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.

[Q]: 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

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





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

Network Management Outsourcing Agreement





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

Network Management Outsourcing Agreement





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

Network Management Outsourcing Agreement





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

Network Management Outsourcing Agreement





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

Network Management Outsourcing Agreement





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

Network Management Outsourcing Agreement
[A]: 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?


[Q]: Exhibit 10.10

CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. MASTER DEVELOPMENT AND MANUFACTURING AGREEMENT

This Master Development and Manufacturing Agreement (including all appendices hereto, this Agreement) is entered into as of February 13, 2018 (the Effective Date) by and between Magenta Therapeutics, Inc., a Delaware corporation having offices at 50 Hampshire Street, 8t h Floor, Cambridge, MA 02139 (Magenta), and Bachem Americas, Inc., a California corporation, having offices at 3132 Kashiwa Street, Torrance, CA 90505 (Bachem). Magenta and Bachem may be referred to individually as a Party or collectively as the Parties.

RECITALS

WHEREAS, Magenta is engaged in the development and research of certain pharmaceutical products and requires assistance in the development and manufacture of active pharmaceutical ingredients for its clinical trials; and

WHEREAS, Bachem is a contract manufacturer that possesses the necessary technical capabilities and operates pharmaceutical process development facilities for both the development and manufacture of pharmaceutical products used in clinical trials, as required by Magenta; and

WHEREAS, Magenta desires Bachem to provide the Services and manufacture the Products specified in Project Plans (as defined below); and

WHEREAS, Bachem is willing to provide the Services, manufacture the Product, and fulfill the Project Plans on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and adequacy of which each of the Parties does hereby acknowledge, the Parties, intending to be legally bound, agree as follows.

Section 1. DEFINITIONS

As used herein, the following terms shall have the following meanings:

1.1 Affiliate shall mean any corporation or other entity which controls, is controlled by, or is under common control with, a Party to this Agreement. A corporation or other entity shall be regarded as hi control of another corporation or entity if it owns or directly or indirectly controls more than fifty percent (50%) of the voting stock or other ownership interest of the other corporation or entity, or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or other entity or the power to elect or appoint fifty percent (50%) or more of the members of the governing body of the corporation or other entity.

1.2 Applicable Laws means all relevant federal, state and local laws, statutes, rules, regulations, and ordinances and industry standards and guidelines as in effect on the Effective Date or adopted thereafter and which are applicable to a Party's activities hereunder in their respective countries, including, without limitation, the applicable regulations and guidelines of the FDA and all applicable GMPs together with amendments thereto.





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 1.3 Batch means a specific quantity of Product that is intended to have uniform character and quality, within specified limits, and is produced according to a single manufacturing order during the same cycle of manufacture.

1.4 CMC shall mean (i) manufacturing process development for Product; (ii) all chemistry, manufacturing and control procedures necessary for the manufacturing, testing and quality control release of Product; and (iii) sourcing and testing of all raw materials and components used in the production of any Product.

1.5 [***] means the specific sequence(s) defined in Appendix B.

1.6 Development Specifications shall mean the requirements of all Applicable Laws and the procedures, process parameters, analytical tests and other attributes and written specifications for the Development Work attached hereto as part of a Project Plan.

1.7 Development Work shall mean those development Services that are to be performed by Bachem hereunder and which may include work related to identifying, formulating, developing and demonstrating cost effective, reproducible Product and manufacturing a feasibility Batch.

1.8 DMF means a Drug Master File as described in 21 C.F.R. § 314.420.

1.9 Effective Date has the meaning set forth in the introduction.

1.10 FDA means the United States Food and Drug Administration or any successor entity thereto.

1.11 GMPs shall mean current good manufacturing practices, including the regulations promulgated by the FDA under the United States Food, Drug and Cosmetic Act, 21 C.F.R. Part 210 et seq., as amended from time to time, applicable guidance documents issued by the FDA, applicable documents developed by the International Conference on Harmonization (ICH) to the extent that they are applicable to Product and the Parties hereunder.

1.12 Governmental Authority means any court, including any political subdivision thereof, court instrumentality, or agency thereof, and any other federal, state, or public authority, domestic or foreign, exercising governmental powers and having jurisdiction over any activity of a Party under this Agreement.

1.13 IND means an investigational new drug application relating to a Product, and includes such applications submitted to the FDA and equivalent applications submitted to a Governmental Authority outside of the U.S.

1.14 Latent Defect means a defect which could have been detected (but was not) by the analytical test methods in operation at the date of shipment to Magenta, attributable to an act or omission of Bachem that causes a Product to fail to conform to the Specifications, which may not be discoverable upon the inspection and testing which Magenta would have been expected to carry out in its ordinary course of business, but is discovered at a later time. 2





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 1.15 Product means the product to be developed or manufactured by Bachem pursuant to a Project Plan.

1.16 Project Plant(s) means a mutually agreed to project plan, statement of work, quotation or other ordering document that sets forth a description of the Services to be provided by Bachem, and related timeline(s), costs, and other relevant details, that references, and is expressly governed by this Agreement and is executed by an authorized representative of each Party. Notwithstanding, the Parties acknowledge and agree that the quotations identified in Appendix A attached hereto are Project Plans, and are governed by this Agreement, even though they do not expressly reference this Agreement.

1.17 Services means, with respect to a Project Plan, those services (including Development Work and manufacture of Product) to be provided by Bachem, as described in such Project Plan.

1.18 Specifications means the requirements of all Applicable Laws, the master batch record, current standard operating procedures and the procedures, process parameters, analytical tests and other attributes and written specifications for the Product attached hereto as part of a Project Plan, which the Parties agree are necessary for the manufacture and release of the Product for use in clinical trials. The Parties recognize that specifications for Product for a specific Project Plan are likely to change during the term of this Agreement, and the Parties agree to act in good faith and reasonably to effect such changes as may be required. Copies of such Specifications, as amended, shall be maintained by both Parties, and shall be incorporated into this Agreement and the Quality Agreement (as defined below).

1.19 Third Party means any entity other than Magenta or Bachem.

1.20 U.S. means the United States of America, its territories, commonwealths, and possessions, including the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and all other places under the jurisdiction thereof.

Section 2. ENGAGEMENT OF BACHEM

Magenta hereby engages Bachem to perform the Services and manufacture the Product in accordance with the applicable Project Plan(s) and in compliance with Applicable Laws and the terms and conditions set forth herein, and Bachem hereby accepts such engagement. Bachem will supply to Magenta all Product ordered by Magenta hereunder as set forth in the Project Plan and related purchase orders.

Section 3. PROJECT PLANS

3.1 Project Plans. All Project Plans entered into after the Effective Date shall be added to Appendix A after execution by the Parties of a written amendment in the form of the Amendment to Appendix A, attached hereto (the Amendment). There shall be no limit to the number of Project Plans that may be added to Appendix A and governed by the terms and conditions of this Agreement. In the event of a conflict between the terms of a Project Plan or any attachments thereto or any purchase order issued in connection therewith and this Agreement, the terms of this Agreement will govern. 3





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 3.2 Content of Project Plans. Each Project Plan shall include a description of the Services to be provided, including, if applicable, the Development Work to be completed, the Product to be manufactured, relevant Development Specifications, relevant Specifications, deliverables, a corresponding budget, a schedule for completion of the Project Plan (which may be set forth for the entire Project Plan or stages thereof), a fee and payment schedule, delivery terms, and such other information as the Parties determine is necessary for Bachem to perform the Services and manufacture the Product. Magenta may amend any Project Plan before its completion, subject to prior written approval by Bachem, which approval shall not be unreasonably withheld. If such amendment entails additional expenses that will be incurred by Bachem, the Parties agree to reconsider in good faith the budget and the payment and fee schedule.

3.3 Materials and Equipment. Unless otherwise agreed by the Parties in writing or specified in the applicable Project Plan, Bachem shall supply all materials and standard processing and manufacturing equipment needed to provide the Services and manufacture the Product in accordance with this Agreement and the applicable Project Plan, at its sole cost and expense.

3.4 Change Orders. In the event that Magenta requests or requires Bachem to perform services that are outside the scope of this Agreement, or Magenta desires to amend a Project Plan, such changes must be mutually agreed upon by the Parties in a written change order (a Change Order) prior to the provision of said services or implementation of such amendment by Bachem. Each such Change Order constitutes an amendment to the Agreement and/or the applicable Project Plan, and thereafter the services or amendments set forth therein shall be deemed Services hereunder.

3.5 Project Manager. With respect to each Project Plan, an employee of Bachem shall be appointed as project manager by Bachem (the Project Manager). The Project Manager shall be the primary contact for Magenta and shall timely address all issues and concerns raised by Magenta, as well as provide to Magenta all information requested by Magenta concerning this Agreement or the Services. The Project Manager shall not be replaced without advanced written notice to Magenta. In the event that Bachem becomes aware that the Project Manager plans to leave the employment of Bachem or shall be unable to complete the Services due to dismissal, death or disability, it shall give immediate written notice of the same to Magenta so as not to impact ongoing manufacture or supply. Should Magenta not be satisfied with the services of Project Manager, Magenta may give notice of the same to Bachem and Bachem will assign a suitable replacement who is reasonably acceptable to Magenta within [***] of such notice.

Section 4. COMPENSATION

4.1 Generally. The fees to be paid to Bachem in connection with the Services shall be set forth in reasonable detail in each Project Plan. Bachem represents that it has included all of its costs, fees and expenses, including administrative overhead, in calculating the fee for the Services budget attached hereto as part of the applicable Project Plan, and that Magenta shall not be liable for or be charged for any other costs, fees or expenses of Bachem. No line item in any Project Plan budget shall be exceeded by Bachem without the prior written consent of Magenta. 4





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 4.2 Invoicing and Payment. Unless specifically agreed otherwise in writing by the Parties, including as agreed in a Project Plan, (i) all invoices and payments hereunder shall be in U.S. Dollars, (ii) payments will be made payable to Bachem at the address set forth in applicable Project Plan(s), and (iii) all undisputed payments shall be made within [***] of receipt of invoice by Magenta.

4.3 Taxes. All prices are stated exclusive of VAT (or equivalent tax) that may or may not become due according to Applicable Law. Each Project Plan shall set forth an estimate of VAT that may become due thereunder and Bachem shall notify Magenta within a reasonable period of time upon becoming aware of a material deviation from such estimate.

