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Exhibit 3
PATENT AND TECHNOLOGY AGREEMENT
Made and entered into by and between:
NET 1 HOLDINGS S.a.r.l
and
NET 1 UEPS TECHNOLOGIES, INC.
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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
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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.a.r.l, a company incorporated in
accordance with the laws of
Luxembourg and having its registered
office at 0, xxx Xxxx Xxxxxx, X-0000
Xxxxxxxxxx, herein represented by
Xxxxxx Xxxxxxx 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 additional, if any, granted to
Net 1;
1.2.2.5 "Signature Date" shall mean the last
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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 0000),
Xxxxxxx, Xxxxxxxx, Xxxxxxx, Xxxxxxxxx,
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 000 Xxxx Xxx Xxxx
Xxxxxxxxx, Xxxxx 0000, Xxxx
Xxxxxxxxxx, Xxxxxxx, 00000.
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
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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.
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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.
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.
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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 4,726,612 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;
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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 being 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.
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
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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
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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.
10. CONFIDENTIAL INFORMATION
10.1 Neither party shall at any time divulge or disclose to any third party
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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.
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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 xxx 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.
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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:
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14.1 Net 1 at 0xx Xxxxx, Xxxx Xxxx, Xxxxxxxxx Xxxxx, Xxx Xxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxxx, Xxxxxxxx xx Xxxxx Xxxxxx;
14.2 NUEP at 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000, Xxxx
Xxxxxxxxxx, Xxxxxxx, 00000, Xxxxxx Xxxxxx 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 addresses 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 - 0000 000-0000
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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; and
18.1.2 the carrying into effect of; or
18.1.3 any of the Party's rights and obligations arising from; or
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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
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act as an expert and not as an arbitrator, and if the Parties are
unable to agree on the nature 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
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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 the 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.
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Appendix A
Non Non
Non Exclusive Exclusive Non
Exclusive Exclusive UEPS Non Exclusive Outsourcing Exclusive
UEPS UEPS Commercial Manufacturing Technical Operating
Name/Country/Area Licence Licence Agreement UEPS Licence Agreement Licence Co???????????
----------------- -------- --------- --------- ------------- ----------- --------- -------------
VISA o Banking
BGS, CIS o
Gemplus o Smart Card only
Ghana o o
Chile o Not yet launched
Rwanda o o
Burundi o o
Northern Countries
(Nordic) o Process of finalisation
Nedcor S.A. and
Surrounding Territories o Banking
Nedcor Rest of World o o Option
Australia ? o Process of finalisation
Aplitec S.A. and
Surrounding Territories o Non-Banking
Aplitec Rest of World o o
Xxxx Drove ? ? Derivative Action
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DATED AT JOHANNESBURG ON THIS THE 3rd DAY OF
MAY 2000.
AS WITNESSESS:
1
2
/s/ Xxxxx Xxxxxxxx
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For and on behalf of:
Net 1 Holdings S.a.r.l
DATED AT JOHANNESBURG ON THIS THE 3rd DAY OF
MAY 2000.
AS WITNESSESS:
1
2
/s/ Xxxxxx Xxxxxxx
-------------------------------
For and on behalf of:
Net 1 UEPS Technologies, Inc.
