ATTACHMENT G1 PRICING METHODOLOGY

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A

TTACHMENT

G1

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ATTACHMENT G1 TO THE TRANSNET IT DATA SERVICES AGREEMENT

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1.0 Introduction

This Attachment G1 (with Attachment G2 and G3) provides the basis for determining the Fees

applicable to the Services under the Agreement. This Attachment G1 sets out the pricing

Methodology for the Fees and describes the processes and methodologies as to how the Fees shall be calculated.

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2.0 Definitions

The following definitions apply for the purposes of this Attachment G1 and Attachments G2 and

G3. Any other terms used in this Attachment G1 shall bear the meaning as assigned thereto in

the Agreement, including Attachments A and B, and Attachment V Appendix 1 thereto:

2.1 "Annual Adjustment": means the adjustment which is applied to the Resource

unit rates on the anniversary of each Contract Year based on the Annual Fee

Review Formula.

2.2 “Annual Services Fees” has the meaning given in

Attachment A

of the

Agreement.

2.3 "ARC": means additional resource charge.

2.4 "ARC Ceilings":

means the graduated maximum volume above the Agreed

Volume Baseline, for which unit rates are provided, in

Attachment G2

.

2.5 "

Annual Fee Review Formula

":

means the Fee adjustment formula set forth in

section 3.5.5 below.

2.6 "

Agreed Volume Baseline

":

means the unit volume baseline per Service Tower,

agreed in writing between the Parties on an annual basis and applicable for each

contract year as detailed in the Pricing Workbook attached hereto as

Attachment

G2

(subject to section 3.5.1

below).

2.7 "

Basis Date for Economic Data

":

means unless otherwise agreed in writing, the

dates set forth in section 3.5.5 hereto.

2.8 "

Billing

Measurement Period

":

means each period commencing from the 1

st

(first) day of a particular calendar month until the last day of that month.

2.9 "

CPI

":

means the Consumer Price Index for all urban areas, notified from time to

time by Statistics South Africa and should Statistics South Africa for any reason

cease publishing the Consumer Price Index, then the index substituted therefore

shall apply

mutatis mutandis

to this Agreement and in the absence of any such

substitute, any index determined on an equivalent basis by independent auditors

mutually appointed by the Parties and failing agreement, appointed at the request

of either Party by an arbitrator in accordance with clause 62 of the Agreement.

2.10 "

Pricing Workbook

":

means the spreadsheet and associated MS/Excel tabs as

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2.11 "Procured Technology Fee": means a fee that the Service Provider will apply to

Procured Technology that is procured on behalf of Transnet in accordance with

clause 21 of the Agreement.

1.12 “

Resources Rate

”

has the meaning given in

Attachment A

of the Agreement;

2.13 "

RRC

":

means reduced resource charge

.

2.14 "

RRC Floor

":

means the graduated maximum volume below the Agreed

Volume Baseline, for which unit charges are provided, in

Attachment G2

.

2.15 "

Usage

Measurement Tool

":

means the procedures or processes or software

(including Software) used to automatically measure the number of units used

and/or allocated or serviced as part of the Services.

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3.0 Units, Baseline Volumes and Measurement

3.1 Resource units

Units are described in Attachment G2 for each Service Tower (Attachments V1 through V7),

and are a unit of resource for which Transnet and the Service Provider have established unit charge and the associated Agreed Volume Baseline.

3.2 Resource Measurement

The Service Provider will measure, track, retain and validate measurement unit data as defined in Attachment G2. The number of units serviced or used or allocated as part of the Services during each Billing Measurement Period will be used for reporting and billing purposes and the measurement criteria will be dependent on the specific resources being measured.

The Service Provider will not alter the basis for units of measurement or reporting without Transnet’s prior written approval. In the event that the Service Provider alters measurement processes and data collection in accordance with this section 3.2, the Service Provider shall provide Transnet with test reports such that Transnet is able to verify the measurement results and accuracy of unit usage. The Service Provider shall provide Transnet with ongoing reporting of actual unit usage for each unit for each Billing Measurement Period.

3.3 Resource Inventory Validation

Within 6 (six) months of the Effective Date, the Parties shall conduct an inventory verification exercise and validate all information that is reflected in or omitted from this Agreement. If during such Resource Inventory Validation Transnet or the Service Provider discovers inaccuracies in the information contained in this Agreement or inaccuracies because of an omission from this Agreement, the Parties will amend this Agreement to reflect the Agreed Volume Baseline, Services, Service Levels and other terms as may be affected by such inaccuracies. If Transnet or the Service Provider dispute the inaccuracies or equitable adjustments Transnet or the Service Provider may submit the matter to the Dispute Resolution procedure as defined in clause 62 of the Agreement.

In addition and also within 6 (six) months from Effective Date, the Parties will review the current Service Provider Measurement Tools, processes, procedures and resulting data to ensure such tools, processes and procedures are appropriate, accurate, producing consistent data and reaching all devices that are required to be measured.