4.4 Bachem's Fees for Performance of Services. Bachem's fees for the performance of Services represent the entire cost for the provision of such Services. Magenta shall not be charged for any Service or deliverable that is not performed or delivered, as the case may be, in accordance with this Agreement or the applicable Project Plan(s).

Section 5. BACHEM REPRESENTATIONS, WARRANTIES, AND CERTAIN COVENANTS

5.1 Authority. Bachem represents and warrants mat it has full authority to enter into this Agreement and there is no provision contained in any other agreement to which it is party or arrangement or obligation to which it is bound that prohibits or restricts it from entering into or performing under this Agreement.

5.2 Services. Bachem shall provide the Services in accordance with each Project Plan. Bachem will perform all Services in accordance with this Agreement and the agreed upon Specifications. All Products shall be packaged, labeled and shipped in accordance with this Agreement, the applicable Project Plan and all Applicable Laws. Bachem and its employees and agents have, and will continue to have, the knowledge, experience, facilities, equipment and skill to provide, and will provide, the Services in a professional and timely manner. Services will conform to consistently high standards of workmanship and the specifications applicable to each Project Plan.

5.3 Material/Supplies. In situations where Magenta provides materials or supplies to Bachem in connection with this Agreement and/or a Project Plan(s), Bachem shall use such materials and supplies only in accordance with the applicable Project Plan for which it was received, and Bachem shall not use it for any other purpose. Bachem shall be responsible for all such materials and supplies provided by Magenta while they are in Bachem's control or the control of its agents, and Bachem shall promptly, at Magenta's direction, destroy or return to Magenta all unused quantities of its materials and supplies provided by Magenta. For the avoidance of doubt, Magenta shall retain title to all of its materials and supplies, including any API or intermediates, while it is in Bachem's facility (as of the Effective Date, this facility will [***]. Magenta shall be responsible for all such materials and supplies until delivered to Bachem at its facility. Any such materials or supplies shall be delivered in a timely manner and in accordance with the shipping instructions and specifications to be agreed upon by the Parties. 5





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 5.4 Deliverables. Each deliverable (including Product) developed or produced in connection with a Project Plan and this Agreement shall conform to the Specifications. The Development Work, as described in the Project Plan, shall conform to the Development Specifications. Bachem shall warrant compliance with the agreed acceptance criteria together with the results as reported on the Certificate of Analysis in conjunction with the analytical methods at the time of the release of Product. In no event shall Bachem be liable for any defects that could not have been detected by Bachem with the analytical test methods in operation at the date of product release. For reasons of clarity, the Parties acknowledge and agree that it shall remain solely the responsibility and liability of Magenta to determine the suitability of the Product for any intended or specific use of the Product. Bachem makes no expressed or implied guarantees, warranties or undertakings as to the use of the Product for an intended or specific purpose or use.

5.5 Third Party IP. Bachem will not knowingly infringe or misappropriate any third party intellectual property rights in connection with the performance of its obligations hereunder. Materials delivered by Magenta to Bachem will not, to Magenta's knowledge, infringe any third party intellectual property rights.

5.6 No Encumbrance. Bachem hereby (i) acknowledges and agrees that neither it, nor any of its affiliates or subsidiaries, nor any of its or their directors, officers, employees and agents has any interest in Magenta Pre-Existing Intellectual Property or Magenta Developed Intellectual Property (each as defined below) and (ii) covenants that it will not lien or encumber, or otherwise cause, permit or consent to the granting of a lien or encumbrance of Magenta Pre-Existing Intellectual Property or Magenta Developed Intellectual Property.

5.7 Books and Records. Bachem shall maintain true, complete and accurate books, records, test and laboratory data, reports and all other information relating to Services performed and Product manufactured under this Agreement, including all information required to be maintained by Applicable Laws.

5.8 Disclosures. Upon Magenta's reasonable request, Bachem shall also provide all information to Magenta that is specifically related to the Product and Services, including any information which is reasonably required to comply with any disclosure requirements of regulatory authorities.

5.9 Regulatory Inspections. Bachem shall make its facilities and all records relating to the Product, and Services related thereto, available to the FDA or other regulatory authorities, as mutually agreed by the Parties, and shall notify Magenta immediately if the FDA or any other regulatory authority begins or schedules an inspection of Bachem's records, facilities, or manufacturing processes that are solely related to the Product or the Services related thereto. Bachem shall provide Magenta access to any documentation related to or resulting from each such inspection in accordance with the provisions of the Quality Agreement. If a regulatory authority in connection with a preapproval inspection of the Product inspects the Bachem facility used for production of Product, Bachem will notify Magenta in writing within [***] after learning of the inspection unless otherwise specified in the Quality Agreement. If an FDA Form 483 (or an equivalent foreign regulatory authority form) is issued in connection with the Product, Bachem will provide its proposed response to such Form 483 (or equivalent form) to Magenta 6





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. for Magenta's review and (non-binding) input in accordance with the provisions of the Quality Agreement. Bachem will consider in good faith any comments and suggestions provided by Magenta with respect to such proposed response if received by Bachem in a timely manner. For the avoidance of doubt, nothing in this Agreement shall hinder Bachem from providing its answers to regulatory authorities within the timelines required by such authorities.

5.10 Report of Noncompliance. In the event that an employee or agent of Bachem who is working on a Project Plan fails to comply with Applicable Laws, this Agreement or any applicable agreement as the same relates to the Services, and such failure is discovered by or comes to the attention of Bachem's COO or a supervisor of Bachem with respect to the applicable Project Plan, Bachem will immediately notify Magenta in writing. Appropriate action will be taken by Bachem at the direction of Magenta, after Bachem consults in good faith with Magenta, as to what actions might be undertaken by Bachem in view of the particular facts surrounding such noncompliance.

5.11 Information. Upon request, Bachem shall provide to Magenta access to all information in Bachem's control that relates to the [***], Product and/or the Project Plan within a reasonable period of time. Copies of batch records will be provided on an electronic platform for a period of [***], or another period of time by mutual agreement of the Parties, and with restricted access rights only.

5.12 Debarment. Bachem hereby certifies that it does not and shall not employ, contract with or retain any person directly or indirectly to perform Services under this Agreement or any Project Plan if such person is or has been debarred under 21 U.S.C. 335a (a) or (b) or other equivalent laws, rules, regulations or standards of any other relevant jurisdiction. Upon written request of Magenta, Bachem shall, [***], provide written confirmation that it has complied with the foregoing obligation. Bachem agrees to immediately disclose in writing to Magenta if any employee or agent is debarred, or if any action or investigation is pending or, to the best of Bachem's knowledge, is threatened in relation to the debarment of Bachem or any person performing Services in connection with this Agreement.

5.13 Restrictions on Bachem. Bachem agrees to supply the Product(s) identified in each applicable Project Plan to Magenta pursuant to the terms and conditions of this Agreement and any applicable Project Plans. During the Initial Term and any Renewal Term, Bachem agrees not to sell, supply or otherwise distribute [***] for any clinical or commercial use to any Third Party without Magenta's prior written consent, for so long as Bachem remains Magenta's primary supplier of [***] for the Initial Term and any Renewal Term.

5.14 Changes by Bachem. Bachem shall not make any major changes to the Development Specifications, the Specifications or any manufacturing process with a potential to adversely impact the quality of the Product in connection with a Project Plan without the prior written consent of Magenta. Notwithstanding, Magenta acknowledges and agrees that changes will be required for the development of the Product. Thus, during the development phase of a Product and up to the completion of the full validation of the manufacturing process of a Product, some quality assurance standards may not be fully implemented or applied in the manufacturing, release and supply of such Product. These limited quality assurance standards may relate to (i) the manufacturing and testing procedures in development and/or (ii) formalized 7





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Product specific procedures that may not be in place and generic procedures that may be applied instead and/or (iii) change control that may be less stringent during development and/or (iv) Product specific validation may not be available. However, Bachem will manufacture the Product according to applicable GMP guidelines as defined in the Quality Agreement.

5.15 DMF/Amendment. Upon Magenta's reasonable request and order, Bachem will compile a DMF for the Product in cooperation and mutual agreement with Magenta. Bachem hereby grants to Magenta, at no additional cost, reference rights to the DMFs, which are necessary to support Magenta's regulatory submissions with respect to the Product. Bachem shall provide reasonable advance written notice to Magenta prior to amending any Bachem DMF that is referenced in a filed IND of Magenta or in a proposed IND filing of Magenta. Bachem will, at Magenta's expense, provide reasonable assistance as necessary so that the FDA (and/or equivalent foreign regulatory authority) can reference the relevant DMF. Bachem shall not permit the FDA or any other regulatory authority to reference its DMF in order to permit a Third Party to develop, manufacture or commercialize [***] or any products that incorporate [***] or compete with [***]. In the event that the Parties agree that Bachem will not file a DMF in connection with a Project Plan, Bachem shall instead fully cooperate with Magenta, and provide a quote (similar to the compiling of a DMF) to provide all information, data, and rights of reference reasonably required by Magenta in connection with its regulatory and governmental filings related to Product.

5.16 Waste Disposal. Bachem shall generate, handle, store, ship and dispose of all wastes associated with its manufacture of Product in accordance with Applicable Laws. Notwithstanding the foregoing sentence, if any specially regulated waste must be removed pursuant to a given Project Plan, such specially regulated waste and the process for its removal shall be expressly set forth in such Project Plan. If the specially regulated waste is solely attributable to Magenta's Product and the Specifications and instructions for production of such Product, then unless the Parties otherwise agree, Magenta shall be responsible for the reasonable costs associated with the removal of such specially regulated waste. Such costs shall be included in the Project Plan or, if not specified therein, included in the price of the Services and Product.

5.17 Audits. Magenta and its agents and designees shall have the right to audit Bachem's facilities, systems, records, procedures, and documentation related to this Agreement. In connection with any such audit, Bachem shall also provide Magenta access to its personnel. Magenta may conduct no more than one (1) technical visit and one (1) quality assurance audit per year, unless there is cause for an additional audit (i.e., a technical issue or quality issue). Such audits may be conducted upon reasonable notice during the term of this Agreement and for [***] thereafter. On-site technical discussions may also be requested and held at mutually agreeable times.

