TASK DEFINITION: In this task, you're given a passage that represents a legal contract or clause between multiple parties. Your job is to write questions that ask the basic details corresponding to the legal contracts or clauses. Avoid questions that can be answered correctly without actually understanding the paragraph, and which might have multiple answers. The answer to each question should be unambiguous.
PROBLEM: Exhibit 10.10

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

                              CO-BRANDING AGREEMENT

      This Co-Branding Agreement (this Agreement), dated as of June 8, 1999, is made by and between Snap Technologies, Inc. a California corporation having its principal place of business at 111 Townsend St., San Francisco, CA 94107 (Snap), and, United Airlines, Inc., a Delaware corporation having its principal place of business at 1200 E. Algonquin Road, Elk Grove Township, IL 60007 (Sponsor).

                                    RECITALS

      A.    Snap provides access to applications and other information and content regarding selecting and applying to and attending colleges and graduate and professional degree programs to end users via the World Wide Web; and

      B.    Sponsor wishes to obtain sponsorship placement on Snap's web site and access to certain information pertaining to Snap's end users.

                                    AGREEMENT

      NOW, THEREFORE, the parties agree as follows:

SECTION 1.  DEFINITIONS

      Wherever used in this Agreement with initial terms capitalized, the following terms shall have the following defined meanings:

      CO-BRANDED PAGES means pages of the Snap Web Site, to be developed pursuant to Section 2.2  [CO-BRANDED PAGES] and hosted on the Snap Web Site, that display both the Snap Brand Features and the Sponsor Brand Features, along with such Sponsor Content, Snap Content and other content as the parties may agree upon.

      CONFIDENTIAL INFORMATION means information of either party (whether of a technical, business or other nature) which the other party knows or reasonably should know to be confidential or proprietary information of such party.

      INTELLECTUAL PROPERTY RIGHTS means any patent, copyright, rights in Trademarks, trade secret rights, moral rights and other intellectual property or proprietary rights arising under the laws of any jurisdiction.

      EXCLUSIVE CATEGORY means those product and/or service categories identified on Exhibit A.

      SNAP BRAND FEATURES means the Snap Marks and Snap's distinct brand elements that appear from time to time in Snap's properties, ventures and services worldwide and are protected under U.S. copyright law or for which Snap has established trademark, service mark or trade dress rights and any modifications to the foregoing that may be created during the term of this Agreement.

CO-BRANDING AGREEMENT                                                     PAGE 1                                                                SNAP CONFIDENTIAL

* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

      SNAP CONTENT means any information, materials or content developed by Snap for use on the Sponsor Web Site.

      SNAP MARKS means those Trademarks of Snap set forth on Exhibit B hereto and such other Trademarks as Snap may from time to time notify Sponsor to be Snap Marks within the meaning of this Agreement.

      SNAP WEB SITE means that Web Site, the primary home page for which is located at URL http://www.collegedge.com (and any successor or replacement thereof).

Source: EMBARK COM INC, S-1/A, 10/8/1999





      SPONSOR CONTENT means any information, materials or content supplied by or on behalf of Sponsor, whether directly or indirectly, for use on the Co-Branded Pages.

      SPONSOR BRAND FEATURES means the Sponsor Marks and Sponsor's distinct brand elements that appear from time to time in Sponsor's properties, ventures and services worldwide and are protected under U.S. copyright law or for which Sponsor has established trademark, service mark or trade dress rights and any modifications to the foregoing that may be created during the term of this Agreement.

      SPONSOR MARKS means those Trademarks of Sponsor set forth on Exhibit B hereto and such other Trademarks (if any) as Sponsor may from time to time notify Snap in writing to be Sponsor Marks within the meaning of this Agreement.

      SPONSOR WEB SITE means that Web Site, the primary home page for which is located at URL http://www.ual.com and any successor or replacement thereof.

      TERM means the term of this Agreement as provided in Section 4.1  [TERM].

      TRADEMARKS means any trademarks, service marks, trade dress, trade names, corporate names, proprietary logos or indicia and other source or business identifiers.

      WEB SITE means, with respect to any person or entity, all points of presence and/or services maintained by such person or entity on the Internet (including, without limitation, the World Wide Web) or on any successor public data network. With respect to any Web Site maintained on the World Wide Web, such Web Site includes all HTML pages (or similar unit of information presented in any relevant data protocol) that either (a) are identified by the same second-level domain (such as .com) or by the same equivalent level identifier in any relevant address scheme, or (b) contain branding, graphics, navigation or other characteristics such that a user reasonably would conclude that the pages are part of an integrated information or service offering.

SECTION 2.  CONTENT, CO-BRANDING AND LICENSES

      2.1   CREATION OF CONTENT. Following the execution of this Agreement, Snap and Sponsor will work in good faith to develop the content specified in Exhibit C. All content to be included on the Co-Branded Pages shall be required to comply with Snap's generally applicable content and technical guidelines.

      2.2   CO-BRANDED PAGES. Following the execution of this Agreement, Snap and Sponsor will work in good faith to develop the Co-Branded Pages which may include all or part of the

CO-BRANDING AGREEMENT                                                     PAGE 2                                                                SNAP CONFIDENTIAL

* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

Sponsor Content and/or the Snap Content. The Co-Branded Pages will have the specifications set forth on Exhibit C. The Co-Branded Pages shall be required to comply with Snap's generally applicable content and technical guidelines. Sponsor will supply Sponsor Content and Sponsor Brand Features as agreed upon by the parties for inclusion in the Co-Branded Pages. Following the development thereof, Snap shall use commercially reasonable efforts to post and maintain the Co-Branded Pages on the Snap Web Site. Snap may from time to time, in consultation with Sponsor, update and modify the Co-Branded Pages but may not change Sponsor content or Sponsor Brand Features, or do anything else with them, without Sponsor's prior written consent.

      2.3   LICENSES.

            2.3.1  Subject to Section 2.4  [APPROVAL OF TRADEMARK USAGE], Sponsor hereby grants Snap a non-exclusive, revocable nontransferable, royalty-free, worldwide license to: (a) use, reproduce, publish, perform and display the Sponsor Marks and Sponsor Brand Features on the Co-Branded Pages; (b) link to the Sponsor Web Site from the Co-Branded Pages and/or the Snap Web Site that contains the Co-Branded Pages and (c) use, reproduce, publish, perform, and display the

Source: EMBARK COM INC, S-1/A, 10/8/1999





Sponsor Content in and on the Co-Branded Pages. All goodwill arising out of Snap's use of any of the Sponsor Marks shall inure solely to the benefit of Sponsor.

            2.3.2  Subject to Section 2.4  [APPROVAL OF TRADEMARK USAGE], Snap hereby grants Sponsor a non-exclusive, nontransferable, royalty-free, worldwide license to (a) use, reproduce, publish, perform and display the Snap Marks and Snap Brand Features on the Sponsor Web Site in connection with the logo link contemplated by Section 2.l, and in connection with its promotional and marketing activities contemplated by Section 2.5  [PROMOTION OF SNAP SERVICES] and (b) use, reproduce, publish, perform and display the Snap Content on the Sponsor Web Site or other Sponsor properties as mutually agreed by the parties. All goodwill arising out of Sponsor's use of any of the Snap's Marks shall inure solely to the benefit of Snap.

      2.4   APPROVAL OF TRADEMARK USAGE. Snap shall not use or exploit in any manner any of the Sponsor Marks or Sponsor Brand Features, and Sponsor shall not use or exploit in any manner any of the Snap Marks or Snap Brand Features, except in such manner and media as may be specified in the other party's trademark usage and branding guidelines or as the other party may consent to in writing. Either party may revise such guidelines or revoke or modify any such consent upon written notice to the other party.

      2.5   PROMOTION OF SNAP SERVICES. Commencing upon the date of this Agreement and thereafter throughout the Term Sponsor will use its commercially reasonable efforts (subject to the terms of this Agreement) to generally promote and market Snap and the Snap Web Site. In addition, Sponsor will perform those specific promotional and marketing services specified on Exhibit D.

      2.6   EXCLUSIVE SPONSORSHIP. During the Term, Snap will not grant any third party any right to sponsor any products or services in the Exclusive Category on or through the Snap Web Site. For the avoidance of doubt, the parties acknowledge that the foregoing restriction applies only to persistent sponsorship placement as judged by Sponsor at its discretion, and not to run-of-site banner advertisements or other rotating promotional placements.

      2.7   SNAP USER DATA. Snap will distribute marketing messages on behalf of Sponsor to Snap's end users via electronic mail and other methods of communication as mutually agreed by the parties. Furthermore, Snap will make available to Sponsor necessary end user data as reasonably

CO-BRANDING AGREEMENT                                                     PAGE 3                                                                SNAP CONFIDENTIAL

* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

appropriate for marketing purposes, including, without limitation, pre-populating end user data into online frequent flier account applications. Sponsor acknowledges that all such end user data that is generated by Snap is valuable proprietary information of Snap and Sponsor agrees that any use of such end user data will limited solely to use for purposes of delivering superior travel values to Snap end users and for no other purpose. Furthermore, Sponsor acknowledges that any use of Snap end user data shall be limited to the extent allowed by and subject to Snap's agreement with such end users; provided, however, that Snap represents and warrants that such agreements with its end users will not increase Sponsor's duties or decrease its rights, nor reduce Snaps obligation to Sponsor hereunder without Sponsor's prior written permission.

SECTION 3.  COMPENSATION AND REPORTING

      3.1   UP-FRONT PAYMENT. Upon execution of this Agreement, Sponsor will pay Snap the amounts set forth on Exhibit A as the Up-Front Fee in consideration of Snap's development and integration of travel-related content for use on the Co-Branded Pages and/or the Sponsor Web Site.

      3.2   QUARTERLY FEE PAYMENTS. Sponsor will pay Snap the quarterly fees as set forth below on Exhibit A hereto.

      3.3   LAUNCH OF TRAVEL CO-BRANDED PAGES. After execution of this Agreement, the parties shall work together cooperatively to determine a mutually agreeable timeline for the launch of the Co-Branded Pages. If the parties determine that an adjustment to the timing of quarterly payments hereunder is

Source: EMBARK COM INC, S-1/A, 10/8/1999





appropriate, the parties may amend the quarterly payment schedule set forth on Exhibit A hereto with a written amendment signed by both parties.

SECTION 4.  TERM AND TERMINATION

      4.1   TERM. The Term shall commence on the date of this Agreement and, unless earlier terminated or extended as provided below, shall end as of December 31, 2000.

      4.2   TERMINATION. Either party may terminate the Term upon not less than sixty (60) days prior written notice to the other party of any breach hereof by such other party. In addition, either party may terminate the Term immediately upon written notice in the event that the other party shall fail to do business in the normal course or become subject to any bankruptcy, assignment for creditors, corporate dissolution or similar proceeding.

      4.3   EFFECT OF TERMINATION. Upon termination or expiration of the Term for any reason, all rights and obligations of the parties under this Agreement shall be extinguished, except that: (a) the rights and obligations of the parties under Sections 5, 6, 7 and 8 of this Agreement, along with all accrued payment obligations of Sponsor (i.e. the up-front payment referenced in Section 3.1  [UP-FRONT PAYMENT] and set forth in Exhibit A hereof), shall survive any termination or expiration of the Term.

      4.4   RIGHT OF FIRST REFUSAL. In the event of termination or expiration of this Agreement for other than a material breach of this Agreement by Sponsor, upon notice from Sponsor delivered to Snap at least forty-five (45) days prior to such expiration or termination, Snap shall negotiate in good faith an agreement providing Sponsor with sponsorship rights similar to those described herein on terms and conditions to be mutually agreed upon by the parties. In the event that an agreement

CO-BRANDING AGREEMENT                                                     PAGE 4                                                                SNAP CONFIDENTIAL

* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

between the parties is not executed within thirty (30) days following delivery, of such notice to Snap, Snap shall be free thereafter to enter into an such an agreement with any third party.

SECTION 5.  REPRESENTATIONS AND WARRANTIES; INDEMNITY

      5.1   SNAP REPRESENTATIONS AND WARRANTIES. Snap represents and warrants to Sponsor that:

            (a)   it has full power and authority to enter into this Agreement;

            (b)   the execution, delivery and performance by Snap of this Agreement will not violate any law, statute or other governmental regulation, and will not violate any other agreement or instrument to which Snap is a party; and

            (c)   the use of the Snap Content will not violate or infringe any Intellectual Property Right or other right of any third party.

      5.2   SPONSOR REPRESENTATIONS AND WARRANTIES. Sponsor represents and warrants to Snap that:

            (a)   it has full power and authority to enter into this Agreement;

            (b)   neither the execution, delivery and performance by Sponsor of this Agreement, nor the performance of ticketing services by Sponsor, in connection with the Co-Branded Pages, will violate any law, statute or other governmental regulation or any other agreement or instrument to which Sponsor is a party; and

      (c)   the use of the Sponsor Content will not violate or infringe any Intellectual Property Right or other right of any third party.

SECTION 6.  EXCLUSIONS; NO LIABILITY

Source: EMBARK COM INC, S-1/A, 10/8/1999





      6.1   WARRANTIES EXCLUDED. NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING: (A) SNAP MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SNAP WEB SITE, SNAP BRAND FEATURES OR ANY OTHER ITEMS OR SERVICES PROVIDED BY SNAP, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY ARISING BY USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTY OF NON-INFRINGEMENT; (B) SPONSOR ACKNOWLEDGES THAT THE SNAP WEB SITE (INCLUDING ANY SERVERS OR OTHER HARDWARE, SOFTWARE AND ANY OTHER ITEMS USED OR PROVIDED BY SNAP IN CONNECTION WITH THE SNAP WEB SITE) AND SNAP BRAND FEATURES ARE PROVIDED AS IS AND THAT SNAP MAKES NO WARRANTY THAT THE SNAP WEB SITE WILL BE FREE FROM BUGS, FAULTS, DEFECTS OR ERRORS OR THAT ACCESS TO THE SNAP WEB SITE WILL BE UNINTERRUPTED; (C) SPONSOR MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SPONSOR WEB SITE,

CO-BRANDING AGREEMENT                                                     PAGE 5                                                                SNAP CONFIDENTIAL

* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

SPONSOR BRAND FEATURES OR ANY OTHER ITEMS OR SERVICES PROVIDED BY SPONSOR, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY ARISING BY USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTY OF NON-INFRINGEMENT; AND (D) SNAP ACKNOWLEDGES THAT THE SPONSOR WEB SITE (INCLUDING ANY SERVERS OR OTHER HARDWARE, SOFTWARE AND ANY OTHER ITEMS USED OR PROVIDED BY SPONSOR IN CONNECTION WITH THE SPONSOR WEB SITE) AND SPONSOR BRAND FEATURES ARE PROVIDED AS IS AND THAT SPONSOR MAKES NO WARRANTY THAT THE SPONSOR WEB SITE WILL BE FREE FROM BUGS, FAULTS, DEFECTS OR ERRORS OR THAT ACCESS TO THE SPONSOR WEB SITE WILL BE UNINTERRUPTED.

