Service Level Agreement Dated March 31, 2006

Exhibit 10.26


SERVICE LEVEL AGREEMENT


BETWEEN


THE LIMPOPO PROVINCIAL GOVERNMENT IN ITS
DEPARTMENT OF HEALTH AND SOCIAL
DEVELOPMENT

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

and

CASH PAYMASTER SERVICES (NORTHERN) (PTY LTD

Represented by DR. SERGE BELAMANT in his capacity as Chief Executive Officer (hereinafter referred to as " the SERVICE PROVIDER" ) and duly authorised.SLA V 0.1 06/05/08Page 1 of 49

1.

PREAMBLE

Whereas the DEPARTMENT has been necessitated to enter into an urgent interim agreement following the court order setting aside the contract for the payment of social security grants between the DEPARTMENT and Cash Paymaster Services (Northern) Proprietary Limited, and having given due consideration to all alternatives to remedy the emergency situation that has arisen within the Province -1.1

The DEPARTMENT wishes to enter into a service level agreement with the SERVICE PROVIDER to ensure that the beneficiaries' constitutional right to social assistance is not violated. 1.2

The SERVICE PROVIDER agrees to render payment services to the beneficiaries of pensions and grants on behalf of the DEPARTMENT at Pay Points and / or Participating Merchants. 1.3

Payments of pensions and grants currently made by the South African Post Office and Banks are excluded. 1.4

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

THEREFORE the PARTIES wish to record in writing their agreement relating to the aforementioned and matters incidental thereto. 2.

INTERPRETATION AND DEFINITIONS

In this Agreement and in the annexures hereto-2.1

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

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2.2

unless the context indicates a contrary intention, but not limited to, an expression which denotes- 2.2.1

any gender includes the other gender; 2.2.2

a natural person includes a juristic person and vice versa; 2.2.3

the singular includes the plural and vice versa;

DEFINITIONS" account"

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

Act"

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

" AFIS"

means Automated Fingerprint Identification System;

" Agreement" and

this Agreement"

means this agreement and its annexures;

" Biometric identification"

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

" Biometric verification"

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

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fingerprints already captured previously during bulk enrolment;

" Biometric Identification and Verification Software and Procedures"

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

" Business day"

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

" Completion date"

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

" Confidential Information"

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

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

" Contract Manager"

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

" Disclose"

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

" District and sub-district"

means the pension district more fully described in Annexure " A" hereto;

" District officer"

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

" Commencement date"

24 March 2006;

" Head of Department"

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

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" Identity Number"

means 13 (thirteen) digit, bar coded number for personal identification issued by the Department of Home Affairs'

" Month"

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

" Merchant Acquiring"

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

" Participating Merchants"

merchant stores appointed by the SERVICE PROVIDER that have installed the Merchant Acquiring solution;

" PARTIES"

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

" Pay Days"

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

" Pay Points"

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

" Pay Times"

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

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

" Procurator"

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

" Province"

means the Province of Limpopo;

" Service Level Reports"

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

" Prime Rate"

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

" Registration"

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

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

" Services"

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

" SOCPEN Payment File"

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

" Steering Committee"

means a committee referred to in clause 7.2;

INTERPRETATION2.3

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

2.4

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

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the same meanings in schedules and appendices or annexures to this Agreement that do not themselves contain their own definitions; 2.5

all schedules, appendices and annexures to this Agreement shall be deemed to have been expressly incorporated into and form an integral part of this Agreement and as such each reference herein to this Agreement shall be deemed to include a reference to all such schedules, appendices and annexures; 2.6

where any term is defined within the context of any particular clause in this Agreement, the term so defined, unless it is clear from the clause in question that the term so defined has limited application to the relevant clause, shall bear the meaning ascribed to it for all purposes in terms of this Agreement, notwithstanding that term has not been defined in this interpretation and definitions clause; 2.7

a reference to a party includes that party' s successors in title and permitted assigns; 2.8

any reference to an enactment is to that enactment, as amended, as of the date of signature thereof, and as amended or re-enacted from time to time; 2.9

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

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2.10

the rule of construction that the contract be interpreted against the party responsible for the drafting or preparation of the agreement shall not apply. 3.