5.18 Person-In-Plant. If reasonably requested by Magenta, at a mutually agreed day and time, Bachem will permit and provide working space for Magenta to staff one person on location at Bachem's premises, limited to no more than [***] days, during preparation for manufacturing and packaging of the Product. Such person shall be given reasonable access to all records, facilities and personnel working on any Services or Project Plans for the purpose or providing advice, coordinating reviews, approvals or any other actions required to ensure compliance with this Agreement to the extent that it does not compromise the confidentiality of other customers. 8





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 5.19 Quality Agreement. As reasonably required by Magenta in connection with Product manufacturing activities hereunder, Bachem shall enter into a written quality agreement with Magenta (the Quality Agreement).

Section 6. ADDITIONAL PRODUCT SUPPLY TERMS

6.1 Delivery. Unless otherwise agreed to between the Parties, delivery terms shall be DDP (Incoterms 2010) Magenta's facility located at 50 Hampshire Street, 8t h Floor, Cambridge, MA 02139, or such other destination as Magenta may instruct in writing, at which time risk of loss and responsibility for Product will transfer to Magenta. Bachem shall assume all risk and responsibility for handling, storing, rotating stock, packaging, loading and shipping all Product in accordance with applicable Incoterms. Bachem shall ship the Product in accordance with the applicable Project Plan. Delivery shall occur on the delivery dates set forth in each Project Plan and any related purchase orders or as otherwise agreed to in writing by the Parties.

6.2 Acceptance and Rejection of Products.

(a) Promptly following receipt of Product, Magenta shall have the right but not the obligation to test such Product to determine compliance with the Specifications. Magenta shall have [***] after receipt of the Product to notify Bachem in writing of any rejection of Product based on a sufficiently documented claim that the Product fails to meet the Specifications. In the event that Magenta does not inform Bachem within the [***] period that the Product does not meet the Specifications, Magenta shall be deemed to have accepted the Product. If there is no dispute between the Parties over a claim that the Product fails to meet the Specifications, Bachem shall (i) replace or (ii) with Magenta's prior written consent, reprocess or rework the rejected Product within an agreed upon time frame, after the notice of such rejection, and in any case as soon as reasonably possible after receiving such notice, provided that Magenta shall, at Bachem's expense, provide to Bachem sufficient quantities of supplies required to be supplied by Magenta under the relevant Project Plan, at no additional cost to Magenta (including transportation costs), and Bachem shall make arrangements with Magenta for the return or disposal of any rejected Product, such return shipping or disposal charges to be paid by Bachem. In the event of a discrepancy between Magenta's and Bachem's test results such that one Party's test results fall within relevant Specifications and the other Party's test results fall outside the relevant Specifications, or there exists a dispute between the Parties over the extent to which such failure is due to acts or omissions of Bachem, the Parties shall cause an independent GMP laboratory or appropriate experts promptly to review records, test data and perform comparative tests and/or analyses on samples of the alleged defective Product. Such independent laboratory shall be mutually agreed upon by the Parties. The independent laboratory's results shall be in writing and shall be final and binding save for manifest error. Unless otherwise agreed to by the Parties in writing, the costs associated with such testing and review shall be borne by the Party against whom the independent laboratory rules. 9





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. (b) If Bachem shall fail to deliver to Magenta the full quantity of the Product as specified in a Project Plan by the delivery date specified therein, for any reason whatsoever other than a breach of this Agreement by Magenta, then at Magenta's election: (i) Bachem shall be relieved of any obligation to deliver the remaining quantity of the Product or (ii) Bachem shall deliver the remaining quantity of the Product as soon as reasonably possible after the date Magenta notifies Bachem of such election. Magenta and Bachem will agree upon the time period to deliver the remaining Product allowed under clause (ii) [***] of the missed delivery date (or, if applicable, the date on which Bachem notifies Magenta that such delivery will be late).

6.3 Latent Defects; Contamination.

(a) As soon as either Party becomes aware of a Latent Defect in any lot of Product, but in no case later than (i) within one (1) week after reaching such awareness or (ii) the end of the indicated retest period for the lot with the Latent Defect, whichever is earlier, it shall immediately notify the other Party. Bachem shall be fully responsible for all Latent Defects. At Magenta's election, the lot or batch with the Latent Defect shall be deemed rejected as of the date of such notice and the provisions of Section 6.2 shall apply.

(b) Bachem shall be fully responsible for any Product and/or Product-related supplies that are adulterated, contaminated, damaged or destroyed while in Bachem's control. Bachem agrees, at the election of Magenta and in addition to any other remedies Magenta may have, to promptly replace such Product and/or Product-related supplies (as the case may be) or refund to Magenta the value of the Product or Product- related supplies.

6.4 Stability, Record Keeping. Bachem shall retain such Product stability samples and keep manufacturing records, and any other records set forth in a Project Plan, for [***] from the expiration or termination of this Agreement. Bachem shall make accessible for review by Magenta during an audit or inspection, or following Product release by Bachem's Quality Assurance Department, either onsite or on an electronic platform with restricted access rights only (as reasonably requested by Magenta), at a mutually agreeable time, all specific Batch and lot records relevant to Bachem's performance hereunder, including written investigations of any deviations and out-of-specification events that may have been generated from manufacturing, packaging, inspection, or testing processes.

6.5 CMC Responsibilities; Regulatory Submissions; Permits. Bachem shall be responsible for obtaining and maintaining, at its sole expense, any facility or other licenses or permits, and any regulatory approvals, necessary for the manufacture of Product, supply of Product, and performance of Services, all in accordance with the terms and conditions of this Agreement, At Magenta's request and expense, Bachem shall also compile the regulatory submissions documentation for the Product (i.e. CMC documentation and DMF) as reasonably requested by Magenta, including permitting the FDA to reference Bachem's DMF, once it is available, in connection with Magenta's IND.

6.6 Recall. In the event of a recall of Product, Magenta shall be responsible for coordinating such recall. Magenta promptly shall notify Bachem if any Product is the subject of a recall and, to the extent required by Bachem, provide Bachem with a copy of all documents relating to such recall. Bachem shall cooperate fully with Magenta in connection with any recall. Magenta shall be responsible for all of the costs and expenses of such recall, except to the extent 10





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. that Bachem is determined to be responsible for such recall. In such case, Bachem shall be responsible for such costs and expenses. Such determination of responsibility may be made by the governmental agency involved or by mutual agreement by the Parties following examination and review of all records pertinent to the manufacture of the Product subject to such recall. In case of shared responsibility, the costs should be allocated in accordance with each Party's share of responsibility.

Section 7. TERM AND TERMINATION

7.1 Term. This Agreement shall commence on the Effective Date and shall extend for a period of Five (5) years thereafter (Initial Term), unless this Agreement is terminated earlier as provided herein or is extended by mutual written agreement of the Parties. This Agreement may be renewed for additional periods of one (1) year (each such additional period, a Renewal Term) unless either Party provides notice of nonrenewal upon not less than [***] prior written notice to the other Party. Notwithstanding the foregoing, each Project Plan may have separate term and termination provisions, so long as the term of any Project Plan does not extend beyond the Initial Term or a subsequent Renewal Term.

7.2 Termination. This Agreement or any Project Plan may be terminated:

(a) by Magenta for any reason upon [***] written notice to Bachem;

(b) by either Party if the other Party materially breaches a provision of this Agreement or a Project Plan, and fails to cure such breach within [***] following receipt of written notification of such breach from the non-breaching Party;

(c) by either Party, immediately, if the other Party becomes insolvent, is dissolved or liquidated, makes a general assignment for the benefit of its creditors, or files or has filed against it, a petition in bankruptcy that is not dismissed within sixty days after filing, or has a receiver appointed for a substantial part of its assets; and

(d) by a Party or the Parties pursuant to Section 13.

In the event of termination pursuant to Section 7.2(a) or a termination by Bachem pursuant to Section 7.2(b), Bachem shall be compensated for Services rendered up to the date of termination. In the event of any other termination, the Parties shall negotiate in good faith to determine the appropriate amount to be paid by Magenta to Bachem (or refunded to Magenta by Bachem, as the case may be), in light of the circumstances of such termination, in compensation for all Services rendered in accordance with this Agreement. In the event of Bachem's inability to supply the Product or a material breach by Bachem pursuant to Section 7.2(b), Bachem shall provide, without additional charge to Magenta, sufficient information and technology pertaining to its Services to Magenta and/or its technically competent designee, such that Magenta and/or its technically competent designee are enabled to continue Development Work and manufacture of the Product. The termination of any Project Plan may be independent of the termination of this Agreement. 11





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 7.3 Regulatory information and Compounds. On or before the effective date of any termination or expiration of this Agreement or upon the written request of Magenta, Bachem shall promptly transfer to Magenta all compounds and other materials and supplies provided to Bachem by or on behalf of Magenta in connection with this Agreement, as well as all works-in-process and raw materials purchased under a Project Plan. Upon the expiration or termination of this Agreement or upon the written request of Magenta, Bachem will also compile CMC documentation as provided for in the applicable Project Plan, which will contain all information necessary for Magenta for regulatory and manufacturing purposes related to the Product. The CMC documentation would also contain the information required for any competent Third Party manufacturing to assume manufacturing of the Product independently, if Magenta desires to transfer the process. Upon the request of and at the expense of Magenta, after termination of this Agreement, Bachem agrees to reasonably assist Magenta in identifying Third-Party manufacturers of the Product. If such termination is due to Bachem's inability to make the Product, or a material breach by Bachem pursuant to Section 7.2(b), Bachem will provide such assistance without charge.

7.4 Project Plans in Progress. In the event of any termination or expiration of this Agreement, Bachem shall, upon the request of Magenta and notwithstanding the effective date of any termination or expiration, complete any Project Plans involving the manufacture of Product that were accepted by Bachem prior to such date, and Magenta shall pay Bachem for any Product produced or services completed, in accordance with the terms of the applicable Project Plans and this Agreement. If this Agreement is terminated by Magenta pursuant to Section 7.2(a) or by Bachem pursuant to Section 7.2(b) or (c), Magenta shall also pay to Bachem amounts for any services that cannot be reasonably stopped at the time of termination; provided, that, Bachem will take all reasonable steps necessary to wind down such work as promptly as practicable.

7.5 Survival. The rights and obligations of each Party which by their nature survive the termination or expiration of this Agreement shall survive the termination or expiration of this Agreement, including Sections 4.2, 5, 6.3-6.6, 7.2-7.5, 8, 9, 10, 11, 12, 14, 15.1, 15.4-15.8, 15.10, 15.11 and 15.12. In addition, Bachem hereby acknowledges that neither expiration nor termination of this Agreement shall affect in any manner Magenta's right to manufacture and sell, or have manufactured and sold, the Product.

