Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Net 1 UEPS Technologies Inc.  - Exhibit 10.2

Exhibit 10.2

 PATENT AND TECHNOLOGY AGREEMENT 

  

 Made and entered into by and between 

  

 NET 1 HOLDINGS S.à.r.l 

  

 and 

  

NET 1 UEPS TECHNOLOGIES, INC. 

Table of Contents 

	 	 	Page	 
	 	 	 	 
	1.	DEFINITIONS	1	 
	 	 	 	 
	2.	PREAMBLE	2	 
	 	 	 	 
	3.	DURATION	2	 
	 	 	 	 
	4.	GRANT OF RIGHTS	2	 
	 	 	 	 
	5.	CONSIDERATION	3	 
	 	 	 	 
	6.	MAINTENANCE OF THE PATENTS	4	 
	 	 	 	 
	7.	DEVELOPMENT AND MAINTENANCE OF UEPS	4	 
	 	 	 	 
	8.	PATENTS INFRINGEMENT	4	 
	 	 	 	 
	9.	ASSIGNABILITY	4	 
	 	 	 	 
	10.	CONFIDENTIAL INFORMATION	5	 
	 	 	 	 
	11.	WARRANTIES	5	 
	 	 	 	 
	12.	BREACH	5	 
	 	 	 	 
	13.	WHOLE AGREEMENT	6	 
	 	 	 	 
	14.	DOMICILIA	6	 
	 	 	 	 
	15.	NOTICES	6	 
	 	 	 	 
	16.	LAW TO APPLY	7	 
	 	 	 	 
	17.	INDULGENCE	7	 
	 	 	 	 
	18.	ARBITRATION	7	 

	1.  	DEFINITIONS

	 	 	 	 	 
	1.1 	 	The clause headings of this
        Agreement are for reference purposes only and shall not be used in the
        interpretation thereof. 

	 	 	 
	1.2 	 	Unless the context clearly
        indicates a contrary intention: 

	 	 	 
	1.2.1 	 	 	expressions which denote:
      

	 	 	 	 
	1.2.1.1	 	 	 	any gender shall include the other genders;
      

	 	 	 	 	 
	1.2.1.2	 	 	 	a natural person shall include an artificial
        person and vice versa; 

	 	 	 	 	 
	1.2.1.3	 	 	 	the singular shall include the plural;
      

	 	 	 	 	 
	1.2.2 	 	 	the following expressions
        shall have the meanings set opposite them and cognate expressions shall
        bear corresponding meanings: 

	 	 	 	 	 
	1.2.2.1	 	 	 	“Licensee” shall mean any
        entity to whom NUEP grants a licence on behalf of Net 1 to use the Patent
        in any country within the Territory; 

	 	 	 	 	 
	1.2.2.2	 	 	 	“Net 1” shall mean Net 1 Holdings
        S.à.r.l, a company incorporated in accordance with the laws of
        Luxembourg and having its registered office at 6, rue Jean Monnet, L-2180
        Luxembourg, herein represented by Brenda Stewart in her capacity as a
        Director of the Company, she being duly authorised hereto; 

	 	 	 	 	 
	1.2.2.3	 	 	 	“Parties” shall mean the parties
        to this Agreement; 

	 	 	 	 	 
	1.2.2.4	 	 	 	“Patents” shall mean United
        States Patent No. 5,175,416 and European Patent No. 0-421808 together
        with all patents of addition, if any, granted to Net 1; 

	 	 	 	 	 
	1.2.2.5	 	 	 	“Signature Date” shall mean
        the last date of signature of this Agreement by the Parties; 

	 	 	 	 	 
	1.2.2.6	 	 	 	“Territory” shall mean any
        country of the World, except the Republic of South Africa (as constituted
        on 31 May 1961), Namibia, Botswana, Lesotho, Swaziland, Mozambique and
        Zimbabwe; 

	 	 	 	 	 
	1.2.2.7	 	 	 	“NUEP” shall mean Net 1 UEPS
        Technologies, Inc., a company incorporated under the laws of the State
        of Florida and having its registered office at 200 East Las Olas Boulevard,
        Suite 1900, Fort Lauderdale, Florida, 33301. 

	 1.2.2.8	 	 	 	 “UEPS” shall mean the Universal
        Electronic Payment System designed by Net 1, as described and detailed
        in the complete specification to Net 1’s application for the Patents.
        UEPS is an application that uses the Patents to provide an integrated,
        secure and complete payment system.

	 	 	 	 	 
	2.	PREAMBLE

	 	 	 	 	 
	2.1 	 	Net 1 is the owner and manager
        of the Patents.

	 	 	 	 	 
	2.2 	 	Net 1 has agreed to appoint
        NUEP as its sole and exclusive agent to market and sell to Licensees licences
        for the use of the Patents anywhere within the Territory and to conclude.
        licence agreements with such Licensees on behalf of Net 1.

	 	 	 	 	 
	2.3	 	 NUEP shall in terms of
        this Agreement have the right to permit a Licensee to purchase and or
        use the UEPS in conjunction with the Patents or to develop similar systems
        that make use of the Patents.

	 	 	 	 	 
	2.4 	 	The Parties require the
        agreement arrived at between them to be reduced to writing.

	 	 	 	 	 
	3.	DURATION

       This Agreement shall commence on the Signature Date
        and shall endure for the life of the Patents, unless terminated earlier
        as provided for hereunder.

	 	 	 	 	 
	4.	GRANT OF RIGHTS

	 	 	 
	4.1 	 	Net 1 hereby grants to NUEP
        the exclusive right to market, negotiate and sell licences to Licensees
        for the use of the Patents within the Territory.

	 	 	 
	4.2 	 	Net 1 hereby appoints NUEP
        as its agent to grant licences on its behalf to Licensees and authorises
        NUEP to execute and register such Licence Agreements on its behalf, provided
        that in granting such licences on behalf of Net 1, NUEP shall not do so
        in contravention of any obligations whatsoever in respect whereof Net
        1 is bound in terms of any existing or pending Licence Agreements with
        Licensees or any other entity. In this regard, NUEP acknowledges that
        it is fully conversant with the terms and conditions of all existing Licence
        Agreements for the use of the Patents which Net 1 has granted to Licensees,
        and with the terms and conditions of all Licence Agreements that are pending
        and are being finalised as per Appendix A.

2

	4.3	 	Net 1 hereby grants the right
        to NUEP to market and sell UEPS in the Territory provided that the said
        activities do not conflict with existing or pending license agreements.
      

	 	 	 	 	 
	4.4 	 	Net 1 hereby grants the
        right to NUEP to sell the UEPS to a Licensee as part and parcel of a license
        agreement or to allow the Licensee to develop a proprietary system that
        uses the Patents. 

	 	 	 
	4.5	 	Net 1 shall upon the Signature
        Date become a conduit for NUEP, thereby allowing NUEP to achieve an optimal
        tax benefit in respect of its world-wide operations and NUEP shall be
        liable for any expenses incurred by Net 1’s fiscal, commercial, operational
        and administrative activities in this regard or any other costs incurred
        while performing the said services and any other costs that may be approved
        by NUEP from time to time. 

	 	 	 
	5.  	CONSIDERATION

	 	 	 
	5.1 	 	In consideration for the exclusive
        rights granted to NUEP in terms of Clause 4.1 Supra 
        - 

	 	 	 	 	 
	5.1.1 	 	 	NUEP has agreed to issue
        from its Treasury an allotment of 2,364,806 common shares (prior split
        or 4,729,612 after split) to Net 1 in accordance with the following stipulations:
      

	 	 	 	 	 
	5.1.1.1	 	 	 	the shares will be issued at a deemed
        price of US$0.001 per share, being the par value thereof; 

	 	 	 	 	 
	5.1.1.2	 	 	 	the shares will be fully paid up and
        non-assessable common shares. The Parties record that the shares referred
        to in 5.1.1 Supra were issued to Net 1 on 27 November 1997
        and were been kept in trust pending the finalisation of an exclusivity
        agreement. 

	 	 	 
	5.2	 	In consideration for the
        services to be rendered by NUEP to Net 1 in terms of Clause 4 Supra
        - Net 1 shall pay to NUEP an amount equivalent to Net 1’s
        annual after tax net profit as reflected in its annual financial statements
        from time to time. Such amount shall be paid by Net 1 to NUEP annually
        in arrear at the expiration of 120 (one hundred and twenty) days of its
        financial year-end. 

	 	 	 
	5.3	 	NUEP shall at its own discretion
        elect to use Net 1 as the recipient of any full or partial payments due
        by a Licensee in terms of the license agreement granted to the Licensee
        by NUEP as of the Signature Date or granted or committed to a Licensee
        by Net 1 at a date prior to the Signature Date of this Agreement. 