APPOINTMENT OF THE SERVICE PROVIDER 3.1

In accordance with the award of this contract to the SERVICE PROVIDER, the DEPARTMENT hereby appoints the SERVICE PROVIDER, which hereby accepts the appointment to provide the Services in accordance with the terms of this Agreement. 3.2

Notwithstanding the date of signature of this Agreement, all rights and obligations arising from this Agreement must be deemed to have come into operation on t he Commencement date. 3.3

Neither the appointment of the SERVICE PROVIDER in Clause 3.1 nor anything in this Agreement shall give rise to or be construed as giving rise to an employer- employee relationship between the PARTIES nor that of principal and agent, nor shall it give rise to a joint venture nor an agreement of partnership between the PARTIES, nor shall it give rise to a labour broking agreement. 3.4

Notwithstanding anything to the contrary contained herein, the PARTIES acknowledge that neither of the PARTIES has any authority whatsoever to represent or to bind the other in any capacity whatsoever. In particular, but without limiting the generality of the aforegoing, neither of the PARTIES must be entitled to conclude any contract or sign any document on behalf of the other party, or in any way bind the other party' s performance, variation, release or discharge of any obligation. 3.5

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

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the other' s subsidiaries. All the PARTIES hereby acknowledge such rights, title or interest to be the sole and exclusive property of the other or such subsidiary as the case may be (" the owning party" ). If called upon to do so by the owning party, the party or PARTIES called upon shall sign a user agreement in respect of any such brand name or trademark. 3.6

The SERVICE PROVIDER shall transfer to the card account of the beneficiary, the monies due to him / her in full, as per the SOCPEN Payment File, without making any deductions whatsoever. 4.

EXCLUSIVITY 4.1

The SERVICE PROVIDER shall be exclusively entitled to and shall provide the Services to the DEPARTMENT as per this Agreement. 4.2

The DEPARTMENT shall be entitled to demand from the SERVICE PROVIDER to deliver Services as per this Agreement. 5.

THE SERVICES

The SERVICE PROVIDER shall, in return for fees charged, render to the DEPARTMENT the Services, from the Commencement date in accordance with the provisions of this Agreement. 6.

AMENDING THE SCOPE OF SERVICES 6.1

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

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6.1.1

either party may propose to the other party in writing that the scope of the Services should be amended and shall describe the nature of the proposed amendment; 6.1.2.

the proposal shall be accompanied by reasons explaining the need for the amendment; 6.1.3

the other party may within fourteen (14) working days request an amplification of the reasons provided in accordance with clause 6.1.2; 6.1.4

the PARTIES shall consult in good faith regarding the nature, scope and implementation of the amendment; 7.

CONTRACT MANAGEMENT 7.1

Contract Managers 7.1.1.

The PARTIES shall within ten (10) days of signature of this Agreement, each appoint a Contract Manager whose responsibility must be to ensure that the responsibilities of the party appointing such manager outlined in this Agreement are carried out. The manager for the DEPARTMENT shall be the manager responsible for Social Security in the DEPARTMENT and the manager for the SERVICE PROVIDER shall be the Provincial Co-ordinator. 7.1.2

The two Contract Managers shall communicate on an ongoing basis, but at least monthly, to discuss the provision of the Services and any issues that may arise. 7.1.3

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

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7.1.4

The Contract Managers are responsible for monitoring the provision of Services in accordance with the service level reports and for the general management of this Agreement. 7.2

The Steering Committee is hereby established. The Steering Committee shall comprise of: 7.2.1

The Senior General Manager responsible for Social Development (chairperson). 7.2.2

The Chief Financial Officer of the DEPARTMENT; 7.2.3

The Head of Social Security; 7.2.4

The Senior Manager responsible for Provisioning and Contract Management in the DEPARTMENT; 7.2.5

The Senior manager responsible for Grants Administration in Social Security; 7.2.6

The Contract Manager for the SERVICE PROVIDER and not more than three (3) representatives 7.3

