Master Services and License Agreement between Bridgepoint Education and eCollege.com

1)              Products and Services

Subject to the terms and conditions set forth in this Agreement, eCollege agrees to provide the products and perform the services selected by Customer (“ Products and Services ”), as set forth in the exhibits hereto and any subsequent addenda or amendments to this Agreement.  Customer is not authorized to access or use any other eCollege products or services, unless expressly set forth in this Agreement.

2)              Statement of Work

Additional services may be purchased pursuant to a Statement of Work, which shall be governed by the terms and conditions of this Agreement.  “ Statement of Work ” means the standard eCollege statement of work form, as such form may be revised by the parties, that is signed by both parties and sets forth the services, deliverables and pricing for the services ordered by Customer.

3)              Customer Information

Customer Ownership . Customer and its authorized users may provide eCollege, either directly or indirectly (through placement of such information, materials and data on the eCollege System by Customer’s authorized users) with information, materials and data (the “ Customer Information ”).  As between eCollege and Customer, all such Customer Information is the exclusive and proprietary property of Customer.  eCollege shall under no circumstances sell, lease, assign, sublicense or disclose the Customer Information except as provided herein.

Grant of License .  Customer grants to eCollege a non-transferable, non-exclusive and non-sublicenseable license during the term of this Agreement to copy, transmit, use and prepare derivative works of the Customer Information to the extent necessary for eCollege to perform its obligations under this Agreement.  This license cannot be sublicensed by eCollege nor shall it be construed to permit eCollege to use Customer Information for any other purpose, except as expressly permitted by this Agreement.

4)              The eCollege System

eCollege System .  The “ eCollege System ” shall mean the computer system (including software,

hardware, interfaces and other components) operated by eCollege and used to provide the Products and Services to Customer.  As part of its ongoing development efforts, eCollege may, from time to time, make upgrades or enhancements to the eCollege System.  In most instances, such upgrades and enhancements are made available free of charge to eCollege customers.  However, if eCollege requires payment of additional fees in order to use certain upgrades and enhancements, such use shall be at Customer’s sole discretion.  Customer hereby acknowledges that eCollege has made no commitments as to the exact functionality or timing of upgrades and enhancements to the eCollege System.

License Terms .   eCollege hereby grants Customer a non-transferable, non-exclusive and non-sublicenseable  (except as to Customer’s Affiliates) license to access and use the applicable portions of the eCollege System, and all work product created by eCollege pursuant to any Statement of Work, during the term of this Agreement for the sole purpose of Customer and its authorized users receiving the Products and Services for educational, instructional and related administrative purposes.  All such access and use shall be subject to the terms and conditions of this Agreement.  All rights not specifically granted herein are reserved by eCollege.

Authorized Users.   Customer’s faculty, staff and students enrolled in Customer’s Affiliates (defined below) (“ Authorized Users ”) are hereby deemed to be authorized users of the eCollege System.  In all instances, Customer shall be responsible for the actions and inactions of its faculty and staff Authorized Users with regard to their access and use of the eCollege System and the Products and Services.  Customer shall use reasonable efforts to inform and educate student Authorized Users regarding limitations on the use of the Products and Services; however, Customer shall not liable for any violations by student Authorized Users and any such violations do not constitute material breaches of the Agreement. Student Authorized Users shall remain responsible for any infringing or prohibited use of the Products and Services by such student Authorized Users.