3

	6.  	MAINTENANCE OF THE
        PATENTS

	 	 	 
	6.1	 	NUEP shall during the life of this Agreement pay
        all renewal fees and do all such acts and things that may be necessary
        to maintain and keep registered the Patents and shall produce to Net 1
        the receipt for renewing the Patents. 

	 	 	 
	6.2	 	NUEP shall not during the life of this Agreement,
        save with the prior written consent of Net 1, abandon the Patents or allow
        them to lapse. 

	 	 	 
	6.3 	 	NUEP shall be obliged on an on-going basis to make
        applications on behalf of Net 1 for new patents or patentable improvements
        in order to ensure that the Net 1 technology remains the front runner
        in its field. 

	 	 	 
	7.  	DEVELOPMENT AND MAINTENANCE
        OF UEPS

	 	 	 
	7.1 	 	NUEP shall be obliged on an on-going basis to continue
        with the development, maintenance and support of the UEPS and the development
        of new software applications that use the Patents 

	 	 	 
	7.2 	 	NUEP shall perform the duties outlined in 7.1 Supra,
        alternatively NUEP may delegate or sub-contract its obligations as outlined
        in 7.1 Supra to a third party with the prior written approval
        of Net 1. 

	 	 	 
	8.  	PATENTS INFRINGEMENT

	 	 	 
	8.1 	 	Upon the occurrence of any infringement or suspected
        or threatened infringement of the Patents, the Parties shall immediately
        consult to decide what steps shall be taken to prevent or terminate such
        infringement. 

	 	 	 
	8.2 	 	NUEP shall take all steps as may be agreed by the
        Parties pursuant to Clause 8.1 above including the institution of legal
        proceedings where necessary. 

	 	 	 
	8.3 	 	If NUEP fails to take such steps as may be considered
        necessary or appropriate by Net 1, Net 1 shall have the right to take
        those steps independently and NUEP shall give Net 1 all reasonable assistance
        to facilitate any such proceedings by Net 1. Any costs or expense incurred
        by Net 1 in this regard shall be borne by NUEP. 

	 	 	 
	9. 	ASSIGNABILITY

	 	 	 
	9.1 	 	Neither party shall cede any of its rights nor assign
        any of its obligations without the prior written consent of the other.
      

	 	 	 
	9.2 	 	NUEP may not delegate or sub-contract its obligations
        under this Agreement without the prior written approval of Net 1. 

4

	10.	CONFIDENTIAL INFORMATION

	 	 	 
	10.1 	 	Neither party shall at any time divulge
        or disclose to any third party any information concerning the affairs
        of the other which may be communicated to it or which otherwise comes
        into its possession, unless such information becomes publicly available
        through no fault of such party.

	 	 	 
	10.2 	 	Neither party shall use, exploit, divulge
        or disclose to any third party any business systems or methods of the
        other party of which it may gain knowledge while working with the other
        party or in the course of the performance of its obligations in terms
        of this Agreement, except with the prior written consent of the other
        party.

	 	 	 
	10.3 	 	This clause is severable from the rest
        of this Agreement and shall remain valid and binding on the Parties notwithstanding
        any termination of this Agreement.

	 	 	 
	11.	WARRANTIES

       Net 1 declares and warrants unto and in favour of NUEP
        that -

	 	 	 
	11.1 	 	As at the Signature Date, Net 1 was
        the sole patentee of the Patents and that the Patents were of full force
        and effect.

	 	 	 
	12.	BREACH

	 	 	 
	12.1 	 	Should NUEP at any time cease trading
        or operating, be placed under Judicial Management, be declared insolvent
        or be placed under provisional or final liquidation, then and in such
        event and without prejudice to whatever other claims Net 1 may have against
        NUEP as a result of or arising out of such breach, including any claim
        for damages, Net 1 shall have the right to cancel this Agreement and revert
        to the licensing agreement that was in place prior to this Agreement.
        All income streams current or future that were in place prior to such
        breach shall however remain the property of NUEP. In such event, all contractual
        agreements entered into with Licensees in terms of clause 5.3 Supra
        shall be ceded to NUEP.

	 	 	 
	12.2	 	 Should either party commit a breach
        of any of the provisions of this Agreement, all of which are material
        and go to the root of this Agreement, and fail to remedy such breach within
        a period of 10 (ten) days of the date of a written notice from the aggrieved
        party calling upon the defaulting party to remedy such breach, then the
        aggrieved party shall have the right in addition to such other rights
        as are available to him/it in law or in terms of this Agreement to sue
        for specific performance of the terms of this Agreement, or to cancel
        this Agreement subject to the aggrieved Party’s right to claim damages
        arising from such breach.

5

	13.	WHOLE AGREEMENT

       This Agreement constitutes the sole and exclusive record
        of the Agreement between the Parties relating to the subject matters thereof
        and no variation, modification, consensual cancellation, novation or waiver
        of any provisions thereof, or any consent to any departure therefrom by
        any party, shall be of any force and effect or create any estoppel
        unless the same shall be confirmed in writing, signed by or on
        behalf of that party and any other party affected thereby and in any event
        the same shall be effective only in the specific instance and for the
        specific purpose and to the extent for which made or given.

	 	 	 
	14.	DOMICILIA

       For all purposes under this Agreement or any amendment
        thereof, or with regard to any matter arising thereout or in connection
        therewith, the parties hereby choose their domicilia citandi et
        executandi at their respective addresses specified below provided
        that the parties shall be entitled to nominate a substitute address in
        the Republic of South Africa, as their domicilium citandi et executandi,
        by written notice to that effect given to the other party in accordance
        with paragraph 15 and with effect from 7 (seven) days after receipt of
        such notice:

	 	 	 
	14.1 	 	Net 1 at 4th Floor, West Wing, President
        Place, Jan Smuts Avenue, Rosebank, Johannesburg, Republic of South Africa;

	 	 	 
	14.2 	 	NUEP at 200 East Las Olas Boulevard,
        Suite 1900, Fort Lauderdale, Florida, 33301, United States of America.

	 	 	 
	15.	NOTICES

       Any notice required to be given or permitted to be given
        by any party to the other in terms of this Agreement shall be in writing
        addressed in the name of the latter and shall be delivered to the addressee
        at the addressee’s domicilium citandi et executandi for
        the time being in terms of Clause 14 Supra. Alternatively,
        such notice may be sent by telefacsimile to the addressee at its undermentioned
        telefacsimile number, and such notice shall be deemed to have been duly
        delivered on the first business day following the date of sending thereof:

       NUEP                 
        -                    1
        888 796 2233

       Net 1                  
        -                     2711
        880-7080

6

	16.	LAW TO APPLY

       This Agreement shall in all respects be governed by
        and construed in accordance with the laws of England, and all disputes,
        actions and other matters in connection therewith shall be determined
        in accordance with such law.

	 	 	 	 
	17.	INDULGENCE

       No relaxation or indulgence granted by either Party
        to the other shall be deemed to be a waiver of that Party’s rights
        in terms hereof, nor shall any such relaxation or indulgence be deemed
        to be a novation or waiver of any of the terms and conditions of this
        Agreement.

	 	 	 	 
	18.	ARBITRATION

	 	 	 	 
	18.1 	 	Unless otherwise provided
        for in this Agreement to the contrary, any dispute which arises in regard
        to:

	 	 	 	 
	18.1.1	 	 	 the interpretation of; or

	 	 	 	 
	18.1.2	 	 	 the carrying into effect of; or

	 	 	 	 
	18.1.3 	 	 	any of the Party’s rights and obligations
        arising from; or

	 	 	 	 
	18.1.4	 	 	 the rectification or proposed rectification
        of this Agreement may, at the instance of either Party hereto, be referred
        for determination by an expert, and in relation to that referral the provisions
        of this Clause 18 shall apply.

	 	 	 	 
	18.2 	 	The expert shall:

	 	 	 	 
	18.2.1 	 	 	if the matter in issue is an accounting
        matter, be an independent auditor agreed upon between the Parties or failing
        agreement, appointed by the President for the time being of the English
        Society of Chartered Accountants;

	 	 	 	 
	18.2.2 	 	 	if the matter is a legal matter, only,
        be a Barrister of at least 10 (ten) years’ standing as such practising
        as such at the London Bar, agreed upon between the Parties to the dispute
        or failing Agreement, appointed by the Chairman for the time being of
        the London Bar Council;

	 	 	 	 
	18.2.3	 	 	 if the matter in dispute is any other
        matter, be an independent person agreed upon between the Parties to the
        dispute or failing agreement, appointed by the Chairman for the time being
        of the London Bar Council;

	 	 	 	 
	18.3 	 	The expert appointed or
        nominated as aforesaid shall in all respects act as an. expert
        and not as an arbitrator, and if the Parties are unable to agree on the
        nature

7

	 	 	of the matter in dispute, it shall be deemed to be
        of a legal nature and subject to 18.2.2 Supra. 