Section 8. INTELLECTUAL PROPERTY

8.1 Magenta Pre-Existing Intellectual Property. All intellectual property (including trademarks), including all data, information, know-how, reports and any and all related documentation, which are developed, generated or derived, directly or indirectly by or on behalf of Magenta prior to the Effective Date (Magenta Pre-Existing Intellectual Property) shall remain the sole property of Magenta.

8.2 Bachem Intellectual Property. All intellectual property (including trademarks), including all data, information, reports, manufacturing know- how and any and all related documentation, which are (a) developed, generated or derived, directly or indirectly by or on behalf of Bachem prior to the Effective Date or (b) any manufacturing know-how developed or generated by Bachem that is generally applicable to the field of peptide manufacturing and not specific to the Product or Magenta's Confidential Information (such items under the foregoing clauses (a) and (b), collectively, Bachem Intellectual Property), shall remain the sole property of Bachem. In the event that any Bachem Intellectual Property is incorporated into any 12





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. deliverable (including Magenta Developed Intellectual Property (including Product)) or is otherwise necessary to fully exploit such deliverable, Bachem hereby grants to Magenta a perpetual, irrevocable, nonexclusive, worldwide, paid up, royalty-free license under such Bachem Intellectual Property (with the full right to sublicense directly or indirectly through multiple tiers) to (i) copy, distribute, display, perform and create derivative works of the Bachem Intellectual Property, in whole or in part; and (ii) to use Bachem Intellectual Property and/or practice the subject matter thereof, in each case solely in connection with manufacturing, marketing, promoting, using, selling, offering for sale, importing or distributing such deliverable (e.g., Product). Without limiting the foregoing, Magenta may use and disclose Bachem Intellectual Property to the extent necessary in connection with the prosecution, maintenance and enforcement of Magenta Developed Intellectual Property.

8.3 Magenta Data. All data, images, information, documents, records in whatever form obtained, developed, recorded or compiled (i) in connection with this Agreement or any Project Plan that relates to the Development Work or the Product, including, but not limited to, its development, manufacture or use, expressly excluding any Bachem Intellectual Property, or (ii) based upon or utilizing Magenta Confidential Information (collectively, Magenta Data) are and shall remain the sole and exclusive property of Magenta, and will be gathered, stored, secured, managed and maintained by Bachem in accordance with Applicable Laws. Bachem agrees to take such further acts as may be requested by Magenta in order to evidence the foregoing. Promptly upon the expiration or termination of this Agreement or any Project Plan, and otherwise upon Magenta's request, Bachem will promptly provide originals or a copy (as applicable) of all Magenta Data to Magenta in a form acceptable to Magenta, and, to the extent that Magenta so requests. Availability of batch records shall be provided as set forth in Section 5.11. At Magenta's request, Bachem will destroy all remaining Magenta Data in Bachem's possession or under Bachem's control, so long as not in contravention of Applicable Laws. Bachem will not utilize Magenta Data for any purpose other than the performance of Services, and will cease use of any Magenta Data after expiration or termination of this Agreement. Notwithstanding anything herein to the contrary, Bachem may retain any Magenta Data in electronically stored archives that cannot be deleted, subject to Bachem's document retention policies and to the terms of confidentiality and non- use set forth in this Agreement.

8.4 Magenta's Developed Intellectual Property. Any invention (whether patentable or not), discoveries, improvements, works-of-authorship or other intellectual property made, conceived or reduced to practice by Bachem in connection with its performance under this Agreement or any Project Plan, which expressly excludes Bachem Intellectual Property (Magenta Developed Intellectual Property), shall be exclusively owned by Magenta. For the avoidance of doubt, Magenta Developed Intellectual Property includes Magenta Data. Bachem hereby assigns, and agrees to assign, to Magenta all of its right, title and interest to and in any Magenta Developed Intellectual Property, including all related intellectual property rights. Magenta grants to Bachem a limited, non-exclusive license to use any Magenta Developed Intellectual Property to manufacture and release the Product for Magenta in accordance with the terms and conditions of this Agreement and any applicable Project Plan. 13





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 8.5 Disclosure and Assignment. With respect to all Magenta Developed Intellectual Property, Bachem agrees (i) to disclose the same promptly to Magenta; (ii) to execute documents evidencing the rights of Magenta set forth in this Section 8; and (iii) upon the request of Magenta and at the sole expense, discretion and exclusive control of Magenta, to apply, or to assist and cooperate with Magenta in applying for, letters patent or like corresponding legal protection of any of the foregoing in the United States and all foreign countries (and for any extension, continuation, validation, reissue or renewal thereof). For that purpose, Bachem shall, and shall cause its employees and agents to, execute all papers necessary therefor, including assignments to Magenta or its nominee, without consideration, and also agrees without further consideration, but at Magenta's expense, to provide such information as may be required by Magenta and to assist Magenta, or its agents or designees, in the preparation and prosecution of any such patent application, the enforcement of any such resulting patent and the intellectual property protection of any such invention or discovery.

Section 9. CONFIDENTIALITY

9.1 Confidentiality Agreement. The Parties agree that the terms and provisions of this Agreement shall supersede all terms and provisions of that certain Confidentiality Agreement between the Parties dated February 9, 2016 (the Confidentiality Agreement) and, as of the date hereof, the Confidentiality Agreement is hereby terminated and of no further force or effect.

9.2 Confidential Information. As of the Effective Date, the Parties agree to treat all Confidential Information (as described herein) acquired by either of them from the other under this Agreement as being secret and confidential, and each Party agrees that it shall not, at any time, without the express written consent of the other Party, disclose to any third party any Confidential Information. Each Party agrees that it shall use the other Party's Confidential Information solely to conduct the activities contemplated under this Agreement and for no other purpose. Confidential Information of a Party shall only be disclosed to the those employees, agents and Affiliates of the other Party who have a need to know such Confidential Information and only to the extent necessary in order to fulfill the relevant Party's obligations under this Agreement, who have been informed of the confidential nature of such information and who are obligated by written agreement to comply with confidentiality provisions no less restrictive than those set forth in this Agreement. Notwithstanding the foregoing, Magenta may disclose Confidential Information of Bachem relating to a Project Plan(s), Services, or the manufacture of Product to entities with whom Magenta has or may have a marketing and/or development collaboration or partnership and who have a specific need to know such Confidential Information and who are bound by written agreements which contain restrictions regarding disclosure and use of such Confidential Information no less restrictive than those set forth herein. Each Party further agrees to take such reasonable precautions as it normally takes with its own Confidential Information to prevent any unauthorized disclosure or use of such Confidential Information. For the purposes of this Agreement, Confidential Information shall mean all confidential or proprietary materials or information not generally available to the public that is confidential and proprietary to Magenta or Bachem (as the case may be). Magenta's Confidential Information includes, but is not limited to, Magenta Pre-Existing Intellectual Property, Magenta Developed Intellectual Property, confidential information provided to Bachem prior to the date hereof, all information regarding Magenta's materials, processes, know-how, formulations, analytical procedures, clinical procedures, its INDs and any other regulatory filings, other information related to the Product or any other product that may or will be under development by Magenta and any other technical or business information of Magenta (in each case, expressly excluding 14





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Bachem Intellectual Property). Bachem's Confidential Information includes, but is not limited to, Bachem Intellectual Property, and all information regarding its business, customers, and price lists. As used in this Section 9, the Party in receipt of Confidential Information is the Recipient and the Party disclosing such information is the Disclosing Party.

9.3 Exceptions. The provisions of Section 9.2 shall not apply to any information disclosed hereunder that:

(a) was known to Recipient prior to its date of disclosure by the Disclosing Party as evidenced by Recipient's written records;

(b) is disclosed lawfully to Recipient either before or after the date of the disclosure by the Disclosing Party, without an obligation of confidentiality by a Third Party rightfully in possession of such information;

(c) is published or generally known to the public, either before or after the date of disclosure by the Disclosing Party, through no act or omission on the part of Recipient;

(d) is independently developed by Recipient without reference to or in reliance upon the Confidential Information of the Disclosing Party; and

(e) is required to be disclosed by Recipient to comply with Applicable Laws, to defend or prosecute litigation, or to comply with governmental regulations; provided that Recipient provides prior written notice of such disclosure to the Disclosing Party and cooperates with the Disclosing Party to take reasonable and lawful actions to avoid and/or minimize the degree of such disclosure.

9.4 Return of Confidential Information. Upon request by the Disclosing Party, Recipient shall promptly return to the Disclosing Party the originals and all copies of any Confidential Information then in the Recipient's possession or under the Recipient's control. Notwithstanding the foregoing, the Recipient may retain one (1) copy of such Confidential Information for legal archival purposes, provided that such copy shall be kept confidential after the termination or expiration of this Agreement.

9.5 Handling and Reconstruction of and Access to Confidential Information. Bachem will establish and maintain rigorous safety and facility procedures, data security procedures and other safeguards against the destruction, loss, or alteration of Magenta's Confidential Information in the possession of Bachem. Bachem will be responsible for developing and maintaining procedures for the recovery and reconstruction of lost Confidential Information. Bachem will correct or remedy, at Magenta's request and sole discretion and at no charge to Magenta, any destruction, loss or alteration of any of Magenta's Confidential Information that occurs while such Confidential information is under the control of Bachem. Upon reasonable request by Magenta, Bachem will promptly retrieve any portion of Magenta's Confidential Information reasonably specified by Magenta. Magenta shall have the right to review and retain the entirety of, all computer or other files containing Magenta's Confidential Information. Bachem shall not withhold from Magenta any of Magenta's Confidential Information as a means of resolving a dispute. 15





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 9.6 Equitable Relief. In the event of a breach or threatened breach by a Party of any provision of Section 8 or 9 hereof, the other Party shall be authorized and entitled to obtain from any court of competent jurisdiction equitable relief, whether preliminary or permanent, including specific performance, in addition to any other rights or remedies to which such Party may be entitled in law or equity.

9.7 Survival. The obligations of confidentiality set forth in this Agreement shall survive its termination or expiration for a period of [***].

