed by the SERVICE PROVIDER that
      have installed the Merchant Acquiring solution; 

	  	
       

	“PARTIES” 	
      means Cash Paymaster Services (Northern) (Proprietary)
      Limited and the DEPARTMENT; 

	  	
       

	“Pay Days” 	
      means those days agreed upon between the PARTIES on which
      the withdrawal of grants or allowances must be made by the beneficiaries
      at the Pay Points; 

	  	
       

	“Pay Points” 	
      means the designated places for the payment of grants and
      allowances by the SERVICE PROVIDER as set out in Annexure B; 

	  	
       

	“Pay Times” 	
      means the times between 08h00 and 15h00 agreed upon
      between the PARTIES during which beneficiaries and/or procurators who have
      been identified by the DEPARTMENT in accordance with the provisions of
      this Agreement and registered by the SERVICE PROVIDER in

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      accordance with the provisions of this Agreement, will be
      paid; 

	  	
       

	“Procurator” 	
      means a person who is entitled to withdraw a social grant
      on behalf of a beneficiary as provided for by the Act. Both the DEPARTMENT
      and the SERVICE PROVIDER should duly register this person as provided for
      in clause 32; 

	  	
       

	“Province” 	
      means the Province of Limpopo; 

	  	
       

	“Service Level Reports” 	
      means service level reports as set out in a separate
      document required from both PARTIES which are regarded as a management
      tool and framework on which to base, evaluate and assess the performance
      criteria in each of the functional areas of the social grants payment
      service as specified in the contract as per Clause 33; 

	  	
       

	“Prime Rate” 	
      means the basic annual rate of interest quoted and levied
      from time to time by bankers as appointed by the DEPARTMENT from time to
      time, on the unsecured overdrawn current accounts of its most favoured
      corporate customers in the private sector, as certified by a certificate
      issued by any director or manager of that bank (whose authority or
      appointment or qualification it must not be necessary to prove) calculated
      on the daily balance and capitalised monthly in arrears, such certificate
      constituting prima facie proof of such rate in the event of a dispute;
    

	  	
       

	“Registration” 	
      means the process to capture fingerprints of four
      fingers, two from each hand, of each beneficiary

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      and / or his / her procurator in the Province using the
      AFIS computer technology (these fingerprints will be used for Biometric
      verification of each beneficiary); 

	  	
       

	“Services” 	
      means the services the SERVICE PROVIDER shall provide to
      the DEPARTMENT in terms of this Agreement, and shall include but not
      limited to registration, issuing of smart cards, replacement of lost smart
      cards, security at Pay Points and payment of grants; 

	  	
       

	“SOCPEN Payment File” 	
      means the electronic data fle provided by the State
      Information Technology Agency (SITA), that contains the details of all
      beneficiaries to be paid during a payment cycle; 

	  	
       

	“Steering Committee” 	
      means a committee referred to in clause 7.2;
  

INTERPRETATION 

	2.3 	
      if any provision in a definition is a substantive
      provision conferring rights or imposing obligations on any party,
      notwithstanding that it is only in definition clause, effect shall be
      given to it as if it were a substantive provision in the body of this
      Agreement; 

	  	
       

	2.4 	
      when any number of days is prescribed in this Agreement,
      they must be reckoned exclusively of the first and inclusively of the last
      day unless the last day falls on a Saturday, Sunday or public holiday, in
      which case the last day shall be the next succeeding day which is not a
      Saturday, Sunday or public holiday; where figures are referred to in
      numerals and in words, if there is any conflict between the two, the words
      shall prevail; expressions defined in this Agreement shall bear
  

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      the same meanings in schedules and appendices or
      annexures to this Agreement that do not themselves contain their own
      definitions;

	 	 
	2.5 	
      all schedules, appendices and annexures to this Agreement
      shall be deemed to have been expressly incorporated into and form an
      integral part of this Agreement and as such each reference herein to this
      Agreement shall be deemed to include a reference to all such schedules,
      appendices and annexures;

	 	 
	2.6 	
      where any term is defined within the context of any
      particular clause in this Agreement, the term so defined, unless it is
      clear from the clause in question that the term so defined has limited
      application to the relevant clause, shall bear the meaning ascribed to it
      for all purposes in terms of this Agreement, notwithstanding that term has
      not been defined in this interpretation and definitions clause;

	 	 
	2.7 	
      a reference to a party includes that party’s successors
      in title and permitted assigns;

	 	 
	2.8 	
      any reference to an enactment is to that enactment, as
      amended, as of the date of signature thereof, and as amended or re-enacted
      from time to time;

	 	 
	2.9 	
      the expiration or termination of this Agreement shall not
      affect such of the provisions of this Agreement as expressly provided that
      they will operate after any such expiration or termination or which of
      necessity must continue to have effect after such expiration or
      termination, notwithstanding that the clauses themselves do not expressly
      provide for this: Provided that if either it be expressly so provided
      without agreement as to the termination of such a continuation or if there
      be no provision allowing for a continuation, a provision that continues to
      operate by virtue of this clause shall cease to do so after a reasonable
      time;

	SLA V 0.1 06/05/08 	Page 9 of 49 

	2.10 	
      the rule of construction that the contract be interpreted
      against the party responsible for the drafting or preparation of the
      agreement shall not apply.

	 	 
	3. 	
      APPOINTMENT OF THE SERVICE PROVIDER

	 	 
	3.1 	
      In accordance with the award of this contract to the
      SERVICE PROVIDER, the DEPARTMENT hereby appoints the SERVICE PROVIDER,
      which hereby accepts the appointment to provide the Services in accordance
      with the terms of this Agreement.

	 	 
	3.2 	
      Notwithstanding the date of signature of this Agreement,
      all rights and obligations arising from this Agreement must be deemed to
      have come into operation on the Commencement date.

	 	 
	3.3 	
      Neither the appointment of the SERVICE PROVIDER in Clause
      3.1 nor anything in this Agreement shall give rise to or be construed as
      giving rise to an employer- employee relationship between the PARTIES nor
      that of principal and agent, nor shall it give rise to a joint venture nor
      an agreement of partnership between the PARTIES, nor shall it give rise to
      a labour broking agreement.

	 	 
	3.4 	
      Notwithstanding anything to the contrary contained
      herein, the PARTIES acknowledge that neither of the PARTIES has any
      authority whatsoever to represent or to bind the other in any capacity
      whatsoever. In particular, but without limiting the generality of the
      aforegoing, neither of the PARTIES must be entitled to conclude any
      contract or sign any document on behalf of the other party, or in any way
      bind the other party’s performance, variation, release or discharge of any
      obligation.

	 	 
	3.5 	
      Neither of the PARTIES must acquire any rights, title or
      interest of any kind in any brand name or trademark of the other party or
      any of

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      the other’s subsidiaries. All the PARTIES hereby
      acknowledge such rights, title or interest to be the sole and exclusive
      property of the other or such subsidiary as the case may be (“the owning
      party”). If called upon to do so by the owning party, the party or PARTIES
      called upon shall sign a user agreement in respect of any such brand name
      or trademark.

	 	 
	3.6 	
      The SERVICE PROVIDER shall transfer to the card account
      of the beneficiary, the monies due to him / her in full, as per the SOCPEN
      Payment File, without making any deductions whatsoever.

	 	 
	4. 	
      EXCLUSIVITY

	 	 
	4.1 	
      The SERVICE PROVIDER shall be exclusively entitled to and
      shall provide the Services to the DEPARTMENT as per this
  Agreement.

	 	 
	4.2 	
      The DEPARTMENT shall be entitled to demand from the
      SERVICE PROVIDER to deliver Services as per this Agreement.

	 	 
	5. 	
      THE SERVICES

The SERVICE PROVIDER shall, in return for fees charged, render
to the DEPARTMENT the Services, from the Commencement date in accordance with
the provisions of this Agreement. 

	6. 	
      AMENDING THE SCOPE OF SERVICES

	 	 
	6.1 	
      Amendments by the PARTIES to this contract to the scope
      of the Services shall be made subject to the DEPARMENT’s approval and in
      accordance with the following procedure:

	SLA V 0.1 06/05/08 	Page 11 of 49 

	6.1.1 	
      either party may propose to the other party in writing
      that the scope of the Services should be amended and shall describe the
      nature of the proposed amendment;

	 	 
	6.1.2. 	
      the proposal shall be accompanied by reasons explaining
      the need for the amendment;

	 	 
	6.1.3 	
      the other party may within fourteen (14) working days
      request an amplification of the reasons provided in accordance with clause
      6.1.2;

	 	 
	6.1.4 	
      the PARTIES shall consult in good faith regarding the
      nature, scope and implementation of the amendment;

	 	 
	7. 	
      CONTRACT MANAGEMENT

	 	 
	7.1 	
      Contract Managers

	 	 
	7.1.1. 	
      The PARTIES shall within ten (10) days of signature of
      this Agreement, each appoint a Contract Manager whose responsibility must
      be to ensure that the responsibilities of the party appointing such
      manager outlined in this Agreement are carried out. The manager for the
      DEPARTMENT shall be the manager responsible for Social Security in the
      DEPARTMENT and the manager for the SERVICE PROVIDER shall be the
      Provincial Co-ordinator.

	 	 
	7.1.2 	
      The two Contract Managers shall communicate on an ongoing
      basis, but at least monthly, to discuss the provision of the Services and
      any issues that may arise.

	 	 
	7.1.3 	
      The Contract Managers shall maintain minutes of their
      meetings and shall send copies to the Steering
Committee.

	SLA V 0.1 06/05/08 	Page 12 of 49 

	7.1.4 	
      The Contract Managers are responsible for monitoring the
      provision of Services in accordance with the service level reports and for
      the general management of this Agreement.

	 	 
	7.2 	
      The Steering Committee is hereby established. The
      Steering Committee shall comprise of:

	 	 
	7.2.1 	
      The Senior General Manager responsible for Social
      Development (chairperson).

	 	 
	7.2.2 	
      The Chief Financial Officer of the DEPARTMENT;

	 	 
	7.2.3 	
      The Head of Social Security;

	 	 
	7.2.4 	
      The Senior Manager responsible for Provisioning and
      Contract Management in the DEPARTMENT;

	 	 
	7.2.5 	
      The Senior manager responsible for Grants Administration
      in Social Security;

	 	 
	7.2.6 	
      The Contract Manager for the SERVICE PROVIDER and not
      more than three (3) representatives

	 	 
	7.3 	
      The Steering Committee shall meet at least quarterly to
      evaluate performance of Services in terms of this Agreement and any other
      related issues.

	 	 
	7.4 	
      The management committee shall meet on a monthly basis
      and shall consist of :

	 	 
	7.4.1 	
      The Head of Social Security (Chairperson)

	 	 
	7.4.2 	
      Senior Managers Social Security

	 	 
	7.4.3 	
      Managers in Social Security

	 	 
	7.4.4 	
      District Managers

	SLA V 0.1 06/05/08 	Page 13 of 49 

	7.4.5 	 SERVICE PROVIDER’s Branch Managers

	 	 
	7.4.6 	 Two Contract Managers

	 	 
	7.5 	 District committees shall meet on a monthly basis and
        shall comprise of :

	 	 
	7.5.1 	 District Manager (Chair)

	 	 
	7.5.2 	 SERVICE PROVIDER’s Branch Manager

	 	 
	7.5.3 	 Sub-district managers

	 	 
	8. 	 DURATION, TERMINATION AND BREACH

	 	 
	8.1 	 This Agreement shall endure until the Completion date,
        unless terminated in accordance with the provisions of this Agreement.
        The DEPARTMENT shall give the SERVICE PROVIDER notice by 30 September
        2006 if the Completion date will be later than 31 December 2006.