      6.2   LIMITATION OF LIABILITY. NEITHER PARTY WILL HAVE ANY LIABILITY FOR, AND EACH PARTY HEREBY WAIVES AND DISCLAIMS, ANY AND ALL CLAIMS AND CAUSES OF ACTION AGAINST THE OTHER PARTY, WHETHER IN CONTRACT, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE AND STRICT LIABILITY), WARRANTY OR OTHERWISE, RELATING TO ANY INDIRECT, CONSEQUENTIAL OR EXEMPLARY DAMAGES, IN EACH CASE, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (INCLUDING ANY BREACH HEREOF) OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

SECTION 7.  OWNERSHIP

      7.1   SPONSOR. As between the parties, Sponsor retains all right, title and interest in and to the Sponsor Web Site, the Sponsor Content and the Sponsor Marks and other Sponsor Brand Features, along with all Intellectual Property Rights associated with any of the foregoing.

      7.2   SNAP. As between the parties, Snap retains all right, title and interest in and to: (a) the Snap Content, Snap Web Site (including, without limitation, any and all Snap Web Site content (other than the Sponsor Content), Sponsor generated data, URLs, domain names, technology, hardware, software, code, know-how, techniques, algorithms, processes, user interfaces, look and feel, Trademarks and any other items posted thereon or used in connection or associated therewith) and the Snap Marks and other Snap Brand Features, along with all Intellectual Property Rights associated with any of the foregoing.

      7.3   OTHER TRADEMARKS. Snap shall not register or attempt to register any of the Sponsor Marks or any Trademarks which Sponsor reasonably deems to be confusingly similar to any of the Sponsor Marks. Sponsor shall not register or attempt to register any of the Snap Marks or any Trademarks which Snap reasonably deems to be confusingly similar to any of the Snap Marks.

      7.4   FURTHER ASSURANCES. Each party shall take, at the other party's expense, such action (including, without limitation, execution of affidavits or other documents) as the other party may reasonably request to effect, perfect or confirm such other party's ownership interests and other rights as set forth above in this Section 7.

CO-BRANDING AGREEMENT                                                     PAGE 6                                                                SNAP CONFIDENTIAL

Source: EMBARK COM INC, S-1/A, 10/8/1999





* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

SECTION 8.  GENERAL PROVISIONS

      8.1   CONFIDENTIALITY. During the Term, and for a period of five (5) years thereafter, the receiving party will not disclose to others or use for any purpose of its own, other than in performance of this Agreement, any Confidential Information of the other party. Each party shall take, at a minimum, measures consistent with those taken to protect its own similar types of Confidential Information (and in any event, at least reasonable measures) to protect the other's Confidential Information against disclosures prohibited by this Agreement. Each party acknowledges that its breach of the provisions of this Section 8.1  [CONFIDENTIALITY] will result in immediate and irreparable harm to the other and that money damages alone would be inadequate to compensate such party. Therefore, in the event of a breach of this Section 8.1  [CONFIDENTIALITY] by either party the other party may, in addition to other remedies, immediately obtain and enforce injunctive relief prohibiting the breach or threatened breach or compelling specific performance. Notwithstanding any other provision of this Agreement, the restrictions set forth in this Section 8.1  [CONFIDENTIALITY] shall not apply to any information that: (i) is in or enters the public domain through no fault of the receiving party; (ii) is disclosed to the receiving party by a third party legally entitled to make such disclosure; (iii) is independently developed by the receiving party without reference to any Confidential Information of the other party; or (iv) is required to be disclosed by applicable law, regulation or order of any governmental authority; provided, that in such event, the receiving party shall provide the disclosing party with prior notice that is reasonable in the circumstances of such disclosure and shall use reasonable efforts to cooperate with the disclosing party to minimize the extent and scope of such disclosure.

      8.2   INDEPENDENT CONTRACTORS. Sponsor and Snap are independent contractors under this Agreement, and nothing herein shall be construed to create a partnership, joint venture, franchise or agency relationship between Sponsor and Snap. Neither party has any authority to enter into agreements of any kind on behalf of the other party.

      8.3   ASSIGNMENT. Neither party may assign this Agreement or any of its rights or delegate any of its duties under this Agreement without the prior written consent of the other party, not to be unreasonably withheld; except that either party may, without the other party's consent, assign this Agreement or any of its rights or delegate any of its duties under this Agreement: (a) to any corporate affiliate of such party; or (b) to any purchaser of all or substantially all of such party's assets or to any successor by way of merger, consolidation or similar transaction. Subject to the foregoing, this Agreement will be binding upon, enforceable by, and inure to the benefit of the parties and their respective successors and assigns.

      8.4   CHOICE OF LAW; FORUM SELECTION. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California without reference to its choice of law rules. Sponsor hereby irrevocably consents to personal jurisdiction and venue in the state and federal courts located in San Francisco, California with respect to any actions, claims or proceedings arising out of or in connection with this Agreement.

      8.5   NONWAIVER. No waiver of any breach of any provision of this Agreement shall constitute a waiver of any prior, concurrent or subsequent breach of the same or any other provisions hereof, and no waiver shall be effective unless made in writing and signed by an authorized representative of the waiving party.

CO-BRANDING AGREEMENT                                                     PAGE 7                                                                SNAP CONFIDENTIAL

* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

      8.6   FORCE MAJEURE. Neither party shall be deemed to be in default of or to have breached any provision of this Agreement as a result of any delay, failure in performance or interruption of service, resulting directly or indirectly from acts of God, acts of civil or military authorities, civil

Source: EMBARK COM INC, S-1/A, 10/8/1999





disturbances, wars, strikes or other labor disputes, fires, transportation contingencies, interruptions in telecommunications or Internet services or network provider services, other catastrophes or any other occurrences which are beyond such party's reasonable control.

      8.7   NOTICES. Any notice or other communication required or permitted to be given hereunder shall be given in writing and delivered by first class U.S. mail, in person, or mailed via confirmed facsimile or e-mail, or delivered by courier service, properly addressed and stamped with the required postage, to the person signing this agreement on behalf of the applicable party at its address specified above and shall be deemed effective upon receipt. Either party may from time to time change the person to receive notices or its address by giving the other party notice of the change in accordance with this section:

      8.8   INTEGRATION. This Agreement contains the entire understanding of the parties hereto with respect to the transactions and matters contemplated hereby, supersedes all previous agreements or negotiations between Snap and Sponsor concerning the subject matter hereof, and cannot be amended except by a writing signed by both parties. If any provision of this Agreement shall be adjudged by any court of competent jurisdiction to be unenforceable or invalid, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable.

      IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date set forth above.

SNAP:                                  SPONSOR:

Snap Technologies                      United Airlines, Inc.

By:  /s/ Howard Berman                 By:  /s/ [*]    ----------------------------------     -------------------------------------- Name:    Howard Berman                 Name:    [*]      --------------------------------       ------------------------------------ Title:   Chief Operating Officer       Title:   Director Electronic Distribution       -------------------------------        ----------------------------------- Date:    June 8, 1999                  Date:    June 8, 1999      --------------------------------       ------------------------------------

CO-BRANDING AGREEMENT                                                     PAGE 8                                                                SNAP CONFIDENTIAL

* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

                                    EXHIBIT A

                            PAYMENTS AND EXCLUSIVITY

      1.    The Exclusive Category is PROVIDERS OF TRAVEL SERVICE.

      2.    The up-front payment called for by Section 3.1 will be [*].

      3.    Sponsor shall pay the following non-accrued obligation quarterly fees on or prior to the following dates:

                                                                 June 30, 1999                              [*]             September 30, 1999                         [*]             December 31, 1999                          [*]             March 31, 2000                             [*]             June 30, 2000                              [*]             September 30, 2000                         [*]             December 31, 2000                          [*]

CO-BRANDING AGREEMENT                                                     PAGE 9                                                                SNAP CONFIDENTIAL

* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

Source: EMBARK COM INC, S-1/A, 10/8/1999





                                    EXHIBIT B

                                   TRADEMARKS

      The following Trademarks of Sponsor as well as additional Trademarks of Sponsor added at a later date related to the development of the United Student Travel Center are Sponsor Marks as that term is used in this Agreement.

      United Airlines logos (forthcoming)

      CollegePlus logo (forthcoming)

      The following Trademarks of Snap are Snap Marks as that term is used in this Agreement:

[LOGO]

CO-BRANDING AGREEMENT                                                    PAGE 10                                                                SNAP CONFIDENTIAL

* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

                                    EXHIBIT C

                 SPECIFICATIONS OF CONTENT AND CO-BRANDED PAGES

      SNAP CONTENT

      The following content shall be developed by Snap (with input from Sponsor) and provided to Sponsor for inclusion on the Sponsor Web Site:

- -   Travel related content on the Going to School section of the Snap site     for students seeking to enter college, graduate school, professional     schools or ESL programs. This content shall include but not be limited to     informational articles on how to pack for travel, frequent flyer programs,     and travel tips, etc. Content ideas or articles may be provided by Sponsor     or by Snap. Snap will edit or write these articles as necessary to fit the     overall tone of the site.

- -   As other areas of the Snap site are developed that may pertain to travel,     Sponsor and Snap will look to develop travel related content in a similar     fashion as above.

- -   Snap agrees to include Sponsor specials and e-fare related information in     Snap's monthly newsletter to Snap's registered users. The input will be     provided by Sponsor but may be adjusted by Snap to fit the overall tone of     the newsletter. The Sponsor's input to the newsletter may include buttons     or links back to the Sponsor's booking engine or its E-Fares-Registered     Trademark- so that users may, for example, actually book tickets or sign-up     for weekly E-Fare-Registered Trademark- notifications.

    SPONSOR CONTENT

      The following content shall be developed by Sponsor (with input from Snap) and provided to Snap for inclusion on the Co-Branded Pages:

- -   The Sponsor shall develop a student travel site that will include a     booking engine and E-Fares-Registered Trademark- engine. Snap users may link     to this site through the Snap store or through any other relevant pages on     the Snap site. Users who connect from the Snap site will be linked to or     from the Co-branded or Snap pages by a logo link containing the Snap Brand     Features to be supplied by Snap which links back to the Snap web site. This     logo link will be placed in a mutually acceptable above the fold location     on the Sponsor site (based on a 640x450 pixels screen).

- -   Sponsor agrees that users who connect from the Snap site shall be at least     one click away from any page which mentions the CollegePlus or MileagePlus

Source: EMBARK COM INC, S-1/A, 10/8/1999





    First Card credit card.

- -   Sponsor will work with Snap to develop content ideas and articles for the     Going to School and other areas on the Snap site as outlined above.

CO-BRANDING AGREEMENT                                                    PAGE 11                                                                SNAP CONFIDENTIAL

* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

                                    EXHIBIT D

                         SPONSOR PROMOTIONAL ACTIVITIES

      Sponsor and Snap shall work together to create mutually acceptable content for inclusion on the Going to School section of the Snap Web Site.

      On each page of the Sponsor Web Site linked to or from the Co-Branded Pages or containing any Snap Content, Sponsor shall include, in a mutually acceptable above-the-fold location (based on a 640x480 pixels screen), a logo link containing the Snap Brand Features, to be supplied by Snap, which links back to the Snap Web Site.

      Sponsor shall make available to Snap [*] of advertising placements (based on Sponsor's standard prices for the same or similar advertising) during each the calendar years 1999 and 2000 in marketing vehicles owned or controlled by Sponsor as reasonably requested by Snap for the purpose of marketing the Co-Branded Pages and the services provided on such pages. The parties acknowledge that Snap has elected to use HEMISPHERES magazine as the initial marketing vehicle. Snap acknowledges that marketing pieces included in Sponsor's marketing vehicles must be reasonably consistent with the overall message delivered by such vehicle.

      Sponsor shall develop a its new proprietary product category to be offered through the Co-Branded Pages that shall represent a college-oriented electronic fare based on Sponsor's E-Fare-Registered Trademark- product. It is the parties' expectations that the investment required of Sponsor to deliver this new product category to the relationship described in this Agreement shall be approximately [*].

      Sponsor shall make available to Snap [*] worth of travel on Sponsor's airline ([*] in calendar 1999 and [*] in calendar 2000) to be given away by Snap through a sweepstakes process as a promotional tool. Snap shall be free to elect to give away domestic or international travel in its sole election and will be credited [*] per domestic roundtrip ticket given away and [*] per international roundtrip ticket given away. In the event that the parties mutually determine that the sweepstakes form of promotion is a valuable marketing tool, the parties may agree to make additional tickets available to be given away.

CO-BRANDING AGREEMENT                                                    PAGE 12                                                                SNAP CONFIDENTIAL

* Portions of this exhibit have been omitted and filed separately with the   Commission pursuant to a request for confidential treatment under Rule 406.

Source: EMBARK COM INC, S-1/A, 10/8/1999

SOLUTION: Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.

PROBLEM: Exhibit 10.21

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

Network Management Outsourcing Agreement



Bank of South Pacific Ltd   Network Management Outsourcing Agreement







Datec Contact Details   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]     Commercial in Confidence   Page 2   May 2004

Network Management Outsourcing Agreement   ***** CONFIDENTIAL TREATMENT REQUESTED





Bank Of South Pacific Ltd

Document outline prepared by Des Kearse: Datec PNG Ltd May 2004



Document Distribution, Approval and Revision History

Distribution

This document has been distributed to   Name   Title-Company [*****]   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]

Approvals

This document requires the following approvals. Signed approval forms are filed in the Quality section of the Bank of South Pacific Limited and Datec PNG LTD.   Name   Title

Revision History   Date of this revision:   Date of Next revision: (date)   Revision Number   Revision Date   Summary of Changes   Changes marked                     Commercial in Confidence   Page 3   May 2004

Network Management Outsourcing Agreement   ***** CONFIDENTIAL TREATMENT REQUESTED





Abbreviations   Bank South Pacific Limited   BSP

Datec PNG Limited   Datec

Business Continuity Planning   BCP

Hardware, Maintenance, Support Services for designated Equipment   Break Fix

BSP Customer Business Manager   CBM

Disaster Recovery Plan   DRP

Financial Point of Sale   FPOS

Local Area Network   LAN

Managed Third Parties   MTP

Moves, Adds and Changes   MACs

Network Terminal Unit   NTU

Request for Service   RFS

Service Level Agreement   SLA

Single Point of Contact   SPOC

Wide Area Network   WAN   Commercial in Confidence   Page 4   May 2004

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Definitions

Agreement means this agreement. The Network Management Outsourcing Agreement.