Section 10. INSURANCE

Bachem shall, during the Initial Term and any Renewal Terms, and [***] after the expiration of the last Product is delivered, obtain and maintain, at its own cost and expense and from a qualified insurance company, comprehensive general liability insurance including, but not limited to, contractual liability coverage and standard product liability coverage in an amount commensurate with industry standards. At Magenta's request, Bachem shall provide Magenta with proof of such coverage. Bachem shall provide, and shall cause its Affiliates and sublicensees who perform activities in connection with the manufacture of Product to provide, to Magenta, upon its reasonable request, a statement of coverages, amounts of insurance, and deductibles, and a copy of all policies including clauses within the policies that the insurance company has a duty to defend and indemnify.

Section 11. INDEMNIFICATION

11.1 By Magenta. Magenta agrees to indemnify, defend and hold harmless Bachem, its Affiliates, directors, officers, employees and agents from and against damages finally awarded or finally paid in settlement of any and all losses (including attorneys' fees and expenses), whether arising as a result of third party claims or a claim between the Parties (Losses) arising out of or in connection with (i) the use or sale of the Product (ii) Magenta's labeling or improper handling and storage of Product, or (iii) any gross negligence, willful misconduct or misrepresentation by Magenta or material breach by Magenta of this Agreement, except to the extent that such Losses are attributable to the gross negligence or willful misconduct of or breach of this Agreement by Bachem.

11.2 By Bachem. Bachem shall indemnify, defend and hold harmless Magenta, its Affiliates, directors, officers, employees and agents from and against Losses arising out of or in connection with: (i) any Product that does not meet the Specifications, (ii) Bachem's labeling or improper manufacturing, handling, use or storage of a Product, (iii) any gross negligence, willful misconduct or misrepresentation by Bachem or material breach by Bachem of this Agreement, or (iv) any Latent Defects in a Product, except to the extent that such Losses are attributable to the gross negligence or willful misconduct of or breach of this Agreement by Magenta.

11.3 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE, WHETHER BASED ON CONTRACT LAW, TORTS OR ANY OTHER AREA OF LAW, FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR ITS PERFORMANCE AND THE MAXIMUM TOTAL LIABILITY OF EITHER PARTY WHETHER BASED ON 16





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. CONTRACT LAW, TORTS OR ANY OTHER AREA OF LAW SHALL BE LIMITED TO THE AMOUNT [***]. NOTWITHSTANDING THE FOREGOING, THESE LIMITATIONS SHALL NOT APPLY TO DAMAGES ARISING FROM A PARTY'S (I) INDEMNIFICATION OBLIGATIONS UNDER SECTION 11.1 OR SECTION 11.2 HEREOF, (II) GROSS NEGLIGENCE OR WILFUL MISCONDUCT, (III) BREACH OF ITS OBLIGATIONS UNDER SECTION 9 OR (IV) INFRINGEMENT OR MISAPPROPRIATION OF THE OTHER PARTY'S INTELLECTUAL PROPERTY.

Section 12. PUBLICITY AND PUBLICATIONS

Neither Magenta nor Bachem shall make any news release or other public statement, whether to the press or otherwise, disclosing the existence of this Agreement, the terms thereof or of any amendment thereto, or any Project Plan without the prior written approval of the other Party, except as required by Applicable Laws. To the extent, if any, that a Party concludes in good faith that it is required by Applicable Laws or regulations to file or register this Agreement or a notification thereof with any Governmental Authority, including the U.S. Securities and Exchange Commission, such Party may do so, and the other Party shall cooperate in such filing or notification and shall execute all documents reasonably required in connection therewith. In such situation, the filing Party shall request confidential treatment of sensitive provisions of the Agreement to the extent permitted by Applicable Laws. A Party may disclose this Agreement to a Third Party in connection with or in conjunction with a proposed merger, consolidation, sale of assets that include those related to this Agreement, an assignment of this Agreement or loan financing, raising of capital, or sale of securities; provided, however, that the disclosing Party obtains an agreement for confidential treatment thereof with a limitation on use solely for consideration of the relevant transaction.

Section 13. FORCE MAJEURE

If either Party shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strike, lockouts, labor troubles, restrictive governmental or judicial orders or decrees, riots, insurrection, war, terrorist acts, acts of God, inclement weather or other reason or cause reasonably beyond such Party's control (each a Force Majeure), then performance of such act shall be excused for the period of such Force Majeure. The Party affected by the Force Majeure shall provide prompt written notice to the other Party of the commencement and termination of the Force Majeure. Should a Force Majeure continue for more than two (2) months, the Party unaffected by the Force Majeure may terminate this Agreement upon prior written notice to the affected Party. If the Force Majeure equally affects the ability of each Party to perform under this Agreement, then such termination shall only be by mutual written agreement.

Section 14. NOTICES

All notices or other communications that are required or permitted by this Agreement shall be in writing and shall be delivered personally, sent by fax (and promptly confirmed by overnight courier), sent by nationally recognized overnight courier, or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: 17





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. If to Magenta: Magenta Therapeutics, Inc. Attn: [***] 50 Hampshire Street 8t h Floor Cambridge, MA 02139 [***]

If to Bachem: Bachem Americas, Inc. Attn: [***] 3132 Kashiwa Street, Torrance, CA 90505 [***]

All notices delivered pursuant to this Section 14 shall be considered delivered upon receipt by the intended recipient.

Section 15. MISCELLANEOUS

15.1 Further Actions. The Parties shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments, and to do and cause to be done such further acts that may be necessary to carry out the provisions and purposes of this Agreement, notwithstanding any expiration or termination of this Agreement.

15.2 Amendments; Assignment. This Agreement, including any Project Plans or other attachments, may not be altered, amended or modified except by a written document signed by both Parties. Bachem will not assign this Agreement without the prior written consent of Magenta, and any purported assignment in contravention of this Section 15.2 shall be null and void; provided, however, that either Party may assign this Agreement in connection with (i) the sale, transfer or other disposition of its assets related to this Agreement, (ii) a change in control of such Party, or (iii) the sale or transfer of substantially all of such Party's outstanding stock.

15.3 Subcontracting. Bachem shall not assign, subcontract or delegate any of its rights or obligations under this Agreement without the express prior written authorization of Magenta, provided however, that Bachem may subcontract its rights and obligations hereunder to those subcontractors identified and agreed to by the Parties in the Quality Agreement. Bachem shall cause any such authorized subcontractor to be subject by contract to the same restrictions, exceptions, obligations, reports, termination provisions and other provisions contained in this Agreement and any applicable Project Plan(s). Bachem shall remain primarily obligated for all acts and omissions of any of its subcontractors as if Bachem had performed the subcontracted obligations itself, and shall guarantee the performance of the same.

15.4 Successors; Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and each of their respective successors and permitted assigns.

15.5 Severability. All agreements and covenants contained herein are severable, and in the event any of them shall be held to be invalid by any competent court, this Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein.

15.6 Entire Agreement. This Agreement, including the attached Project Plans, constitutes the entire agreement between the Parties related to the subject matter hereof, and supersedes all prior communications, representations, or agreements, either verbal or written, between the Parties. Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically set forth herein. 18





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 15.7 Independent Contractor. This Agreement shall not be deemed to create any partnership, joint venture, or agency relationship between the Parties. Each Party shall act hereunder as an independent contractor, and its agents and employees shall have no right or authority under this Agreement to assume or create any obligation on behalf of, or in the name of, the other Party. All persons employed by a Party shall be employees of such Party and not of the other Party, and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.

15.8 Waiver. The waiver by either Party of any right hereunder shall not be deemed a waiver of that same right in the future or a waiver of any other right hereunder.

15.9 Counterparts. This Agreement may be executed by original or facsimile signature in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute the same instrument.

15.10 Headings. The headings used in this Agreement are for convenience only and are not a part of this Agreement.

15.11 Governing Law. This Agreement will be construed and interpreted and its performance governed by the laws of the State of New York, without giving effect to its conflict of laws principles. The parties submit to the exclusive jurisdiction of the state and federal courts in New York for any suit, action or proceeding relating to this Agreement.

15.12 Dispute Resolution. The parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiations between executives who have authority to settle the controversy. Any party may give the other party written notice of any dispute not resolved in the normal course of business. Within [***] after delivery of said notice, executives of both parties shall meet at a mutually acceptable time and place in the State of New York or as otherwise agreed and thereafter as often as they reasonably deem necessary to exchange relevant information and to resolve the dispute. Once the executive of either party determines that additional meetings are not likely to resolve the dispute, each of the parties shall be entitled to terminate such meetings and the dispute shall be submitted to binding arbitration. The binding arbitration shall be in accordance with the rules and procedures for commercial arbitration of the American Arbitration Association. Unless the parties to such dispute agree otherwise in writing, any such arbitration shall be conducted in New York pursuant to New York law, without any consideration of conflict of law issues, and the results of such arbitration shall be final and binding on the parties and enforceable in any court of competent jurisdiction. Notwithstanding the foregoing, the parties acknowledge and agree that each of them shall have the right to seek immediate injunctive and other equitable relief through the courts in the event of any material breach by the other party of any provision of this Agreement that would cause the non-breaching party irreparable injury for which there would be no adequate remedy at law. Any such legal proceeding will be brought in the applicable state or federal court of the State of New York, and the parties hereby consent to this exclusive jurisdiction for this purpose.

* * * * * 19





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IN WITNESS WHEREOF, each of the Parties hereto has caused this Master Development and Manufacturing Agreement to be executed by its duly authorized representative as of the Effective Date. Magenta Therapeutics, Inc.

By:/s/ Christina Isacson Name: Christina Isacson Title: CBO

Bachem Americas, Inc.

By:/s/ Brian Gregs Name: Brian Gregs Title: COO

Acknowledged by Bachem AG

By:/s/ Beat Sax Name: Beat Sax Title: Site Manager

By:/s/ Boris Corpateaux Name: Boris Corpateaux Title: VP BD & Sales 20





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. APPENDIX A

List of Existing Project Plans [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] 21





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. [Form of Amendment to Appendix A]

AMENDMENT TO APPENDIX A

This Amendment to Appendix A is dated as of [ ], 20[_], and made pursuant to Section 3.1 of the Master Development and Manufacturing Agreement (the Master Agreement), dated [ ] [ ], 20[ ], between Magenta Therapeutics, Inc. and Bachem Americas, Inc. In consideration of the mutual promises contained in the Master Agreement and for other good and valuable consideration, the receipt and adequacy of which each of the Parties does hereby acknowledge, the Parties hereby agree to amend Appendix A by adding the attached new Project Plan entitled [ ], which is designated as Project Plan A-[ ]. This Project Plan is effective as of [ ], 20[ ] and shall terminate on [ ], 20[ ], unless earlier terminated as permitted in the Master Agreement.