	 	 
	8.2 	 Should either party commit a material breach of any
        of the provisions of this Agreement, the aggrieved party shall be obliged
        to give the other party 30 (thirty) working days written notice to remedy
        the breach. If the guilty party fails to comply with such notice or where
        the breach cannot be remedied within 30 (thirty) working days or fails
        within such period to initiate such steps towards remedying such breach
        as must be reasonable in the circumstances and fails to proceed to remedy
        such breach, or is incapable of being remedied, then and only in such
        events the aggrieved party shall be entitled to:

	 	 
	8.2.1 	 Cancel this Agreement and / or

	 	 
	8.2.2 	 Claim specific performance from the other party of all
        its outstanding obligations, in either instance and without prejudice
        to such other rights as the aggrieved party may have in law arising out
        of such

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      breach, such party may not cancel this Agreement unless
      the breach is a material breach going to the essence of this Agreement and
      is incapable of being remedied.

	 	 
	9. 	
      WARRANTIES

	 	 
	9.1 	
      The SERVICE PROVIDER hereby represents and warrants to
      the DEPARTMENT that:

	 	 
	9.1.1 	
      it has full power and authority to enter into, legally
      bind itself by, and perform its rights and obligations under this
      Agreement;

	 	 
	9.1.2 	
      This Agreement has been duly authorised and executed by
      it and constitutes a legal, valid and binding set of rights and
      obligations on it; and

	 	 
	9.1.3 	
      To the best knowledge of the SERVICE PROVIDER, the
      execution and performance of this agreement does not constitute a
      violation of any statute, judgement, order, decree or regulation or rule
      of any court, competent authority or arbitrator of competent jurisdiction
      applicable or relating to it, its assets or its business, or its
      memorandum, articles of association or any other documents or any binding
      obligation, contract or agreement to which it is a party or by which it or
      its assets are bound.

	 	 
	9.2 	
      The DEPARTMENT hereby represents and warrants to SERVICE
      PROVIDER that:

	 	 
	9.2.1 	
      it has full power and authority to enter into, legally
      bind itself by, and perform its rights and obligations under this
      Agreement;

	 	 
	9.2.2 	
      this Agreement has been duly authorised and executed by
      the DEPARTMENT;

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9.2.3 		
to the best knowledge of the DEPARTMENT, the execution of this Agreement does not violate any judgement or order of any court, competent authority or arbitrator of competent jurisdiction applicable in relation to the DEPARTMENT or
the existing assets of the DEPARTMENT;

	
	 	 
	
9.2.4 		
it has the legal capacity and authority to appoint the SERVICE PROVIDER as a service provider on the basis set out in this Agreement

	
	 	 
	
9.3 		
It is expressly agreed between the PARTIES that each warranty and each representation given by both of them in this Agreement are material to this Agreement and have induced them to conclude this Agreement.

	
	 	 
	
9.4 		
Only the warranties or representations which are set forth in this Agreement shall be binding on either party.

	
	 	 
	
9.5 		
SERVICE PROVIDER guarantees:

	
	 	 
	
9.5.1 		
The SERVICE PROVIDER guarantees that it can deliver the Services according to the terms and conditions as stipulated in this Agreement.

	
	 	 
	
9.5.2 		
The SERVICE PROVIDER shall provide backup to ensure performance in all respects as per this Agreement.

	
	 	 
	
9.5.3 		
The SERVICE PROVIDER shall ensure data integrity, accessibility and systems continuity by making appropriate backups and depositing the Biometric Identification and Verification Software and Procedures with Escrow as per clause
33.1

	

	SLA V 0.1 06/05/08 	Page 16 of 49 

	10. 	
      DISPUTE RESOLUTION

	 	 
	10.1 	
      The PARTIES agree that it is in their best interest to
      resolve any matters of disagreement before resorting to available legal
      remedies.

	 	 
	10.2 	
      The PARTIES agree that the two Contract Managers shall
      attempt to resolve all issues involved in the administration of this
      Agreement. If the two Contract Managers are unable to reach a resolution
      within seven (7) working days, the Chief Executive Officer of the SERVICE
      PROVIDER and the Head of the DEPARTMENT shall attempt to reach an
      acceptable resolution.

	 	 
	10.3 	
      In the event that the Chief Executive Officer of the
      SERVICE PROVIDER and the Head of the DEPARTMENT reach an impasse after
      fourteen (14) working days of referral of the dispute, the aggrieved party
      will notify the other party in writing within seven (7) days of the nature
      and cause of the dispute.

	 	 
	10.4 	
      The party notified of the dispute shall have twenty one
      (21) working days to rectify the cause.

	 	 
	10.5 	
      If party notified of a dispute fails to rectify the cause
      of the dispute, the aggrieved party may refer the dispute to
      arbitration.

	 	 
	11. 	
      ARBITRATION

	 	 
	11.1 	
      A dispute which arises in regard to-

	 	 
	11.1.1 	
      the interpretation of;

	 	 
	11.1.2 	
      the carrying into effect of;

	 	 
	11.1.3 	
      either of the party’s rights and obligations arising
      from:

	SLA V 0.1 06/05/08 	Page 17 of 49 

	11.1.4 	
      the termination or purported termination of or arising
      from the termination of; or

	 	 
	11.1.5 	
      the rectification or proposed rectification of this
      Agreement, or out of or pursuant to this Agreement, or on any matter in
      terms of which this Agreement requires agreement by the PARTIES (other
      than where an interdict is sought or urgent relief may be obtained from a
      court of competent jurisdiction) must be submitted to and decided by
      arbitration, provided that it has first been negotiated in terms of clause
      11 above, and is not subject to any process or remedy in this Agreement
      that is not compatible with arbitration.

	 	 
	11.1.6 	
      The arbitration shall be held at Polokwane

	 	 
	11.1.7 	
      with only the legal and other representatives of the
      parties to the dispute present threat; mutatis mutandis in accordance with
      the provisions of the Supreme Court Act 59 of 1959 as amended, the rules
      made in terms of that Act and the practice of the High Court of South
      Africa and in terms of the Arbitration Act, No. 42 of 1965, it being the
      intention that the arbitration must be held and completed as soon as
      possible.

	 	 
	11.2 	
      The arbitrator must be, if the matter in dispute is
      principally-

	 	 
	11.2.1 	
      a legal matter, a practising advocate or attorney of at
      least 5 (five) years’ standing;

	 	 
	11.2.2 	
      an accounting matter, a practising chartered accountant
      of at least 5 (five) years’ standing;

	 	 
	11.2.3 	
      any other matter, any independent person, agreed upon
      between the PARTIES.

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11.3 		
Should the PARTIES to the dispute fail to agree whether the dispute is principally a legal, accounting or other matter, the matter must be deemed to be a legal matter.

	
	 	 
	
11.4 		
Should the PARTIES fail to agree on an arbitrator within 3 (three) working days of a request by either party, the arbitrator shall be appointed at the request of either party to the dispute by the President for the time being of
the law Society of the Northern Provinces (or its successor).

	
	 	 
	
11.5 		
The decision of the arbitrator shall be final and binding on the PARTIES to the dispute and may be made an order of the court at the instance of either of the PARTIES to the dispute.

	
	 	 
	
11.6 		
The decision of the arbitrator shall be recorded in writing.

	
	 	 
	
11.7 		
This clause shall not preclude either party from obtaining interim relief from the High Court of South Africa pending the resolution of the deadlock or dispute by the PARTIES.

	
	 	 
	
11.8 		
The provisions of this clause:

	
	 	 
	
11.8.1 		
constitute an irrevocable consent by the PARTIES to any proceedings in terms hereof and no party shall be entitled to withdraw there from or claim at any such proceedings that it is not bound by such provisions; and

	
	 	 
	
11.8.2 		
are severable from the rest of this Agreement and shall remain in effect despite the termination of or invalidity of any provision of this Agreement.

	

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12. 		
REGISTRATION

	
	 	 
	
12.1 		
Standards

	
	 	 
	
12.1.1 		
The SERVICE PROVIDER’s system shall cater for the registration of all beneficiaries and procurators as defined by SOCPEN receiving payment (excluding beneficiaries receiving payment at banks and post offices).

	
	 	 
	
12.1.2 		
The SERVICE PROVIDER shall register beneficiaries from computerised lists supplied by the DEPARTMENT through the SOCPEN file. The DEPARTMENT shall have final approval rights on all beneficiaries so registered.

	
	 	 
	
12.1.3 		
The SERVICE PROVIDER shall perform enrolment of biometric and other data for the beneficiaries, including fingerprints (four fingers, two from each hand, for each beneficiary) in accordance with clause 12.2.

	
	 	 
	
12.1.4 		
The SERVICE PROVIDER shall perform live scanning of four fingers, two from each hand. Image files must comply with an acceptable international format.

	
	 	 
	
12.1.5 		
The SERVICE PROVIDER shall utilise enrolment workstations at all Pay Points during registration.

	
	 	 
	
12.1.6 		
Ownership of the registration equipment and systems remains with the SERVICE PROVIDER.

	
	 	 
	
12.1.7 		
The SERVICE PROVIDER shall not use fingerprint or other data belonging to the DEPARTMENT for any other purpose unless agreed to by the DEPARTMENT.

	

	SLA V 0.1 06/05/08 	Page 20 of 49 

	 12.1.8 	 When the system as described in clause 13.1.2 of this
        Agreement is made available for use to the SERVICE PROVIDER, the SERVICE
        PROVIDER shall ensure that only one ID number relates to a set of fingerprints
        by the methods described in paragraph 14.1.2 of this Agreement. 

	 	 
	 12.1.9 	 The SERVICE PROVIDER shall store the identification
        records, to which the DEPARTMENT will have access on request (at no additional
        cost).

	 	 
	 12.1.10 	 All information and data are the DEPARTMENT’s
        property at all times and must be transferred (in a format and process
        mutually agreed upon by the PARTIES) to the DEPARTMENT on expiry of the
        contract.

	 	 
	 12.1.11 	 The SERVICE PROVIDER must with regard to registration
        provide beneficiaries and procurators with smart cards at Pay Points during
        payment at no additional cost.

	 	 
	 12.2 	 Procedures

	 	 
	 12.2.1 	 The SERVICE PROVIDER’s registration workstations
        must have full capacity to take fingerprints and capture data required
        by SOCPEN. Any other data required by the DEPARTMENT can be collected
        as agreed to by the PARTIES. 

	 	 
	 13. 	 CLEAN - UP OF DATABASE

	 	 
	 13.1 	 Standard

	 	 
	 13.1.1 	 The SERVICE PROVIDER shall provide an AFIS component
        as part of the enrolment technology to ensure that any individual, recognised

	SLA V 0.1 06/05/08 	Page 21 of 49 

		
      by means of fingerprints, will have only one identity in
      the pensions system.

	 	 
	13.1.2 	
      The SERVICE PROVIDER’s system shall at all times ensure
      that no duplicate registration exists in the DEPARTMENT’s pension system.
      This shall be achieved by the SERVICE PROVIDER utilising the system being
      developed by Home Affairs (HANIS) through which one to many or many to one
      searches can be performed. These searches must be conducted at the request
      of the DEPARTMENT and under the arrangement agreed to between the
      DEPARTMENT and Home Affairs. The cost of such searches, if any, must be
      for the account of the DEPARTMENT.

	 	 
	13.2 	
      Procedures

	 	 
	13.2.1 	
      The SERVICE PROVIDER shall, upon written instruction from
      the DEPARTMENT, use AFIS biometric identification technology to identify
      duplicates as per 13.1.2 above.

	 	 
	14. 	
      AUTOMATED PAYMENT SYSTEM USING
BIOMETRICS

	 	 
	14.1 	
      Standards

	 	 
	14.1.1 	
      Biometric verification shall be the only method used
      during payment to verify the beneficiaries.

	 	 
	14.1.2 	
      Payment to beneficiaries shall be provided through the
      existing mobile and portable pay stations or similar equipment.

	 	 
	14.1.3 	
      Pay Points shall be specified by the DEPARTMENT and
      registered on SOCPEN. The DEPARTMENT shall allocate pensioners to SOCPEN
      Pay Points. The creation or change of any Pay Points shall only be
      considered after full consultation between the
affected

	SLA V 0.1 06/05/08 	Page 22 of 49 

		
      community, the SERVICE PROVIDER and the DEPARTMENT, which
      retains the right of final approval.