CPI means an amount determined by reference to All Groups Indexes for Urban Areas being the figure relating to the weighted urban average for PNG contained in the Consumer Price Index published by the Papua New Guinea Bureau of Statistics each quarter in the Papua New Guinea Statistical Bulletin.

Help Desk means a physical location within Datec's head office designated as an immediate contact point to provide service assistance to customers.

Material Breach includes (but is not necessarily limited to) the occurrence of any or more of the following:

  (i) a breach, or series of breaches, of this agreement which causes a substantial disruption to the Services; or

  (ii) an accumulation of breaches which places unreasonable burdens on the BSP Personnel, or

  (iii) Datec commits a breach which at common law would justify termination of this agreement, or

  (iv) Datec commits multiple breaches of this agreement occurring within a 6 month period; or

  (v) Datec fails to comply with the Transition Plan.

Business Hours means Monday to Friday 07.30 hours to 18.00 hours.   Commercial in Confidence   Page 5   May 2004

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TABLE OF CONTENTS   OVERVIEW   1.1   Introduction   10 1.2   Document Structure   10 1.3   Agreement Assumptions   10 1.4   Contract Term   10 1.5   Hours of Support   10

The Datec (PNG) LTD Deliverables   2.1   General Statements   11 2.2   Physical Boundaries And Demarcation Points   11 2.3   Network Operations Management   12 2.4   Systems And Technical Support   13 2.5   Network Virus Management   14 2.6   Internet Services   14 2.7   Management Tools   14 2.8   Document Management   15 2.9   Related Software Distribution   15 2.10  Technology (Equipment) Refresh Planning And Implementation Recommendations   16 2.11   Performance Management   16 2.12  Capacity Management   17 2.13  Managed Third Parties (MTP)   18 2.14  Moves, Adds And Changes (MACs)   18 2.15  Help Desk Services   19 2.16  Hardware, Software And Equipment Support   20 2.17  User Logon And Password Administration for Wide Area Network (WAN)   21 2.18  Project Services   21 2.19  Asset Management   22 2.20  Security Services   22 2.21  Business Continuity Planning (BCP) And Disaster Recovery Plan   23 2.22  Change Management   23 2.23  Backup Requirements   24 2.24  Designated Locations   24

Performance Standards   3.1   General Requirements   25 3.2   Measurement And Monitoring Tools   25 3.3   All Data And Supporting Information Confidential   26

Reports   4.1   Reporting   26 4.2   Types Of Reports   26 4.3   Structure Of Reports   27   Commercial in Confidence   Page 6   May 2004

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Personnel   5.1   Standards Of Datec Personnel   27 5.2   Replacement At BSP's Request   28 5.3   No Right To Require Termination   28 5.4   Restraints On Engagement Of BSP Personnel   28 5.5   Enforceable Restraint   28 5.6   Employer Obligations   28 5.7   Security And Occupational Health And Safety   29

Audits And Record Keeping   6.1   Record Keeping   29 6.2   Access To The Datec's And Subcontractors Premises And Material   29 6.3   Regular Audits For BSP Reporting   29 6.4   Assistance   29

Subcontractors   7.1   Approval   30 7.2   Terms   30

Pricing   8.1   General Principles   30 8.2   Base Fees   30 8.3   Price Inclusive   30 8.4   Pricing Criteria   31 8.5   Rebates   31

Pricing Adjustments   9.1   CPI Adjustments   31 9.2   Pass - Through Expenses   32 9.3   Service Level Reviews   32

Extraordinary Events   10.1   Extraordinary Events   32

Confidentiality   11.1   Confidentiality   32   Commercial in Confidence   Page 7   May 2004

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Returning Material, Data, Hardware, Software And Information   12.1   Datec's Obligations   33 12.2   BSP's Obligations   33

Compliance With Laws   13.1   Compliance   33

Termination   14.1   Termination By BSP for Cause   33 14.2   Termination For Change Of Control   33 14.3   Termination By BSP For Convenience   34 14.4   Termination By Datec For Convenience   34 14.5   Termination Fee   34 14.6   Sole Remedy   34 14.7   Mitigation   34

General Indemnities   15.1   Indemnity By Datec (PNG) LTD   35 15.2   Enforcement Of Indemnities   36

Personal Injury, Property Damage Indemnity   16.1   Datec Indemnifies BSP   36 16.2   BSP Indemnifies Datec   36

Risk Management   17.1   Insurance Coverage   36 17.2   Terms Of Insurance   37

General Conditions   18.1   Assignment By Datec   37 18.2   Assignment By BSP   37 18.3   Governing Law   37

Dispute Resolution   19.1   Notice   37 19.2   Escalation   37 19.3   Expert Determination Or Mediation   38 19.4   Expert Determination Criteria   38 19.5   Selection Of Expert Or Mediator   38 19.6   Procedure   38   Commercial in Confidence   Page 8   May 2004

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Disengagement   20.1   Planning   39 20.2   Implementation Of Plan   39

Schedules   A:   Equipment List - Asset Register   42 B:   Service Level Agreement   45 C:   Pricing Schedule   50 D:   Sample Moves, Adds, and Changes Form - (MAC Form)   51 E:   Sample Request for Service Form - (RFS Form)   55   Commercial in Confidence   Page 9   May 2004

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OVERVIEW

1.1 Introduction

This Network Management Outsourcing Agreement incorporates the terms and conditions for the provision of Network Outsourcing Services and Deliverables by Datec (PNG) LTD (Datec) to the Bank of South Pacific Limited (BSP).

The parties further agree that they will provide best commercial efforts for the benefit of one another to ensure that neither the BSP nor Datec are disadvantaged throughout the fulfilment of this agreement.

The parties will therefore provide full assistance to each other and agree to work proactively together to:

  •   Improve and enhance the Services for the benefit of the BSP and

  •   Perform their respective obligations for the benefit of the BSP   1.2 Document Structure

This document is structured to capture the key conditions of the agreement in a logical order. It is understood that the agreement may be changed at any time by the mutual consent of both parties using the revision history and approval records contained in the Document Distribution, Approval and Revision History.   1.3 Agreement Assumptions

The following assumptions apply to this agreement:

  •   All tasks and the scope of work are covered by this agreement.

  •   This agreement is for the provision of management services covering the BSP Wide Area Network (WAN) and provided by Datec.

  •   The BSP existing WAN has been upgraded to the standard agreed to by Datec and the BSP as detailed in the Phase 3 Document dated 12th December 2003 entitled Audit Review Recommendation Costs' and the Memorandum of Understanding dated 7th May 2004.

  •   BSP is formally engaging Datec to be the network manager for the provision of service for the day-to-day operations of the wide area network (WAN) service.

  •   BSP will retain ownership of all the assets as listed in the Asset Register and contained in Schedule A.   1.4 Contract Term

The commencement date for this contract will be 16th June 2004.

The initial term of the contracted agreement is 5 years from the commencement date. The BSP then have the option to renew the agreement for another 5 years subject to any restructuring of the agreement as required by the parties.

Either party may advise the other of the impending expiry of the then current term, generally in accordance with section 14 .   1.5 Hours of Support

The normal business hours for services under this agreement will be Monday - Friday 07.30 hours to 1800 hours.

Twenty-Four Hour (24Hour) Help Desk will be provided Monday to Friday outside of normal business hours.   Commercial in Confidence   Page 10   May 2004

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The Datec (PNG) LTD Deliverables

2.1 General Statements

Datec will:

  (a) provide operational support services for designated Equipment and Networks;

  (b) perform moves, adds and changes (MACs) for data services;

  (c) provide pricing and perform MACs for data services;

  (d) take over where agreed and/or manage existing third party contracts (MTP'S) as agreed with the BSP;

  (e) act as the local BSP representative in matters directly related to the BSP, in a cooperative manner, with other Managed Third Parties (MTP) and take responsibility for the resolution of WAN related activity by acting as the vendor interface.

  (f) provide hardware maintenance support services for designated Equipment (break Fix) as defined in Schedule A,

Datec will deliver the following project related Services:

  (a) perform Site Surveys, Stage and configure new Equipment, deliver the Equipment, install the Equipment, manage the installation of the Network Services, test, and accept the Network as required.   2.2 Physical Boundaries And Demarcation Points

2.2.1 It is agreed that Datec will have operational responsibility on behalf of the BSP to manage the Wide Area Network (WAN), which is defined as Hosting the HUB and PIX Firewall plus the management of the network to each and including the main branch switch, including all Financial Point of Sale (FPOS) links owned by the BSP.

2.2.2 BSP will have operational responsibility from the main branch switch onwards and any equipment that is connected to this. This is considered to be the Local Area Network (LAN). FPOS links are excluded.   2.2.3 Datec will be responsible for providing BSP with updated site information for existing Sites as necessary to satisfy BSP's business and operational requirements as they may change overtime. Whenever required to install a new Site on the Network, Datec will conduct a physical survey of that Site to determine Site features, implementation readiness, and specific installation needs for required standards. Site Survey information will be recorded in a database in the network management system. Site Survey information will include definitions and clarification of:

  (a) current Network Services;   Commercial in Confidence   Page 11   May 2004

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  (b) Telecommunications vendor point of entry;

  (c) boundaries of responsibility;

  (d) power/UPS requirements;

  (e) space requirements;

  (f) Equipment related special requirements;

  (g) cabling and wiring requirements; and

  (h) relevant environmental requirements.   2.2.3 Floor Space

Certain hardware such as the Telikom Lease Line Circuits -NTU's (Network Terminal Units), Pix Firewall and content engine, plus and a number of routers and switches will need to be relocated to the Datec computer room. The computer room and the Datec building have been purposely built with a full disaster recovery management system in place with triple redundancies. The space that this equipment will occupy is based on the industry standards set for such equipment when placed in a computer room environment.   2.3 Network Operations Management

Datec will:

2.3.1 Maintain designated Equipment as listed in Schedule A, and any other equipment that may added from time to time within Papua New Guinea.

(i) BSP will provide Datec with tine required authority to acquire spares parts in order to complete any repairs /replacement that may be required

(ii) Datec will be responsible for the provision of any spare parts required to complete any repairs to the managed Network equipment.   2.3.2 Maintain a Single Point of Contact to interface with and coordinate problem determination and resolution with BSP's appropriate support personnel and third party service providers;   2.3.3 Perform Incident Management to closure. Datec will provide Level 1 support by:

(a) entering problem information into a problem record;

(b) performing incident source identification and severity impact level;

(c) providing feedback to users;

(d) invoking proper incident resolution resources;   Commercial in Confidence   Page 12   May 2004

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  (e) dispatching on site service resources, where applicable;

  (f) monitoring resolution status and document actions taken;

  (g) manage escalation or critical situation procedures;

  (h) compiling and maintain the incident resolution system;

  (i) confirming incident resolution with the end user prior to closure;

  (j) maintaining a second and third-level contacts list system including site access requirements for business and after hours site access;   2.3.4 Level 2 support responsibilities include:

  (a) performing problem analysis, trending and reporting;

  (b) accepting problems not completed by Level 1 support personnel;

  (c) investigating severe and recurring problems to determine the root cause, expediting problem resolution and, using historical data, to minimise the recurrence of duplicate or similar incidents;

  (d) working with vendors to resolve problems;

  (e) contacting other support groups and organisations;

  (f) interfacing with other systems, data networks and operating system environment personnel;

  (g) escalating delays in problem resolution; and

  (h) focusing on making fixes available to the first-level support team, to decrease resolution times.

2.3.5 provide problem reports to BSP on a periodic basis, including required information on problems, owner, location, Service Level Agreement (SLA) commitments achieved and status of any problems, including their impact on the required service level.   2.4 Systems And Technical Support

Datec Will:

  (a) be responsible for the installation support, management and control of the BSP WAN environment in Papua New Guinea.

  (b) be responsible for testing, certifying, configuring and deploying upgrades to any installed Software to the latest version available from the Software vendor as agreed with the BSP

  (c) work with BSP Personnel to communicate the effect and impact and compatibility of any changes to the Hardware and Software managed to ensure minimal business impact of such changes;   Commercial in Confidence   Page 13   May 2004

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  (d) advise BSP of new technologies that may provide BSP business benefit or improvements in efficiency. The BSP will assess benefits and risks and work with Datec to include on the approved lists as appropriate;

  (e) ensure that Datec staff are trained and skilled on all current and new technologies for the managed Hardware and Software.

  (f) centrally monitor performance of infrastructure components, where possible, to identify performance degradation, capacity and Hardware/Software problems and respond to identified performance tuning, problems and capacity needs;

  (g) tune infrastructure components to ensure optimum operating performance to meet Service Levels.

  (h) provide assistance and support to BSP Personnel as required;



(i) provide in-depth (Level 1 and 2) technical support for operating systems, standard software (for Software problems or questions, defect and non-defect related). It includes problem tracking, problem source identification, problem impact (severity) determination, bypass and recovery support, problem resolution, management reporting and trend analysis and interfacing with other Suppliers on behalf of the BSP;

  (j) provide support, in accordance with the BSP, manufacturers and vendors procedures;

  (k) install, set up and maintain configurations, to deliver the required Services;

  (l) coordinate and recommend system upgrades to BSP, and work with them in recommending proper hardware configurations and upgrades based on performance and capacity planning guidelines;

  (m) schedule and coordinate testing of network systems Software changes with the BSP   2.5 Network Virus Management -WAN

Datec will assist in detecting, fire-walling and blocking propagation of network viruses but are not responsible for virus detection or outbreaks that occur within the banks local area network. Datec will assist the BSP when requested to handle any virus issues that fall out side the scope of this agreement as per the terms of this agreement.   2.6 Internet Services

Datec will provide in accordance with BSP requirements Internet Services and follow on support as currently provided to the BSP under Datec's customer ISP services policy.   2.7 Management Tools

Datec will:

2.7.1 Install, configure and test the selected management tools used to support problem management (e.g. to generate automatic alerts for critical outages)   Commercial in Confidence   Page 14   May 2004

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2.7.2 Install, configure and test the selected management tools used to support performance and capacity management (e.g defining alert thresholds and performing notification)   2.8 Document Management

Datec will:

2.8.1 in a mutually agreed format provide documentation, configuration details or other data necessary for the BSP to perform their various business activities and functions;

2.8.2 provide such information that may be necessary to enable the BSP to develop Strategy and Architecture policies and guidelines, undertake benchmarking of Services provided and perform applications development functions.   2.9 Related Software Distribution

Datec will:

2.9.1 upon request from the BSP, distribute and implement software upgrades, software patches to the distributed network equipment as necessary to meet BSP's business requirements

2.9.2 ensure that software distribution windows are managed to ensure that minimal distribution impacts business operations and performance unless otherwise agreed with the BSP

2.9.3 ensure that the software installed are appropriately licensed;

2.9.4 ensure that all software distributions are reconciled to ensure completion;

2.9.5 ensure that all software distributions are virus free;

2.9.6 assist BSP End Users in performing any such upgrades that should be required. Such assistance will be provided via a Help Desk and may result in the dispatch of a support person to the End User location

2.9.7 inform BSP and take corrective action, as appropriate, for failed software distributions and problems resulting from software distribution.