Affiliates .  Subject to the terms and conditions of this Agreement, eCollege hereby extends the licenses granted under this Agreement to Customer’s Affiliates.  Customer hereby represents and warrants that it has the authority to require Affiliates to comply with the terms and conditions of this Agreement.   Customer and eCollege agree that: (a) the faculty, staff and enrolled students of Customer’s Affiliates shall be deemed to be Authorized Users of Customer; (b) Customer will ensure that the faculty and staff of each such Affiliate will comply with the terms and conditions of this Agreement and Customer shall use reasonable efforts to inform and educate student Authorized Users enrolled with Customer’s Affiliates regarding limitations on the use of the Products and Services; however, Customer shall not liable for any violations by student Authorized Users and any such violations do not constitute material breaches of the Agreement. Student Authorized Users shall remain responsible for any infringing or prohibited use of the Products and Services by such student Authorized Users; (c) Customer will remain solely responsible to eCollege for the performance of all obligations owed to eCollege under this Agreement (including payment of fees for the use of the eCollege system and the Products and Services, as set forth in Exhibit 2 and any subsequent addenda or Statements of Work to this Agreement), whether such obligations are applicable to Customer or such Affiliates; and (d) subject to subparagraph (b) above, each act, omission and/or breach by an Affiliate will be deemed to be an act, omission and/or breach by Customer.  Subject to subparagraph (b) above, Customer shall be responsible for the actions and inactions of its Authorized Users with respect to the subject matter of this Agreement. “ Affiliate ” shall mean for purposes of this Agreement any legal entity Controlled by or under common Control with Customer and shall include without limitation Ashford University, LLC, an Iowa limited liability company, University of the Rockies, LLC, a Colorado limited liability company, and any other institution which is either now or hereafter becomes Controlled by or under Common Control with Customer.  The terms “ Control ” and “ Controlled ” as used in this Agreement shall mean the beneficial ownership, direct or indirect, of more than fifty percent (50%) of the aggregate of all equity interest in such entity.

Restrictions . Except as expressly provided for in this Agreement, under no circumstances may Customer, without prior written permission from eCollege: (a) use the eCollege System or eCollege Products or Services to provide products or services to any school, college, university, or other third party other than an Authorized User or an Affiliate of

Customer; (b) directly or indirectly provide access to the eCollege System or provide eCollege Products or Services, in whole or in part, to another school, college, university or other third party, (c) sublicense its rights with respect to this Agreement without the written permission of eCollege, or (d) attempt, or allow others, to modify, adapt, decompile, decrypt, disassemble, extract or reverse engineer any part of the eCollege System. Customer represents and warrants that it shall not, and it shall advise its student Authorized Users that they shall not, use the eCollege System to (a) engage in spamming or other impermissible advertising, marketing or other activities, including, without limitation, any activities that violate anti-spamming laws or regulations; (b) transmit, display or store infringing, obscene, threatening, indecent, libelous, slanderous, defamatory or otherwise unlawful or tortious material, including material that is harmful to children or violates third party privacy rights; (c) introduce malicious programs (such as viruses, worms or Trojan horses) into the eCollege System; (d) interfere with or disrupt the integrity or performance of the eCollege System, the eCollege services or the data contained or used therein; (e) attempt to gain unauthorized access to the eCollege System or its related systems or networks; or (f) harass or interfere with another user’s use of the eCollege System or the eCollege services.  Customer and eCollege will, at all times, comply with all applicable local, state, federal, and foreign laws in using or providing, as applicable, the eCollege System or the eCollege services.  With notice to Customer, eCollege reserves the right to suspend access to and use of the eCollege System and the eCollege services with respect to any individual user that eCollege reasonably believes has undertaken, or participated in, any of the foregoing activities.

Location of the eCollege System .  Notwithstanding the foregoing, and except for the license granted in this Section 4, Customer shall not have direct access to the software or infrastructure used to provide the Products and Services to Customer, at any time during or after the term of this Agreement.  Customer shall have no right to modify the eCollege System.

Ownership .  eCollege shall retain all right, title and interest  in all eCollege proprietary information and property and the eCollege System, including all updates and enhancements, reproductions and corrections thereof and all related patent rights, copyrights, trade secrets, trademarks, service marks, related goodwill and other intellectual property.  eCollege shall also retain all right, title and interest, including all intellectual property rights therein, in and to any work product or any other work of authorship or invention conceived of,

developed or created by eCollege under the terms of this Agreement or any Statement of Work.

5)              System Availability

eCollege shall use commercially reasonable efforts to maintain operation of the eCollege System on a 24 hours per day, 365 days per year basis.  In addition to the foregoing, eCollege commits to the obligations set forth in the Service Level Agreement detailed in Exhibit 4 to this Agreement.