	 	 
	14.1.4 	
      The PARTIES shall agree upon the payment dates and times
      six (6) months in advance. Adjustments due to unforeseen reasons can be
      agreed to by the PARTIES.

	 	 
	14.1.5 	
      The SERVICE PROVIDER shall be able to pay the beneficiary
      at Pay Points within his / her district on or subsequent to the official
      payment date having elapsed but prior to the official SOCPEN cut-off date
      for that month where possible. Where possible, beneficiaries shall be paid
      at Participating Merchants prior to the official SOCPEN cut-off
    date.

	 	 
	14.1.6 	
      The SERVICE PROVIDER shall not override the payment
      system except in cases as dealt with under clause 14.2.2.

	 	 
	14.1.7 	
      The SERVICE PROVIDER shall only effect retrospective
      payments exceeding Four Thousand Rands (R4,000.00) subject to written
      approval of the designated DEPARTMENT officer. (SERVICE PROVIDER to print
      exceptions report of all these payments upon request by the
      DEPARTMENT).

	 	 
	14.2 	
      Procedures

	 	 
	14.2.1 	
      The SERVICE PROVIDER shall pay all beneficiaries who can
      be biometrically verified.

	 	 
	14.2.2 	
      In addition to 14.2.1 the SERVICE PROVIDER shall, where
      false rejection of fingerprints occur, pay the beneficiary on the
      presentation and identification of a valid South African identity document
      subject to written approval and positive identification by the
      DEPARTMENT’s designated official. A copy of this approval to be retained
      by the authorising official.

	SLA V 0.1 06/05/08 	Page 23 of 49 

	14.2.3 	
      On a monthly basis, the Contract Manager of the SERVICE
      PROVIDER shall provide the DEPARTMENT with a list of beneficiaries paid
      manually, the electronic rejected beneficiaries, and the name of the
      DEPARTMENT’S authorising official. The DEPARTMENT shall request the
      information as specified on a monthly basis.

	 	 
	14.2.4 	
      The DEPARTMENT shall provide a minimum of one (1)
      DEPARTMENT official per the SERVICE PROVIDER’s payment team as help desk
      officials to handle DEPARTMENT related queries from
  beneficiaries.

	 	 
	14.2.5 	
      The equipment used for payment must be accessible to
      beneficiaries with disabilities.

	 	 
	14.2.6 	
      Ownership of the automated payment equipment and systems
      remains with the SERVICE PROVIDER.

	 	 
	15. 	
      REGISTRATION OF NEW SOCIAL BENEFICIARIES

	 	 
	15.1 	
      Once the registration process had been completed in a
      district, the SERVICE PROVIDER shall enrol new applicants for social
      benefits on a one-stop-enrolment basis at the venues as listed in Annexure
      A.

	 	 
	15.2 	
      The SERVICE PROVIDER’s registration workstations shall
      have full capacity to take fingerprints and capture data required by
      SOCPEN. Any other data required by the DEPARTMENT can be collected as
      agreed upon by the PARTIES.

	 	 
	15.3 	
      From time to time the Contract Managers of the PARTIES
      shall meet to agree on the amendments on the timetable and venues where
      the SERVICE PROVIDER shall provide workstations for
  registration.

	SLA V 0.1 06/05/08 	Page 24 of 49 

	15.4 	
      Ownership of the registration equipment and systems
      remains with the SERVICE PROVIDER.

	 	 
	16. 	
      PROVISION OF SECURITY SERVICES

	 	 
	16.1 	
      Upon the receipt of and signature for the cash at the
      nominated cash depots of the SERVICE PROVIDER, the SERVICE PROVIDER shall
      be responsible for the provision of adequate security for cash in transit
      and for securing all resources and the beneficiaries and personnel at Pay
      Points.

	 	 
	16.2 	
      The SERVICE PROVIDER shall deploy five (5) guards of B
      & C grade at high-risk Pay Points and five (5) guards of C & D
      grade at lower risk areas as determined by the SERVICE PROVIDER’s managers
      from time to time.

	 	 
	16.3 	
      The SERVICE PROVIDER must where necessary and at its own
      cost, source the required guards from a reputable and SIRA (Security
      Industry Regulatory Authority) accredited security company in the Limpopo
      Province to deliver the guarding service at Pay Point level.

	 	 
	16.4 	
      Where a Pay Point is fenced, the SERVICE PROVIDER shall
      ensure that non-beneficiaries / vendors are restricted to at least ten
      (10) metres outside the fence.

	 	 
	16.5 	
      In situations where the Pay Point is not fenced, the
      SERVICE PROVIDER shall ensure that non-beneficiaries / vendors are
      restricted to at least twenty (20) metres away from the
  workstation.

	 	 
	16.6 	
      The SERVICE PROVIDER shall ensure that the requirement in
      respect of restricted access to the Pay Point by vendors, hawkers, etc. as
      stated above is adhered to.

	SLA V 0.1 06/05/08 	Page 25 of 49 

	
16.7 		
The DEPARTMENT must co-ordinate with South African Police Services and Traffic department to patrol and be visible within the area where payment is taking place.

	
	 	 
	
17. 		
ADMINSTRATION AND SUPPORT SERVICES

	
	 	 
	
17.1 		
Transfer of Data and/or Information

	
	 	 
	
17.1.1 		
Standards

	
	 	 
	
17.1.1.1 		
The SERVICE PROVIDER shall operate the automated cash payment system from their existing central facility.

	
	 	 
	
17.1.1.2 		
The central facility must function as the only electronic gateway between the National Department of Social Development and the SERVICE PROVIDER. This facility shall be protected by twenty four (24) hour security and shall have
access control and shall have twenty four (24) hour standby power supply.

	
	 	 
	
17.1.1.3 		
The SERVICE PROVIDER shall ensure electronic interfaces between its systems with the National Department of Social Development social security system (currently SOCPEN).

	
	 	 
	
17.1.1.4 		
Procedures shall ensure adequate control and shall conform to the Regulations as of the Public Finance Management Act as amended and to good management principles

	
	 	 
	
17.1.1.5 		
The SERVICE PROVIDER shall reconcile payment information on a daily basis indicating the total number of people paid per grant type, pay point, sub-district, and district on a daily basis. .

	

	SLA V 0.1 06/05/08 	Page 26 of 49 

	17.1.1.6 	
      The SERVICE PROVIDER shall make reconciled payment
      information electronically accessible to the DEPARTMENT as part of this
      service level agreement at no additional cost.

	 	 
	17.1.1.7 	
      Reconciled information shall be transferred back to the
      National Department of Social Development computer system on dates
      specified in the SOCPEN cut-off schedule.

	 	 
	17.1.1.8 	
      The SERVICE PROVIDER shall ensure timeous transfer and
      recovery of reconciliation data for its own purpose and so that reports
      can be rendered to the DEPARTMENT at most two days after the end of the
      payment period.

	 	 
	17.1.1.9 	
      Format of the relevant data for daily reconciliation
      reports compiled by the SERVICE PROVIDER shall at least cover the
      following categories for each region;

	 	Ø	By beneficiary 
	 	Ø 	By Pay Point 
	 	  	Ø	Any other issues that may be specified by the
      DEPARTMENT from time to time 

For the above categories the following must be disclosed: 

	 	Ø 	Amount to be paid 
	 	Ø 	Amount paid 
	 	Ø 	Difference, unclaimed cash 
	 	Ø 	Amount returned 
		Ø 	Any other information that may be required by
      the DEPARTMENT in future 

	17.1.1.10 	
      The DEPARTMENT may negotiate further report analysis in
      writing and these must be provided at no additional cost and shall form
      part of the service level agreement.

	SLA V 0.1 06/05/08 	Page 27 of 49 

	17.1.2 	
      Procedures

	 	 
	17.1.2.1 	
      Transfer of beneficiary’s data (from the DEPARTMENT via
      SOCPEN to the SERVICE PROVIDER) and database
updates:

	 	a) 	
      The DEPARTMENT shall provide the SERVICE PROVIDER with
      full details of all social grant beneficiaries and procurators within the
      time limits as per the SOCPEN cut-off schedule. The details required shall
      be in terms of the agreed linkage specification format.

	 	 	 
	 	b) 	
      The DEPARTMENT shall be responsible for correcting errors
      or inaccuracies that, may occur on the electronic records supplied to the
      SERVICE PROVIDER.

	 	 	 
	 	c) 	
      The PARTIES agree to implement a system that, shall cater
      for “emergency” stop payments at the Pay Point where the DEPARTMENT could
      not meet the 2 (two) days cut-off to prevent a procurator from withdrawing
      the social grant of a deceased beneficiary. This shall always be an
      instruction from the DEPARTMENT to the SERVICE PROVIDER in
  writing.

	 	 	 
	 	d) 	
      The SERVICE PROVIDER shall provide the DEPARTMENT with a
      written confirmation about payments stopped within 24 hours after a
      payment has been stopped.

	 	 	 
	 	e) 	
      The DEPARTMENT shall ensure that all information supplied
      by it and all identification is unambiguous and in such a form as can be
      utilised by the SERVICE PROVIDER and shall comply with the specifications
      for such information required by the SERVICE PROVIDER from time to
      time.

	SLA V 0.1 06/05/08 	Page 28 of 49 

	 	f) 	
      The DEPARTMENT shall re-supply or furnish to the SERVICE
      PROVIDER correct information or an update and corrected electronic record
      of any incorrect information or electronic record which the SERVICE
      PROVIDER has rejected because such information or electronic record was
      not materially accurate or contained errors or
  inaccuracies.

	17.1.2.2 	
      Transfer of beneficiary data and/or information (from the
      SERVICE PROVIDER to the DEPARTMENT and SOCPEN) and database
  updates.

	 	a) 	
      The SERVICE PROVIDER shall transfer all relevant
      information received from the DEPARTMENT and captured electronically
      during the registration of beneficiaries and procurators to the National
      Department of Social Development’s central system within the time limits
      as per the SOCPEN cut-off schedule.

	 	 	 
	 	b) 	
      The SERVICE PROVIDER shall issue a certificate to the
      DEPARTMENT once a month certifying that the amounts provided for the
      payment of grants by the DEPARTMENT have been transferred in full as per
      clause 3.6 of this Agreement to the accounts of the beneficiaries or
      returned to the DEPARTMENT as the case may be.

	 	 	 
	 	c) 	
      The SERVICE PROVIDER shall, on completion of the
      processing required for the purposes of this Agreement, confirm to the
      DEPARTMENT in writing by direct computer link or fax or delivery by no
      later than 10.00 am on the last business day of the month preceding the
      month during which payments must be made to beneficiaries that the
      accounts of all beneficiaries as per SOCPEN payment list have been
      activated and processed and must reflect the appropriate credit at the
      start of business on the first (1st ) business of the month in
      which the credit amount is due for payment.

	SLA V 0.1 06/05/08 	Page 29 of 49 

	 	d) 	
      At the request of the DEPARTMENT the SERVICE PROVIDER
      shall make available to the Auditor General and the DEPARTMENT an audited
      report of all grants paid..

	18. 	 TRUST ACCOUNT

	 	 
	18.1 	 The DEPARTMENT shall transfer funds to the DEPARTMENT’s
        “Pension Trust Account” held at the DEPARTMENT’s approved
        bankers from time to time. The interest earned on the un-utilised balance
        of funds in this account shall accrue to the DEPARTMENT. Any bank charges
        and fees incurred on this account shall be for the account of the DEPARTMENT.

	 	 
	18.2 	 The SERVICE PROVIDER may draw on the “Pension Trust
        Account” on daily basis for the amounts required according to the
        cash draw down schedules for each pension payment cycle. The cash draw
        down schedule should be compiled by the SERVICE PROVIDER according to
        the SOCPEN Pay File for the month preceeding the current month and signed
        off by the DEPARTMENT and the SERVICE PROVIDER not later than five working
        days prior to the commencement of the pension payment cycle.