2.9.8 take corrective action to overcome failed or problematic software or data distribution. Datec will fallback to previous (original) release of the affected software.

2.9.9 de-install software, as directed by the BSP, and remove it and any associated documentation to an area designated by the BSP; and

2.9.10provide verification of each completed software distribution, installation or de-installation, and update the asset management and software license management system(s) for that Software Supplier.   Commercial in Confidence   Page 15   May 2004

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2.10 Technology (Equipment) Refresh Planning And Implementation

Datec will be responsible for liaison with managed third parties (MTP's) in the procurement and management of installations, and deletion of and Tracking Network Services within the Network under instruction from BSP. Such responsibilities will include:

  (a) Management of the installation of Network Services;

  (b) Procurement of upgrades, changes or deletion of Network Services, as appropriate to accommodate BSP's changing requirements;

  (c) interfacing with the appropriate Network Services providers for problems related to Network Services; and

  (d) tracking relevant Network Service information .

Datec will be responsible for supporting, administering, managing and performing provisioning of Equipment and Equipment Software comprising the Network. Unless specifically exempted, the equipment is to be supplied by Datec and invoiced for payment according to Datec's normal terms of trade.

Datec will:

  (a) install Network Equipment and Equipment Software and monitor the fulfilment of each order for accuracy;

  (b) store, deliver and unpack all items of Equipment and remove and dispose of all packaging;

  (c) configure, install and test all Equipment and Equipment Software and transfer data and Equipment Software configurations as required prior to commissioning in the production environment

  (d) provide connectivity for the Equipment and Equipment Software at, or prior to, the time of installation;

  (e) remove BSP Equipment Software from displaced or retired Equipment to the extent required by BSP's security procedures;

  (f) remove displaced or retired Equipment and Equipment Software; and

  (g) ensure BSP is aware of all needs to promptly disconnect and end Network Services and remove related Equipment no longer needed by BSP upon termination of Services at a Site. Datec agrees to remove the applicable Equipment.   2.11 Performance Management

Datec will:

2.11.1monitor, measure, and report on the performance of the WAN environment;

2.11.2 enhance and continuously improve its performance of the Services;   Commercial in Confidence   Page 16   May 2004

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2.11.3 identify and recommend product and enhancement opportunities for improved performance;

2.11.4monitor, measure, analyse and report actual systems performance;

2.11.5 recommend changes to the Applications Software for BSP approval to improve system performance;

2.11.6 investigate and correct reported or observed system performance degradation or malfunctions and record for each the downtime, hardware or Software involved, nature of the problem, causes, nature of the fix and product provider. Such fixes will be completed within agreed service windows;

2.11.7monitor and report on capacity inadequacies;   2.12 Capacity Management

Datec will:

  (a) provide additional capacity as required to meet moves, adds and change (MAC) requests;

  (b) provide capacity to meet project requirements as required in conjunction with the BSP

  (c) monitor WAN infrastructure capacity and plan and implement sufficient infrastructure capacity as agreed with the BSP to meet BSP requirements and applicable Service Levels.

  (d) on an ongoing basis, manage the capacity of the environment to meet its obligations under the Service Levels and respond to BSP's operational requirements as they evolve over time;

  (e) monitor and report on Equipment capacity utilisation as it relates to established capacity thresholds, on a continuing basis and upon request by the BSP

  (f) monitor and measure the physical capacity and performance of the environment and report to the BSP when requested;

  (g) upgrade, remove, or add capacity to the environment as necessary to meet BSP's requirements; and

  (h) participate in joint capacity planning reviews with the BSP

Should it be determined that extra capacity is required this cost will be meet by the BSP working with Datec.   Commercial in Confidence   Page 17   May 2004

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2.13 Managed Third Parties (MTP)

In accordance with the Agreement, Datec will co-ordinate Managed Third Parties (MTP) where agreed with the BSP.

Datec will:

  (a) manage Third Parties, including monitoring operational day-to-day Network Service delivery, monitoring performance, escalating events for resolution, and maintaining technical support relationships;

  (b) work with BSP to establish and manage new and existing contractual relationships between BSP and MTP as needed to provide the Services;

  (c) escalate MTP performance failures to MTP management as necessary to achieve timely resolution as per the SLA;

  (d) monitor and Manage the MTP's efforts to remedy a failure;

  (e) communicate to designated personnel the status of MTP's efforts to remedy a failure.   2.14 Moves, Adds And Changes (MACs)

As a component of the base fee Datec will perform any required MACs that fall within the scope of work contained in this agreement.

Datec will also be required to provide MACs to the BSP with pricing and costs for tasks that fall outside the agreement such as project management or the acquisition of new equipment or upgrades but not just restricted to these items.

On approval of any MAC Datec will be required to assist in the supervision, management and implementation of changes related to the Network and the Services as necessary to satisfy BSP's business and operational requirements.

Datec will:

  (a) receive, log and track the completion of service requests and provide related information to the IBM Help Desk and billing system;

  (b) schedule the execution of the MAC;

  (c) for MACs, dispatch and manage the performance of appropriate technicians;

  (d) coordinate and communicate with designated personnel concerning scheduling and requirements, so as to eliminate the business impact on end users;

  (e) provide the necessary technical support to complete the MAC;

  (f) physically move Equipment, as required, and install any necessary in-scope cabling where appropriate;

  (g) notify the BSP contact person of completion of the MAC;   Commercial in Confidence   Page 18   May 2004

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  (h) confirm correct implementation of the MAC with the designated personnel and the BSP Help Desk, as appropriate;

  (i) track the completion of the MAC in a management system by updating relevant inventory and configuration information.   2.15 Help Desk Services

Datec will

2.15.1

provide a single-point-of-contact (SPOC) Help Desk. The Help Desk will support and have access to, and maintain, sufficient information that will facilitate knowledge of the BSP's business and technology environment;

2.15.2

provide one primary Help Desk contact phone number and enable contact fax, e-mail and browser for all technology requests. This includes, but is not limited to, communication faults, Hardware and Software failures, and general enquiries by the BSP.

2.15.3   record, analyse and report on a regular basis, as and when required by the BSP, on calls received by the Help Desk, including details of:

  •   call volumes and duration;

  •   problem trends;

  •   call abandon rate and wait times;

  •   Level 1 resolution rate;

  •   problem resolution time;

  •   provide Level 1 support for any end user IT problem;

  •   resolve problems at the first level, to decrease resolution times;

Provide Help Desk support, which includes:

  •   recording all problem calls, inquiries and requests for service;

  •   gathering the end user information;

  •   obtaining resource status;

  •   accessing on-line information;

  •   responding to end user requests with accurate and appropriate information;

  •   handling routine Hardware, Software, and usage problems;   Commercial in Confidence   Page 19   May 2004

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  •   transferring calls to the appropriate support group, although coordination and ownership of the problem and escalation management remains with the Level 1 support;

  •   opening the problem record and providing the end users with a unique problem identifier (e.g. number);

  •   informing the end user of the status;

  •   calling the end user for further information;

  •   closing the call, with the end user's agreement and ensuring end user survey is completed;

  •   escalating delays in problem resolution;

  •   notify users of system unavailability (scheduled and non-scheduled);

  •   report all suspected viruses to the BSP in a timely manner; and

  •   assist the BSP in removing viruses   2.16 Hardware, Software And Equipment Support

Datec will:

  (a) process warranty claims, as applicable;

  (b) coordinate and schedule maintenance activities with the BSP and third parties;

  (c) ensure that maintenance personnel follow documented recovery procedures;

  (d) maintain accurate documentation on the current location and status of Hardware and Equipment under repair;

  (e) update the problem management and asset management systems with relevant maintenance information;

  (f) diagnose and resolve complex network, operational and Software problems;

  (g) provide trouble shooting and problem resolution for all managed Hardware, Software, and Equipment;

  (h) provide Software and Equipment support including trouble shooting for problem determination;

  (i) resolve problems with long term fix or if problem cannot be resolved within an acceptable time frame, an alternative solution must be available in order to get the BSP working with the long term fix implemented at a later time;

  (j) identify and resolve user Hardware and Equipment problems including the management and execution of any Service Levels agreed in third party vendor maintenance agreements in place currently or in the future;d   Commercial in Confidence   Page 20   May 2004

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  (k) provide end user support and problem resolution for Software;

  (l) coordinate with other parties as necessary to resolve Hardware and Equipment problems;

  (m) order new Hardware and Equipment and schedule installation;

  (n) interface with Hardware and Equipment vendors for planning and problem resolution.   2.17 User Logon And Password Administration for Wide Area Network (WAN)

2.17.1Datec will provide a central point for the generation of new user logons and passwords as agreed with the BSP.

2.17.2Datec will reset passwords and perform logon ID administration in accordance with BSP's security guidelines.

2.17.3User logon and password administration include providing access and administering passwords for firewalls and internet requirements.   2.18 Project Services

Datec will provide project services as agreed with the BSP that fall outside the scope of this document.

2.18.1Datec will execute Projects according to the following guidelines: All new projects, new Requests for Service (RFS), and work considered out- of-scope of day-to-day operations will be treated as competitive

2.18.2BSP will ask Datec for a quote based on a Scope of Work

2.18.3Datec is to provide a relevant quote to the BSP Customer Business Manager (CBM)

2.18.4Quotes will be approved by the BSP CBM, who will then notify Datec.

BSP Customer Business Manager (CBM) contact details:

[*****]

[*****]

[*****]

[*****]

[*****]   Commercial in Confidence   Page 21   May 2004

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2.19 Asset Management

  2.19.1 Datec will assist the BSP in the ongoing management of an inventory of Equipment, Equipment Software and Network Services comprising the Network. Such inventory will record, Site locations and Equipment configuration (including hardware components and operating system software) as applicable to the Equipment, Equipment Software and Network Services in an agreed format.

  2.19.2 Datec will provide updates to the inventory that result from other processes including performance management, fault management, configuration and capacity planning. Updates from these processes will be tracked through work order activity. Datec will provide BSP with changes to the inventory in an agreed format.

Datec will:

  (a) within 30 days from each Site Acceptance Date, provide the necessary information to populate the inventory management database with information regarding that Site;

  (b) provide updated inventory data on a weekly basis as a result of performance management, fault management, and MAC activity; and

  (c) manage an inventory of spares made available for the purpose of facilitating the maintenance of critical Service components.   2.20 Security Services

As set forth below, Datec will manage physical security for the Network as necessary to satisfy BSP's business and operational requirements. Datec will be responsive to BSP changes in its physical Network security requirements as they may change over time. Datec will comply with relevant BSP information security policies, and government regulations. With respect to this responsibility,

Datec will:

  2.20.1 on an ongoing basis, identify Datec subcontractors and Personnel who are to be granted access to specific operations or BSP facilities related to the Services;

  2.20.2 follow a standard equivalent to the BSP physical security standard for the Network. If Datec security standards provide a greater degree of security, Datec will follow Datec standards for the Network;

  2.20.3 follow all security procedures in effect at the Installation Sites. BSP is responsible for site security at the Sites;   Commercial in Confidence   Page 22   May 2004

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  2.20.4 immediately report breaches of security evident during site visits to BSP. Such breaches are to include all unauthorised attempts to use or obtain physical access to BSP Network resources and information;

  2.20.5 for facilities under BSP's control, comply with BSP's physical security standards of which Datec receives reasonable advance written notice.   2.21 Business Continuity Planning (BCP) And Disaster Recovery Plan (DRP)

Datec will adhere to the BSP's DRP policy and procedures and will assist wherever possible to further enhance these within the scope of this agreement.   2.22 Change Management

Change management is both a communications process and a methodology that seeks to introduce change into any environment without adversely impacting service delivery and commitments and will usually be associated with a MAC document.

Datec will perform the change management functions below:

  (a) accept and enter authorised change requests into an information system for the purpose of tracking changes to the environment in accordance with the BSP processes, procedures and methodologies;     (b) for each change affecting the environment the Supplier will:

  (i) assess the necessity and impact of the proposed change on performance, connectivity and overall operation;

  (ii) in conjunction with BSP, develop acceptance test criteria and test the change;

  (iii) work with BSP to resolve acceptance test issues;

  (iv) schedule and manage testing and implementation of the change, including communication to and coordination with other affected functions in accordance with the change management procedures;

  (v) with BSP assistance, verify the successful implementation of the change. Notify the change requestor and customers of the outcomes following the change implementation;

  (vi) ensure diligence is applied in deciding upon time of day and day of week for implementation of change so that provision of service is continued;

  (vii) ensure all potential and/or actual business impacts expected as a consequence of the implementation of change are communicated to and understood by the BSP

  (viii) ensure potential conflicts between changes are identified and resolved in advance of implementation; and   Commercial in Confidence   Page 23   May 2004

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  (ix) ensure changes are bundled to ensure Services are not subject to more outages than are sensible or necessary.   2.23 Backup Requirements

Datec Will:

  (a) ensure that network configurations and O/S are fully backed up so that they can be reinstalled without delay in an emergency.

  (b) assist with the installation and decommissioning of equipment and associated hardware and software;

  (c) assist with the facilitation of scheduled hardware maintenance;

  (d) assist with the physical placement and movement of hardware, cables, connectors and installations;

  (e) maintain and distribute configuration diagrams and associated documentation;

  (f) assist with testing the recovery procedures required to re-establish, in the event of a failure, the functionality of systems included in the agreement, in compliance with BSP's requirements;

  (g) prepare, test and document backup and recovery procedures for both Datec and BSP

  (h) maintain the physical environment, and all equipment, in a safe and clean manner and in accordance with equipment vendors specifications.

  (i) manage physical site security in accordance with Datec and BSP security policies;

  (j) implement recovery processes and procedures, as required to ensure timely recovery following any environmental failure;

  (k) ensure regular testing of Datec's environmental components (eg. fire alarms, generators, UPS, etc); and

  (l) keep all equipment in good operating condition in accordance with equipment specifications, and such other performance criteria as contained in this Agreement so as to be able to effectively perform to specification.   2.24 Designated Locations

Datec will manage the BSP WAN operations from its Corporate Head Office located in Waigani Drive, Port Moresby.

In order for this to occur certain routers/switches and associated network equipment will be located at Datec   Commercial in Confidence   Page 24   May 2004

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The Current Router and Switch Locations that will be covered by this agreement are:         [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]

Performance Standards

3.1 General Requirements

Throughout the term of the agreement Datec will:

  (a) meet or exceed the Service Levels identified within the service level agreement.