	 	 	 
	18.4 	 	The expert shall determine the manner in which the
        proceedings are conducted and the procedure to be adopted and he shall
        be entitled to require the Parties to the proceedings to make available
        to each other and to the expert all information, documentation and records
        that are necessary for the determination of the dispute submitted to him.
      

	 	 	 
	18.5 	 	Any hearing by the expert shall be held in London
        or such other place as the Parties may agree in writing. 

	 	 	 
	18.6 	 	The Parties shall use their best endeavours to procure
        that the decision of the expert shall be given within 21 (twenty-one)
        days or so soon thereafter as possible after it has been demanded. 

	 	 	 
	18.7 	 	The decision of the expert shall be final and binding
        on all parties affected thereby and shall be carried into effect and may
        be made an order of any competent Court at the instance of any of the
        Parties. 

	 	 	 
	18.8 	 	This clause constitutes an irrevocable consent by
        the Parties to any proceedings in terms hereof and neither of the Parties
        shall be entitled to withdraw therefrom or claim at any such proceedings
        that it is not bound by the provisions of this clause. 

	 	 	 
	18.9 	 	The expert shall determine the liability for his
        costs which shall be paid in accordance with his determination. 

	 	 	 
	18.10 	 	Notwithstanding the provisions of 18.8 Supra
        either party may choose to launch proceedings by way of Court
        action or application, save in regard to any matter already referred by
        either Party in terms of this paragraph 18. 

8

 NET 1 U.E.P.S. 

  TECHNOLOGIES INC.  

 We have read the preceding representation letter items 1 through
  20 and agree without exception and approve the financial statements to be issued
  subject to audit committee and board approval. 

Yours truly,

 __________________________________________________

  S.C.P. Belamant, President 

  

 __________________________________________________

  C. Guérard, Director 

  

__________________________________________________
 Randy Saunders, North American representative

10

 Appendix A 

	Name/Country/

      Area	Exclusive

      FTS

      Licence	Non

      Exclusive

      FTS

      Licence	Exclusive

      UEPS

      Licence	Non

      Exclusive

      UEPS

      Licence	Non

      Exclusive

      UEPS

      Commercial

      Agreement	Non

      Exclusive

      Manufacturing

      FTS

      Licence	Non

      Exclusive

      Outsourcing

      Support

      Agreement	Non

      Exclusive

      FTS

      Operating

      Licence	Comments
	VISA

        

      
	 	•	 	 	 	 	 	 	Banking
	BGS	 	 	•	 	 	 	 	 	CIS

      republics
	Gemplus	 	 	 	 	 	•	 	 	Smart Card

      only
	Ghana
 
 	 	•	 	•	•	 	 	 	 
	Chile	 	•	 	 	 	 	 	 	Not yet

      launched 
	Rwanda
 
 	 	•	 	•	•	 	 	 	 
	Burundi
 
 	 	•	 	•	•	 	 	 	 
	Latvia	 	•	 	•	•	 	 	 	Process of

      finalisation
	Nedcor S.A.and

      Surrounding

      Territories	•	 	•	 	 	 	 	 	Banking
	Nedcor Rest of

      World	 	 	 	 	 	 	 	•	Option
	Australia	 	 	 	 	 	 	 	 	Process of

      finalisation
	Aplitec S.A. and

      Surrounding

      Territories	•	 	•	 	 	 	 	 	Includes

      Nedcor
	Aplitec Rest

      of World	 	 	 	 	 	 	•Filed by Automated Filing Services Inc. (604) 609-0244 - Net 1 UEPS Technologies Inc.  - Exhibit 10.3

Exhibit 10.3

SERVICE LEVEL AGREEMENT

BETWEEN

THE LIMPOPO PROVINCIAL GOVERNMENT

IN ITS

DEPARTMENT OF HEALTH AND WELFARE

AND

CASH PAYMASTER SERVICES

(Northern) (Pty) Ltd

 SERVICE LEVEL AGREEMENT 

  

 BETWEEN 

  

THE LIMPOPO PROVINCIAL GOVERNMENT IN ITS 

DEPARTMENT OF HEALTH AND WELFARE 

 Represented by DR. HLAMALANI NELLY MANZINI in her capacity as Head
  of Department of Health and Welfare (Hereinafter referred to as “the Department”)
  and duly authorised

 and 

CASH PAYMASTER SERVICES (Northern) (Pty) Ltd 

  Represented by Solomon Poroma Mohale in his capacity as director (hereinafter
  referred to as “the CONTRACTOR”) duly authorised thereto by a Directors’
  resolution, copy attached hereto marked Annexure A, in respect of disbursement
  of social pensions and social grants. 

2

	1.  
	PREAMBLE 

	 	 
	Whereas the Department has
        sought an alternative, more efficient and cost effective means to administer
        and operate all activities included in the automated cash payments of
        pensions and grants. 

	 	 
	 	 
	1.1 
	The Provincial Tender Board has approved
        tender no NTP8342 to the CONTRACTOR and has authorised the Department
        to enter into a service level agreement with the CONTRACTOR prior to the
        commencement of any activities under this contract, the Effective date;
      

	 	 
	1.2 
	The CONTRACTOR agrees to render cash
        payment services to the beneficiaries of pensions and grants on behalf
        of the Department. 

	 	 
	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 expected
        to be serviced is estimated at 514 000 as at the time of preparation of
        the tender specification, allocated to 1 900 Pay points. These quantities
        shall in no way be construed by the CONTRACTOR as being guaranteed minimums
        or maximums by the Department. 

	 	 
	THEREFORE the parties wish
        to record in writing their agreement relating 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; 

	 	 
	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; 

3

 

	 	2.2.2	a natural person includes a juristic person and vice versa; 
	 	 	 
	 	2.2.3	the singular includes the plural and vice versa; 

	account”	means interest bearing smart card based
        account which does not require the maintenance of any minimum balance
        therein and free of any bank charges or costs, opened by the CONTRACTOR
        in the name of each grant beneficiary.

	 	 
	“AFIS”	means Automated Fingerprint Identification
        system.

	 	 
	“Act”	means Social Assistance Act 1992 (Act
        59 of 1992) as amended.

	 	 
	“Biometric identification”	means the identification of a person
        by using Automated Fingerprint Identification (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 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 CONTRACTOR that allows

4

	 	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 CONTRACTOR
        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.

	 	 
	“Bulk enrolment,
 register
      or registration”	  
	means the process to capture
        fingerprints of four fingers, two from each hand, of each beneficiary
        and/or his/her procurator in the Province using the AFIS computer technology
        (these fingerprints will be used for Biometric verification of each beneficiary).

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

	 	 
	Completion date	The date on which this contract shall
        be completed being the 30 November 2006 or any later date, due to possible
        extensions, which may be agreed to by both parties.

	 	 
	“District and sub-district”	Means the pension district more fully
        described in Annexure “B” hereto:

5

	“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;

	 	 
	“Effective date”	The date on which the CONTRACTOR shall
        commence payment of grants or pensions to the beneficiaries or their designated
        procurators being 1 December 2003.

	 	 
	Contract date	The date on which this contract is signed,
        being a maximum of 45 days from the date the tender was awarded (28 November
        2002) or later 25 may be agreed to by both parties.

	 	 
	“Procurator”	means a person who is entitled to withdraw
        social grant on behalf of a beneficiary. Both the Department and the CONTRACTOR
        should dul register this person as provided for in clause 32.

	 	 
	“Province”	Means the Provincial Government of Limpopo.

	 	 
	“Identity Number”	Means 13 (thirteen) digit, bar coded
        cumber for personal identification issued by the Department of Home Affairs.

	 	 
	“Legislature”	Means the Legislature of the Limpopo
        Provincial Government, its successors or assignees.

	 	 
	“Parties”	Means the CONTRACTOR and the DEPARTMENT.

	 	 
	“Pay Days”	Means those days agreed upon between
        the Parties on which the withdrawal grants or allowances shall be made
        by the beneficiaries at the Pay points;

	 	 
	“Pay points”	Means the designated places for the
        payment of grants and

6

	 	allowances by the CONTRACTOR as set
        out in ANNEXURE C.