	 	 
	18.3 	 The DEPARTMENT shall make funds available to the SERVICE
        PROVIDER at least forty eight (48) hours (or as mutually agreed between
        the DEPARTMENT and the SERVICE PROVIDER) prior to payment. The SERVICE
        PROVIDER shall ensure that all unclaimed amounts for each day shall be
        re-deposited within ninety six (96) hours after delivery to the SERVICE
        PROVIDER.

	 	 
	18.4 	 For beneficiaries utilising the Merchant Acquiring payment
        solution, the SERVICE PROVIDER shall provide the DEPARTMENT with a payment
        schedule for the month preceeding the current month not

	SLA V 0.1 06/05/08 	Page 30 of 49 

		 later than five (5) working days prior to the commencement
        of the pension payment cycle. The DEPARTMENT shall make two (2) electronic
        transfers to the SERVICE PROVIDER’s nominated bank account for the
        monies required according to the payment schedule. The first transfer
        shall be made no later than seventy two hours (72) prior to the commencement
        of the pension payment cycle. The first transfer shall include the first
        two weeks’ monies required according to the payment schedule. The
        second transfer shall be made no later than tenth (10th ) pay
        day of the pension payment cycle for the remaining balance of the monies
        required according to the payment schedule.

	 	 
	 18.5 	 Liability of trust funds shall pass to the SERVICE
        PROVIDER when the funds are delivered to and signed for by the SERVICE
        PROVIDER at its designated cash depots or when the funds are electronically
        transferred into the SERVICE PROVIDER’s nominated bank account.

	 	 
	 19. 	 DEATH BENEFITS

	 	 
	 19.1 	 Standards

	 	 
	 19.1.1 	 A claimant shall put a claim at a sub-district office
        in respect of the outstanding payment for the deceased. The claimant shall
        surrender the smart card previously issued to the deceased pensioner to
        the DEPARTMENT.

	 	 
	 19.1.2 	 The DEPARTMENT shall capture the relevant data on
        the SOCPEN system and SOCPEN shall be requested to include payment instructions
        in the SOCPEN Pay File.

	SLA V 0.1 06/05/08 	Page 31 of 49 

	19.1.3 	
      The social security officer will record the claim and
      issue a receipt as a proof for the claim.

	 	 
	19.1.4 	
      The SERVICE PROVIDER shall pay the claimant upon
      producing an official identification document

	 	 
	19.1.5 	
      The SERVICE PROVIDER, during payment, shall take the
      electronic fingerprints of the claimant for record
  purposes.

		Ø 	
      The SERVICE PROVIDER shall provide payment reconciliation
        report for unclaimed benefits on a monthly basis as part of the monthly
        reconciliations submitted to the DEPARTMENT in terms of this Agreement.
      

	20. 	
      RECONCILIATION

The SERVICE PROVIDER shall reconcile to SOCPEN monthly
according to SOCPEN reconciliation cut off dates. 

	21. 	
      THE SERVICE PROVIDER’s BLACK ECONOMIC EMPOWERMENT
      COMMITMENT

In terms of this Agreement the SERVICE PROVIDER undertakes
that: 

	21.1 	
      Where possible and economically feasible, it shall
      procure the following assets and services when and if necessary from
      within the province and preferably from previously disadvantaged
      individual owned service provider:

	 	Ø 	Vehicles 
	 	Ø 	Stationery 
	 	Ø 	Office Furniture 

	SLA V 0.1 06/05/08 	Page 32 of 49 

	 	Ø 	Offices / Premises 
	 	Ø 	Recruitment 
	 	Ø 	Construction 
	 	Ø 	Fuel and Maintenance 
	 	Ø 	Security Services (armed guards)

	22. 	
      COMMUNITY INVOLVEMENT/SOCIAL
  RESPONSIBILITY

	 	 	 
		a) 	
      The SERVICE PROVIDER shall contribute at least an amount
      of R 675 000.00 (six hundred and seventy five thousand rands) over a
      period of nine (9) months to the community development fund.

	 	 	 
		b) 	
      The community development fund shall be administered and
      managed jointly by the SERVICE PROVIDER and the DEPARTMENT.

	 	 	 
		c) 	
      The SERVICE PROVIDER shall undertake to empower local
      pensioner committees in the Province.

	 	 	 
	23. 	
      HUMAN RESOURCES DEVELOPMENT

	 	 	 
		a) 	
      The SERVICE PROVIDER hereby confirms that it has a Human
      Resource Development strategy to support the objective of this
      Agreement.

	 	 	 
		b) 	
      The SERVICE PROVIDER shall as far as possible recruit
      local people from the Limpopo Province.

	 	 	 
		c) 	
      The SERVICE PROVIDER shall adhere to all relevant
      statutes including but not limited to:

	SLA V 0.1 06/05/08 	Page 33 of 49 

	 	i. 	
      Employment Equity Act

	 	 	 
	 	ii. 	
      Basic Conditions of employment Act

	 	 	 
	 	iii. 	
      Skills Development Act, etc.

	24. 	 CUSTOMER SERVICE

	 	 	 
		a) 	 The SERVICE PROVIDER shall serve and treat beneficiaries
        and procurators with dignity, appropriate courtesy and the humanity they
        deserve.

	 	 	 
		b) 	 The SERVICE PROVIDER shall avail its frontline staff
        to be oriented and trained in Batho Pele and customer care by the DEPARTMENT.
        The cost of the training in the form of venues, stationery, facilities
        and meals must be pre-approved by the SERVICE PROVIDER and shall be for
        the SERVICE PROVIDER’s account.

	 	 	 
		c) 	 The DEPARTMENT shall provide a help desk facility at
        each Pay Point. The help desk shall be staffed by DEPARTMENTal officials
        who will attend to beneficiaries’ problems which are either DEPARTMENTal
        or the SERVICE PROVIDER related.

	 	 	 
		d) 	 The DEPARTMENT shall provide a toll free number as a
        communication and query line between the SERVICE PROVIDER and the beneficiaries.

	 	 	 
	25. 	 INSURANCE

The SERVICE PROVIDER must provide acceptable proof of insurance
  cover, including Public Liability, upon the signature date of this Agreement.
  Any change in insurance cover must be notified to the DEPARTMENT within 24 hours
  of the change. 

	SLA V 0.1 06/05/08 	Page 34 of 49 

	26. 	 TRANSFER OF RISK

	 	 	 
		a) 	 The risk in any monies held by the SERVICE PROVIDER
        in terms of this Agreement shall pass to the SERVICE PROVIDER when such
        monies are delivered to and signed for by the SERVICE PROVIDER at its
        designated cash depots or when the funds are electronically transferred
        into the SERVICE PROVIDER’s nominated bank account and the risk shall
        remain with the SERVICE PROVIDER until such time as the monies have been
        paid to the beneficiary or procurator or have been repaid to the Trust
        account.

	 	 	 
		b) 	 All monies not paid out shall be deposited into the
        Trust Account within ninety six (96) hours from the stipulated payment
        date.

	 	 	 
	27.1 	 SUPPORT SERVICES AND BACK-UP

	 	 	 
	27.1.1 	 The SERVICE PROVIDER agrees to provide proper
        and acceptable support services both in respect of equipment maintenance
        and back- up in terms of vehicles, personnel, computer equipment, extra
        cash, and extra security.

	 	 	 
	27.1.2 	 The SERVICE PROVIDER shall provide all reasonable
        technical and development skills required for the project.

	 	 	 
	27.1.3 	 The SERVICE PROVIDER shall develop the system
        further and / or implement new procedures, within reasonable time frames
        as to cater for all reasonable changes which may be required in future
        provided that details are negotiated and agreed to by the PARTIES in writing.

	SLA V 0.1 06/05/08 	Page 35 of 49 

	 27.2 	 DISASTER RECOVERY PLANS

	 	 	 
		 a) 	 The SERVICE PROVIDER shall provide and implement disaster
        recovery plans as far as the pensions payment system is concerned. This
        will include incidents such as equipment failure, fire, storm, explosion,
        labour disputes, accidents, lack or failure of transport facilities, cash
        heist, epidemic, cyclone, floods, droughts, lack or failure of labour,
        utilities, or supplies, blockage, sanctions.

	 	 	 
		 b) 	 The SERVICE PROVIDER shall ensure availability of
        enough vehicles to undertake the pension payment task unhindered.

	 	 	 
	 28. 	 INVESTIGATIONS AND QUERIES

	 	 	 
	 28.1 	 All queries pertaining to beneficiaries
        that take place at Pay Points, shall be immediately dealt with by the
        help desk officer in conjunction with the SERVICE PROVIDER’s team
        leader where necessary. Any unresolved issues shall be reduced in writing
        by the help desk officer.

	 	 	 
	 28.2 	 Within the context of the above paragraph,
        any complaints affecting the pension committee member shall be directed
        to the DEPARTMENTal help desk officer. Any complaint affecting the DEPARTMENTal
        help desk officer shall be directed to the DEPARTMENT by the SERVICE PROVIDER.

	 	 	 
	 28.3 	 All queries of any nature relating to provision
        of grants in terms of this Agreement, whether such queries are made by
        beneficiaries. Procurators or various DEPARTMENTs of the Government shall
        be made in writing to the SERVICE PROVIDER via the DEPARTMENT. The SERVICE
        PROVIDER shall be obliged to attend to any such queries and give feedback
        to the DEPARTMENT.at no extra cost to the DEPARTMENT. 

	SLA V 0.1 06/05/08 	Page 36 of 49 

	28.4 	 All queries made by and all information required by
        the SERVICE PROVIDER in respect of the implementation of this Agreement
        shall be made to or directed to the Head of the DEPARTMENT.

	 	 
	28.5 	 Should it be necessary for the DEPARTMENT to intervene
        on behalf of a beneficiary and / or Procurator who alleges that he / she
        has been defrauded in the payment of his / her social grant or that his
        / her grant has been misappropriated in any way, the SERVICE PROVIDER
        shall at all times co-operate with the DEPARTMENT and provide all necessary
        information required by the DEPARTMENT for its investigation into the
        matter.

	 	 
	29. 	 CONSIDERATION AND PAYMENT OF SERVICE FEES

	 	 
	29.1 	 The service fees payable for the Services as required
        in terms of this Agreement are set out in Annexure C.

	 	 
	29.2 	 The SERVICE PROVIDER accepts that the price adjustments
        will only become effective from 1 January 2007, if the Completion date
        is later than 31 December 2006. The following formula will be applied
        to calculate the price adjustment:

		Ø 	
      Consumer Price Index (CPIX) applicable to Metropolitan
      and other urban areas will be according to Statistical release PO141.1 by
      Statistics South Africa. 

	 	Ø 	
      The base CPIX index shall be the index for October 2005.
      

	 	Ø 	
      Formula: 

	TN = [ ( A-C ) x ( D/B ) ] + ( C-A ) 
	  	  
	TN = 	The new price to be calculated 
	A = 	The price as per Annexure C 
	B = 	The base month index being October 2005 (PO
      141.1) 

  

  	SLA V 0.1 06/05/08 	Page 37 of 49 

	C = 	Fixed element of the price being 15 % of the
      price as per Annexure C 
	D = 	The new index for October from October 2006
      onwards 

	29.3 	 The service fee invoices shall be presented to the DEPARTMENT
        together with all the payment reconciliation with the SOCPEN report by
        the second working day after each monthly payment cycle.

	 	 
	29.4 	 The DEPARTMENT shall verify and pay the said service
        fee invoices not later than five (5) business days after receipt of the
        invoice by the DEPARTMENT. Any issues preventing the DEPARTMENT from certifying
        the service charges as due and payable must be resolved within the same
        period.

	 	 
	29.5 	 All payments by the DEPARTMENT to the SERVICE PROVIDER
        in terms of this Agreement shall be made without deductions or set off,
        of any kind and shall be paid free of exchange, bank costs and other changes.
        The principle of set-off shall apply exclusively in the case of previous
        over-payments of any kind as well as where the SERVICE PROVIDER has failed
        to refund any amounts not claimed by beneficiaries.