If such review reveals that the Measurement Tools are inaccurate or inappropriate, the Service Provider shall replace same with an alternate accurate Measurement Tools, provided such Measurement Tools do not affect the agreed Transition Plan timelines. Should the Parties agree that there is a Transition Plan impact, the Parties will agree the timeline when the Service Provider will implement the alternate Measurement Tools. Transnet will have the right to access all the Measurement Tools and the Transnet Data.

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Page 7 of 12 During each Contract Year from the Effective Date, the Parties will review the Measurement Tools, processes, procedures and resulting data to ensure that such Usage Measurement Tools and processes are appropriate and produce accurate and consistent data. If such review reveals that the Measurement Tools are inaccurate, the Service Provider shall initiate a remedy to correct any inaccuracies in the Usage Measurement Tool. The resource measurement processes and procedures will be updated, such that the measurement documentation will accurately reflect the current processes and procedures upon which the Parties have mutually agreed.

3.4 Annual Services Fees

The Annual Service Fees set forth in Attachments G1 and G2 are equal to the sum of the monthly

volumes utilised by Transnet multiplied by the applicable Resource Rates and Service Rates, subject to clauses 37.6, 38.1 and 49.21 of the Agreement.

3.5 Fee and Baseline Volume Adjustments

3.5.1 Previous Baseline Volumes

The volumes used by the incumbent service provider for invoicing purposes in the calendar month prior to the Commencement Date, will be used for invoicing purposes as from Commencement Date until such volumes are agreed between the Parties. If mutual agreement is not reached, the

Baseline Volumes as reflected in Attachment G2 shall be used as the basis for invoicing post

the Commencement Date.

3.5.2 Transnet Business Change Adjustment

Transnet may elect to effect an adjustment to the Services, Service volumes, and/or Service Level Requirements, as applicable, if Transnet experiences a sudden and material change in the scope or nature of its business that Transnet believes will or may cause a sustained or significant decrease or increase in the number of units, in respect of any one or more Service Towers, that Transnet will require, such that Transnet would substantially exceed, or fall short of, the applicable

Baseline Volumes (a "Business Change Adjustment"). Such change shall follow the Change

Management Procedure as referred to in clause 32 and Attachment H of the Agreement. The

Service Provider shall work with Transnet to reach prompt agreement on such changes (with the Service Provider not unreasonably withholding its agreement), and such changes shall be effective from the cessation or provision of the Business Change Adjustment Services.

Some examples of events that would permit a Business Change Adjustment include, without limitation:

1. Changes to Transnet Sites;

2. Changes to Transnet’s economic environment;

3. Mergers, acquisitions or divestitures affecting either Party to the Agreement;

4. Changes in the Services; and

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Page 8 of 12 A Business Change Adjustment may occur at any time, provided that Transnet shall provide the Service Provider with at least 30 (thirty) days prior written notice of the commencement of joint planning to effect such Business Change Adjustment. Such adjustments shall be implemented

in accordance with Attachment H.

3.5.3 Adjustments

At any time upon the occurrence of a Business Change Adjustment request, Transnet and Service will review and adjust the Baseline Volumes, Service Level Requirements, Resource Unit Fees

and ARC/RRC rates as may be necessary to reflect the change in Transnet’s projected

requirements such that the Fees are no less reasonable or competitive than the applicable Fees immediately prior to such adjustments. Any such adjustments will be effective from the date of cessation or provision of the Services.

3.5.4 Regular formal review

In accordance with clauses 7.3 and 37.6 of the Agreement, Transnet will hold regular meetings with the Service Provider to inter alia review Services provision (including Projects) and the billing for same, including the volumes and related Fees.

3.5.5 Annual Adjustment

In accordance with the provisions of clauses 7.3 and 37.6 of the Agreement, an annual Fee review will be conducted for each Contract Year, on each anniversary date of the Effective Date.

3.6 Invoices, Disputes and Penalties

Please refer to clauses 39 and 62 of the Agreement which deals inter alia with all matters relating to the preparation, presentation, dispute resolution and payment of invoices, as well as to the penalties applicable to the late presentation of invoices.

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4.0 Fees

Fees are addressed in Attachment G2. The Fees set forth in Attachment G2 are subject to

Annual Adjustments and/or any adjustments as a result of Benchmarking, the Annual Renegotiation, the year-on-year Cost Reduction, or any other review conducted under the Agreement.

4.1 Unit Charges

The unit charges are contained in Attachment G2

4.2 Additional Resource Charges (ARCs)

Additional Resource Charges ("ARCs") are those Fees applicable to the unit usage above the

next graduated Volume Baseline in Attachment G2.

4.3 Reduced Resource Charges (RRCs)

Reduced Resource Charges (“RRCs”) are those Fees applicable to the unit usage below the next

graduated Volume Baseline in Attachment G2.

4.4 ARCs and RRCs Billing Measurement Period

The Service Provider shall complete its analysis and reporting of actual consumption of units to Transnet no later than 5 (five) Business) Days following the end of the Billing Measurement Period during which the Services were delivered. In the event that there is a suspicion or discovery of inaccuracies in the measurement or reporting of actual unit usage in a Billing Measurement Period, which suspicion or discovery by either Party occurs after the 10 (ten) day period following the end of the Billing Measurement Period, the volumes which shall be allowable (and which may be billed by the Service Provider) will be limited to the actual volumes that have been reported by the Service Provider and received by Transnet during the previous Billing Measurement Period.