	 	 
	“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 CONTRACTOR in accordance with
        the provisions of this agreement will be paid.

	 	 
	“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.

	 	 
	“agreement” and
 ”this
      agreement”
 	 
	means this agreement and the tender
        documents;

	 	 
	“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 and act as a communication channel
        between parties.

	 	 
	“confidential information”	means all confidential data whether
        of a historical, current or future nature irrespective of whether it is
        stored, recorded or

7

	 	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 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;

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

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

	 	 
	“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 or 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 shall 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;

8

	“services”	means the services the CONTRACTOR shall
        provide to the Department in terms of the tender documents, and shall
        include but not limited to bulk enrolment, ongoing enrolment, issuing
        of smart cards, replacement of lost cards, security at Pay points and
        payment of grants.

	 	 
	“SOCPEN payment file”	means the electronic data file provided
        by the State Information Technology Agency, which contains the details
        of all beneficiaries to be paid during a payment cycle.

	 	 
	“steering committee”	means a committee referred to in clause
        [8.2]

	 	 
	“tender”	means tender number NPT8342, approved
        by the tender board of the Limpopo Provincial Government.

	 	 
	“tender documents”	Means tender number NPT8342, the specifications
        (Annexure D), NPT1 and NPT2, the CONTRACTOR’s response to the tender
        and the tender board’s letter of acceptance of the CONTRACTOR’s
        offer. In the event that a conflict occurs between the above mentioned
        documents the tender board’s letter of the acceptance of the CONTRACTOR’s
        offer shall have precedence over the CONTRACTOR’s response which
        shall have precedence over the tender specifications NPT 8342.

9

	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 shall 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 the same
        meanings in schedules and Appendices or Annexures to this agreement which
        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 anintegral
        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; 

10

	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;

	 	 
	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 CONTRACTOR. 

	 	 
	3.1 	In accordance with the award of the tender to the CONTRACTOR,
        the Department hereby appoints the CONTRACTOR, 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 shall be deemed
        to have come into operation on the Effective date. 

	 	 
	3.3 	Neither the appointment of the CONTRACTOR 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,
      

11

	 	neither of the parties shall 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 parties shall acquire any rights, title
        or interest of any kind in any brand name or trademark of the other party
        or any of 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 CONTRACTOR shall pay a beneficiary in full, the
        monies due to him/her, as per the SOCPEN payment file, without making
        any deductions whatsoever. 

	 	 
	4.  
	EXCLUSIVITY 

	 	 
	4.1 
	The CONTRACTOR shall be 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
        CONTRACTOR to deliver services as per this agreement. 

	 	 
	5.  
	THE SERVICES  

	 	 
	The CONTRACTOR shall, in
        return for fees charged, render to the Department the services, from the
        Effective 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 Tender Board’s
        approval and in accordance with the following procedure; 

12

	 	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 30 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.  	INCORPORATION OF TENDER
        DOCUMENTS 

	 	 
	7.1 	It is recorded that this
        agreement supplements the tender documents whose provisions shall be incorporated
        into this agreement as if expressly set out herein. 

	 	 
	7.2	In the event that there
        is a conflict between the terms of this agreement and the tender documents,
        the tender documents shall receive precedence subject to changes if any
        agreed by both parties and ratified by the Tender Board. 

	 	 
	8.  	CONTRACT MANAGEMENT 

	 	 
	8.1 	Contract Managers 

	 	 
	 	8.1.1 
	The parties shall each appoint a contract
        manager whose responsibility shall 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 general manager responsible
        for social security in the Department and the manager for the CONTRACTOR
        shall be the provincial manager appointed by the CONTRACTOR’s board
        of directors. 

13

	 	8.1.2
	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. 

	 	 	 
	 	8.1.3 
	The contractor shall maintain minutes of the meetings
        of the contract managers and shall send copies to the Steering Committee.
      

	 	 	 
	 	8.1.4
	The Contract managers shall be responsible for monitoring
        the provision of services in accordance with the service level reports
        and for the general management of this agreement. 

	 	 	 
	8.2	The parties agree to establish
        a Steering Committee that shall be responsible for the evaluation of performance
        of the parties’ obligations in terms of this agreement. The Steering
        Committee shall meet on a quarterly basis or as agreed upon by both parties
        and shall comprise of:

	 	 	 
	 	8.2.1 
	The Senior General Manager responsible for Welfare
        (chairperson).

	 	 	 
	 	8.2.2 
	The Chief Financial Officer of the Department:

	 	 	 
	 	8.2.3 
	The General Manager (Contract Manager for the Department)
        responsible for social security; 

	 	 	 
	 	8.2.4 
	The Senior Manager responsible for Provisioning and
        Contract Management of the Department; 

	 	 	 
	 	8.2.5 
	The Senior manager responsible for social security;
      

	 	 	 
	 	8.2.6 
	The Contract Manager for the CONTRACTOR and not more
        than three representatives. 

	 	 
	8.3 	The Steering Committee shall
        meet at least quarterly to evaluate performance of services in terms of
        this agreement and any other related issues. 

14

	8.4 	The management committee
        shall meet on a monthly basis or as agreed upon by both parties and shall
        consist of:

	 	 	 
	 	8.4.1
	The General Manager Social Security (Chairperson);

	 	 	 
	 	8.4.2 
	Two Senior Managers Social Security;

	 	 	 
	 	8.4.3 
	Managers in the Social Security; 

	 	 	 
	 	8.4.4
	District Managers; 

	 	 	 
	 	8.4.5 
	CONTRACTOR’s Branch Managers; 

	 	 	 
	 	8.4.6 
	Two Contract Managers; 

	 	 	 
	 	8.4.7 
	CONTRACTOR’s Provincial Manager. 

	 	 	 
	8.5 	District committees shall
        meet on a monthly basis or as agreed upon by both parties and shall comprise
        of: 

	 	 	 
	 	8.5.1 
	CONTRACTOR’s Branch Managers 

	 	 	 
	 	8.5.2 
	District Managers (Chair) 

	 	 
	9.  	DURATION, TERMINATION
        AND BREACH 

	 	 
	9.1	This agreement shall endure
        for a period of three years calculated from the effective date, unless
        terminated in accordance with the provisions of this agreement, with the
        option for the Department to extend it if necessary for one (1) more year
        at a time. 

	 	 
	9.2	The CONTRACTOR acknowledges
        that it is bound by the provisions of paragraph 45 (failure to comply
        with conditions and delayed execution), paragraph 46 (remedies in the
        case of bribes) and paragraph 48 (remedies in case of liquidation and
        procedures in the event of unsatisfactory performance) of Northern Province
        Tender Board General Conditions and Procedures (NPT1). 

	 	 
	9.3 	Should either party commit
        a material breach of any of the provisions of this agreement, then the
        aggrieved party shall be obliged to give the other party 30 (thirty) working
        days 

15

	 	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, fails within
        such period to initiate such steps towards remedying such breach as shall
        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:

	 	 	 
	 	9.3.1 
	Cancel this agreement or

	 	 	 
	 	9.3.2 
	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 breach, such party shall not cancel this agreement unless the
        breach is a material breach going to the essence of this agreement and
        is incapable of being remedied. 

	 	 	 
	10. 	WARRANTIES 

	 	 
	10.1 	The CONTRACTOR hereby represents
        and warrants to the Department that: 

	 	 	 
	 	10.1.1
	it has full power and authority to enter
        into, legally bind itself by and perform its rights and obligations under
        this agreement;

	 	 	 
	 	10.1.2 
	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 

	 	 	 
	 	10.1.3
	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 ir 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. 

	 	 
	10.2 	The Department hereby represents
        and warrants to CONTRACTOR that: 

16

	 	10.2.1
	it has full power and authority to enter into, legally
        bind itself by and perform its rights and obligations under this agreement;
      

	 	 	 
	 	10.2.2
	this agreement has been duly authorised and executed
        by the Department; 

	 	 	 
	 	10.2.3 
	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; 

	 	 	 
	 	10.2.4
	It has the legal capacity and authority to appoint
        the CONTRACTOR as a service provider on the basis set out in this agreement.
      

	 	 	 
	10.3	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. 

	 	 
	10.4 	No warranties or representations
        which are not set fort in this agreement shall be binding on either party.
      

	 	 
	10.5	CONTRACTOR guarantee: 

	 	 	 
	 	10.5.1 
	The CONTRACTOR guarantees that it can
        deliver the services according to the terms and conditions as stipulated
        in the tender documents. 