	 	 
	29.6 	 All payments due by the DEPARTMENT to the SERVICE PROVIDER
        in terms of this Agreement shall be made electronically into the SERVICE
        PROVIDER’s bank account as certified by the SERVICE PROVIDER’s
        Executive Director duly authorised by the Board.

	 	 
	30. 	 PENALTIES

Interest at prime rate shall be payable by either party for each
  day in default in respect of service fees or unclaimed benefits refunded outside
  the specified time period. 

	SLA V 0.1 06/05/08 	Page 38 of 49 

	
31. 		
VARIATION OF INSTRUCTIONS BY THE DEPARTMENT

	
	 	 
	
31.1 		
The DEPARTMENT may vary any information given to the SERVICE PROVIDER and may revoke any instruction to pay benefits to any beneficiary as it deems necessary from time to time.

	
	 	 
	
31.2 		
The SERVICE PROVIDER shall only be obliged to implement any variation or revoke if it has received notice in writing of such variation or revoke. The SERVICE PROVIDER shall only be obliged to implement any variation or revoke
within two (2) business days from the date upon which such variation or revoke has been received by the SERVICE PROVIDER and that such variation or revoke is recorded.

	
	 	 
	
32. 		
PROCURATORS

	
	 	 
	
32.1 		
The DEPARTMENT must approve the nomination of a Procurator for any beneficiary who is unable to personally collect his / her grant in terms of this Agreement, provided that such nominated Procurator is not an employee of the
SERVICE PROVIDER or Social Security Chief Directorate (unless authorised by the Head of DEPARTMENT).

	
	 	 
	
32.2 		
Should the DEPARTMENT approve the appointment of a Procurator such Procurator shall only be registered if accompanied by the beneficiary.

	
	 	 
	
32.3 		
The SERVICE PROVIDER shall not register and process payment to any Procurator who is not registered with SOCPEN by the DEPARTMENT. If the beneficiary so wishes to personally collect the grant he / she should be allowed to do
so.

	

	SLA V 0.1 06/05/08 	Page 39 of 49 

	32.4 	
      Once the Procurator is registered with SOCPEN and by the
      SERVICE PROVIDER the Procurator shall be entitled to withdraw the
      beneficiary’s grant for and on behalf of the beneficiary. Nothing shall
      preclude the beneficiary from also being personally enrolled by the
      SERVICE PROVIDER and if both the beneficiary and the Procurator are so
      enrolled the SERVICE PROVIDER shall be obliged to pay the grant due, from
      time to time, to the beneficiary or whichever one of them first presents
      themselves to withdraw the grant due to the beneficiary at that
    time.

	 	 
	32.5 	
      All obligations of the SERVICE PROVIDER to pay a grant to
      a beneficiary shall be discharged when that beneficiary’s Procurator
      withdraws the grant in accordance with the provisions of this Agreement.
      Neither the beneficiary nor the DEPARTMENT shall have any claim whatsoever
      against the SERVICE PROVIDER in respect of a payment made by the SERVICE
      PROVIDER to a registered Procurator. The SERVICE PROVIDER shall not
      demand that the beneficiary personally receives a grant when a Procurator
      is duly appointed unless authorised by the DEPARTMENT.

	 	 
	32.6 	
      The appointment of a temporary power of attorney in terms
      of Regulation 17(3) and (4) of the Act shall entitle the holder of such
      power of attorney to withdraw the beneficiary’s grant for and on behalf of
      the beneficiary but subject to the following;

	 	 
	32.6.1 	
      The SERVICE PROVIDER shall pay a temporary power of
      attorney holder on the presentation of an official form subject to
      identification by the help desk officials, and

	 	 
	32.6.2 	
      The official form shall be in triplicate with a copy to
      the SERVICE PROVIDER and a copy for the DEPARTMENT’s help desk. Any fraud
      that could be associated to these or any other manual payments shall be
      for the account of the DEPARTMENT.

	SLA V 0.1 06/05/08 	Page 40 of 49 

	33. 	
      MANAGEMENT REPORTS

The SERVICE PROVIDER shall provide the DEPARTMENT with the
following reports as a minimum: 

	33.1 	
      Detailed monthly payments report indicating paid and
      unpaid beneficiaries per district, sub-district, and Pay Point with the
      following fields: identity number, name, grant type and amount

	 	 
	33.2 	
      Large amounts report three days before commencement of
      the pay cycle

	 	 
	33.3 	
      Provincial reconciliation report specifying total number
      paid and unpaid per grant type and the amounts

	 	 
	33.4 	
      Enrolment / registration report specifying beneficiaries
      and Procurators registered per month, district, sub-district, and Pay
      Point and reconciled to SOCPEN database

	 	 
	33.5 	
      Pay Point listing report. The report should have the
      following information:

	 	Ø 	Pay Point number 
	 	Ø	Name of Pay Point 
	 	Ø	Number of beneficiaries 
	 	Ø 	Name of district and sub-district

	34. 	
      SUPPORT

The PARTIES undertake to support each other in terms of rendering
  service during the subsistence of this Agreement. 

	SLA V 0.1 06/05/08 	Page 41 of 49 

	35. 	
      COPYRIGHT AND PROPRIETARY RIGHTS

	 	 
	35.1 	
      The copyright and all proprietary rights in and relating
      to the Biometric Identification and Verification Software and Procedures
      used by the SERVICE PROVIDER in terms of this Agreement shall remain the
      property of the SERVICE PROVIDER but will be deposited with a mutually
      acceptable independent party according to the Escrow principles for the
      benefit of the DEPARTMENT. A copy of the Biometric Identification and
      Verification Software and Procedures that is used to verify a beneficiary
      or a Procurator shall be made available to the DEPARTMENT at the end of
      the contract, in the state that it will be in at that time. All changes
      the DEPARTMENT requires to the Biometric Identification and Verification
      Software and Procedures must be effected, if possible, before the next
      payment cycle and the DEPARTMENT shall have the right to audit any changes
      made.

	 	 
	35.2 	
      In case there is a requirement from the SERVICE PROVIDER
      to amend the Biometric Identification and Verification Software and
      Procedures without being requested by the DEPARTMENT, the SERVICE PROVIDER
      shall inform the DEPARTMENT of such changes and update the Escrow
      depository accordingly in writing. These changes shall form part of the
      monthly management reporting.

	 	 
	35.3 	
      All data collected during the contract period, associated
      with the required services, shall remain the property of the
      DEPARTMENT.

	 	 
	35.4 	
      The SERVICE PROVIDER shall ensure that the DEPARTMENT has
      access and is able to utilise data even after the termination of the
      contract.

	 	 
	35.5 	
      If, during the term of this Agreement and as a result of
      the provision of the Services provided in terms of this Agreement, the
      PARTIES jointly develop any computer software, operational system or other
      intellectual property, then the copyright and any other
  proprietary

	SLA V 0.1 06/05/08 	Page 42 of 49 

		
rights to such property must vest in the SERVICE PROVIDER and should be regarded as part of systems maintenance and should be undertaken at no cost to the DEPARTMENT.

	
	 	 
	
35.6 		
Should the SERVICE PROVIDER wish to use the intellectual property, if any, which vests in the DEPARTMENT otherwise than for the Services undertaken by the SERVICE PROVIDER in terms of this Agreement, or grant the use of such
property to a third party then the Service Provider must only do so with the written consent of the DEPARTMENT and upon the terms and conditions acceptable to the DEPARTMENT.

	
	 	 
	
36. 		
AUDITING

	
	 	 
	
36.1 		
The SERVICE PROVIDER shall arrange for regular audits by both internal and external auditors. The DEPARTMENT shal be provided with the opportunity to request, within reason, specific issues to be audited and shall have access to
the audit reports.

	
	 	 
	
36.2 		
The SERVICE PROVIDER shall comply with the Companies Act and the South African Generally Accepted Accounting Standards.

	
	 	 
	
37. 		
PARTIES NOT AFFECTED BY WAIVER OF BREACHES ETC.

	

Any waiver whether express, tacit or implied by either party of any term or condition of this Agreement shall not be binding on the other party unless it is reduced to writing and signed by both PARTIES. 

	
38. 		
VARIATIONS

	

	SLA V 0.1 06/05/08 	Page 43 of 49 

No variations, modification or waiver of any provision of this Agreement, or consent to any departure therefrom, shall in any event be of any force or effect unless confirmed in writing and signed by the PARTIES; and then such variation,
modification, waiver of consent shall be effective only in the specific instance and for the purpose and to the extent for which made or given. No addition to, variation or consensual cancellation shall be of any force or effect unless in writing
and signed by or on behalf of the PARTIES. 

	
39. 		
GENERAL PROVISIONS

	
	 	 
	
39.1 		
All actions in the implementation and performance of this Agreement will conform with good management principles and good co-operative governance.

	
	 	 
	
39.2 		
This Agreement constitutes the sole record of this Agreement between the PARTIES. No party must be bound by any express or implied term, representations, warranty, promises or the like not recorded herein.

	
	 	 
	
39.3 		
No indulgence which either party may grant the other party shall constitute a waiver of any rights of the grantor who shall not hereby be precluded from exercising any rights against the grantee which may have arisen in the past
or which may arise in the future.

	
	 	 
	
40. 		
SECRECY AND INFORMATION

	

Either party shall cause its directors, employees, agents and servants to hold in confidence all information received from the other party in respect of all information except as it – 

	
40.1 		
Was known to the first party or the public generally prior to the date it was received from the other party; or

	

	SLA V 0.1 06/05/08 	Page 44 of 49 

	
40.2 		
Becomes known to the public generally subsequent to the date it was received from the other party through no act or failure to act on the part of the first party; or

	
	 	 
	
40.3 		
Is received by the first party from an independent third party who did not receive the information directly or indirectly from the other party; or

	
	 	 
	
40.4 		
Is the subject of a request from any statutory authority or court order; or

	
	 	 
	
40.5 		
Is determined to the contrary by the Promotion of Access to Information Act (Act 2 of 2000).

	
	 	 
	
40.6 		
The SERVICE PROVIDER shall avail for vetting by the DEPARTMENT any of its directors or employees or agents whom the DEPARTMENT may deem it necessary.

	

At the expiry or termination of this Agreement, the SERVICE PROVIDER shall cause all information in whatever form which is at its disposal and which is related to the provision of Services in terms of this Agreement, to be transferred to the
DEPARTMENT. 

	
41. 		
COMMUNICATION

	
	 	 
	
41.1 		
The DEPARTMENT retains ultimate responsibility for communicating with the public, including the media, on all matters pertaining to the disbursement of grants in the province

	

	
41.2 		
The SERVICE PROVIDER shall communicate with the DEPARTMENT through the following channels:

	

	SLA V 0.1 06/05/08 	Page 45 of 49 

	41.2.1 	
      At district level through the district officer;

	 	 
	41.2.2 	
      At provincial level through the Contract
  Manager;

	 	 
	41.2.3 	
      Any communication between the SERVICE PROVIDER and the
      public (beneficiaries) shall be done in agreement with the
    DEPARTMENT;

	 	 
	41.2.4 	
      The SERVICE PROVIDER shall under no circumstances give or
      purport or imply to be giving information to the public on behalf of the
      DEPARTMENT;

	 	 
	41.2.5 	
      The SERVICE PROVIDER shall prepare six (6) months payout
      programmes in consultation with the DEPARTMENT, three (3) months before
      the commencement of the six (6) months period, and the DEPARTMENT shall
      have the final ratification authority;

	 	 
	41.2.6 	
      The SERVICE PROVIDER shall come up with a communication
      strategy to inform beneficiaries about the pay-out programmes three (3)
      months in advance;

	 	 
	41.2.7 	
      The DEPARTMENT shall be responsible for publishing and
      disseminating information concerning the Pay Days and Pay Times for each
      Pay Point and must use its best endeavours to notify beneficiaries of any
      changes thereto.