  (b) comply with industry standards; and

  (c) Datec will also maintain the BSP quality assurance procedures where applicable and agreed between the parties.   3.2 Measurement And Monitoring Tools

Datec will:

  (a) perform all Service Level reporting, in a manner acceptable to the BSP   Commercial in Confidence   Page 25   May 2004

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  (b) implement further automated measurement, monitoring tools and procedures as advised by the BSP to measure and report Datec's performance on a monthly basis should the existing tools be inadequate. The acquisition of new tools will be subject to a MAC and approval by the BSP for their acceptance of costs and purchase.   3.3 All Data And Supporting Information Confidential

Detailed supporting information and reports relating to service levels and performance will be confidential between the two parties.

Both parties will treat the terms of this agreement and any supporting documentation, such as emails, facsimiles and the like as confidential and may only disclose it:

  (a) to officers and employees who have signed a confidentiality agreement that imposes on that person confidentiality obligations and who:

  (i) have a need to know (and only to the extent that each has a need to know); and

  (ii) have been directed and have agreed to keep confidential the Confidential Information on terms consistent with this Statement of Work; or

  (b) to the extent, and to the persons, required by law.

Reports

4.1 Reporting

Datec is to provide a range of reports and/or data required to develop such reports in an agreed format to the BSP or its nominee on daily, weekly, monthly and ad hoc basis as requested by BSP.

Datec will undertake the following functions:

  4.1.1 respond to user report enquiries

  4.1.2 follow up errors with areas providing the source data

  4.1.3 manage reporting platform   4.2 Types Of Reports

Datec will make available to the BSP

  4.2.1 the reports identified in this document and the Service Level Agreement   Commercial in Confidence   Page 26   May 2004

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  4.2.2 the reports and documents which were provided by the BSP prior to the Commencement Date

  4.2.3 each month such reports as are necessary to ensure and validate the Supplier's performance and commitments made under the Service Level Agreement and

  4.2.4 such other reports as may be specified by the BSP from time to time.   4.3 Structure Of Reports

Datec must structure performance reporting so that it can be readily communicated to the management or end-user, business areas and business system owners in a mutually agreed format.

Personnel

5.1 Standards Of Datec Personnel

Datec will:

  (a) use an adequate number of Personnel to supply the Services outlined in this agreement

  (b) ensure all Personnel who perform Services are properly educated, trained and fully qualified for the Services they perform;

  (c) ensure that all Personnel comply with:

  (i) any protocols, codes of conduct or procedures specified by the BSP and advised by from time to time

  (ii) ensure any obligations under this agreement in respect of Confidential Information, Personal Information, data security and material

  (iii) all Laws; and

  (iv) any policies existing or introduced from time to time, including policies regarding occupational health and safety requirements, building access and physical security;     (d) comply with any authorisation procedures specified in this agreement before:

  (i) assigning any person to supply Services; or

  (ii) permitting that person to enter any premises of Datec or BSP, to handle any material or become aware of any Confidential Information or Personal Information; and

  (iii) ensure that only Datec Personnel who are currently authorised are involved in supplying the Services or given access to any BSP Material, Confidential Information or Personal Information.   Commercial in Confidence   Page 27   May 2004

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5.2 Replacement At BSP's Request

BSP may by notice to Datec, require Datec to replace any of the Supplier Personnel for the reasons stated in the notice and:

  i. in the case of breaches of security or confidentiality requirements, Datec must immediately replace that person with another person of suitable ability and qualifications; or



ii. in any other case, after receipt of that notice, Datec will have 48 hours in which to investigate the matters stated in the notice, discuss its findings with the BSP and resolve any problems with the person. If, following that period the BSP requests replacement of the person, Datec must replace that person, within 60 days with another person of suitable ability and qualifications.   5.3 No Right To Require Termination

BSP does not have the right to require Datec to terminate any person's employment or contract with Datec. It is only intended to give the BSP the right to require that Datec discontinue using a particular person in the performance of Services for the BSP.   5.4 Restraints On Engagement Of Datec - BSP Personnel

From the Commencement Date of the agreement both parties must ensure that they do not without mutual written consent solicit, entice or attempt to entice away any employee from either organisation during the Term and for 1 year after the termination date.   5.5 Enforceable Restraint

Clause 5.5 will not in any way restrict either organisation from hiring any person who has responded to any published advertisement of position or who has otherwise approached either organisation for employment unsolicited or its agents or Related Corporations.   5.6 Employer Obligations

Datec must ensure that it, and each of the approved subcontractors and employee's complies with all obligations relating to payment of tax instalment deduction, deductions from prescribed payments, fringe benefits tax, training guarantee levy, superannuation, payroll tax and any other taxes or levies imposed upon an employer which arise in respect of any amounts paid to the Datec under this agreement and that it complies with all requirements imposed on an employer under the relevant legislation to keep records, lodge returns and provide information in relation to such obligations.   Commercial in Confidence   Page 28   May 2004

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5.7 Security And Occupational Health And Safety

Datec must at all times comply with and ensure that its personnel and approved subcontractors comply with the laws and regulations on occupational health and safety.

Audits And Record Keeping

6.1 Record Keeping

Datec must keep, and must require subcontractors to keep, adequate accounts, documents and records to the extent required by the BSP as advised and in sufficient detail to enable Datec's compliance with this agreement and the accuracy of its invoices to be determined.   6.2 Access To Datec's And Subcontractors Premises And Material

Datec must give, and must ensure that its Subcontractors give, BSP and their Personnel, (including internal and external auditors and advisers) full access at all reasonable times and on reasonable notice to:

  (a) any premises at which or from which Datec supplies the Services

  (b) the Supplier Personnel; and

  (c) equipment, Software systems, data, accounts, documents and records relating to the Services provided both by Datec and by its Subcontractors, but excluding information relating to the Datec's internal costs and margins for the Services,

in order to enable the BSP to audit Datec's compliance with this agreement and for operational risk reasons.   6.3 Regular Audits For BSP Reporting

The BSP itself may also audit the Supplier's (and its subcontractors) records relevant to the supply of the Services for any reasonable purpose including processes, procedures and performance for operational risk assessment, regulatory requirements and annual reporting.   6.4 Assistance

For the purpose of complying with this clause, Datec must promptly and efficiently give the BSP and their Personnel any assistance they reasonably require, including, if requested, installing and operating audit software. BSP and their Personnel will comply with Datec's reasonable security requirements.   Commercial in Confidence   Page 29   May 2004

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Subcontractors

Datec may only subcontract its obligations under this agreement as follows:   7.1 Approval

Datec must obtain the BSP's approval for any subcontracts but may do so without its consent if:

  (a) it is in the ordinary course of business

  (b) Datec supplies BSP with advance notice

  (c) it does not result in a material change in the way Datec conducts its business

  (d) it does not adversely affect the BSP   7.2 Terms

The terms of any subcontract must be consistent with this agreement, unless the BSP agrees otherwise, including:

  i. confidentiality and intellectual property obligations;

  ii. BSP's approval rights (which must apply directly to the subcontractor);

  iii. compliance with BSP's policies and directions;

  iv. indemnities that protect BSP

  v. termination and disengagement rights; and

  vi. key personnel.

Pricing

8.1 General Principles

The BSP will pay Datec a base fee plus any other fees and charges that may be agreed too during the term of the agreement but excluding, travel, freight and tax related matters.

BSP will be responsible for any freight and or related travel costs incurred by Datec in the execution of the services as defined in this agreement. Prior to undertaking or committing to any freight and or related travel costs Datec must first obtain approval from BSP.   8.2 Base Fee

The base fee includes all things necessary to manage the WAN management services as provided for by the terms of this agreement.   8.3 Price Inclusive

The base fee includes all costs, expenses, taxes (except for GST/VAT), duties, levies or imposts relating to the services and Datec's performance of its obligations under this agreement.   Commercial in Confidence   Page 30   May 2004

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8.4 Pricing Criteria

Each month Datec will provide the BSP with an invoice including:

  (a) 1/12 of the Base Charge for the service

  (b) pass through expenses for the month

  (c) the annual Base Charge/s once established may still be adjusted from time to time by agreement between the parties.   8.5 Rebates

  1. Should Datec not achieve the agreed Service Levels contained in the Service Level Agreement as detailed in Schedule B, a monthly rebate will be applied as per the Rebate Table in Pricing Schedule C,

  2. Rebates will apply to Severity Levels One (1) and Two (2) during the agreed business hours detailed in Schedule B.

  3. The maximum rebate in any given month will be 50% of the monthly base fee. The rebate calculation will be completed before the 15th Day of the following month for the preceding month together with supporting monthly reports and provided to the BSP.

  4. For the purposes of determining SLA achievement the Time to Respond measurement will be used.

The following definition will apply:

Time to Respond means, the time between the problem being logged and the customer being given a job number and the technician beginning the job As this applies to Severity Levels One (1) and Two (2) this will also include the informing of Datec's senior operational management.

Pricing Adjustments

9.1 CPI Adjustments

No later than 30 days after the end of each contract year the Base Fee must be increased or decreased in accordance with the increase or decrease in the CPI and such increases or decreases will be calculated by using the following formula:

R2 = R1 x New CPI   Old CPI

Where:

R2 = the Base Fee payable for the relevant 12 month period of the Term

R1 = the Base Fee specified the previous year.

New CPI means the last published CPI for a complete quarter ending prior to the date of commencement of the relevant 12-month period of the term.

Old CPI means the last published CPI for a complete quarter ending prior to the date of this agreement.   Commercial in Confidence   Page 31   May 2004

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Should the CPI increase exceed more than 10% in any given year the maximum amount applied will be 10% or which ever is lower.   9.2 Pass - Through Expenses

These are expenses to be paid directly by the BSP with no margin or mark up added by Datec. Datec must provide the BSP with all information and material reasonably required to validate a pass through expense.   9.3 Service Level Reviews

The BSP may conduct a service level review at least once per 12-month period or as required with the agreement of Datec.

At least annually the parties will review the Service Levels to determine whether they still reflect the requirements of the BSP. Should the BSP decide that they do not, the BSP may:

  (a) conduct benchmarking on the relevant Services to establish appropriate service levels

  (b) require Datec to propose a means of improving performance.

Extraordinary Events

10.1 Extraordinary Events

The BSP may notify Datec that an Extraordinary Event has occurred or is likely to occur and provide details of such Extraordinary Event.

On receipt of such notice, Datec must promptly determine and report to the BSP the effect on:

  (a) the level of resources required to provide the Services ('Required Resources'); and

  (b) the Fees as a result of the Extraordinary Event.

The parties must use their efforts to agree on the level of required resources and, having agreed, will adjust the agreement accordingly to reflect this change. This will include the adjustment of the base fee and a suitable implementation plan.

Confidentiality

11.1 Confidentiality

All information exchanged between the parties under this agreement or during any negotiations undertaken at any time in respect of this agreement is confidential to those parties and must not be disclosed to any persons except:

  (a) as required by any law of the state of Papua New Guinea

  (b) to legal advisers, auditors, accountants and other consultants of either party requiring information for the purpose of this agreement

  (c) to directors and shareholders of the respective parties

  (d) with the consent of the party that supplied the information   Commercial in Confidence   Page 32   May 2004

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  (e) if the information is generally and publicly available other than as a result of the breach of confidence by the person receiving the information.

Returning Material, Data, Hardware, Software And Information

12.1 Datec's Obligations

Upon request from the BSP or at the end of the disengagement period Datec must:

  (a) promptly return all BSP data, physical and written records, hardware, software or any other medium whatsoever

  (b) if requested by the BSP destroy any relevant information and certify in writing that it has done so.   12.2 BSP's Obligations

At the end of the disengagement period the BSP will transfer any material, data, hardware, software and information from Datec to its chosen new location. Datec will assist where possible. The disengagement period will be as determined under Section 14 (Termination) of this agreement.

Compliance With Laws

13.1 Compliance

This agreement will be constructed in accordance with the laws of Papua New Guinea and the parties submit to the non-exclusive jurisdiction of the National Court of Justice of Papua New Guinea.

Termination

14.1 Termination By BSP for Cause

If so advised the BSP may terminate this agreement by giving written notice to Datec if:

  (a) Datec materially breaches the agreement and the breach (Material Breach) cannot be, or is not, rectified within 30 days after a notice from the BSP,

  (b) an Insolvency Event occurs in relation to Datec

  (c) any other event specified in this agreement as giving rise to a right for the BSP to terminate immediately occurs; or

  (d) Datec commits a series of breaches that together constitute a Material Breach.   14.2 Termination For Change Of Control

The BSP may after giving due consideration to all circumstances and not acting unreasonably, terminate this agreement by giving written notice to Datec if there is a change of control or major shareholding of Datec.   Commercial in Confidence   Page 33   May 2004

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In the case of the BSP requiring termination under this clause, the BSP will use its best commercial efforts to ensure that it gives due consideration to all the circumstances and does not act unreasonably in demanding such termination.

If the BSP gives such a notice of termination, then:

  (a) if the change of control:

  (i) results in a competitor of the BSP controlling Datec or

  (ii) is reasonably likely in the BSP's opinion, to have a detrimental effect on Datec's ability to provide the Services in accordance with the agreement,

then the BSP will pay Datec according to Section 14 - Termination of this agreement and the Termination Table in Schedule C.   14.3 Termination By BSP For Convenience

The BSP may terminate the whole or any part of this agreement for convenience at any time by giving Datec at least 6 months prior written notice.   14.4 Termination By Datec For Convenience

Datec may terminate the whole or any part of this agreement for convenience at any time by giving the BSP at least 6 months prior written notice.   14.5 Termination Fee

If the BSP terminates under clause 14.3 (Termination by BSP for Convenience) the BSP will pay Datec the Termination Fee calculated in accordance with Attachment C (Pricing).   14.6 Sole Remedy

The amount payable by the BSP under clause 14.3 (Termination Fee) will be Datec's sole remedy for the BSP terminating for convenience.   14.7 Mitigation

Datec must mitigate the cost of termination, including by using its best efforts to:

  i. redeploy personnel used to provide the Services

  ii. terminate contractors in accordance with the terms of their contracts so as to avoid any liability to pay compensation for early termination; and

  iii. redeploy any equipment used to provide the Services that is not acquired by the BSP   Commercial in Confidence   Page 34   May 2004

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General Indemnities

15.1 Indemnity By Datec PNG LTD

Datec must indemnify, defend and hold harmless the BSP, their employees, agents, successors and assigns, from any and all Damages arising from, in connection with, or based on allegations of, any of the following:

  (a) Datec's breach of;

  (i) any representation and warranty specified in this agreement or

  (ii) its obligations with respect to BSP Confidential Information

  (b) any claim, demand, proceeding or other action ('Claim') arising out of or related to occurrences Datec is required to insure against     (c) any Claim arising out of or in any way relating to:

  (i) Datec,

  (A) engaging a contractor; or

  (B) employing or terminating the employment of any person,;

  (ii) any fraudulent act or omission, or any fraudulent misrepresentation or deceit by Datec, its Personnel or subcontractors in connection with this agreement; or

  (iii) a decision by the BSP not to approve a subcontractor or to revoke its approval for an Approved Subcontractor under the agreement

  (d) any Claim whether or not the BSP is liable at law for the amount the subject of the Claim, which maybe made against the BSP by, or on behalf of:

  (i) the Tax Office in respect of any payroll tax or penalties that the office may seek to recover from the BSP in respect of any amounts paid to Datec under this agreement

  (ii) any revenue raising authority including the Commissioner of Taxation in respect of any other payment, liability, or penalty that the authority may seek to recover from the BSP in respect of any amounts paid to Datec under this agreement;     (e) any Claim arising from:

  (i) the Acquired Assets or

  (ii) managed Third Party Agreements to which Datec is or becomes a party as a consequence of the operation of this agreement; and   Commercial in Confidence   Page 35   May 2004

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  (iii) any Claim arising from any breach by Datec of its obligations under this agreement.   15.2 Enforcement Of Indemnities

It is not necessary for a party to incur expense or make payment before enforcing a right of indemnity conferred by this agreement.