Project Plan A-[ ] shall hereby be deemed incorporated into the Master Agreement referenced above. Magenta Therapeutics, Inc.

By: Name: Title:

Bachem Americas, Inc.

By: Name: Title: 22





CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH [***]. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. APPENDIX B

[***] [***] [***] Date Added [***] [***] Effective Date [***] [***] Effective Date [***] [***] Effective Date
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Exhibit 10.16

     EL BANCO FINANCIAL CORPORATION

AGENCY AGREEMENT

, 2006

Ladies and Gentlemen:

El Banco Financial Corporation, a Georgia corporation (the Company), proposes, subject to the terms and conditions stated herein, to engage the sales agent identified on the signature page to this Agreement (the Agent or you) to assist the Company on a best efforts basis in the sale of the Company's common stock, $.01 par value per share (the Shares).

1. The Offering. The Company is offering the Shares, in connection with the Company's initial public offering (the Offering).

The Company has prepared and filed, in accordance with the provisions of the Securities Act of 1933 and the rules and regulations thereunder (collectively, the 1933 Act), with the Securities and Exchange Commission (the Commission) a registration statement on Form SB-2 (File No. 333-135900) under the 1933 Act, including a prospectus, relating to the Shares. Except where the context otherwise requires, Registration Statement, as used herein, means the registration statement, as amended at the time of such registration statement's effectiveness for purposes of Section 11 of the 1933 Act (the Effective Time), including (i) all documents filed as a part thereof, (ii) any information contained in a prospectus subsequently filed with the Commission pursuant to Rule 424(b) under the 1933 Act and deemed, pursuant to Rule 430A or Rule 430C under the 1933 Act, to be part of the registration statement at the Effective Time, and (iii) any registration statement filed to register the offer and sale of the Shares pursuant to Rule 462(b) under the 1933 Act.

Except where the context otherwise requires, a Preliminary Prospectus, as used herein, means any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant to Rule 424(a) under the Securities Act.

Except where the context otherwise requires, Prospectus, as used herein, means the prospectus filed by the Company with the Commission pursuant to Rule 424(b) under the 1933 Act on or before the second business day after the Effective Time (or such earlier time as may be required under the Act), or, if no such filing is required, the final prospectus included in the Registration Statement at the Effective Time.

Permitted Free Writing Prospectuses, as used herein, means the documents and each road show (as defined in Rule 433(h)(4) under the 1933 Act), if any, related to the offering of the Shares contemplated hereby that is a written communication (as defined in Rule 405 under the 1933 Act).

Disclosure Package, as used herein, means any Preliminary Prospectus together with any combination of one or more of the Permitted Free Writing Prospectuses, if any.

Blue Sky Application, as used herein, means any instrument or document executed by the Company or based upon written information supplied by the Company filed in any state or jurisdiction to register or qualify any or all of the Shares or to claim an exemption therefrom or provided to any state or jurisdiction to exempt the Company as a broker-dealer or the officers, directors or employees as broker-dealers or agents of the Company under the securities laws thereof.

Any reference herein to the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and include the documents, if any, incorporated by reference, or deemed to be incorporated by reference, therein (the Incorporated Documents), including, without limitation, unless the context otherwise requires, the documents, if









any, filed as exhibits to such Incorporated Documents. Any reference herein to the terms amend, amendment or supplement with respect to the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and include the filing of any document under the Securities Exchange Act of 1934 and the rules and regulations thereunder (the Exchange Act) on or after the Effective Time, or the date of such Preliminary Prospectus, the Prospectus or such Permitted Free Writing Prospectus, as the case may be, and deemed to be incorporated therein by reference.

2. Retention of Agent; Compensation; Sale and Delivery of the Shares. Subject to the terms and conditions herein set forth, the Company hereby appoints the Agent as a placement agent, on a non-exclusive basis, to utilize its best efforts to solicit subscriptions for the Shares and to assist the Company with respect to the Company's sale of the Shares in the Offering.

On the basis of the representations and warranties and subject to the terms and conditions of this Agreement, the Agent accepts such appointment. The Agent shall not be obligated to purchase any Shares and shall not be obligated to take any action which Agent deems to be inconsistent with any applicable law, regulation, decision or order. Subscriptions will be offered as described in the Registration Statement. Except as otherwise provided in this Agreement, the appointment of the Agent will terminate upon completion, expiration or termination of the Offering.

In the event the Company is unable to sell a minimum of 1,875,000 Shares on or before June 30, 2007, this Agreement shall terminate and the Company shall cause the Escrow Agent (as defined below) to refund to any persons who have subscribed for any of the Shares the full amount it received from them, without interest, as set forth in the Prospectus; and none of the parties to this Agreement shall have any obligation to the other parties hereunder, except as set forth in this Section 2 and in Sections 8, 10, and 11.

In the event the Offering is terminated and the Closing (as defined below) does not occur, then the Agent shall not receive the fees set forth in subparagraph (a) below (the Fees); provided, however, regardless of whether or not the Closing occurs, the Agent shall be entitled to receive reimbursement of its actual accountable out-of-pocket expenses, as set forth in subparagraph (b) below.

If all conditions precedent to the consummation of the Offering are satisfied, the Company agrees to issue, or have issued, the Shares sold in the Offering and to release for delivery certificates for such Shares on the Closing Date (as defined below) against payment to the Company by any means authorized pursuant hereto; provided, however, that no funds shall be released to the Company until the conditions specified in Section 9 hereof shall have been complied with to the reasonable satisfaction of the Company. The release of Shares against payment therefor shall be made on a date or dates and at a place determined by the Company (each closing, a Closing). Certificates for Shares shall be delivered directly to the purchasers in accordance with their directions. The date upon which the Company shall release or deliver the Shares sold in the Offering, in accordance with the terms herein, is called the Closing Date. After the initial Closing, which may occur at any time after the minimum of 1,875,000 Shares have been sold, the Company may continue the Offering and the Agent may continue to solicit purchasers for the Shares up to the maximum amount of the Offering or until the Offering expires or is closed by the Company as set forth in the Prospectus. Additional Closings shall occur with respect to Shares sold after the initial Closing on dates and at locations as determined by the Company after the initial Closing, each also considered a Closing Date.

The Agent shall receive the following compensation for its services hereunder:

a. The fee shall be equal to 5.2% of the gross proceeds received in the Offering attributable to the efforts of the Agent. At least 48 hours prior to each Closing, the Agent shall deliver a schedule, identified as Appendix A, that lists each investor and the amount of investment.

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b. Agent shall be reimbursed for expenses as contemplated by Section 8 of this Agreement, regardless of whether the Offering is successfully completed. Any out-of-pocket expenses or commissions payable under this Agreement shall be paid in next day funds on the earlier of the initial Closing Date or a determination by the Company to terminate or abandon the Offering, and on each subsequent Closing Date thereafter.

3. Representations and Warranties of the Company. The Company represents and warrants to the Agent that:

a. The Company has all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to issue and sell the Shares as contemplated herein and as described in the Registration Statement, any Preliminary Prospectuses, the Prospectus or any Permitted Free Writing Prospectus. The consummation of the Offering, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein have been duly and validly authorized by all necessary corporate action on the part of the Company and this Agreement has been validly executed and delivered by the Company and is the valid, legal and binding agreement of the Company enforceable in accordance with its terms, except to the extent, if any, that the provisions of Section 10 hereof may be unenforceable as against public policy, and except to the extent that such enforceability may be limited by bankruptcy laws, insolvency laws, or other laws affecting the enforcement of creditors' rights generally.

b. The Registration Statement is effective under the 1933 Act; no stop order of the Commission preventing or suspending the use of any Preliminary Prospectus or Permitted Free Writing Prospectus or the effectiveness of the Registration Statement has been issued, and no proceedings for such purpose have been instituted or, to the knowledge of the Company, are contemplated by the Commission; the Registration Statement complied when it became effective, complies as of the date hereof and, as amended or supplemented, at each time a subscription agreement of funds are submitted by prospective investors to the Company during the Offering period (each such time referred to as a time of delivery), at the Closing Date and at all times during which a prospectus is required by the 1933 Act to be delivered (whether physically or through compliance with Rule 172 under the 1933 Act or any similar rule) in connection with any sale of Shares, will comply, in all material respects, with the requirements of the 1933 Act; each Preliminary Prospectus complied, at the time it was filed with the Commission, and complies as of the date hereof, in all material respects, with the requirements of the 1933 Act; at no time during the period that begins on the earlier of the date of such Preliminary Prospectus and the date such Preliminary Prospectus was filed with the Commission and ends at the Closing Time (as defined herein) did or will any Preliminary Prospectus, as then amended or supplemented, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and at no time during such period did or will any Preliminary Prospectus, as then amended or supplemented, together with any combination of one or more of the then issued Permitted Free Writing Prospectuses, if any, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; the Prospectus will comply, as of its date, the date that it is filed with the Commission, each time of delivery, the Closing Date and at all times during which a prospectus is required by the Act to be delivered (whether physically or through compliance with Rule 172 under the 1933 Act or any similar rule) in connection with any sale of Shares, in all material respects, with the requirements of the 1933 Act (including, without limitation, Section 10(a) of the 1933 Act); at no time during the period that begins on the earlier of the date of the Prospectus and the date the Prospectus is filed with the Commission and ends at the later of the Closing Time and the end of the period during which a prospectus is required by the 1933 Act to be delivered (whether physically or through compliance with Rule 172 under the 1933 Act or any similar rule) in connection with any sale of Shares did or will the Prospectus, as then amended or

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supplemented, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; at no time during the period that begins on the date of such Permitted Free Writing Prospectus and ends at the time of purchase did or will any Permitted Free Writing Prospectus include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty with respect to any statement contained in the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus in reliance upon and in conformity with information concerning the Agent and furnished in writing by or on behalf of the Agent to the Company expressly for use in the Registration Statement, such Preliminary Prospectus, the Prospectus or such Permitted Free Writing Prospectus, as applicable. All Permitted Free Writing Prospectuses were preceded by, or accompanied with, a statutory prospectus meeting the requirements of Section 10(a) of the Act as required by Rule 164 under the 1933 Act.