	 	 
	42. 	
      VIS MAIOR OR SUPERVENING IMPOSSIBILITY

	 	 
	42.1 	
      To the extent that, and for so long as either of the
      PARTIES (hereinafter referred to as ”the affected party”) are rendered
      unable wholly or in part, to carry out any of its obligations under this
      Agreement, by reason of any contingency beyond its reasonable control,
      then subject to this clause the affected party shall be released from the
      relevant obligation and shall incur no liability therefore during the
      continuance of the said contingency. Those obligations not affected by the
      said contingency shall remain in force. So far as the fault of either
      party is not the cause thereof, such contingency may be deemed to include,
      but shall not be limited to natural fire, fire, storm, explosion,
      accidents, earthquake, earth

	SLA V 0.1 06/05/08 	Page 46 of 49 

		
tremor, epidemic, cyclone, volcano, floods, droughts, Acts of God, blockage, sanctions, civil war, subsequent legislation making performance illegal.

	
	 	 
	
42.2 		
Should such contingency arise, the affected party must as soon as reasonably possible notify and meet the other party to determine the estimated duration and extent of the disturbing circumstances with sufficient particulars to
enable the PARTIES to assess the possibility of obtaining performance by another means not affected by the event of the vis maior or supervening impossibility. The PARTIES shall use its best efforts to remove the disturbance with the least possible
delay so that their obligations can again be fulfilled as soon as reasonably possible in manner provided for in this Agreement.

	
	 	 
	
42.3 		
Should the vis maior or supervening impossibility last more than thirty (30) days from the date of receipt of notification by the other party, that other party shall be entitled to terminate this Agreement by giving not less than
thirty (30) days written notice to the affected party. The DEPARTMENT shall be entitled to use the services of other parties during such period. It is agreed that where the vis maior or supervening impossibility affects the resources and service
needs of the DEPARTMENT in such a way that a reduction in service is not the fault of the SERVICE PROVIDER, the DEPARTMENT agrees to pay the SERVICE PROVIDER monthly fees/service levy for the reduced Services until re-established, on the basis of
the average of the previous three (3) months’ fees/service levy.

	
	 	 
	
43. 		
CESSION

	

 The SERVICE PROVIDER may with the prior written consent of
  the DEPARTMENT transfer or assign its rights and obligations under this Agreement
  with the prior written consent of the DEPARTMENT. The SERVICE PROVIDER will
  notify the DEPARTMENT as soon as it is legally 

	SLA V 0.1 06/05/08 	Page 47 of 49 

aware or as soon as restraints of confidentiality allow, of any
proposed change in its shareholding or that of any subsidiary in which it has a
controlling interest and to which the contract has been ceded.

	44. 	
      DOMICILIA

The PARTIES choose domicilium citandi et executandi for the
purpose of this Agreement as follows: 

The DEPARTMENT at: 

Health and Social Development Building, 18 College Street,
Polokwane. 

The SERVICE PROVIDER at: 
19 A Schoeman Street, Polokwane

Either party must be entitled to change the domicilium citandi
et excutandi chosen by it giving to the other party thirty (30) days’ notice of
such change of address. Provided that this new address is not a post office or
post restante. 

Any notice given and any payment made by either party to the
other (“the addressee”) that: 

	
  is delivered by hand during normal business hours of the addressee at the
  addressee’s domicilium for the time being must be presumed, until the contrary
  is proved by the addressee, to have been received by the addressee at the time
  of delivery. 

  
	
  if posted by prepaid registered post to the addressee at the addressee’s
  domicilium for the time being must be presumed, until the contrary is proved
  by the addressee, to have been received by the addressee on the seventh day
  after the date of posting. 

	SLA V 0.1 06/05/08 	Page 48 of 49 

THUS DONE AND SIGNED AT POLOKWANE ON

THIS 31st DAY OF March 2006 

 

 

	/s/ Mr. Moffat Mogane 	...31/3/2006.... 
	MR. MOFFAT MOGANE 	DATE 
	(FOR THE DEPARTMENT) 	  
	  	  
	  	  
	  	  
	WITNESS :......................... 	  
	  	  
	  	  
	  	  
	/s/ Dr. Serge Belamant...... 	...31/03/2006.... 
	DR. SERGE BELAMANT 	DATE 
	(FOR THE SERVICE PROVIDER) 	  
	  	  
	  	  
	  	  
	WITNESS :......................... 	  

	SLA V 0.1 06/05/08 	Page 49 of 49Exhibit 10.1

    
      

    

    Exhibit
      10.1

    

    SUPPLY
      AGREEMENT

    

    Dated:
      April 26, 2006

     

    
      	 BETWEEN:	 	 
	 	 	 
	
               (1)

            	

            	
              Digital
                Angel Corporation 490 Villaume Avenue, South St. Paul, MN 55075-2443
                USA
                (hereinafter called DAC)

            
	 	 	 
	
               (2)

            	  	
              Raytheon
                Microelectronics España,
                S.A.
                Parque Tecnológico
                de
                Andalucía,
                Avda.
                Juan Lopez de Peñalver,
                12
                Málaga.
                (hereinafter called RME)

            
	 	 	 
	
              WHEREAS:

            	 	RME and DAC are parties
              to a
              Supply Agreement dated June 19, 2003 which expires on June 30, 2006
              (the
              “2003 Agreement”), and the parties want to negotiate a new agreement that
              reflects the changes to the business since the execution of the 2003
              Agreement; and
	 	 	 
	
              WHEREAS:

            	 	The parties desire to assure
              that
              the sale of the Products pursuant to this Agreement includes the right
              for
              DAC and the subsequent purchasers and users of the Products to use
              for the
              intended purpose(s) Intellectual Property that may be owned by RME
              or its
              Affiliates that relates exclusively to the design, manufacture or
              distribution of the Products.

    

     

    

     IT
      IS AGREED:

    

    
      	 	
              1.

            	
              Definitions

            

    

     

    
      	 	
              1.1

            	
              “Affiliate”
                means any person, partnership, joint venture, corporation or other
                form of
                enterprise, domestic or foreign, including but not limited to
                subsidiaries, that directly or indirectly, control, are controlled
                by, or
                are under common control with a
                party.

            

    

     

    
      
        	 	
                1.2

              	
                “Confidential
                  Information”
                  means nonpublic information that RME or DAC (“Disclosing Party”)
                  designates as being confidential at the time of disclosure, by
                  suitable
                  legend to the party that receives such information (“Receiving Party”)
                  that has or could have commercial value in the business or prospective
                  business of Disclosing Party, or which, under the circumstances
                  surrounding disclosure ought to be treated as confidential by the
                  Receiving Party. “Confidential Information” includes, without limitation,
                  information in tangible or intangible form relating to and/or including
                  released or unreleased Disclosing Party technology, software or
                  hardware
                  products, the marketing or promotion of any Disclosing Party product,
                  Disclosing Party’s business policies, financial information, contracts,
                  records, or practices, and information received from others that
                  Disclosing Party is obligated to treat as confidential. Except
                  as
                  otherwise indicated in this Agreement, the term “Disclosing Party” also
                  includes all Affiliates of the Disclosing Party and, except as
                  otherwise
                  indicated, the term “Receiving Party” also includes all Affiliates of the
                  Receiving Party. An “Affiliate” means any person, partnership, joint
                  venture, corporation or other form of enterprise, domestic or foreign,
                  including but not limited to subsidiaries, that directly or indirectly,
                  control, are controlled by, or are under common control with a
                  party.
                  Confidential Information shall not include any information, however
                  designated, that: (i) is or subsequently becomes publicly available
                  without Receiving Party’s breach of any obligation owed
                  Disclosing

              

      

    

     

    
 

    
      	Page 1 of
              10	
               4/26/2006

            

    

     

    
      
                                                                                                                                                                                                                    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
               

            	
               

            	
              
                Party;
                  (ii) became known to Receiving Party prior to Disclosing Party’s
                  disclosure of such information to Receiving Party pursuant to the
                  terms of
                  this Agreement; (iii) became known to Receiving Party from a source
                  other than Disclosing Party other than by the breach of an obligation
                  of
                  confidentiality owed to Disclosing Party; or (iv) is independently
                  developed by Receiving Party.

              

            

    

     

    
      	 	
              1.3

            	
              “Intellectual
                Property”
                means any and all intellectual property held by a party or any Affiliate
                of a party, including but not limited to patents, licenses of patented
                technology, trademarks, exclusively
                copyrights, trade secrets, and know-how to the extent that such
                Intellectual Property relates to the manufacture or distribution
                of the
                Products.

            

    
      

      	 	
              1.4

            	
              “Products”
                means
                glass encapsulated, syringe-implantable transponders, regardless
                of
                operating frequency for use in animals, human beings and inanimate
                objects
                carried on or worn by animals and human
                beings.

            

    

     

    
      	 	
              1.5

            	
              “Specifications”
                means all documentation related to the operating performance, design,
                manufacture or use of the Products, whether developed by RME or
                DAC.

            

    

             
      

    
      	 	
              2.

            	
              Terms
                and Conditions of Supply

            

    

    

    
      	 	
              2.1

            	
              DAC
                shall purchase products in accordance with the terms set forth in
                Clause 3
                below and
                RME shall manufacture and supply the products, in accordance with
                the
                Specifications in existence at the time of the order release. RME
                shall
                ensure that the materials procured by RME and RME’s manufacturing of the
                Products shall remain competitive with regard to price, quality and
                other
                terms.

            

    

    
      	 	
              2.2

            	
              This
                Agreement shall be effective from April 26, 2006 and except as provided
                by
                clause 17 below, shall continue until June 30th
                2010.

            

    

    
      	 	
              2.3

            	
              Any
                modification to this Agreement shall be made by written agreement
                between
                DAC and RME.

            

    

    
      	 	
              2.4

            	
              RME
                will be DAC’s preferred supplier of the Products for the duration of this
                agreement provided RME’s pricing remains market competitive.
                Notwithstanding the foregoing, DAC reserves the right to purchase
                components for the Products from any supplier/vendor including RME’s
                suppliers/vendors.

            

    

    
      	 	
              2.5

            	
              DAC
                may review and audit the components used by RME and/or its suppliers
                for
                compliance with the terms and conditions of this Agreement. In connection
                with any such audit, DAC shall be provided with copies of any documents
                reasonably requested by DAC.

            

    

    

    
      	 	
              3.

            	
              Orders
                and Forecast

            

    

    

    
      	 	
              3.1

            	
              In
                the last week of each calendar month, DAC shall send RME a 12 month
                non-binding rolling forecast. 

            

    

    
      	 	
              3.2

            	
              DAC
                will place orders covering at least 90 days
                horizon.

            

    

    
      	 	
              3.3

            	
              At
                the time of receiving the rolling forecast, RME will also order long
                lead
                time parts needed to cover the quantity indicated in the forecast
                for the
                fourth month forward +/- 25%.

            

    

    
      	 	
              3.4

            	
              DAC
                is committed to lead times as agreed between the parties and will
                therefore bear responsibility for the long lead materials defined
                in 3.3
                above if not consumed as
                forecasted.

            

    

    
      	 	
              3.5

            	
              RME
                will do its best to manage requested changes in the 90 days horizon
                to
                reflect DAC’s demand changes.

            

    

    

    
      	Page 2 of
              10	
               4/26/2006

            

    

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              4.

            	
              Suppliers

            

    

    

    
      	 	
              4.1

            	
              RME
                and DAC will set a formal vendor approval process with the participation
                of both parties.

            

    

    
      	 	
              4.2

            	
              The
                vendor approval process shall endeavor to establish that DAC
                representatives will have full access to the facilities of RME/DAC
                approved suppliers.

            

    

    

    
      	 	
              5.

            	
              Production

            

    

    

    
      	 	
              5.1

            	
              RME
                shall operate a quality system to the requirements of EN ISO 9001
                or
                agreed equivalent.