Personal Injury, Property Damage Indemnity

16.1 Datec Indemnifies BSP

Datec indemnifies the BSP against all Damages that the company may sustain or incur (including those sustained or incurred as a result of a claim by a third party against the BSP as a result of:

  (a) any injury to or death of any person arising out of or in any way relating to this agreement; or

  (b) damage to any real or tangible property,

caused by an act or omission of Datec or its personnel   16.2 BSP Indemnifies Datec

The BSP indemnifies Datec against all Damages that Datec may sustain or incur (including those sustained or incurred as a result of a claim by a third party against Datec or any related company as a result of:

  (a) any injury to or death of any person arising out of or in any way relating to this agreement; or

  (b) damage to any real or tangible property,

caused by an act or omission of the BSP or its personnel.

Risk Management

17.1 Insurance Coverage

The BSP will provide full comprehensive replacement insurance cover for all assets contained in the Asset Register (Schedule A).   Commercial in Confidence   Page 36   May 2004

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17.2 Terms Of Insurance

The BSP will provide documentary evidence to Datec that such insurance is in place for the term of the agreement.

Datec will not be held liable for service level deficiencies related to insurance issues or an Act of God. Both parties agree to work together to resolve any such issues.

General Conditions

18.1 Assignment By Datec

Datec must not assign this agreement or any right under this agreement unless Datec

  (a) is not in breach of this agreement;

  (b) obtains the prior written consent of the BSP

  (c) ensures that the assignee agrees to be bound by all of the Datec's obligations under this agreement; and

  (d) acknowledges that it remains bound by this agreement   18.2 Assignment By BSP

BSP may:

  (a) assign all or part of this agreement to any person as part of a restructure; and

  (b) assign or novate all or part of the rights and obligations under this agreement to any of the BSP's Related Company's as part of a re- organisation of its business.   18.3 Governing Law

This agreement will be construed in accordance with the laws of Papua New Guinea and the parties submit to the non-exclusive jurisdiction of the National Court of Papua New Guinea.

Dispute Resolution

19.1 Notice

A party claiming that a dispute, difference or question arising out of this agreement (Dispute) has arisen must notify the other party in writing giving details of the dispute.   19.2 Escalation

Senior executive managers of both companies must meet together to negotiate in good faith with a view to resolving the dispute.   Commercial in Confidence   Page 37   May 2004

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19.3 Expert Determination Or Mediation

If the parties cannot resolve the Dispute within 30 days after the Notification, the parties must refer the Dispute to:

  (a) Expert determination or

  (b) Mediation

the cost of which will be at either parties own cost   19.4 Expert Determination Criteria

If a Dispute is referred for expert determination the expert must make a determination by reference to what is reasonable in the context of the overall service delivery environment but taking into account best practice standards and relevant benchmarks in Papua New Guinea.

Expert determination must be completed by a mutually acceptable independent expert such as an accountant, computer expert or other person/s as agreed between the parties to assist in the resolution of any such dispute with knowledge of the operating conditions within Papua New Guinea.

But whose decision will not be binding on the parties.

Neither party may terminate this agreement pending the decision of such expert, but either party may approach the court for urgent relief if it is though desirable   19.5 Selection Of Expert Or Mediator

The parties will attempt to agree an appropriate expert or mediator. If they are unable to agree either party may at its own cost, request the president of the Law Society of Papua New Guinea to appoint a suitably qualified person to decide the dispute and determine the cause of action which best meets the objectives of the parties under or in the context of this agreement.

That person will act as an expert and not as an arbitrator and the decision or determination must, so far as practicable, be made within 21 days of the request

The expert may request either of the parties to appear before him or to provide a written explanation as to the reasons for the dispute and as to the party's reasons for following a certain course of action.   19.6 Procedure

Each expert determination and mediation conducted in accordance with this clause will be conducted in accordance with the relevant sections of the this agreement and the appropriate laws of Papua New Guinea.

The parties agree that a determination made by an expert will not be binding on either party. Once a determination has been made, the parties will recommence negotiation to resolve the Dispute and if they fail may initiate court proceedings.   Commercial in Confidence   Page 38   May 2004

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Disengagement

20.1 Planning

The purpose of Disengagement is:

  (a) to enable the BSP or its nominee to perform the Disengaged Services from the end of the Disengagement Period; and

  (b) to eliminate or minimise any disruption to the Services (including the Disengaged Services) as a result of the handover of the Disengaged Services to the BSP or its nominee.

Datec must upon request from the BSP work with them to formulate a disengagement plan.

  (a) as part of the Disengagement Plan:

  (i) BSP's right to use any Software continues following Disengagement

  (ii) there is no degradation of service levels or quality of service during Disengagement;

  (iii) there is no interruption to the Services during Disengagement;     (b) the Disengagement Plan:

  (i) specifies the Datec Personnel and other resources that will provide Disengagement Assistance;

  (ii) specifies all things necessary to effect Disengagement as efficiently as possible as at the start of this Agreement to effect the transition to Datec;

  (iii) sets out a timetable and process for effecting Disengagement that will deal with each of the issues in this agreement and will enable the BSP to have completed Disengagement as quickly as possible without disrupting the quality of the Services; and

  (iv) contains all things necessary to ensure that Datec is able to comply with the clauses in this agreement.   20.2 Implementation Of Plan

Datec must ensure that, at all times during the agreement, on 60 days notice it is able to deploy all necessary resources to complete Disengagement in accordance with the agreed Disengagement Plan.

  (a) Datec must ensure there is no degradation of quality of service during Disengagement;

  (b) Datec acknowledges all Service Levels apply during Disengagement but subject to agreement of the viability of the Disengagement Plan   Commercial in Confidence   Page 39   May 2004

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  (c) Datec use its best efforts to ensure that the Disengagement Period ends on the intended date of termination for the Disengaged Services,

  (d) the BSP will be permitted (on its own or on behalf of its nominated third party) without interference from Datec (including counter- offers), to make offers to any Datec employees or contractors who were used solely or primarily by Datec to provide the Disengaged Services during the 12 month period prior to the commencement of Disengagement;

  (e) The BSP or its nominee will be permitted to acquire all of Datec's right, title and interest in any Equipment owned or leased by Datec or its Subcontractor that is used in the performance of the Disengaged Services

  (f) If the BSP appoints a third party to assume the BSP role in relation to any or all of the Disengagement, Datec must provide Disengagement assistance to that third party.   Commercial in Confidence   Page 40   May 2004

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EXECUTED as an agreement.

SIGNED SEALED AND DELIVERED by BANK SOUTH PACIFIC LIMITED by Garth Mcllwain its duly constituted Attorney in the presence of:

)



BANK OF SOUTH PACIFIC LIMITED by its Attorney who hereby states that at the time of his executing this instrument he has no notice of the revocation of the Power of Attorney Registered No. S.25458

AND I certify that the person executing this instrument is personally known to me   )   Under the authority of which he has executed this instrument   )     )

/s/ Illegible   )     /s/ Illegible Witness   )   Illegible Name (printed)   )

Signed for and on behalf of DATEC (PNG) LIMITED by the authority of the Directors and Management   )

/s/ Illegible   )   Signature of Authorised Officer   )

Financial Controller   )     Illegible Title   )   Name of Authorised Officer (Please Print)

/s/ Illegible    )     Illegible Signature of Witness   )   Name of Witness (Please Print)   Commercial in Confidence   Page 41   May 2004

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Schedule A:

Equipment List — Asset Register   Illegible   Illegible   Illegible   Illegible Daru   1721   Catalyst 1912   Fa/1 , E/1 and S/1 Klunga   1721   Catalyst 1912   E/2 Tabubil   1721   Catalyst 2950   E/1 and S/4 Kerema   1721     E/2 POM Admin 1   Cisco 3660   Catalyst 2912   Fa/2, S/10 and ATM/1 POM Admin 2   Cisco 3660   Catalyst 2912   Fa/2 and S/9 POM CC   Cisco 1721   Catalyst 2912   E/1 and S/2 Boroko CC   Cisco 3640   Catalyst 2950   E/2 and S/4 Ori Lavi   Cisco 805     E/1 and S/1 Waigani Drive CC     Catalyst 1912   E/1 and S/2 Security Base   Cisco 805   Catalyst 1912   E/1 and S/1 Gordons CC   Cisco 3662   Catalyst 2950 and Catalyst 1900   Fa/2 and S/12 Stores   Cisco 1605   Catalyst 1912   E/2 and S/1 Bunker nsc_adm1   Cisco 3660   Cataryst 3550   Fa/2, S/27 and ATM/1 Bunker nsc_adm2   Cisco 3660   Catalyst 3550   E/2 and S/8 Bunker NCD   Cisco 3640   Catalyst 3550   E/2 and S/16 Bunker EB   Cisco 3640   Cataryst 3550   E/2 and S/8 User Suppt   Cisco 1601     E/1 and S/1 Dev Suppt   Cisco 1601     E/1 and S/1 Waigani Junction CC     Catalyst 2924   Andersons Harbourside   Cisco 2610   Catalyst 2950   E/1 and S/1 TST 4 Mlle   Cisco 2610     E/1 and S1 Hitron         Commercial in Confidence   Page 42   May 2004

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Boroko Foodworld       Rainbow ATM Lobby   Cisco 805     E/1 and S/1 Jacksons   Cisco 805     E/1 and S/1 Alotau   1721   Catalyst 1912   E/1 and S/6 Popondetta   1721   Catalyst 1912   E/2 and S/2 Lae Town   Cisco 3640   Catalyst 2950   E/2 and S/11 Lae Market   1721   Catalyst 2924   E/1 and S/4 Lae CC   Cisco 2611   Catalyst 2950   E/2 and S/6 Lae - Vele Rumana   Cisco 805     E/1 and S/1 Eriku ATM Lobby   1721     E/1 and S/1 Bulolo   1721     E/2 Madang   1721   Catalyst 2924   E/2 and S/4 Madang - Beckslea Plaza   1721     E/2 and S/1 Wewak   Cisco 3640   Catalyst 1912   E/3 and S/4 Wewak ATM Lobby   1721     E/2 and S/1 Maprik   Cisco 806     E/2 Aitape   Cisco 806     E/2 Vanimo   1721   Catalyst 1912   E/2 and S/2 Kainantu   1721   Catalyst 1912   E/1 and S/2 Goroka   Cisco 3640   Catalyst 2950   Fa/1. E/1 and S/6 Bird Of Paradaise   Cisco 805     E/1 and S/1 Kundiawa   1721   Catalyst 1912   E/2 and S/2 Hagen   Cisco 3640   Catalyst 2924   E/2 and S/9 Hagen CC   Cisco 2611   Catalyst 1912   E/2 and S/10 Wabag CC   Cisco 2611   Catalyst 1913   E/2 and S/2 Wabag   Cisco 2611   Catalyst 2924   E/2 and S/2 Mendi   Cisco 2611   Catalyst 1912   E/2 and S/2 Lorengau   1721   Catalyst 1912   E/1 and S/1   Commercial in Confidence   Page 43   May 2004

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Kimbe   1721   Catalyst 2950   E/1 and S/4 Bialla   1721     E/2 Kokopo   Cisco 3640   Catalyst 2924   E/5 and S/B Kokopo IRO   Cisco 2611   Catalyst 1912   E/2 and S/6 Rabaul   1721   Catalyst 1912   E/2 and S/1 Kavleng   1721   Catalyst 1912   E/2 and S/2 Namatanai   1721   Catalyst 1912   E/2 Lihir   1721   Catalyst 1912   E/2 and S/3 Buka   1721   catalyst 1912   Fa/2 and S/2   Commercial in Confidence   Page 44   May 2004

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Schedule B

Datec Service Levels for BSP Networking Outsourcing Project

Services to be performed are defined in the Network Management Outsourcing Agreement. These include Data services, network services and internet services.

As referenced in Section 8.5 of this agreement, rebates will be applied as detailed in Pricing Schedule C, should Datec not achieve the agreed Service Levels. Rebates will apply to Severity Levels One (1) and Two (2) for all logged jobs during the agreed business hours contained in this agreement.   A. Helpdesk / Service Calls

1(a) During Business Hours (Monday to Friday 7.30 to 18.00)   Severity Level   Time to Respond   Escalation Time   Comments

1   15 minutes   1 hour   2   30 minutes   2 hours   3   1 hour   4 hours   4   8 hours   Next business day     Commercial in Confidence   Page 45   May 2004

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After hours assistance Monday through Friday will be available via the Datec Help Desk:

1(b). After Business Hours (Outside Business hours)   Severity Level   Time to Respond   Escalation Time   Comments

1   2 hours   3 hours   2   3 hours   4 hours   3   Next business day   Next business day   4   Next business day   Next business day     1(c). Severity Definitions   Severity Definitions Severity Level

Illegible   Illegible

2 High Impact

Required prompt corrective action. Product of service restricted. Business can operate at reduced capacity. Eg Less than 100 staff impacted, less than 10 branches / ATM's effected by the one event.