	 	 	 
	 	10.5.2 
	The CONTRACTOR shall provide backup
        to ensure performance in all respects as per the tender documents. 

	 	 	 
	 	10.5.3 
	The CONTRACTOR 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 35.1 

17

	10.6	Provisions of clauses 10.1
        to 10.5 shall survive the termination of this agreement but shall not
        survive the Completion date. 

	 	 	 
	11. 	BEST ENDEAVOURS AT DISPUTE
        RESOLUTION  

	 	 
	11.1 	Both parties agree that
        it is in their best interest to resolve any matters of disagreement before
        resorting to legal remedies. 

	 	 
	11.2	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 working days, the signatories
        of this agreement shall attempt to reach an acceptable resolution. 

	 	 
	11.3 	In the event that the signatories
        to this agreement reach an impasse after 14 working days of referral of
        the dispute, the aggrieved party will notify the other party in writing
        within seven days of the nature and cause of the dispute. 

	 	 
	11.4 	The party notified of the
        dispute shall have 21 working days to rectify the cause. 

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

	 	 
	12. 	ARBITRATION 

	 	 
	12.1 	A dispute which arises in
        regard to- 

	 	 	 
	 	12.1.1 
	the interpretation of;

	 	 	 
	 	12.1.2
	the carrying into effect of; 

	 	 	 
	 	12.1.3 
	either of the party’s rights and
        obligations arising from: 

	 	 	 
	 	12.1.4
	the termination or purported termination
        of or arising from the termination of; or

	 	 	 
	 	12.1.5 
	the rectification or proposed rectification
        of this agreement, or out of or pursuant to this agreement, or on any
        matter which in terms of this agreement requires agreement by the parties
        (other than where an interdict is sought or urgent relief 

18

	 	 	may be obtained from a court of competent jurisdiction)
        shall 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. 

	 	 	 
	12.2	The arbitration shall be
        held at Polokwane. 

	 	 	 
	 	12.2.1
	with only the legal and other representatives of
        the parties to the dispute present thereat; mutatis mutandis in accordance
        with the provisions of the Supreme Court Act 59 of 1959, 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 shall be held and completed as soon as possible.
      

	 	 	 
	12.3	The arbitrator shall be,
        if the matter in dispute is principally- 

	 	 	 
	 	12.3.1
	a legal matter, a practising advocate
        or attorney of at least 10 (ten) years’ standing;

	 	 	 
	 	12.3.2 
	an accounting matter, a practising chartered
        accountant of at least 10 (ten) years’ standing; 

	 	 	 
	 	12.3.3
	any other matter, any independent person,
        agreed upon between the parties. 

	 	 
	12.4	Should the parties to the
        dispute fail to agree whether the dispute is principally a legal, accounting
        or other matter, the matter shall be deemed to be a legal matter. 

	 	 
	12.5 	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). 

19

	12.6 	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.

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

	 	 
	12.8 	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.
      

	 	 
	12.9 	The provisions of this clause:
      

	 	 
	 	12.9.1 
	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

	 	 	 
	 	12.9.2 
	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. 

	 	 	 
	13. 	BULK ENROLMENT 

	 	 	 
	13.1 	Standards 

	 	 	 
	 	13.1.1 
	The CONTRACTOR’s system shall cater
        for the registration of all beneficiaries and procurators as defined by
        the SOCPEN file receiving payment in cash (excluding beneficiaries receiving
        payment at banks and post offices). 

	 	 	 
	 	13.1.2 
	The CONTRACTOR 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. 

	 	 	 
	 	13.1.3 
	The CONTRACTOR shall perform enrolment
        of biometric and other data for the beneficiaries, including photographs
        and fingerprints (four fingers, two from each hand, for each beneficiary)
        in accordance with clause 13.2. 

	 	 	 
	 	13.1.4 
	The CONTRACTOR shall perform live scanning
        of four fingers, two from each hand. Image files must comply with an acceptable
        international format. 

20

	 	13.1.5
	The CONTRACTOR shall utilise enrolment workstations
        at all Pay points during bulk registration. 

	 	 	 
	 	13.1.6 
	Ownership of the bulk registration equipment and
        systems remains with the CONTRACTOR. 

	 	 	 
	 	13.1.7
	The CONTRACTOR shall not use fingerprint or other
        data belonging to the Department for any other purpose unless agreed to
        by the Department. 

	 	 	 
	 	13.1.8
	The CONTRACTOR 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.

	 	 	 
	 	13.1.9 
	The CONTRACTOR shall store the identification records
        to which the DEPARTMENT will have access on request (at no additional
        cost). 

	 	 	 
	 	13.1.10 
	All information and data are DEPARTMENT’s property
        at all times and shall be transferred (in a format and process mutually
        agreed by the parties) to the DEPARTMENT on expiry of the contract. 

	 	 	 
	 	13.1.11
	The CONTRACTOR shall with regard to ongoing enrolment
        provide beneficiaries and procurators with cards at Pay points during
        payment at no additional cost. 

	 	 	 
	13.2	Procedures 

	 	 	 
	 	13.2.1
	In terms of the tender specifications, the bulk enrolment
        process of cash paid beneficiaries must be completed within 9 (nine) months.
      

	 	 	 
	 	13.2.2
	The CONTRACTOR’s bulk enrolment workstations
        shall have full capacity to take photos, fingerprints and capture data
        required by SOCPEN. Any other data required by the DEPARTMENT can be collected
        as agreed to by the parties. 

	 	 	 
	14. 	CLEAN - UP OF DATABASE
      

	 	 
	14.1	Standard 

21

	 	14.1.1
	The CONTRACTOR shall provide an AFIS component as
        part of the enrolment technology to ensure that any individual, recognised
        by means of fingerprints, will have only one identity in the pensions
        system. 

	 	 	 
	 	14.1.2 
	The CONTRACTOR’s system shall at all times ensure
        that no duplicate registration exists in the Department’s pension
        system. This shall be achieved by the CONTRACTOR utilising the system
        being developed by Home Affairs (HANIS) through which one to many or many
        to one many searches can be performed. These searches shall 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, shall
        be for the account of the Department. 

	 	 	 
	14.2 	Procedures

	 	 	 
	 	14.2.1
	The CONTRACTOR shall, upon written instruction from
        the DEPARTMENT, use AFIS biometric identification technology to identify
        duplicates as per 14.1.2 above. 

	 	 	 
	15. 	AUTOMATED PAYMENT SYSTEM
        USING BIOMETRICS 

	 	 
	15.1 	Standards 

	 	 
	 	15.1.1
	The CONTRACTOR shall transfer / migrate
        beneficiaries to the new system as soon as possible. Not more than 12
        months shall elapse before all pensioners are on the CONTRACTOR automated
        cash payment system. 

	 	 	 
	 	15.1.2
	Mobile and portable pay stations shall
        be provided in accordance with the CONTRACTOR’s tender response.
      

	 	 	 
	 	15.1.3 
	Biometric verification shall be the
        only method used during payment to verify the beneficiaries. 

22

	 	15.1.4
	Pay points shall be specified by the DEPARTMENT and
        registers on SOCPEN. The DEPARTMENT will allocate pensioners to SOCPEN
        Pay points. The DEPARTMENT shall notify the CONTRACTOR of any amendments
        made on SOCPEN to Pay points, one calendar month in advance. 

	 	 	 
	 	15.1.5
	Payments shall be effected at the SOCPEN designed
        Pay points only. 

	 	 	 
	 	15.1.6 
	The Parties shall agree on the payment dates and times
        six months in advance. Adjustments due to unforeseen reasons can be agreed
        to by the Parties. 

	 	 	 
	 	15.1.7 
	The CONTRACTOR shall be able to pay the beneficiary
        within his/her district subsequent to the official payment date having
        elapsed but prior to the official SOCPEN cut-off date for that month.

	 	 	 
	 	15.1.8
	The CONTRACTOR shall not override the payment system.
      

	 	 	 
	 	15.1.9 
	The CONTRACTOR shall only effect retrospective payments
        exceeding R2 500.00 (Two Thousands Five Hundred Rands) subject to written
        approval of the contract manager of the Department only. (CONTRACTOR to
        print exceptions report of all these payments monthly). 

	 	 	 
	15.2	Procedures 

	 	 	 
	 	15.2.1 
	The CONTRACTOR shall pay all beneficiaries who can
        be biometrically verified. 

	 	 	 
	 	15.2.2 
	In addition to 15.2.1 the CONTRACTOR shall, where
        false rejection of fingerprints occurs, 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
        help desk official. A copy of this approval to be retained by the authorising
        official. 

23

	 	15.2.3
	On a monthly basis, the Contract manager of CONTRACTOR
        shall provide the Department with a list of beneficiaries paid manually,
        the electronic rejected beneficiaries, and the name of the DEPARTMENT’S
        authorising official. 