c. If a Permitted Free Writing Prospectus is sent or given after the Registration Statement is filed with the Commission (and after such Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under the 1933 Act, filed with the Commission), the sending or giving, by the Agent, of any Permitted Free Writing Prospectus will satisfy the provisions of Rule 164 or Rule 433 of the 1933 Act (without reliance on subsections (b), (c) and (d) of Rule 164); each of the Preliminary Prospectuses is a prospectus that, other than by reason of Rule 433 or Rule 431 under the 1933 Act, satisfies the requirements of Section 10 of the 1933 Act, including a price range where required by rule; neither the Company nor the Agent is disqualified, by reason of subsection (f) or (g) of Rule 164 under the 1933 Act, from using, in connection with the offer and sale of the Shares, free writing prospectuses (as defined in Rule 405 under the 1933 Act) pursuant to Rules 164 and 433 under the 1933 Act; the Company is not an ineligible issuer (as defined in Rule 405 under the 1933 Act) as of the eligibility determination date for purposes of Rules 164 and 433 under the 1933 Act with respect to the offering of the Shares contemplated by the Registration Statement; the parties hereto agree and understand that the content of any and all road shows related to the Offering is solely the property of the Company.

d. No Blue Sky Application will include an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty with respect to any statement contained in a Blue Sky Application in reliance upon and in conformity with information concerning the Agent and furnished in writing by or on behalf of the Agent to the Company expressly for use in the Blue Sky Application.

e. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of State of Georgia, and has corporate power and authority to own, lease or operate its properties and to conduct its business as described in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, and to enter into and perform its obligations under this Agreement.

f. Since the respective dates as of which information is given in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, except as otherwise stated therein, there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company considered as one enterprise, whether or not arising in the ordinary course of business (a Material Adverse Effect).

g. The Company has an authorized capitalization as set forth in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any.

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h. The Shares have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued and fully paid and nonassessable and will conform to the description of the Shares contained in the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any.

i. The issuance and sale of the Shares being issued at each Closing Date by the Company and the performance of this Agreement and the consummation by the Company of the other transactions herein contemplated will not conflict with or result in a breach or violation of any terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which any of the property or assets of the Company is bound or to which any of the property or assets of the Company is subject, nor will such action result in any violation of the provisions of the Articles of Incorporation, as amended, or Bylaws, as amended, of the Company or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issuance and sale of the Shares or the consummation by the Company of the transactions contemplated by this Agreement, except such consents, approvals, authorizations, registrations or qualifications as may be required under the Act and under state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Agent.

j. The Company owns its assets and has the right to conduct its business as currently conducted.

k. There is no litigation or governmental proceeding pending or threatened against, or involving the properties or business of, the Company that might materially and adversely affect the value or the operation of the any such properties or the business of the Company.

l. McNair, McLemore, Middlebrooks & Co., LLP, which has certified certain financial statements and supporting schedules of the Company included in the Registration Statement, the Preliminary Prospectus, the Prospectus and the Free Writing Prospectuses containing an audit report, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder.

m. The Company has not distributed, nor will it distribute, prior to the Closing Time any prospectus (as defined under the 1933 Act) in connection with the Offering and sale of the Shares other than the Registration Statement, any Preliminary Prospectuses, the Prospectus, any Permitted Free Writing Prospectuses or other materials, if any, permitted by the 1933 Act, including Rule 134 promulgated thereunder.

4. Representations and Warranties of the Agent.

a. The Agent has all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to act as a sales agent as contemplated herein and as described in the Registration Statement, any Preliminary Prospectuses, the Prospectus or any Permitted Free Writing Prospectus. The consummation of the Offering, the execution, delivery and performance of this Agreement by the Agent and the consummation by the Agent of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part of the Agent and this Agreement has been validly executed and delivered by the Agent and is the valid, legal and binding agreement of the Agent enforceable in accordance with its terms, except to the extent, if any, that the provisions of Section 8 hereof may be unenforceable as against public policy, and except to the extent that such enforceability may be limited by bankruptcy laws, insolvency laws, or other laws affecting the enforcement of creditors' rights generally.

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b. The Agent is registered as a broker-dealer under applicable federal and state laws, is a member in good standing of the National Association of Securities Dealers, Inc., and has met and will continue to meet all registration, licensing, financial and reporting requirements it is required to meet under applicable federal and state laws and regulations in order to provide the services the Agent has agreed to provide, or that the Agent contemplates that it will provide, to the Company under this Agreement or otherwise in connection with the Offering.

c. Each employee, agent, representative or affiliate of the Agent that provides any services to the Company under this Agreement or otherwise in connection with the Offering will, at the time of providing those services, meet all registration and licensing requirements he or it is required to meet under applicable federal and state laws and regulations in order to provide those services.

5. Delivery and Payment.

An escrow procedure shall be established which shall comply with Commission Rule 15c2-4, promulgated under the Exchange Act and applicable NASD rules and regulations, with Flag Bank as escrow agent (the Escrow Agent).

The Company and the Agent shall transmit all funds received from subscribers to the Escrow Agent by noon of the next business day following receipt thereof. The Company shall direct the Escrow Agent to make payment for Shares sold hereunder by wire transfer or certified or bank cashier's check drawn to the order of the Company in next day funds. Such payment is to be made at the offices of Flag Bank, at 10:00 a.m. local time, on each Closing Date or at another time agreed to by the Agent and the Company. The time of such payment is referred to as the Closing Time. The Company shall direct the Escrow Agent to deliver payment of the fees due to the Agent pursuant to Section 2 hereof (less any portion thereof previously paid to the Agent) to the Agent by wire transfer or certified or bank cashier's check drawn to the order of the Agent in next day funds, to the Agent on each Closing Date.

6. Covenants of the Company. The Company hereby covenants to the Agent as follows:

a. The Company has filed the Registration Statement with the Commission. The Company will use its best efforts to cause any post-effective amendment to the Registration Statement to be declared effective by the Commission, and will immediately upon receipt of any information concerning the events listed below notify the Agent (i) when the Registration Statement, as amended, has become effective; (ii) of any request by the Commission or any other governmental entity for any amendment or supplement to the Registration Statement; (iii) of the issuance by the Commission or any other governmental agency of any order or other action suspending the Offering or the use of the Registration Statement, the Preliminary Prospectuses, the Prospectus or the Permitted Free Writing Prospectuses, if any; or (iv) of the issuance by the Commission or any state authority of any stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of initiation or threat of any proceedings for that purpose.

b. The Company will deliver to the Agent copies of the Registration Statement, as originally filed and each amendment thereto. Further, the Company will deliver such additional copies of the foregoing documents to counsel to the Agent as may be required for any NASD filings. The Company will also deliver to the Agent such number of copies of the Prospectus, as amended or supplemented, as the Agent may reasonably request.

c. The Company will comply in all material respects with any and all terms, conditions, requirements and provisions with respect to the Offering and the transactions contemplated thereby imposed by the Commission, by applicable state law and regulations, and by the 1933 Act, the Exchange Act and the rules and regulations of the Commission promulgated under such statutes, to be complied with prior to or subsequent to the Closing Date.

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d. If any event relating to or affecting the Company shall occur, as a result of which it is necessary, in the reasonable opinion of counsel for the Company, to amend or supplement the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus in order to make them not misleading in light of the circumstances existing at the time of its use, the Company will, at its expense, prepare, file with the Commission, and furnish to the Agent, a reasonable number of copies of an amendment or amendments of, or a supplement or supplements to, the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus which will amend or supplement the Registration Statement, Preliminary Prospectus, Prospectus or any Permitted Free Writing Prospectus so that as amended or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time, not misleading.

e. The Company will endeavor in good faith, in cooperation with the Agent, to register or to qualify the Shares for offering and sale under the applicable securities laws of the jurisdictions in which the Offering will be conducted; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify to do business in any jurisdiction in which it is not so qualified. In each jurisdiction where any of the Shares shall have been registered or qualified as above provided, the Company will make and file such statements and reports in each year as are or may be required by the laws of such jurisdictions.

f. Prior to the Closing Date, the Company will inform the Agent of any event or circumstances of which it is aware as a result of which the Registration Statement, any Preliminary Prospectus, the Prospectus, or any Permitted Free Writing Prospectus as then supplemented or amended, would include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading.

g. The Company will distribute the Prospectus or other offering materials in connection with the offering and sale of the Shares only as set forth in the Prospectus, and only in accordance with the 1933 Act and the Exchange Act and the rules and regulations promulgated under such statutes, and the laws of any state in which the Shares are qualified for sale.

h. The Company will maintain appropriate arrangements with the Escrow Agent for depositing all funds received from persons mailing subscriptions for or orders to purchase Shares in the Offering as described in the Prospectus until the Closing Date and satisfaction of all conditions precedent to the release of the Company's obligation to refund payments received from persons subscribing for or ordering Shares in the Offering as described in the Prospectus.

i. The Company will take such actions and furnish such information as are reasonably requested by the Agent in order for the Agent to ensure compliance with the NASD Rule 2790 Restrictions on the Purchase and Sale of Initial Equity Public Offerings of Equity Securities.

j. The Company will not deliver the Shares until the Company has satisfied or caused to be satisfied each condition set forth in Section 9 hereof.

7. Covenants of the Agent.

a. The Agent will not provide any service or engage in any activity, and it will not permit the Agent or any of its employees, agents, representatives or affiliates to provide any service or engage in any activity, whether pursuant to this Agreement or otherwise in connection with the Offering, for which it or he does not have in effect all registrations, licenses and approvals necessary to cause that service or activity to comply with applicable federal and state laws and regulations.

b. Notwithstanding anything contained in this Agreement to the contrary, the terms and conditions of the Offering as described in the Prospectus shall control the conduct of the Offering, and

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neither the Agent nor any of its respective employees, agents, representatives or affiliates shall take any action in connection with the Offering contrary to those terms and conditions.

c. In connection with or during the course of the Offering, neither the Agent nor any employee, agent, representative or affiliate of the Agent will make any representation or provide any information to any subscriber or potential subscriber for the Shares other the representations and information contained in the Prospectus or other information specifically approved by the Company.