Illegible   Illegible   Commercial in Confidence   Page 46   May 2004

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1.1.1 B. Reporting   1.1.2   Report

1.1.3   Report Description   1.1.4   Frequency   1.1. 5   Delivery time   1.1.6   Distribution List

1.1.7

Start of Day Network Status Summary Report   1.1.8

Daily

1.1.9

08:00

1.1.10

1.1.11   Open / Closed Incident report   1.1.12  Daily   1.1.13   10:00   1.1.14

1.1.15

Network Utilisation Report

1.1.16

Weekly

1.1.17

17:00 (Friday)   1.1.18

1.1.19

Management Summary report

1.1.20

Monthly

1.1.21

17:00 (3rd Day of the month)   1.1.22

1.1.23

Details

Start of Day Network Status Summary Report

The report is to detail the status of all bank telecommunication circuits. For those circuits that are unavailable or service is impacted details of actions taken is to be included in the report.   Commercial in Confidence   Page 47   May 2004

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Open / Closed Incident Report

A summary of all calls logged to the Network Helpdesk, status and action taken.

Network Utilisation Report

The report is to provide graphical details of network utilisation statistics for all facets of the network inclusive of;

Banking Traffic

Internet Traffic

Line / Network availability statistics

Any anomalies are to be noted and appropriate commentary / recommendations made.

Monthly Management Report.

The report is detail in a summarised format Network and Operational performance for the month inclusive of;

Statistics of Incident Reports logged

Graphical presentation of Monthly Network Utilisation

Monthly Line / Network Availability Summary

SLA performance status

Staff Report

Management commentary.   Commercial in Confidence   Page 48   May 2004

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2. Managed Third Parties (MTP)

Datec will apply the appropriate severity level and take action as required with managed third party vendors when the resolution requires the involvement of a managed third party.

In the first instance Datec will liase with the managed third party vendor directly keeping records of the action for reporting purposes.

Should there be no successful resolution to this approach within the time durations within this SLA, Datec will escalate the matter directly to the BSP Customer Business Manager (CBM). In any event the CBM will be aware of the request to the MTP due to the daily reporting systems in place.

Once escalated to the BSP CBM, the BSP undertakes to take control of the liaison with the MTP to help Datec resolve the issue.   Commercial in Confidence   Page 49   May 2004

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Schedule C

Pricing Schedule   Annual Fees     Annual Base Fee   K3,524,322.00

Monthly Base Fee   K293,693.50   SLA Rebate Table                         % Of SLA Achieved   100%  95%  90%  85%  80%  75%

Monthly Rebate % applied   0%   10%  20%  30%  40%  50%

• Measured Monthly using the actual Response and Escalation times for logged jobs verse the agreed service times contained in the SLA in Schedule B

• Applies to Severity Levels 1 & 2 during normal business hours

• Maximum rebate will be 50% of the monthly base fee   Termination Fee Table

Contract Term Completed   0-Yrl  1-Yr2  2-Yr3  3-Yr4  4-Yr5  5-Yr6

% of Annual Base Fee Payable   50%   40%   30%   20%   10%   0%

Note: The Annual Base Fee will be adjusted in accordance with Section 9.1, CPI Adjustments, of this agreement   Commercial in Confidence   Page 50   May 2004

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Schedule D

Change Control Form (For MAC's)

Change Control Form

This form must be created as soon as the owner is aware of the change but at least two weeks prior to the implementation date. This is to notify all involved parties of impending change and to help the scheduling of change into production. For urgent fixes the change process is followed but needs to be processed immediately. Full details may not be available at this point, however the minimum requirements to be completed are:

Scheduled date and time of change: Date Time

Change Control Number: CMS

Equipment affected by the change:

Equipment (Applies to one or more hardware, software changes or configuration changes to one or more networks).   Equipment Details   Domain   Location                                       Commercial in Confidence   Page 51   May 2004

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1. Change to be carried out:

2. Reason for Change

3. Is there any impact on other areas?

4. Has agreement been obtained from the business? If so please give details.          Commercial in Confidence   Page 52   May 2004

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5. Has Financial Approval been obtained for this change? If so please give details.

6. Have representatives from both the client and the technical staff tested the software or hardware? Please give details.

7. How will the change be carried out?

8. Has any provision been made to back out the installation if necessary? Please give details.          Commercial in Confidence   Page 53   May 2004

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9. Have the details and the implications of the change been explained to the client and areas that will be affected? Please give details.

This change control must be reviewed and approved by at least one person from each of the following areas:   Area   Signatory   Signature  Date The Business   Head of Relationship Banking

  Head of Technology

  Others

Datec   Outsourcing

  Delivery Manager



Office Automation Manager       Commercial in Confidence   Page 54   May 2004

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Schedule E

REQUEST FOR SERVICE (RFS)

Service Request Form   Commercial in Confidence   Page 55   May 2004

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BSP: Service Request Form

Compulsory section or fields are marked with: F

F SR Number:   (Completed by BSP)

-RFS-

  F Date       F Request Type (Cross) F Region (Cross)



¨ POM

¨ Other (Specify)



¨ Project Request

¨ Support Request

¨ Other: Please Specify

F 1.0 Request Details   Service Request Title

Project Name   BSP Project Code

Description

Provide a brief outline of the project scope including high-level business requirements, technical impacts. Where appropriate, provide details of other areas impacted by this project including external parties     Commercial in Confidence   Page 56   May 2004

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Background

Provide any relevant information, which assists in defining the business imperatives for the project, (e.g. Business Requirements)     List of Attachments supporting this Service Request   Attachment / Filename (Content)

2.0 Contract Reference

The terms and conditions will be applied as per the Network Management Outsourcing Agreement dated May 2004 between the Bank of South Pacific Limited and Datec PNG LTD.   F 3.0 Requestor Information

Initiator of Request   Name   (   Mobile

  Position   e-mail   Fax Prime Contact

(if different from Requestor)

Name



(



Mobile

  Commercial in Confidence   Page 57   May 2004

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  Position   e-mail   Fax

Requesting Business Area

Billing Cost Centre

Project Manager1   Name   (   Mobile   F 4.0 Key Dates (attach Project Plan or relevant documents as appropriate) BSP Phase(s)

Completion Date(s)

/ / / / Datec Phases(s)

Completion Date(s)

/ / / / Priority: (Cross those applicable)   ¨ Regulatory

¨ Normal

  Commercial in Confidence   Page 58   May 2004

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  ¨ Compliance   ¨ Fastpath

Implementation Date(s):   User Acceptance Testing

  Production

  Other (specify)   / /   5.0 BSP/Datec Purchase Order Details

F Purchase Order No.2   F BSP/Datec

Is this Request In-Scope or Out-of-Scope of the Services Agreement   Provide details of components if Out of Scope.

  Commercial in Confidence   Page 59   May 2004

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F 6.0 BSP Managerial Approval Authorised Approver   Name:

  Title:

  Date:   7.0 BSP Executive Approval Approval      Approval Approved / Not Approved for release to Datec PNG LTD on behalf of the Bank of South Pacific Limited by:     Approved / Not Approved for release to Datec PNG LTD on behalf of the Bank of South Pacific Limited by:

                For and on behalf of the Bank South Pacific Limited     For and on behalf of the Bank South Pacific Limited / /     / / Explanation for Non -approval (if appropriate)       Commercial in Confidence   Page 60   May 2004

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SOLUTION: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

PROBLEM: BROKER DEALER   MARKETING AND SERVICING AGREEMENT   FOR VARIABLE ANNUITY CONTRACTS      This Broker Dealer Marketing and Servicing Agreement for Variable Annuity Contracts (the Agreement) is   effective this ______ day of ________________, 2013, by and among Principal Life Insurance Company   (Issuer) and Princor Financial Services Corporation (Distributor), on the one hand, and   _______________________ and its duly licensed insurance affiliates indicated on the signature page of this   Agreement, if any, (collectively Broker Dealer), on the other hand. Distributor, Issuer and Broker Dealer are   individually referred to as a Party and collectively as the Parties      RECITALS      A. Issuer offers certain individual variable annuity contracts listed in the exhibit(s) attached to this Agreement

   B. Distributor is a broker dealer registered with the Securities and Exchange Commission (the SEC) under

   C. Broker Dealer is engaged in the sale of securities and other investment products, including variable annuity

   D. The Parties enter into this Agreement for the purpose of authorizing Broker Dealer to solicit sales of and

   NOW THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, the   receipt and sufficiency of which the Parties acknowledge, the Parties agree as follows:      REPRESENTATIONS      1. Issuer represents that the Annuity Contracts shall comply with the registration and other applicable   requirements of the Securities Act of 1933 (the 1933 Act) and the Investment Company Act of 1940   (the 40 Act) and the rules and regulations thereunder, including the terms of any order of the SEC   with respect thereto. Issuer further represents that the Annuity Contract prospectuses included in   Issuer's registration statement, post-effective amendments, and any supplements thereto, as filed or to be   filed with the SEC, as of their respective effective dates, contain or will contain all statements and   information required to be stated therein by the 1933 Act and in all respects conform or will conform to   the requirements thereof, and no prospectus, nor any supplement thereof, includes or will include any   untrue statement of a material fact, or omits or will omit to state any material fact required to be stated   therein or necessary to make the statements therein not misleading; provided, however, that the   foregoing representations shall not apply to information contained in or omitted from any prospectus or   supplement in reliance upon and in conformity with written information furnished to Issuer by Broker   Dealer specifically for use in preparation thereof. The foregoing representations also shall not apply to   information contained in or omitted from any prospectus or supplement of any underlying mutual fund.

(Annuity Contracts). The exhibit(s) attached to this Agreement are incorporated herein by reference and  made a part hereof (Exhibits).

the Securities and Exchange Act of 1934, as amended, (the 1934 Act) and a member in good standing of  the Financial Industry Regulatory Authority, Inc. (FINRA). Distributor is the principal underwriter of the  Annuity Contracts.

contracts. Broker Dealer either is licensed in certain states as an insurance agent or agency or has entered  into an insurance networking agreement with the undersigned duly licensed insurance affiliates to act on its  behalf in the capacity of a licensed insurance agent or agency.

service Annuity Contracts, subjects to the terms and conditions set forth in this Agreement and the Exhibits.





    2 . Broker Dealer represents and warrants that it is a broker dealer registered with the SEC under the 1934   Act, a member in good standing of FINRA, and is registered as a broker dealer under state law to the   extent required in order for it or those persons who are registered with it and licensed as insurance   producers (Registered Representatives) to provide the services described in this Agreement. Broker   Dealer agrees to abide by all rules and regulations of FINRA, including its Conduct Rules, and to   comply with all applicable state and federal laws and the rules and regulations of authorized regulatory   agencies affecting the sale and servicing of Annuity Contracts.         MARKETING/SERVICING      3 . Issuer and Distributor appoint Registered Representatives to solicit and procure applications for the sale   of and service of Annuity Contracts. This appointment is not exclusive and only extends to those   jurisdictions in which the Annuity Contracts have been approved for sale and in which Broker Dealer   and Registered Representatives are properly registered, licensed and appointed.      4 . Broker Dealer will itself be, or will select persons associated with it who are, trained and qualified to   solicit applications for purchase and service of Annuity Contracts in conformance with applicable state   and federal laws. Any such persons shall be registered representatives of Broker Dealer in accordance   with the rules of FINRA and any applicable state laws, be licensed to offer the Annuity Contracts in   accordance with the insurance laws of any jurisdiction in which such person solicits applications and be   licensed with and appointed by Issuer to solicit applications for and service Annuity Contracts.      5 . Broker Dealer will use commercially reasonable efforts to train and instruct its Registered   Representatives not to make recommendations to an applicant to purchase an Annuity Contract in the   absence of reasonable grounds to believe that the purchase is suitable for such applicant, in accordance   with the suitability and disclosure requirements of the 1934 Act, FINRA Conduct Rule 2310, and any   state insurance law or regulation governing the offer and sale of Annuity Contracts, including any state   law or regulation governing sales to the public in general (e.g. consumer protection laws or regulations,   unfair trade practices, annuity disclosure regulations, etc.) or to senior citizens, as the same may be   amended or interpreted from time to time. Broker Dealer will use commercially reasonable efforts to   determine that each transaction is completed with a Registered Representative's report indicating   suitability, including any required and necessary customer information, and is subjected to a review   process in compliance with FINRA Conduct Rule 3010, as the same may be amended or interpreted   from time to time. Each application shall be approved by one of Broker Dealer's registered principals, in   accordance with all applicable FINRA rules.      6 . The activities of all Registered Representatives, employees and agents (producers) will be under the   direct supervision and control of Broker Dealer. The right of Registered Representatives to solicit   applications for the purchase and service of Annuity Contracts is subject to their continued compliance   with the rules and procedures that may be established by Broker Dealer, or Issuer, including, but not   limited to, those set forth in this Agreement.      7 . Broker Dealer shall ensure that applications for the purchase of Annuity Contracts are solicited only in   the states where Annuity Contracts are qualified for sale, and only in accordance with the terms and   conditions of the then current prospectus applicable to Annuity Contracts and will make no   representations not included in the prospectus, Statement of Additional Information, or in any   authorized supplemental material supplied by Distributor. With regard to Annuity Contracts, Broker   Dealer shall not use or permit its producers to use any sales promotion materials or any form of   advertising other than that supplied or approved by Distributor. Issuer and Distributor shall provide only   approved supplemental material, advertising and sales materials, including illustrations, for Broker   Dealer's use.