            

    

    
      	 	
              5.2

            	
              RME
                shall operate a first in first out policy on all components used
                in the
                Products manufactured for DAC.

            

    

    
      	 	
              5.3

            	
              RME
                shall be responsible for implementing the Specification to manufacture
                the
                Products and ensuring the Products comply with the
                Specification.

            

    

    
      	 	
              5.3.1

            	
              RME
                will strive to improve the yield of all of the assembly processes
                involved
                in the manufacturing of DAC products. Any yield improvement below
                4% will
                be shared equally between RME and
                DAC.

            

    

    

    
      	 	
              6.

            	
              RME
                support

            

    

    

    
      	 	
              6.1

            	
              RME
                will continue supporting DAC prototype build and new product
                introduction.

            

    

    
      	 	
              6.2

            	
              RME
                will continue supporting and collaborating with DAC Engineering on
                a daily
                basis to improve product performance and design and process
                development.

            

    

    
      	 	
              6.3

            	
              A
                project team including at least a program manager, 2 process engineers,
                a
                test engineer, a quality engineer and a supply chain engineer will
                be in
                charge of the whole program.

            

    

    
      	 	
              6.4

            	
              The
                program manager assigned to the project will be in charge of the
                coordination, monitoring and daily activities for the operations
                and in
                dealing with suppliers.

            

    

    
      	 	
              6.5

            	
              RME
                will provide DAC with bills of materials and general process flow
                information for DAC internal use and to be submitted to DAC Head
                Office at
                St Paul MN when required. These documents and its content are covered
                by
                the Confidentiality requirements in article 18 as well as
                signed off RME-DAC non-disclosure agreement and cannot be transferred
                to
                others.

            

    

    
      	 	
              6.6

            	
              RME
                will provide a customer advocate in order to communicate DAC’s desires to
                the appropriate RME personnel, as
                required.

            

    

    

    
      	 	
              7.

            	
              Engineering
                Change Orders “ECOs”

            

    

    

    
      	 	
              7.1

            	
              RME
                will not make any changes to the Specifications without DAC written
                authorization. 

            

    

    
      	 	
              7.2

            	
              If
                DAC issues a written Engineering Change Order (“ECO”) to the
                Specifications, RME will apply such ECO to the relevant Products
                for all
                subsequent deliveries.

            

    

    
      	 	
              7.3

            	
              DAC
                will be responsible to RME for the cost of components specific to
                DAC
                products made obsolete as a consequence of an ECO. If components
                affected
                by ECO are already assembled into product, DAC will accept those
                products
                already manufactured.

            

    

    
      	 	
              7.4

            	
              RME
                will use its reasonable endeavours to mitigate such cost. All such
                costs
                shall be agreed prior to implementation of the
                ECO.

            

    

    
      	 	
              7.5

            	
              RME
                may request changes to the Specification (“ECR”). ECRs will be accompanied
                by an evaluation of cost impact and all other relevant data. ECRs
                will not
                be binding on DAC until expressly accepted in writing by DAC as an
                ECO.

            

    

     

    
      
        	Page 3 of
                10	
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              8.

            	
              Materials

            

    

    

    
      	 	
              8.1

            	
              DAC
                shall have the right, at its discretion, to provide components to
                RME at
                cost and invoice RME for such components; in turn RME will invoice
                DAC at
                the same cost plus 5.5% charge as described in paragraph 11.3 , thereby
                incorporating the supplied component costs within the total unit
                cost
                charged to DAC. It is acknowledged and agreed that DAC will bear
                complete
                responsibility for the components that it provides and that RME will
                be
                excused and compensated for any non-conformance, including but not
                limited
                to delays in delivery, scrap, yield or quality issues as a result
                of any
                components that are provided by DAC, or which fail to be provided
                to RME
                in a timely manner. This situation only could happen for new products
                at
                prototype or new product introduction stages. This situation will
                not
                apply to the current products. 

            

    

    

    
      	 	
              8.2

            	
              Except
                to the extent that DAC provides components to RME pursuant to Clause
                8.1
                above, RME will have full responsibility on the supply of the parts
                of all
                the current transponder Products.

            

    

    

    
      	 	
              9.

            	
              DAC
                Automated equipment and tooling provided to or by
                RME

            

    

     

    
      
        	 	
                9.1

              	
                Schedule
                  9.1 sets forth the automated equipment and tooling, used in the
                  production
                  of the Products, that are owned by DAC but located in the RME facilities
                  (the “DAC-Owned Equipment”). Schedule 9.1 sets forth the automated
                  equipment and tooling, used in the production of the Products that
                  are
                  owned by RME (the RME-Owned
                  Equipment”).

              

      

      
        	 	
                9.2

              	
                The
                  DAC-Owned Equipment shall remain the property of DAC at all times
                  and can
                  be recovered from RME provided ten day’s notice is given and further
                  provided that such removal will not impact RME’s current production
                  obligations for the Products.

              

      

      
        	 	
                9.3

              	
                RME
                  shall pay DAC the replacement cost of all lost of damaged DAC-Owned
                  Equipment.

              

      

      
        	 	
                9.4

              	
                RME
                  shall keep the DAC-Owned Equipment properly maintained and calibrated
                  at
                  DAC’s cost (such cost to be the direct cost incurred by RME for parts
                  and
                  supplies and other mutually agreeable items, but excluding labor
                  costs)
                  provided that RME provide DAC with a written quotation and obtain
                  DAC’s
                  prior written approval before calibration is carried out. DAC will
                  ensure
                  such calibration is carried out in a timely manner to ensure production
                  output is not delayed.

              

      

      
        	 	
                9.5

              	
                DAC-Owned
                  Equipment shall not be removed from RME’s premises without DAC’s written
                  notice.

              

      

      
        	 	
                9.6

              	
                
                  DAC-Owned
                    Equipment shall not be used for manufacturing products or subassemblies
                    for third parties without DAC’s prior written
                    approval.

                

              

      

      
        	 	
                9.7

              	
                Upon
                  termination of this Agreement, DAC shall have the right, having
                  given 10
                  day’s notice in writing to enter RME premises, to remove any DAC-Owned
                  Equipment not returned to DAC when
                  requested.

              

      

    

    

    
      	 	
              10.

            	
              Outsourcing
                decisions

            

    

    

    RME
      may
      outsource the assembly of all Products covered by this agreement with the
      exception of Products incorporating the Super 12 technology, provided the
      subcontractors are approved by both RME and DAC, and provided such subcontractor
      has signed a non compete and confidentiality agreement acceptable to RME and
      DAC
      prior to the performance of any work.

     

    
      
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              11.

            	
              Price

            

    

    

    
      	 	
              11.1

            	
              RME
                material purchasing cost will be reported to DAC at any time that
                it is
                requested.

            

    

    
      	 	
              11.2

            	
              RME
                will strive to continually get the best competitive pricing from
                all the
                suppliers and to develop the highest quality and competitive
                suppliers.

            

    

    
      	 	
              11.3

            	
              At
                the time of taking over responsibility on the supply of all the components
                of the bill of material of DAC products including coils and circuits,
                RME
                will include in the price of the finished Product the actual cost
                to RME
                of components for the Products, labor costs incurred by RME plus
                a fee
                equal to 5.5% of the actual cost of the components for the Products
                purchased by DAC. This 5.5% percentage includes a current 4.5% material
                scrap cost carried by DAC and has been set considering material freight
                cost, material duties, material inventory cost, material overhead
                cost and
                financial cost arising from changes in the payment
                terms.

            

    

    
      	 	
              11.4

            	
              The
                pricing of each Product shall be set forth in the purchase orders
                submitted by DAC based on the prices currently agreed between DAC
                and RME;
                provided, however, that the parties shall from time to time negotiate
                in
                good faith any changes in price for existing Products as a result
                of
                agreed changes to the Products or for future Products, and shall
                update
                this Agreement as necessary to reflect the current price of each
                Product.

            

    

    

    
      	 	
              12.

            	
              Payment

            

    

    

    
      	 	
              12.1

            	
              RME
                shall invoice DAC for Products delivered on or after
                delivery.

            

    

    
      	 	
              12.2

            	
              DAC
                shall pay RME within 30 days after the date of Product is delivered
                to
                DAC.

            

    

    
      	 	
              12.3

            	
              DAC
                products shall be priced and paid for in US$
                currency.

            

    

    

    
      	 	
              13.

            	
              Quality
                Tests

            

    

    

    RME
      is
      responsible for testing all Products and ensuring they perform in accordance
      with the specification and agree not to ship any product not meeting
      specification with DAC prior written consent.

    

    
      	 	
              14.

            	
              Other
                products and rest of the transponder value
                chain

            

    

    

    

    
      	 	
              14.1

            	
              DAC
                and RME will work together to develop and evaluate the feasibility
                of a
                win-win proposal in order for RME be in charge of the whole transponder
                value chain including custom packaging for different DAC
                customers.

            

    

    
      	 	
              14.2

            	
              DAC
                will provide RME with the information needed to quote other electronic
                products, including current price and target price to be successful
                so RME
                could get their suppliers involved to develop a win-win
                proposal.

            

    

    

    
      	 	
              15.

            	
              Warranty

            

    

    

    RME
      warrants that for 12 months from the delivery date, Products supplied will
      conform to the applicable Specifications and be free from defects in material
      and workmanship. DAC will provide a monthly report to RME of all warranty claims
      for the Products within the prior month. Within 30 days of receipt of the above
      information, which must include itemized serial numbers,

     

    
      
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    product
      identification, description of failure, and cost of warranty, RME shall credit
      DAC 100% of the purchase cost of the original product where the serial number
      identifies the age of the product to be equal to or less than 12 months from
      delivery date and RME reasonably determines that the Products are defective,
      based on product failures identified through standard manufacturing testes
      performed by RME, within ten (10) business days after receipt of the Products.
      If no determination is made within such ten (10) business day period, then
      the
      Products shall be deemed defective and covered by the warranty.

    

    
      	 	
              16.

            	
              Liability

            

    

    

    
      	 	
              16.1

            	
              The
                liability of either party to the other, if any, and the sole and
                exclusive
                remedy for damages for any claim of any kind whatsoever made by one
                party
                against the other with respect to the supply of products under this
                Agreement or default in respect of such supply shall be limited to
                an
                amount equal to the value of purchases made by DAC from RME in the
                immediately preceding twelve months. Under no circumstances will
                either
                party be liable to the other for any indirect, special, incidental,
                or
                consequential damages arising out of any breach of this agreement
                whether
                such damages are labeled in tort, contract, or indemnity, even if
                the
                relevant party has been advised of the possibility of such
                damage.

            

    

    

    
      	 	
              17.

            	
              Termination

            

    

    

    
      	 	
              17.1

            	
              Either
                party shall be entitled to terminate this agreement immediately if
                the
                other:

            

    

    
      	 	
              (i)

            	
              commits
                any breach of this Agreement which cannot be remedied within 30 days
                after
                notification;

            

    

    
      	 	
              (ii)

            	
              commits
                a breach which can be remedied but which is not remedied within 30
                days of
                receipt of written notice requiring the breach to be
                remedied;

            

    

    
      	 	
              (iii)

            	
              ceases
                or threatens to cease trading, becomes insolvent or has a receiver,
                administrative receiver appointed over the whole or any part of its
                assets, or enters into composition with is creditors or has a resolution
                passed or order made for it to be wound up (other than for purpose
                of a
                solvent amalgamation or
                reconstruction);

            

    

    

    
      	 	
              17.2

            	
              Termination
                shall not affect any rights which have accrued in favour of either
                party
                prior to the date of termination.

            

    

    

    
      	 	
              18.