The Steering Committee shall meet at least quarterly to evaluate performance of Services in terms of this Agreement and any other related issues. 7.4

The management committee shall meet on a monthly basis and shall consist of : 7.4.1

The Head of Social Security (Chairperson) 7.4.2

Senior Managers Social Security 7.4.3

Managers in Social Security 7.4.4

District Managers

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7.4.5

SERVICE PROVIDER' s Branch Managers 7.4.6

Two Contract Managers 7.5

District committees shall meet on a monthly basis and shall comprise of : 7.5.1

District Manager (Chair) 7.5.2

SERVICE PROVIDER' s Branch Manager 7.5.3

Sub-district managers 8.

DURATION, TERMINATION AND BREACH 8.1

This Agreement shall endure until the Completion date, unless terminated in accordance with the provisions of this Agreement. The DEPARTMENT shall give the SERVICE PROVIDER notice by 30 September 2006 if the Completion date will be later than 31 December 2006. 8.2

Should either party commit a material breach of any of the provisions of this Agreement, the aggrieved party shall be obliged to give the other party 30 (thirty) working days written notice to remedy the breach. If the guilty party fails to comply with such notice or where the breach cannot be remedied within 30 (thirty) working days or fails within such period to initiate such steps towards remedying such breach as must be reasonable in the circumstances and fails to proceed to remedy such breach, or is incapable of being remedied, then and only in such events the aggrieved party shall be entitled to: 8.2.1

Cancel this Agreement and / or 8.2.2

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

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breach, such party may not cancel this Agreement unless the breach is a material breach going to the essence of this Agreement and is incapable of being remedied. 9.

WARRANTIES 9.1

The SERVICE PROVIDER hereby represents and warrants to the DEPARTMENT that: 9.1.1

it has full power and authority to enter into, legally bind itself by, and perform its rights and obligations under this Agreement; 9.1.2

This Agreement has been duly authorised and executed by it and constitutes a legal, valid and binding set of rights and obligations on it; and 9.1.3

To the best knowledge of the SERVICE PROVIDER, the execution and performance of this agreement does not constitute a violation of any statute, judgement, order, decree or regulation or rule of any court, competent authority or arbitrator of competent jurisdiction applicable or relating to it, its assets or its business, or its memorandum, articles of association or any other documents or any binding obligation, contract or agreement to which it is a party or by which it or its assets are bound. 9.2

The DEPARTMENT hereby represents and warrants to SERVICE PROVIDER that: 9.2.1

it has full power and authority to enter into, legally bind itself by, and perform its rights and obligations under this Agreement; 9.2.2

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

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9.2.3

to the best knowledge of the DEPARTMENT, the execution of this Agreement does not violate any judgement or order of any court, competent authority or arbitrator of competent jurisdiction applicable in relation to the DEPARTMENT or the existing assets of the DEPARTMENT; 9.2.4

it has the legal capacity and authority to appoint the SERVICE PROVIDER as a service provider on the basis set out in this Agreement 9.3

It is expressly agreed between the PARTIES that each warranty and each representation given by both of them in this Agreement are material to this Agreement and have induced them to conclude this Agreement. 9.4

Only the warranties or representations which are set forth in this Agreement shall be binding on either party. 9.5

SERVICE PROVIDER guarantees: 9.5.1

The SERVICE PROVIDER guarantees that it can deliver the Services according to the terms and conditions as stipulated in this Agreement. 9.5.2

The SERVICE PROVIDER shall provide backup to ensure performance in all respects as per this Agreement. 9.5.3

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

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10.

DISPUTE RESOLUTION 10.1

The PARTIES agree that it is in their best interest to resolve any matters of disagreement before resorting to available legal remedies. 10.2

The PARTIES agree that the two Contract Managers shall attempt to resolve all issues involved in the administration of this Agreement. If the two Contract Managers are unable to reach a resolution within seven (7) working days, the Chief Executive Officer of the SERVICE PROVIDER and the Head of the DEPARTMENT shall attempt to reach an acceptable resolution. 10.3

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