	 	 	 
	 	15.2.4
	The DEPARTMENT shall provide a minimum of 1 (one)
        Department official per CONTRACTOR’s payment team as help desk officials
        to handle department related queries from beneficiaries. 

	 	 	 
	 	15.2.5
	The equipment used for payment shall be accessible
        to beneficiaries with disabilities. 

	 	 	 
	 	15.2.6
	Ownership of the automated payment equipment and
        systems remains with the CONTRACTOR. 

	 	 
	16.	ONGOING ENROLMENT OF
        NEW SOCIAL BENEFICIARIES 

	 	 
	16.1 	Once the bulk enrolment
        process had been completed in a district, the CONTRACTOR shall enrol new
        applicants for social benefits on a one-stop-enrolment basis at the venues
        as listed in Annexure B. 

	 	 
	16.2	The CONTRACTOR’s ongoing
        enrolment workstations shall have full capacity to take photos, fingerprints
        and capture data required by SOCPEN. Any other data required by the DEPARTMENT
        can be collected as agreed to in writing by the Parties. 

	 	 
	16.3 	From time to time the contract
        managers of the parties shall meet to agree on the amendments on the timetable
        and venues where the CONTRACTOR must provide workstations for ongoing
        enrolment. 

	 	 
	16.4 	Ownership of the ongoing
        enrolment equipment and systems remains with the CONTRACTOR. 

24

	17. 	PROVISION OF SECURITY
        SERVICES 

	 	 	 	 
	17.1 	The CONTRACTOR 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. 

	 	 
	17.2 	The CONTRACTOR shall deploy
        5 guards of B & C grade at high-risk Pay points and 5 guards of C
        & C grade at lower risk areas as determined by the contract managers
        from time to time. 

	 	 
	17.3 	The CONTRACTOR shall where
        possible source the required guards from a Small, Medium or Micro Enterprise
        in the Limpopo Province to deliver the guarding service at pay point level.
      

	 	 
	17.4 	Where a pay point is fenced,
        the CONTRACTOR shall ensure that non-beneficiaries / vendors are restricted
        to at least ten (10) metres away from the fence. 

	 	 
	17.5	In situations where the
        pay point is not fenced, the CONTRACTOR shall ensure that non-beneficiaries
        / vendors are restricted to at least 20 metres away from the workstation.
      

	 	 
	17.6 	The CONTRACTOR shall ensure
        that the requirement in respect of restricted access to the pay point
        by vendors, hawkers etc. as stated above is adhered to. 

	 	 
	17.7 	The Department shall co-ordinate
        with SAPS and Traffic Department to patrol and be visible within the area
        where payment is taking place. 

	 	 
	18. 	ADMINISTRATION AND SUPPORT
        SERVICES 

	 	 
	18.1 	Transfer of Data and/or
        Information 

	 	 
	 	18.1.1 	

      Standards 

	 	 	 	 
	 	 	18.1.1.1 
	The CONTRACTOR shall operate the automated
        cash payment system from their existing central facility. 

	 	 	 	 
	 	 	18.1.1.2 
	The central facility shall function
        as the electronic gateway between the National Department of Social Development
        and the 

25

	 	 	 	CONTRACTOR. This facility shall be protected by 24
        hour armed security and shall have access control and shall have 24 hour
        standby power supply. 

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

	 	 	 	 
	 	 	18.1.1.4 	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. 

	 	 	 	 
	 	 	18.1.1.5	The CONTRACTOR shall reconcile payment information
        on a daily basis. 

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

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

	 	 	 	 
	 	 	18.1.1.8	The CONTRACTOR 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. 

26

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

	 	 	 	 	 
	 	 	 	•
	By beneficiary

	 	 	 	 	 
	 	 	 	•
	By pay point

	 	 	 	 	 
	 	 	 	•
	Any other issues that may be specified by the Department
        from time to time

	 	 	 	 	 
	 	 	 	For the above categories
        the following shall be disclosed:

	 	 	 	 	 
	 	 	 	•
	Amount to be paid

	 	 	 	 	 
	 	 	 	•
	Amount paid

	 	 	 	 	 
	 	 	 	•
	Difference, unclaimed cash

	 	 	 	 	 
	 	 	 	•
	Amount returned

	 	 	 	 	 
	 	 	 	•
	Any other information that may be required by the
        Department in future

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

	 	 	 	 
	 	18.1.2	Procedures
	 	 	 	 
	 	 	18.1.2.1	Transfer of beneficiary’s
        data (from the DEPARTMENT via SOCPEN to the CONTRACTOR) and database updates.

	 	 	 	 
	 	 	 	a) 
	The DEPARTMENT shall provide the CONTRACTOR
        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.

27

	 	 	 	b) 
	The DEPARTMENT shall be responsible for correcting
        errors or inaccuracies which may occur on the electronic records supplied
        to the CONTRACTOR.

	 	 	 	 	 
	 	 	 	c) 
	The parties agree to implement a system which, 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 CONTRACTOR in writing

	 	 	 	 	 
	 	 	 	d) 
	The CONTRACTOR shall provide the Department 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 CONTRACTOR and shall comply with the specifications
        for such information required by the CONTRACTOR from time to time.

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

	 	 	 	 	 
	 	 	18.1.2.2	Transfer of beneficiary
        data and/or information (from the CONTRACTOR to the DEPARTMENT and SOCPEN)
        and database updates. 

28

	 	 	 	a) 	The CONTRACTOR shall transfer all information received
        from the DEPARTMENT and captured electronically during the enrolment 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 CONTRACTOR 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. 

	 	 	 	 	 
	 	 	 	c) 	The CONTRACTOR 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 payment shall be made to beneficiaries that the accounts of all
        beneficiaries as per SOCPEN payment list have been activated and processed
        and shall reflect the appropriate credit at the start of business on the
        1st (first) business of the month in which the credit amount
        is due for payment. 

	 	 	 	 	 
	 	 	 	d) 	The CONTRACTOR shall forward to the DEPARTMENT within
        5 (five) business days of the beginning of each month a hard copy exception
        report reflecting all grant banking accounts from which no withdrawal
        has been made for a period of 3 (three) consecutive months. 

29

	 	 	 	e) 	The CONTRACTOR shall make available to the Auditor
        General and the Department every 12 (twelve) months, an audited report
        of all grants paid since the last audited report. 

	 	 
	19. 	TRUST ACCOUNT 

	 	 
	19.1 	The Department shall transfer
        funds to the Department’s “Pension Trust Account” held
        at its 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. 

	 	 
	19.2 	The CONTRACTOR 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 CONTRACTOR
        according to the SOCPEN pay file and signed off by the Department and
        the CONTRACTOR not later than three working days prior to the commencement
        of the pension payment cycle. 

	 	 
	19.3 	The CONTRACTOR shall arrange
        with its cash provider to only debit the Pension Trust Account for withdrawals
        on the day on which the cash funds for pay outs actually are handed over
        to the CONTRACTOR. Any unclaimed amounts for each pay day must be re-deposited
        in the Pension Trust Account within 24 hours after the end of each pay
        day. Cash in transit between withdrawal to payout pensions and redeposit
        of unclaimed amounts should not exceed 96 hours (four working days). 

	 	 
	19.4 	The CONTRACTOR shall submit
        to the satisfaction of the province a bank guarantee from an acceptable
        financial institution in the amount of 50% of the average daily benefits
        paid out calculated six months in arrears. The initial amount shall be
        R 10,000,000 (Ten million Rand). The DEPARTMENT shall be entitled to claim
        any 

30

	 	amount in terms of this
        bank guarantee when it can prove that the CONTRACTOR has not applied the
        funds drawn from the Pension Trust Account for the payment of social welfare
        grants and that such funds were not redeposited in terms of 19.3. 

	 	 	 
	19.5 	The CONTRACTOR shall provide
        proof of Cash in Transit Insurance to the Department from the Effective
        date of the contract. The CONTRACTOR shall not change the said insurance
        cover without the written approval of the Department. 

	 	 
	20. 	DEATH BENEFITS 

	 	 
	20.1 	Standards 

	 	 	 
	 	20.1.1 
	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. 

	 	 	 
	 	20.1.2 
	The Department shall capture the relevant
        data on the SOCPEN system and SOCPEN shall be requested to generate a
        special payment file to be down-loaded to the CONTRACTOR. 

	 	 	 
	 	20.1.3 
	The Social Security officer will record
        the claim and issue a receipt as a proof for the claim. 

	 	 	 
	 	20.1.4
	Payment will be processed through SOCPEN,
        where a separate payment file for unclaimed benefits will be created.
      