            	
              Confidentiality

            

    

     

    
      	 	
              18.1

            	
              Receiving
                Party shall:

            

    

    
      	 	
              (i)

            	
              Refrain
                from disclosing any Confidential Information of the Disclosing Party
                to
                third parties for three (three) years following the date that Disclosing
                Party first discloses such Confidential Information to Receiving
                Party,
                except as expressly provided in Sections 2(b) and 2(c) of this
                Agreement;

            

      
        	 	 	 

        	 	
                (ii)

              	
                Take
                  reasonable security precautions, at least as great as the precautions
                  it
                  takes to protect its own Confidential
                  Information,
                  but no less than reasonable care, to keep confidential the Confidential
                  Information of the Disclosing Party;

              

      

    

     

     

    
      
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              (iii)

            	
              Refrain
                from disclosing, reproducing, summarizing and/or distributing Confidential
                Information of the Disclosing Party except in pursuance of Receiving
                Party’s business relationship with Disclosing Party, and only as otherwise
                provided hereunder; and 

            

    

     

    
      
        	 	
                (iv)

              	
                Refrain
                  from reverse engineering, decompiling or disassembling any software
                  code
                  and/or hardware devices disclosed by Disclosing Party to Receiving
                  Party
                  under the terms of this Agreement, except as expressly permitted
                  by
                  applicable law. 

              

      

    

     

    

    
      	 	
              18.2

            	
              Receiving
                Party may disclose Confidential Information of Disclosing Party in
                accordance with a judicial or other governmental order, provided
                that
                Receiving Party either (i) gives the undersigned Disclosing Party
                reasonable notice prior to such disclosure to allow Disclosing Party
                a
                reasonable opportunity to seek a protective order or equivalent,
                or (ii)
                obtains written assurance from the applicable judicial or governmental
                entity that it will afford the Confidential Information the highest
                level
                of protection afforded under applicable law or regulation. Notwithstanding
                the foregoing, the Receiving Party shall not disclose any computer
                source
                code that contains Confidential Information of the Disclosing Party
                in
                accordance with a judicial or other governmental order unless it
                complies
                with the requirement set forth in sub-section (i) of this Section
                2(b).

            

    

     

    
      
        	 	
                18.3

              	
                The
                  undersigned Receiving Party may disclose Confidential Information
                  only to
                  Receiving Party’s employees and consultants on a need-to-know basis. The
                  undersigned Receiving Party will have executed or shall execute
                  appropriate written agreements with third parties sufficient to
                  enable
                  Receiving Party to enforce all the provisions of this
                  Agreement.

              

      

       

      
        
          	 	
                  18.4

                	
                  Receiving
                    Party shall notify the undersigned Disclosing Party immediately
                    upon
                    discovery of any unauthorized use or disclosure of Confidential
                    Information or any other breach of this Agreement by Receiving
                    Party and
                    its employees and consultants, and will cooperate with Disclosing
                    Party in
                    every reasonable way to help Disclosing Party regain possession
                    of the
                    Confidential Information and prevent its further unauthorized
                    use or
                    disclosure.

                

        

         

        
          
            	 	
                    18.5

                  	
                    Receiving
                      Party shall, at Disclosing Party’s request, return all originals, copies,
                      reproductions and summaries of Confidential Information and
                      all other
                      tangible materials and devices provided to the Receiving Party
                      as
                      Confidential Information, or at Disclosing Party’s option, certify
                      destruction of the same.

                  

          

           

          
            
              	 	
                      18.6

                    	
                      Remedies.
                        The
                        parties acknowledge that monetary damages may not be a sufficient
                        remedy
                        for unauthorized disclosure of Confidential Information and
                        that
                        Disclosing Party shall be entitled, without waiving any other
                        rights or
                        remedies, to such injunctive or equitable relief as may be
                        deemed proper
                        by a court of competent
                        jurisdiction.

                    

            

             

            
              
                	 	
                        18.7

                      	
                        Miscellaneous 

                      

              

            

          

        

      

    

     

    
      
        	 	
                 

              	
                
                      (a) All
                    Confidential Information is and shall remain the property of
                    Disclosing
                    Party. By disclosing Confidential Information to Receiving Party,
                    Disclosing Party does not grant any express or implied right
                    to Receiving
                    Party to or under any patents, copyrights, trademarks, or trade
                    secret
                    information except as otherwise provided herein. Disclosing Party
                    reserves
                    without

                

              

      

    

    

       

      
        
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                prejudice
                  the ability to protect its rights under any such patents, copyrights,
                  trademarks, or trade secrets except as otherwise provided
                  herein.

              

            

    

     

    
      
        	 	
                 

              	
                
                      (b) The
                    terms of confidentiality under this Agreement shall not be construed
                    to
                    limit either the Disclosing Party or the Receiving Party’s right to
                    independently develop or acquire products without use of the
                    other party’s
                    Confidential Information. However, this sub-paragraph shall not
                    be deemed
                    to grant to the Receiving Party a license under the Disclosing
                    Party’s
                    copyrights or patents.

                

              

      

    

     

    
      	 	
              19.

            	
              Waiver

            

    

    

    The
      failure of either party at any time or times to enforce any provisions within
      this Agreement shall not affect its right to enforce such provision at a later
      date.

    

    
      	 	
              20.

            	
              Law

            

    

    

    This
      Agreement shall be governed by the laws of the state of Minnesota,
      USA.

    

    
      	 	
              21.

            	
              Assignment
                or Transfer.
                RME will not, without prior consent in writing, assign, transfer
                or
                sub-contract, or in any way make over its obligations of this agreement
                without DAC’s consent.

            

    

    

    
      	 	
              22.

            	
              Amendments,
                Assignment, and Entire Agreement.
                This Agreement may not be modified, amended, or supplemented except
                by an
                agreement in writing signed by both parties. This Agreement and the
                rights
                and obligations hereunder shall not be assignable without the express
                written consent of the nonassigning party. Subject to the restrictions
                against transfer or assignment as herein set forth, the provisions
                of this
                Agreement shall inure to the benefit of, and shall be binding on,
                the
                permitted successors and assigns of each of the parties hereto. This
                Agreement shall constitute the entire agreement between the parties
                hereto
                with respect to the transactions contemplated hereby and shall supersede
                all prior or contemporaneous discussions, negotiations, understandings
                and
                agreements. There are no representations, agreements, arrangements,
                or
                understandings, oral or written, between or among the parties hereto
                relating to the subject matter of this Agreement that are not fully
                expressed herein.

            

    

    

    
      	 	
              23.

            	
              Counterparts.
                This Agreement may be executed in various counterparts or copies,
                all of
                which, when taken together, shall constitute the entire
                agreement.

            

    

    

    
      	 	
              24.

            	
              Waiver.
                The failure of any party to insist, in any one or more instances,
                upon
                performance of any of the terms, covenants, or conditions of this
                Agreement shall not be construed as a waiver or a relinquishment
                of any
                right or claim granted or arising hereunder or of the future performance
                of any such term, covenant, or condition, and such failure shall
                in no way
                affect the validity of this Agreement or the rights and obligations
                of the
                parties hereto. No waiver of any provision or condition of this Agreement
                shall be valid unless executed in writing and signed by the party
                to be
                bound thereby, and then only to the extent specified in such waiver.
                No
                waiver of any provision or condition of this Agreement shall be construed
                as a waiver of any other provision or condition of this Agreement,
                and no
                present waiver of any provision or condition of this Agreement shall
                be
                construed as a future waiver of such provision or
                condition.

            

    

     

    
       

      
        
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              25.

            	
              Invalidity

            

    

    

    If
      any
      provision of this agreement is held by any court or other competent authority
      to
      be void or unenforceable in whole or in part, the other provisions of this
      agreement and the remainder of the affected provisions shall continue to be
      valid.

     

    
      
        	 	
                26.

              	
                Intellectual
                  Property.

              

      

    

     

    
      	 	
              26.1

            	License grants from DAC to RME.
              During the term of this Agreement, DAC hereby grants to RME a
              non-exclusive, royalty free license to use DAC’s Intellectual Property in
              connection with the manufacture of the Products, which license
              specifically excludes any right to distribute the Products to third
              parties or to create any derivative works from the Products. Except
              as
              provided in Clause 10 herein, RME shall have no right to grant sublicenses
              to any of DAC’s Intellectual Property to third
              parties.

    

     

    
      
        	 	
                26.2

              	
                License
                  grant from RME to DAC.
                  In consideration of the sale of the Products to DAC, whether such
                  Products
                  are manufactured by RME or by a third party pursuant to the provisions
                  of
                  Clause 10 herein, DAC and any person acquiring title to any Product
                  through DAC shall be deemed to have been granted a non-exclusive,
                  royalty
                  free license to any and all Intellectual Property held by RME or
                  its
                  Affiliates related to the manufacture, distribution or use of the
                  Products; provided, however, that such license shall be considered
                  as part
                  of each Product and shall not be licensed, sublicensed or conveyed
                  separately from the Product to which such license relates. RME
                  represents
                  and warrants that prior to the effective date of this Agreement,
                  neither
                  RME nor its Affiliates (i) have used the Intellectual Property
                  to
                  commercialize syringe-implantable transponders for use in humans
                  or
                  animals other than through DAC or (ii) assigned or otherwise granted
                  any
                  rights in the Intellectual Property to any third
                  parties.

              

      

       

      
        
          	 	
                  26.3

                	
                  Exclusivity.
                    So long as DAC purchases not less than the aggregate quantity
                    of Products
                    purchased by DAC in calendar year 2005 from RME (the “Annual Minimum
                    Purchase Amount”), RME shall not, without the prior written consent of DAC
                    in each instance, (i) manufacture or sell any Products (or Products
                    competitive with the Products) to third parties or (ii) knowingly
                    license
                    any Intellectual Property of RME or its Affiliates to any third
                    party for
                    use in manufacture or distribution of the Products or products
                    competitive
                    to the Products. In the event that RME is unable or unwilling
                    to
                    manufacture the quantities of any Product requested by DAC and
                    does not
                    acquire such Products from third parties pursuant to Clause 10
                    herein, DAC
                    shall have the right to purchase Products from third parties,
                    and (i) such
                    purchases shall be treated as having been purchased from RME
                    for the
                    purpose of calculating the Annual Minimum Purchase Amount, and
                    (ii) the
                    license of Intellectual Property of RME and its Affiliates referred
                    to in
                    subparagraph (c) above shall be deemed to extend to all such
                    Products
                    manufactured by third parties. RME shall have the right, on not
                    less than
                    90 days prior notice, to advise DAC of its willingness to again
                    produce
                    the quantities of Product requested by DAC, and upon delivery
                    of such
                    Products, DAC shall not have the right to treat purchases from
                    third
                    parties against the Annual Minimum Purchase
                    Amount.

                

        

         

        
          
            	 	
                    26.4

                  	
                    No
                      other interest in Intellectual Property.
                      Except as expressly provided herein, the parties acknowledge
                      that neither
                      party has, nor shall such party acquire, any interest in the
                      other party’s
                      Intellectual
                      Property.

                  

          

        

      

    

     

     

    
      
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                27.

              	
                Force
                  Majeure.
                  Any delay or failure of RME to perform its obligations hereunder
                  shall be
                  excused to the extent that it is caused by an event or occurrence
                  beyond
                  its reasonable control such as, by the way of example and not by
                  way of
                  limitation, acts of god, actions by any governmental authority
                  (whether
                  valid or invalid), fires, floods, windstorms, explosions, riots,
                  natural
                  disasters, wars, sabotage, labor problems (including lockouts,
                  strikes,
                  and slowdowns) at RME’s facility, its source plant or suppliers, inability
                  to obtain power, material, labor, equipment, or transportation,
                  or court
                  injunction or order.

              

      

    

     

     

    The
      parties or their duly authorized representatives have executed this Agreement
      on
      the date shown at its head.’

     

    
 

    
      	
              Signed for and on behalf of

              Digital Angel Corporation

            	
              Signed for and on behalf of

              Raytheon Microelectronics España,
                S.A.

            
	 	 
	/s/ James Santelli	/s/Ignacio Galnares
	 	 
	Sr. Vice President James Santelli	Managing Director Ignacio
              Galnares
	 	 
	Dated: April 26, 2006	Dated: April 26,
              2006

    

          

     

     

    
       

      
        
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