4.5 ARC and RRC Bands

ARC and RRC Bands are established to provide a means to evaluate and adjust the Fees if there are shifts in unit usage volumes utilised by Transnet over an extended period of time. In the event that Transnet’s unit usage moves within the bands for a period of 6 (six) consecutive months, the Parties agree to review and renegotiate such applicable units for the new ARC & RRC Band. No

retrospective billing will be done. The ARC & RRC Resource Bands table in Attachment G2

(ARC & RRC Resource Bands) identifies the factors that are to be used in calculating whether actual unit usage has exceeded those limits.

The ARCs & RRC Resource Bands will be adjusted at the end of the Verification Period and annually in each Contract Year or when a Business Change Adjustment is required in terms of section 3.5.4 above. The occurrence of such an event shall constitute written notice to the Service Provider of Transnet’s intent to renegotiate the applicable unit items, and the Parties shall have 30 (thirty) days to reach agreement on an adjustment to such unit items. If no agreement is

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Page 10 of 12 reached within the aforementioned 30 (thirty) day period, the then-existing ARCs and RRCs will continue in effect and no new ARCs or RRCs will be effective until the Parties reach agreement. .

4.6 Cost Reduction

The cost reduction is applicable to the Fees as per Attachment G2. The cost reductions are

available to Transnet from the first anniversary of the Operational Date.

4.7 Other Service Fees

4.7.1 Procured Technology and Required Items Fees

The Service Provider may from time to time procure additional hardware on behalf of Transnet in accordance with clause 21 of the Agreement. The Service Provider shall not be entitled to charge a mark-up on the Procured Technology.

NOTE 1: Transnet will be responsible for the following direct costs related to the procured

hardware and pursuant to Attachment M:

 Any applicable taxes;

 Reasonable delivery costs to transport the hardware to the Transnet site; and  Any foreign exchange fluctuations

 Transnet will generate the PO

 Transnet will make payment for any procured equipment/hardware as follows; o 40% within 30 days of receipt of the Service Provider invoice; and

o the remaining 60% within 30 days of acceptance of delivery of the procured equipment/hardware

4.7.2 Hourly Service Rates

If Transnet requests that the Service Provider supply Transnet with resources for Projects managed by Transnet, then Transnet will pay the Service Provider for the Service Provider’s actual hours, expended in performing such Services, at the Service Rates set forth in the applicable Rate Table / (Hourly Rate Sheet) subject to adjustments where Resources are required (Attachment G2 – Resource Rates / Rate Table) and in accordance with Attachment M.

4.7.3 Break-fix Time and Material Charges

Break-fix services form part of the Base Charge for the Services in accordance with Attachment

G2.

4.8 Termination Fees

The Termination Fees to be paid by Transnet in the event that Transnet exercises its right to

terminate the Agreement for convenience are contained in Attachment W (for Attachment V1

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4.9 Transition Fees

Transition Fees are contained in Attachment G2 as stipulated for each Service Tower. Transition

Fees will be paid in monthly installments from the Effective Date and in accordance with Appendix O1 and Appendix O2. The Transition Fees are all-inclusive and no increase in the stated charges will be allowed unless Transnet has formally agreed in writing to an adjustment to the Transition Fees.

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5.0 Commercial Notes

The following Commercial Notes are applicable to the Fees as set forth in Attachment G2:

 All Fees reflected in Attachments G1 and G2 are exclusive of VAT; and

 Hardware maintenance costs for Transnet Equipment shall be provided for by Transnet for the duration of the Agreement, and the Service Provider shall not charge Transnet any additional pass-through costs with regards to such maintenance costs.

ATTACHMENT G1 PRICING METHODOLOGY

A

G1

Table of Contents

1.0

Introduction

... 3

2.0

Definitions

... 4

3.0

Units, Baseline Volumes and Measurement

... 6

3.1

Resource units

... 6

3.2

Resource Measurement

... 6

3.3

Resource Inventory Validation

... 6

3.4

Annual Services Fees

... 7

3.5

Fee and Baseline Volume Adjustments

... 7

3.5.1

Previous Baseline Volumes

... 7

3.5.2

Transnet Business Change Adjustment

... 7

3.5.3

Adjustments

... 8

3.5.4

Regular formal review

... 8

3.5.5

Annual Adjustment

... 8

3.6

Invoices, Disputes and Penalties

... 8

4.0

Fees

... 9

4.1

Unit Charges

... 9

4.2

Additional Resource Charges (ARCs)

... 9

4.3

Reduced Resource Charges (RRCs)

... 9

4.4

ARCs and RRCs Billing Measurement Period

... 9

4.5

ARC and RRC Bands

... 9

4.6

Cost Reduction

... 10

4.7

Other Service Fees

... 10

4.7.1

Procured Technology and Required Items Fees

... 10

4.7.2

Hourly Service Rates

... 10

4.7.3

Break-fix Time and Material Charges

... 10

4.8