	 	 	 
	 	20.1.5 
	Payment will be electronically downloaded
        to the CONTRACTOR to create a separate payment files for unclaimed benefits.
      

	 	 	 
	 	20.1.6 
	The CONTRACTOR shall pay the claimant
        upon producing an official identification document (RSA 13 digits bar
        coded document). 

	 	 	 
	 	20.1.7 
	The CONTRACTOR, during payment, shall
        take electronic fingerprints of the claimant for record purposes. 

31

	 	20.1.8 
	The CONTRACTOR shall provide
        payment reconciliation report for unclaimed benefits on a monthly basis.
        The format shall be a follows:

	 	 	 	 
	 	 	•
	Name and identity number for the claimant.

	 	 	 	 
	 	 	•
	Name and identity number for the deceased.

	 	 	 	 
	 	 	•
	Payment shall be per district, sub-district
        and pay point.

	 	 	 	 
	 	 	•
	Number of unpaid/outstanding payments
        carried over to the following month.

	 	 	 	 
	 	20.1.9 
	The CONTRACTOR shall be
        responsible for electronic reconciliation of the Death Benefits Trust
        Account within 15 days of each month end and to hand over a detailed reconciliation.
        Such reconciliation shall be certified annually by the CONTRACTOR’s
        external auditors, to the Department.

	 	 	 	 
	 	20.1.10
	The CONTRACTOR shall keep
        unpaid claims for a period of three (3) months to allow claimants to receive
        the money due to them.

	 	 	 	 
	 	20.1.11
	The CONTRACTOR shall, every
        three months, refund all outstanding claims older than three months and
        reconcile accordingly.

	 	 	 	 
	21.	RECONCILIATION

	 	 	 	 
	21.1 	The CONTRACTOR shall reconcile
        to the Department indicating the total number of people paid per grant
        type, pay point, sub-district, and district on a daily basis.

	 	 	 	 
	21.2 	The CONTRACTOR shall reconcile
        to SOCPEN monthly according to SOCPEN reconciliation cut off dates.

	 	 	 	 
	22.	THE CONTRACTOR’S BLACK
        ECONOMIC EMPOWERMENT (“BEE”) COMMITMENT

       In terms of the tender documents and this agreement
        the CONTRACTOR undertakes that: 

	 	 
	22.1	 It shall ensure that Aplitec
        transfers 70% of its shares in CFS (NP) to the BEE groups as per the shareholders’
        agreement included in the CONTRACTOR’s tender response,

32

	 	within 30 days of the Effective
        date. A resolution to this effect shall be furnished to the Department
        within 30 days of the Effective Date.

	 	 	 
	22.2 	The CONTRACTOR confirms
        that Aplitec has entered into an agreement with CPS (NP) whereby Aplitec
        shall remain the technology provider to CPS (NP) as per the tender response.

	 	 
	22.3 	The CONTRACTOR confirms
        that Aplitec has entered into an agreement with the CONTRACTOR as per
        the tender response whereby Aplitec and the CONTRACTOR shall establish
        a joint senior management team consisting of experienced senior managers
        and / or its shareholders to ensure a high standard of service delivery
        in the Province with a strong commitment to the transfer of skills.

	 	 
	22.4	In addition to the senior
        management team in 22.4 above the CONTRACTOR shall continue with most
        of the provincial management and staff who are presently delivering the
        services in the Province. The same applies to the fixed infrastructure
        (deposits/branches).

	 	 
	22.5 	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
        according to the tender response:

	 	 	 
	 	•
	Vehicles

	 	 	 
	 	•
	Stationery

	 	 	 
	 	•
	Office Furniture

	 	 	 
	 	•
	Offices / Premises

	 	 	 
	 	•
	Recruitment

	 	 	 
	 	•
	Construction

33

	 	•
	Fuel and Maintenance

	 	 	 
	 	•
	Security Services (armed
        guards)

	 	 	 
	 	•
	Cash-in-Transit services

	 	 
	23.	COMMUNITY INVOLVEMENT/SOCIAL
        RESPONSIBILITY 

	 	 	 	 
	 	 	a) .
	The CONTRACTOR shall contribute at least
        an amount of R2.7 million (two millions and seven hundreds thousands Rands)
        over three years to the community development fund

	 	 	 	 
	 	 	 b) 
	The Community development fund shall
        be administered and managed jointly by the CONTRACTOR and the Department.
      

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

	 	 	 	 
	24.	HUMAN RESOURCES DEVELOPMENT
        

	 	 	 	 
	 	 	a)
	 The CONTRACTOR shall develop and submit
        a Human Resource Development strategy to support the objective of this
        tender by 31 October 2003.

	 	 	 	 
	 	 	b) 
	The CONTRACTOR shall develop and submit
        a reorientation and induction training programme for the approval by the
        Department by 31 October 2003.

	 	 	 	 
	 	 	 c) 
	The CONTRACTOR shall provide training
        to empower civil servants during subsistence of the contract and the Department
        shall have the right to evaluate and assess progress on training. 

	 	 	 	 
	 	 	d) 
	The CONTRACTOR shall keep record of
        training activities and an attendance register of such training activities.

34

	 	 	e)
	The CONTRACTOR shall as
        far as possible recruit local people from the Limpopo Province. 

	 	 	 	 	 
	 	 	f) 
	The CONTRACTOR shall adhere
        to all relevant statues such as:

	 	 	 	 	 
	 	 	 	i.
	Employment Equity Act 

	 	 	 	ii. 	Basic Conditions of employment Art
	 	 	 	iii. 	Skills Development Act, etc,
	 	 	 	 
	25.
	CUSTOMER SERVICE

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

	 	 	 	 
	 	 	b) 
	The CONTRACTOR 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 shall be pre-approved by the CONTRACTOR
        and shall be for the CONTRACTOR’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 CONTRACTOR related.

	 	 	 	 
	 	 	 d) 
	The Department shall provide
        a toll free number as a communication and query line between the CONTRACTOR
        and the beneficiaries.

	 	 	 	 
	26.
	INSURANCE

       The CONTRACTOR shall provide acceptable proof of insurance
        cover, including Public Liability, upon the Effective date of this agreement.
        Any change in insurance cover shall be notified to the DEPARTMENT within
        24 hours of the change.

35

	27. 	TRANSFER OF RISK

	 	 	 	 
	 	 	a) 
	The CONTRACTOR shall be liable for any payment made
        to a beneficiary by the CONTRACTOR after having received an instruction
        not to make such payment from the DEPARTMENT as long as the instruction
        is received by the CONTRACTOR before the payment is effected.

	 	 	 	 
	 	 	b) 
	The risk in any monies held by the CONTRACTOR in
        terms of this agreement shall pass to the CONTRACTOR when such monies
        are withdrawn from the Trust Account, by the CONTRACTOR and the risk shall
        remain with the CONTRACTOR until such time as the monies have been paid
        to the beneficiary or procurator or have been repaid to the Trust account.

	 	 	 	 
	 	 	c) 
	All monies not paid out shall be deposited into the
        Trust Account within twenty four hours from the stipulated payment date.
      

	 	 	 	 
	27.1 	SUPPORT SERVICES AND BACK-UP
      

	 	 
	 	27.1.1
	The CONTRACTOR 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, extra security. 

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

	 	 	 
	 	27.1.3 
	The CONTRACTOR 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. 

36

	 	27.2 
	DISASTER RECOVERY PLANS

	 	 	 	 
	 	 	a) 
	The CONTRACTOR shall provide and implement disaster
        recovery plans as far as the pensions payment system is concerned as per
        the tender response. 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 CONTRACTOR shall ensure availability of enough
        vehicles to undertake the pension payment task unhindered. 

	 	 	 	 
	28.	INVESTIGATIONS AND QUERIES
        

	 	 
	28.1 	All queries pertaining to
        beneficiaries which take place at Pay points shall be immediately dealt
        with by the help desk officer in conjunction with the CONTRACTOR’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 CONTRACTOR. 

	 	 
	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 CONTRACTOR via the DEPARTMENT.
        The CONTRACTOR shall be obliged to attend to any such queries and give
        feedback to the DEPARTMENT at no extra cost. 

37

	28.4 	All queries made by and
        all information required by the CONTRACTOR 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 social
        grant or that his / her grant has been misappropriated in any way, the
        CONTRACTOR 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 as set-out
        in Annexure B.2 and B.4. of the CONTRACTOR’s tender. These fees will
        become payable from the Effective date and remain fixed until 30 November
        2004. The first escalation will only come into effect on 1 December 2004.