8. Payment of Expenses. The Company covenants and agrees with the Agent that it will pay or cause to be paid the following: (i) the fees, disbursements and expenses of counsel to the Company and accountants in connection with the registration of the Shares under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, each Preliminary Prospectus, the Prospectus, each Permitted Free Writing Prospectus and any amendments or supplements thereto, and the mailing and delivering of copies thereof to the Agent and dealers; (ii) the cost of printing or reproducing this agreement, the Blue Sky Survey, any dealer agreements and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws; (iv) the cost of preparing stock certificates; (v) all expenses related to road shows; (vi) the costs or expenses of any transfer agent or registrar; and (vi) all reasonable out-of-pocket fees and expenses of the Agent, including the reasonable fees and expenses of counsel for the Agent related to the Offering and not otherwise specifically provided for in this Section; the total for all such reasonable out-of-pocket fees and expenses shall not exceed $5,000 without the consent of the Company (exclusive of any blue sky-related fees if the Agent's counsel is requested to complete such services by the Company).

9. Conditions to Closing. The Closing of the Offering is subject to the following conditions:

a. The Registration Statement and any registration statement required to be filed, prior to the sale of the Shares, under the Act pursuant to Rule 424(b) shall have been filed and shall have become effective under the 1933 Act.

b. (i) No stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the 1933 Act; (ii) the Registration Statement and all amendments thereto shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (iii) none of the Preliminary Prospectuses or the Prospectus, and no amendment or supplement thereto, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; (iv) no Disclosure Package, and no amendment or supplement thereto, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; and (v) none of the Permitted Free Writing Prospectuses, if any, shall include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.

c. The Company and Agent agree that Appendix A is accurate and complete.

d. The NASD has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the terms of this Agreement and Agent's compensation hereunder.

10. Indemnification by the Company.

a. The Company agrees to indemnify and hold harmless the Agent, and its officers, directors, agents, representatives and affiliates and any other person, if any, who controls the Agent or its

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affiliates within the meaning of the 1933 Act (these parties together with the Agent are hereinafter referred to as the Agent Indemnitees) against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and counsel's fees) arising out of or based upon the actions of the Company or any of its employees, agents, representatives or affiliates (i) that constitute bad faith or gross negligence on the part of the Company or its employees, agents, representatives or affiliates, (ii) that constitute violations of applicable federal or state laws or regulations on the part of the Company or its employees, agents, representatives or affiliates, or (iii) that constitute a violation of any of the Company's agreements, representations or warranties contained in this Agreement. The Company will reimburse the Agent and the Agent Indemnitees for any legal or other expenses reasonably incurred (individually or collectively) by it or them in connection with investigating or defending any such loss, claim, damage, liability or action. However, the Company will not be responsible for (i) any losses, claims, damages, liabilities or expenses that result from bad faith or gross negligence on the part of the Agent or any of its employees, agents, representatives or affiliates, or on the part of the Agent Indemnitee, (ii) that arise out of actions or conduct by the Agent or any of its employees, agents, representatives or affiliates, or by any Agent Indemnitee, that constitute a violation of any applicable federal or state law or regulation, or (iii) that arise out of actions or conduct by the Agent or any of its employees, agents, representatives or affiliates, or by any Agent Indemnitee, that constitutes a violation of any of Agent's agreements, representations or warranties contained in this Agreement.

b. If any action or claim shall be brought or asserted against an Agent Indemnitee in respect of which indemnity may be sought from the Company, it or he shall promptly notify the Company in writing, enclosing copies of all papers served on or delivered to such party. A failure to notify or delay in notifying the Company shall not affect the right of the Agent Indemnitee to be indemnified or reimbursed hereunder except to the extent the Company is shown to have been materially prejudiced as a result of such failure. No Agent Indemnitee shall settle, compromise or consent to the entry of any judgment with respect to any litigation, investigation or proceeding commenced or threatened by any person or entity, including any governmental agency or body, or any claim whatsoever in respect of which indemnification or contribution can be sought under this Section 10 (whether or not the Agent Indemnitees are actual or potential parties thereto), unless the Agent or the Agent Indemnitee obtains the prior written consent of the Company.

11. Indemnification by the Agent.

a. The Agent agrees to indemnify and hold harmless the Company, and its officers, directors, agents, organizers, representatives and affiliates and any other person, if any, who controls the Company or its affiliates within the meaning of the 1933 Act (these parties together with the Company are hereinafter referred to as the Company Indemnitees) against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and counsel's fees) arising out of or based upon the actions of the Agent or any of its respective employees, agents, representatives or affiliates (i) that constitute bad faith or gross negligence on the part of the Agent or any of its employees, agents, representatives or affiliates, (ii) that constitute violations of applicable federal or state laws or regulations on the part of the Agent or any of its employees, agents, representatives or affiliates, or (iii) that constitutes a violation of any of the Agent's agreements, representations or warranties contained in this Agreement. The Agent will reimburse the Company and the Company Indemnitees for any legal or other expenses reasonably incurred (individually or collectively) by it or them in connection with investigating or defending any such loss, claim, damage, liability or action. However, the Agent will not be responsible for (i) any losses, claims, damages, liabilities or expenses that result from bad faith or gross negligence on the part of the Company or any of its employees, agents, representatives or affiliates, or on the part of the Company Indemnitee, (ii) that arise out of actions or conduct by the Company or any of its employees, agents, representatives or affiliates, or by the Company, that constitute a violation of any applicable federal or state law or regulation, or

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(iii) that constitutes a violation of any of the Company's agreements, representations or warranties contained in this Agreement.

b. If any action or claim shall be brought or asserted against a Company Indemnitee in respect of which indemnity may be sought from the Agent, it shall promptly notify the Agent in writing, enclosing copies of all papers served on or delivered to such party. A failure to notify or delay in notifying the Agent shall not affect the right of the Company Indemnitee to be indemnified or reimbursed hereunder except to the extent the Agent is shown to have been materially prejudiced as a result of such failure. No Company Indemnitee shall settle, compromise or consent to the entry of any judgment with respect to any litigation, investigation or proceeding commenced or threatened by any person or entity, including any governmental agency or body, or any claim whatsoever in respect of which indemnification or contribution can be sought under this Section 11 (whether or not the Company Indemnitees are actual or potential parties thereto), unless the Company obtains the prior written consent of the Company.

c. The Agent agrees to indemnify and hold harmless the Company Indemnitees against any and all losses, liabilities, claims, damages and expenses to which it or they may become subject if such losses, liabilities, claims, damages or expenses arise solely out of, or are based solely on, (i) any untrue or alleged untrue statement of material fact contained in the Prospectus or any amendment or supplement thereto, or the omission of a material fact required to be stated therein, or necessary to make the statements therein not misleading, but only if such untrue statement or omission or alleged omission was made in the Prospectus (as amended or supplemented) based upon and in conformity with written information concerning the Agent furnished to the Company by the Agent specifically for use in the Prospectus or (ii) any untrue or alleged untrue statement of material fact contained in any other information (whether oral or in writing) provided by the Agent or any of its respective employees, agents, representatives or affiliates to the Company or any other person in the course of providing services pursuant to this Agreement or otherwise in connection with the Offering.

12. Representations and Indemnities to Survive. All representations, warranties and agreements contained in this Agreement of the Company and the Agent shall remain in full force and effect, regardless of any termination or cancellation of this Agreement, and shall survive delivery of and payment for the Shares.

13. Termination and Payment of Expenses. This Agreement shall become effective on the date hereof and shall terminate upon the termination of the Offering. If for any reason any Shares are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Agent for all actual and accountable out-of-pocket expenses, including fees and disbursements of counsel, reasonably incurred by the Agent in making preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company shall then be under no further liability to the Agent except as provided in Section 8 and Section 10 hereof.

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14. Notices. All statements, requests, notices and agreements hereunder shall be in writing and shall be sufficient in all respects if delivered or sent by reliable courier, first class mail, or facsimile transmission to:

    Agent:   As set forth on the signature page to this agreement

  Company:   El Banco Financial Corporation 623 Holcomb Bridge Road Roswell, Georgia 30076 Facsimile: (678) 352-1514

    With a copy to: Nelson Mullins Riley & Scarborough LLP 999 Peachtree Street, Suit 1400 Atlanta, Georgia 30309 Attention: Rusty Pickering Facsimile: (404) 817-6050

Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

15. Non-Exclusive. This Agreement does not create an exclusive arrangement for the Agent to provide services to the Company, and nothing in this Agreement shall preclude the Company from contracting or entering into an arrangement with any other sales agent, consultant, broker-dealer or other person for such other person or entity to provide services to the Company as agent in the Offering and to receive compensation from the Company in connection with the Offering.

16. Successors. This Agreement shall be binding upon, and inure solely to the benefit of, the Agent and the Company, and to the extent provided in Sections 10, 11 and 12 hereof; the officers and directors of the Company and each person who controls the Company, or the Agent, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this agreement. No purchaser of any of the Shares from the Agent shall be deemed a successor or assign by reason merely of such purchase.

17. Time of the Essence. Time shall be of the essence in this Agreement.

18. Business Day. As used herein, the term business day shall mean any day when the Commission's office in Washington, D.C. is open for business.

19. Applicable Law. THIS AGREEMENT IS TO BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF GEORGIA (WITHOUT REGARD TO THOSE LAWS RELATING TO CHOICE OF LAW) APPLYING TO CONTRACTS ENTERED INTO AND TO BE PERFORMED WITHIN THE STATE OF GEORGIA. VENUE FOR ANY CAUSE OF ACTION ARISING FROM THIS AGREEMENT WILL LIE IN FULTON COUNTY, GEORGIA.

20. Captions. The captions included in this Agreement are included solely for convenience of reference and shall not be deemed to be a part of this Agreement.

21. Counterparts. This Agreement may be executed by any one or more of the parties in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

22. Pronouns. All pronouns used herein shall be deemed to refer to the masculine, feminine or neuter gender as the context requires.

[Signatures on Following Page]

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 IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its duly authorized officers as of the day and year first above written.

    EL BANCO FINANCIAL CORPORATION

  By:       Name: Its:





(SALES AGENT)       By:         Name: Its:     Address:

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     Appendix A

Name of Investor



Amount of Investment

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EL BANCO FINANCIAL CORPORATION AGENCY AGREEMENT Appendix A
[A]:
Highlight the parts (if any) of this contract related to Minimum Commitment that should be reviewed by a lawyer. Details: Is there a minimum order size or minimum amount or units per-time period that one party must buy from the counterparty under the contract?