    8 . Broker Dealer will promptly forward to the appropriate office of Distributor, or its authorized designee,   all Annuity Contract applications along with other documents, if any, and any payments received with   such applications and will have no rights of set off for any reason. Any Annuity Contract application   that is rejected, together with any payment made and other documents submitted, shall be returned to   Broker Dealer or the source of the payments.      9 . Broker Dealer shall ensure that the prospectus delivery requirements under the 1933 Act and all other   applicable securities and insurance laws, rules and regulations are met and that delivery of any   prospectus for Annuity Contracts will be accompanied by delivery of the prospectus for the underlying   mutual funds, and, where required by state law, the Statement of Additional Information for the   underlying mutual funds. Issuer or Distributor shall inform Broker Dealer of those states that require   delivery of a Statement of Additional Information with the prospectus on initial sale. Broker Dealer is   responsible for prospectus delivery requirements only on initial sale. Issuer and Distributor will be   responsible for prospectus delivery annually after the original sale.      10 . Broker Dealer agrees to maintain all books and records relating to the servicing and sale of Annuity   Contracts or interests therein required under the 1934 Act, and any applicable rules promulgated   thereunder, and applicable securities or insurance laws of any states.      11 . Broker Dealer understands and agrees that in performing the services covered by this Agreement, it is   acting in the capacity of an independent contractor and not as an agent or employee of Distributor or   Issuer and is not authorized to act for, or make any representation on behalf of, Distributor or Issuer   except as specified herein. Broker Dealer understands and agrees that Issuer shall execute telephone   transactions only in accordance with the terms and conditions of the then current prospectus applicable   to Annuity Contracts and agrees that in consideration for Broker Dealer's right to exercise the telephone   transaction services neither Distributor nor Issuer will be liable for any loss, injury or damage incurred   as a result of acting upon, nor will they be held responsible for the authenticity of any telephone   instructions containing unauthorized, incorrect or incomplete information. Broker Dealer agrees to   indemnify and hold harmless Distributor and Issuer against any loss, injury or damage resulting from   any telephone transactions instruction containing unauthorized, incorrect or incomplete information   received from Broker Dealer or any of its Registered Representatives. (Telephone instructions are   recorded on tape.)      12 . Broker Dealer has no authority to: incur any liability or debt on behalf of Issuer or Distributor; accept   risks or contracts of any kind; make, alter, authorize or discharge any contract; fail to transmit promptly   any contributions collected to Issuer or Distributor; or bind Issuer or Distributor in any way.      13 . Broker Dealer agrees to notify Distributor promptly of any change, termination, or suspension of its   status as a broker dealer or FINRA member. Broker Dealer shall immediately notify Distributor with   respect to i) the initiation and disposition of any form of disciplinary action by the FINRA or any other   agency or instrumentality having jurisdiction with respect to the subject matter hereof against Broker   Dealer or any Registered Representative; ii) the issuance of any form of deficiency notice made part of   the public record by FINRA or any such agency regarding Broker Dealer's training, supervision or sales   practices; and/or iii) the effectuation of any consensual order with respect thereto.      14. Broker Dealer agrees to notify Distributor and Issuer immediately of any customer complaints or legal   or regulatory inquiries (including, but not limited to, subpoenas) regarding any Annuity Contracts   offered or sold pursuant to the Agreement. Broker Dealer shall provide full, prompt cooperation and   assistance to Distributor and Issuer in responding to and resolving any such complaints or inquiries.      15. Anti-Money Laundering and Know Your Customer Compliance: The Parties acknowledge that they are   financial institutions subject to the USA Patriot Act of 2001 and the Bank Secrecy Act (collectively, the   AML Acts), which require, among other things, that financial institutions adopt compliance programs





    to guard against money laundering. Each Party represents and warrants that it is in compliance and will   continue to comply with the AML Acts and the applicable rules and regulations of the SEC, FINRA, and   any other self-regulatory organizations, as they now exist and as they may be amended in the future.   Broker Dealer represents and warrants that it has adopted a customer identification program and will   verify the identity of customers who purchase Annuity Contracts. Periodically, Issuer or Distributor may   ask Broker Dealer to, and Broker Dealer agrees to, certify that it is compliance with the requirements,   representations and warranties in this paragraph. The Parties further acknowledge that they have a   current 314(b) notice on file with FinCEN in accordance with section 314(b) of the USA Patriot Act and   agree to refile such notice annually (or as otherwise required to remain current in accordance with   applicable rules and regulations) during the term of this Agreement.      COMPENSATION      16. Unless otherwise provided, Issuer, on behalf of Distributor, shall pay compensation to Broker Dealer as   set out in this Agreement and the Exhibits. Compensation shall only be paid to Broker Dealer of record   on premiums paid to and retained by Issuer while this Agreement is in force. Broker Dealer agrees to   pay a commission to Registered Representatives in connection with the sales or servicing of Annuity   Contracts under this Agreement.      17. In those states where Broker Dealer has not obtained an insurance license, Broker Dealer represents and   warrants that: it has entered into an insurance networking agreement with the undersigned duly licensed   insurance affiliate(s) to act on its behalf in the capacity of a licensed insurance agent or agency   (Affiliated Agency). Broker Dealer authorizes Issuer to pay any compensation owed to Broker Dealer   from the sales or servicing of Annuity Contracts to such Affiliated Agency. Broker Dealer remains fully   responsible for recordkeeping and supervision of the solicitation, sale and/or servicing of Annuity   Contracts. All compensation received by Affiliated Agency in accordance with this section will be   distributed by Affiliated Agency only to duly licensed and registered representatives who have been   appointed by Issuer to solicit applications for Annuity Contracts.      18. Issuer and Distributor may change the compensation schedules set forth in the attached Exhibits at any   time and will notify Broker Dealer of the revised compensation schedules electronically or by other   writing in advance of the effective date of the change. Any change to the compensation schedules will   affect only commissions payable on Annuity Contracts with an effective date on or after the effective   date of the change, unless otherwise provided or required by law. Issuer or Distributor may discontinue   the issuance of any form of Annuity Contract and fix the amount of compensation on Annuity Contracts   issued in exchange for previously issued Annuity Contracts.      19. Broker Dealer agrees to return promptly to Issuer all compensation received for any Annuity Contract   returned within the free look period as specified in the Annuity Contract. Issuer expressly reserves the   right to change the broker dealer of record or Registered Representative in the event an Annuity   Contract owner so requests.      20. Any indebtedness or obligation of Broker Dealer to Distributor or Issuer, whether arising hereunder or   otherwise, shall be set off against any compensation payable under this Agreement or any other   agreement between or among the Parties or their affiliates. Indebtedness or obligations include but are   not limited to any debt, liability, or debit balance resulting from Issuer's reversal of compensation under   this Agreement or any other agreement between or among the Parties or their affiliates. It also includes   any amount paid by Issuer or Distributor, including reasonable attorney fees and costs, to settle a   complaint or satisfy any judgment entered by any court, administrative agency or arbitrator related to   any Annuity Contract sold by Broker Dealer, or its producers or breach of Broker Dealer's duties and   responsibilities contained in this or any prior Agreement, whether or not the liability for settlement or   satisfaction of judgment arose after the termination of this Agreement. Issuer or Distributor reserves the   right to use any remedies under the law to collect any indebtedness Broker Dealer owes Issuer or





    Distributor and Broker Dealer agrees to pay any reasonable attorney's fees and actual costs of collection   incurred as a result of such action.      CONFIDENTIALITY      21. a. Confidentiality. Each Party acknowledges that, in the course of performing its duties under this   Agreement or otherwise, it may receive or learn information about individuals who have applied for   or purchased financial products or financial services from the other Party, including, but not limited   to, personal, financial and/or health information (Confidential Information). Each Party agrees   that it will not use or disclose to any affiliate or third party, orally or in writing, any Confidential   Information of the other Party for any purpose other than the purpose for which the Confidential   Information was provided to that Party. Without limiting any of the foregoing, each Party agrees to   take all precautions that are reasonably necessary to protect the security of the other Party's   Confidential Information. Each Party agrees to restrict access to the other Party's Confidential   Information to those employees who need to know that information to perform their duties under this   Agreement. Each Party further agrees that, upon request of the other Party, it will return to the Party   making such request all tangible items containing any Confidential Information of the other Party,   including all copies, abstractions and compilations thereof, without retaining any copies of the items   required to be returned. The obligations of this paragraph extend to the employees, agents, affiliates   and contractors of each Party and each Party shall inform such persons of their obligations   hereunder.      21. b. Notification obligation. Each Party shall, upon learning of any unauthorized disclosure or use of any   of the other Party's Confidential Information, notify the other Party promptly and cooperate fully   with such Party to protect such Confidential Information.      21. c. Disclosure required by law. If Broker Dealer believes it is required by law or by a subpoena or court   order to disclose any Confidential Information, Broker Dealer, prior to any disclosure, shall   promptly notify Issuer in writing attaching a copy of the subpoena, court order or other demand and   shall make all reasonable efforts to allow Issuer an opportunity to seek a protective order or other   judicial relief.      21. d. Non-restricted information. Except as stated in the final sentence of this paragraph, nothing in this   Agreement shall be construed to restrict disclosure or use of information that: (a) was in the   possession of or rightfully known by the recipient, without an obligation to maintain its   confidentiality, prior to receipt from the other Party; (b) is or becomes generally known to the public   without violation of this Agreement; (c) is obtained by the recipient in good faith from a third party   having the right to disclose it without an obligation of confidentiality; (d) is independently   developed by the receiving Party without the participation of individuals who have had access to the   other Party's confidential or proprietary information. The Parties acknowledge that certain laws   governing Confidential Information about individuals are more restrictive than the foregoing   statements and they agree to comply in all respects with such laws.      21. e. Compliance with law. Each Party agrees, in connection with its performance under this Agreement,   to comply with all applicable laws, including but not limited to laws protecting the privacy of non-   public personal information about individuals.      21. f. Survival. The provisions of this Agreement relating to confidentiality shall survive termination or   expiration of this Agreement.      INDEMNIFICATION      22. In connection with the offer, sale or servicing of Annuity Contracts, Broker Dealer agrees to indemnify





    and hold harmless Distributor and Issuer from any damage or expense, including reasonable attorneys'   fees, as a result of (a) the negligence, misconduct or wrongful act of Broker Dealer or producers; (b) any   violation of any securities or insurance laws, regulations or orders or (c) any actual obligation of the   Affiliated Agency under terms of the agreement between Broker Dealer and the Affiliated Agency,   including claims by one or more of Registered Representatives for compensation due or to become due   on account of such Registered Representatives' sale or servicing of Annuity Contracts and any claims or   controversy between Broker Dealer and Affiliated Agency as to rights to compensation.   Notwithstanding the foregoing, Broker Dealer shall not indemnify and hold harmless Distributor and   Issuer from any damage or expense on account of the negligence, misconduct or wrongful act of Broker   Dealer or producer if such negligence, misconduct or wrongful act arises out of or is based upon any   untrue statement or alleged untrue statement of material fact, or the omission or alleged omission of a   material fact in: (i) any registration statement, including any prospectus or any post-effective   amendment thereto; or (ii) any material prepared and/or supplied by Distributor or Issuer for use in   conjunction with the offer or sale of Annuity Contracts, or (iii) any state registration or other document   filed in any state or jurisdiction in order to qualify any Annuity Contracts under the securities laws of   such state or jurisdiction. The terms of this provision shall not be impaired by termination of this   Agreement      23. In connection with the solicitation of applications for the purchase of Annuity Contracts, Distributor and   Issuer agree to indemnify and hold harmless Broker Dealer from any damage or expense, including   reasonable attorneys' fees, as a result of the negligence, misconduct or wrongful act of Distributor or   Issuer or any employee, representative or agent of Distributor or Issuer, including but not limited to, any   damage or expense which arises out of or is based upon any untrue statement or alleged untrue   statement of material fact, or the omission or alleged omission of a material fact in: (i) any registration   statement, including any prospectus or any post-effective amendment thereto; or (ii) any material   prepared and/or supplied by Distributor or Issuer for use in conjunction with the offer or sale of Annuity   Contracts; or (iii) any state registration or other document filed in any state or other jurisdiction in order   to qualify any Annuity Contract under the securities laws of such state or jurisdiction and/or any actual   or alleged violation of any securities or insurance laws, regulations or orders. The terms of this   provision shall not be impaired by termination of this Agreement.      GENERAL PROVISIONS      24. Issuer or Distributor may modify this Agreement at any time by written notice to Broke Dealer. Any   notice shall be deemed to have been given on the date upon which it was either delivered personally or   by fax or e-mail transmission to the other Party, or mailed post prepaid to his or its address as shown   herein.      25. Any Party hereto may terminate this Agreement at any time upon prior written notice. This Agreement   shall automatically terminate if Broker Dealer voluntarily or involuntarily ceases to be or is suspended   from being, a member in good standing of FINRA. In addition, Distributor and Issuer reserve the right   to terminate this Agreement in the event that any producer of Broker Dealer is suspended, disciplined or   found to be in violation of governing insurance or securities laws, rules or regulations. Failure of any   Party to terminate this Agreement for any of the causes set forth in this Agreement shall not constitute a   waiver of the right to terminate this Agreement at a later time for any such causes.      26. This Agreement may not be assigned by Broker Dealer without the prior written consent of Issuer and   Distributor, which shall not be unreasonably withheld.      27. This Agreement shall be governed by and construed in accordance with the laws of the State of Iowa.      28. No failure or delay to exercise, nor any single or partial exercise of, any right, power, or privilege given   or arising under this Agreement will operate as a waiver of future rights to exercise any such right,





    power, or privilege.      29. This Agreement may be signed in any number of counterparts, each of which will be considered an   original, but all of those counterparts will together constitute only one Agreement.      30. The determination that any provision of this Agreement is not enforceable in a particular jurisdiction   will not affect the validity or enforceability of the remaining provisions generally, or in any other   jurisdiction or as to any other entities not involved in that judgment. Such unenforceable provisions will   be stricken or deemed modified in accordance with such determination and this Agreement, as so   modified, will continue to be in force and effect.      IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed on the date first above   written.      ABC Company, Broker Dealer         By: ____________________________      _______________________________   Please type or print name      _______________________________   Please type or print Title      Date: __________________________           Princor Financial Services Corporation      By: _______________________________________   Marty Richardson   Operations Officer      Date: ____________________________________      Principal Life Insurance Company      By: _______________________________________   Angela Ellis   Assistant Vice President - Marketer Services      Date: ____________________________________      Affiliated Agencies of Broker Dealer      By: _______________________________________      __________________________________________   Please type or print name





    __________________________________________   Please type or print Title      Date: ____________________________________





      EXHIBIT A   COMPENSATION SCHEDULE FOR   PRINCIPAL VARIABLE ANNUITY CONTRACTS         Products may not be available in all states and state variations may apply.     Trail commissions are calculated as a percentage of account value.     Commissions for variable annuities are based on the age of the oldest owner or annuitant.     The trail commission is paid to the current servicing agent of record provided the Annuity Contract is still in effect.   Servicing agent means the broker dealer or Registered Representative appointed by us and accepted by the contract owner as the  servicing agent. If the contract owner requests a change in the servicing agent or if we decide that a change would be in the best  interests of the contract owner, trail commissions will be paid to the new servicing agent or his/her broker dealer where appropriate.  No trail commissions are paid after termination of this Agreement.

  A. Option Elections      The Broker Dealer will be paid compensation on sales of Principal Variable Annuity/Principal Investment Plus Variable   Annuitysm Contracts in accordance with the Compensation Options elected herein and which its Registered Representative   shall elect, using the election procedures established by the Issuer, upon submission of the product application to the   Issuer and for which good payment has been received.      Compensation paid will be based on Option A unless, upon submission of the contract application, the Registered   Representative elects another Option made available to it by Broker Dealer's election below.      Check the options available to your Registered Representatives.      _X_ Option A - Full front end compensation with no trail      ___Option B - Slightly lower front-end commission with a .10% annual trail commission paid quarterly starting at the end of the fifth  quarter      ___Option C - Lower front-end commission with a .30% annual trail commission paid quarterly starting at the end of the fifth quarter     ___Option D - Low or no up front-end commission based upon issue age with a 1.0% annual trail commission paid   quarterly starting at the end of the fifth quarter

Principal Variable Annuity (FVA)*/Principal  Investment Plus Variable Annuity (IPVA)**

SOLUTION:
Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?