	 	 
	29.2	 The CONTRACTOR accepts
        that the annual price adjustments, will only be effective from 1 December
        2004. The price adjustment will be effective from 1 December being the
        contract anniversary date. The following formula will be applied to calculate
        the price adjustment.

	 	 	 
	 	•
	Consumer Price Index (CPI) applicable
        to this sector will be according to Statistical release P0141.1 by Statistics
        South Africa Table 2.2

	 	 	 
	 	•
	The base CPI index shall be the Index
        for November 2003.

38

	 	•
	Formula:-

	 	 	 	 
	 	 	TN
	= [(A-C) x (D/B)] + (C-A)
	 	 	 	 
	 	 	TN
	= The new price to be calculated
	 	 	 	 
	 	 	A
	= The original tender price
	 	 	 	 
	 	 	B
	= The base month being November 2003 Table 2.2 Index
	 	 	 	 
	 	 	C
	= Fixed element of the price being 15% of the original tender price
	 	 	 	 
	 	 	D
	= The new index for November from November 2004 onwards.
	 	 	 	 
	29.3 	The basis for the Services
        Fee charges shall be the following:-

       Enrolment / card issuing service fee:

      

	 	 
	 	•
	Per existing recipient of
        grants no matter how many grants collected by the beneficiary or procurator/
        care giver.

	 	 	 
	 	•
	Per new recipients of cash
        grants no matter how many grants collected by the beneficiary or procurator/
        care giver.

	 	 	 
	 	Payment services

	 	 	 
	 	•
	Per recipient of grant no
        matter how many grants collected credited to individual smart cards presented.
        The SOCPEN payment extraction report less the number of unpaid beneficiaries/procurators
        will confirm the number of transactions to be paid for.

	 	 
	29.4	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.

	 	 
	29.5 	The Department shall verify
        and pay the said service fee invoices not later than the end of the month
        after the payment cycle concerned. Any issues preventing the Department

39

	 	from certifying the service charge as due and payable
        must be resolved within the same period. 

	 	 
	29.6 
	All payments by the DEPARTMENT to the CONTRACTOR
        in terms of this agreement shall be made without deductions or set off,
        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 CONTRACTOR has failed to
        refund any amounts not claimed by beneficiaries. 

	 	 
	29.7 
	All payments due by the DEPARTMENT to the CONTRACTOR
        in terms of this agreement shall be made electronically into the CONTRACTOR’s
        bank account as certified by the CONTRACTOR’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 respect of service
        fees or unclaimed benefits refunded outside the specified time period.
      

	 	 
	31. 
	VARIATION OF INSTRUCTIONS BY THE DEPARTMENT 

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

	 	 
	31.2 
	The CONTRACTOR shall only be obliged to implement
        any variation or revoke if it has received notice in writing of such variation
        or revoke. The CONTRACTOR shall only be obliged to implement any variation
        or revoke within two business days from the date upon which such variation
        or revoke has been received by the CONTRACTOR and that such variation
        or revoke is recorded and must then be confirmed on the magnetic tape
        record submitted by the DEPARTMENT to the CONTRACTOR. 

40

	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, providing that such nominated procurator is
        not an employee of the CONTRACTOR or of the 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 CONTRACTOR 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. 

	 	 
	32.4 	Once the procurator is registered in SOCPEN and by
        the CONTRACTOR 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 CONTRACTOR and
        if both the beneficiary and the procurator are so enrolled the CONTRACTOR
        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 CONTRACTOR 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 CONTRACTOR in respect of a payment made by the CONTRACTOR
        to a registered procurator. The CONTRACTOR shall not demand that the beneficiary
        personally receives a grant when procurator is duly appointed unless authorised
        by the Department. 

41

	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;
      

	 	 
	32.7
	The CONTRACTOR shall pay
        a temporary power of attorney holder on the presentation of an official
        form subject to identification by the help desk officials, and

	 	 
	 32.8 
	The official form must be
        in triplicate with a copy to CONTRACTOR 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.

	 	 
	33.
	MANAGEMENT REPORTS

      
	 	 	 
	The CONTRACTOR 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:

	 	 	 
	 	•
	Pay point number

	 	 	 
	 	•
	Name of pay point

	 	 	 
	 	•
	Number of beneficiaries

	 	 	 
	 	•
	Name of district and sub-district

42

	33.6	The Department shall have
        online access to the CONTRACTOR’s database to generate reports

	 	 	 
	 	33.6.1
	Pay point incidents report.

	 	 	 
	 	33.6.2
	Internal investigation exception report.

	 	 	 
	 	33.6.3
	Source Code update report.

	 	 	 
	 	33.6.4
	Training and Development Report.

	 	 	 
	 	33.6.5
	Disaster Recovery Plan.

	 	 	 
	 	33.6.6
	Service Level Report. 

	 	 	 
	34. 	SUPPORT 

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

	 	 
	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 CONTRACTOR in terms of this agreement
        shall remain the property of the CONTRACTOR 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 shall 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 CONTRACTOR to amend the Biometric Identification and Verification
        Software Procedures without being requested by the 

43

	 	Department, the CONTRACTOR 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 CONTRACTOR shall ensure that the
        Department has access and is able to utilise data even after the termination
        of the contract. 

	 	 
	36. 
	AUDITING 

	 	 
	36.1 
	State Auditors shall have the rights
        to inspect books of the CONTRACTOR and provide the Department with same
        information. 

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

	 	 
	37.
	PARTIES NOT AFFECTED BY WAIVER OF
        BREACHES ETC. 

	 	 
	37.1 
	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 

	 
	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. 

44

	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 shall 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
        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 

	 	 
	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 CONTRACTOR shall avail for vetting by the Department
        any of its directors or employees or agents whom the Department may deem
        it necessary. 

45

	 	At the expiry or termination
        of this agreement, the CONTRACTOR 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 CONTRACTOR shall communicate
        with the Department through the following channels: 

	 	 	 
	 	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 CONTRACTOR
        and the public (beneficiaries) shall be done in agreement with the Department;
      

	 	 	 
	 	41.2.4 
	The CONTRACTOR 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 CONTRACTOR shall prepare six-months
        payout programmes in consultation with the Department, three months before
        the commencement of the six months period, and the Department shall have
        the final ratification authority. 

	 	 	 
	 	41.2.6
	The CONTRACTOR 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 shall use its best endeavours to notify
        beneficiaries of any changes thereto. 

46

	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 parties 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 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
        shall 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 30 (thirty) 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 30 (thirty) 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 away that a reduction in 

47

	 	service is not the fault
        of the CONTRACTOR, the Department agrees to pay the CONTRACTOR monthly
        fees/service levy for the reduced services until re-established, on the
        basis of the average of the previous three months fees/service levy.

	 	 
	43.	CESSION

	 
	The CONTRACTOR may with the prior written consent
      of the Provincial tender board transfer or assign its rights and obligations
      under this agreement with the prior written consent of the Department. The
      CONTRACTOR will notify the Department as soon as it is legally aware or
      as soon as restraints of confidentiality allow, of any proposed change in
      its shareholding or that of any subsidiary in which is 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: 

      Dr Jan Moolman Building, 

        34 Hans Van Rensburg Street. 

        Polokwane: 0699.

       The CONTRACTOR at: 

      97 Bicard Street,

        Polokwane. 0699

       Either party shall be entitled to change the domicilium
        citandi et excutandi chosen by it giving to the other party 30 (thirty)
        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”) which:·

	 	 	 
	 	•
	is delivered by hand during normal business
        hours of the addressee at the addressee’s domicilium for the time
        being shall 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
        shall 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.

48

 THUS DONE AND SIGNED AT POLOKWANE ON 

 THIS ___________ DAY OF _____________ 2003 

	 	 	 
	DR H.N. MANZINI	 	DATE
	 	 	 
	 	 	 
	(FOR THE DEPARTMENT OF HEALTH & WELFARE) 

      WITNESS 

	 	 	 
	 	 	 
	(FOR THE CONTRACTOR)	 	DATE
	 	 	 
	 	 	 
	 	 	 
	WITNESS	 	 

 ANNEXURE A 

 RESOLUTION OF THE BOARD OF DIRECTORS OF CASH PAYMASTER SERVICES (PROPRIETARY)
  LIMITED held at ROSEBANK on 6 MARCH 2003 Resolved: 

	1.	THAT the company enters into a service
        level agreement the Department of Health and Welfare of the Limpop Provincial
        Government regarding the provision of social welfare payment services
        in terms of the agreement tabled and approved.

	 	 
	2.	THAT SP MOHALE in his capacity as a
        director of the company, be and he is hereby authorised to sign the agreement.

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