Critical One Fixes .  Reported problems of a critical nature preventing Customer’s access to the eCollege System shall be repaired within 24 hours, or if not within 24 hours, as soon as commercially reasonable.  eCollege shall commence repair work immediately upon receipt of notice, and shall continue repair work until the problem is corrected.

Critical Two Fixes .  Reported problems of a nature limiting Customer’s use of the Products or Services shall be repaired within three (3) business days, or if not within three (3) business days, as soon as commercially reasonable.  eCollege shall commence repair work as soon as commercially reasonable, and shall continue repair work until the problem is corrected.

Non-critical Fixes .  Reported fixes of typographical errors and other non-critical, incorrect information will be made within ten (10) business days, or if not within ten (10) business days, as soon as commercially reasonable.

eCollege is not responsible for repair of or problems with (i) Customer-caused outages or disruptions, (ii) problems due to the performance of networks or systems controlled by  companies or entities other than eCollege except to the extent caused by eCollege, or (iii) Third Party Services.

6)              Domain Name

eCollege, with the assistance of Customer, will attempt to secure a domain name from Verisign or a comparable domain-name distributor, with eCollege as the billing, administrative, technical and zone contacts.  Any rights granted eCollege for such domain name shall be assigned in full to Customer, upon request of Customer.  All fees to purchase and maintain a domain name shall be paid by Customer.

7)              Marketing and Promotion

Customer will permit eCollege, at eCollege’s sole expense, to: (i) place eCollege’s logo, copyright notice and terms of use on Customer’s Gateway (as defined in Exhibit 1), and (ii) list Customer as a customer of eCollege.

8)              Travel Expenses

All fees incurred by Customer are exclusive of eCollege’s travel-related expenses.  Customer agrees to reimburse eCollege for all pre-approved travel and out-of-pocket expenses incurred by eCollege with respect to any on-site services.

9)              Term and Termination

Initial Term .  The initial term of this Agreement (“ Initial Term ”) shall commence on the Effective Date and shall be for a five (5) year period (each year being a “ Contract Year ”). The term of the Agreement shall be renewed automatically for successive periods of one (1) year each (each a “ Renewal Term ” and a “ Contract Year ”) after the expiration of the Initial Term and any subsequent Renewal Term, unless eCollege provides Customer, or Customer provides eCollege, with a written notice to the contrary at least six (6) months prior to the end of the Initial Term or any Renewal Term.  Except as expressly set forth in this Agreement, this Agreement may not be terminated prior to the end of the Initial Term or the then-current Renewal Term.

Termination for Breach .  This Agreement may be terminated by either party if the other is in material breach of any provision of this Agreement, but only after written notice of default and opportunity to cure has been given to the breaching party.  The notice of default must provide for an opportunity to cure of at least fifteen (15) days following receipt of notice of breach of any representation, warranty or covenant contained in Sections 16 or 18, and at least thirty (30) days following receipt of notice for breaches of other provisions of this Agreement.  If the party receiving the notice has not cured the breach before the cure date stated in the notice then the party giving notice may terminate this Agreement by giving the breaching party written notice of termination, which will be effective upon delivery.   If Customer terminates this Agreement due to a material breach by eCollege, Customer shall be released from all additional fees, other than those incurred by Customer prior to the date the termination is effective, and shall be refunded on a pro rata basis for fees previously paid and still unused as of the date the termination is effective.

Termination in Accordance with the Service Level Agreement .  Exhibit 4 to this Agreement sets forth the terms and conditions under which Customer may terminate this Agreement for eCollege’s failure to maintain its Service Level Agreement commitments.

Effect of Termination or Expiration .  Upon termination or expiration of this Agreement, all licenses granted hereunder shall immediately

terminate.  Notwithstanding the termination of this Agreement for any reason, the rights and duties of the parties under Sections 10-16, 18, 19, 21, 22, 24, 25 and all provisions pertaining to ownership of intellectual property shall survive such termination and remain in full force and effect.

10)       Fees

Pricing for eCollege Products and Services is set forth in the exhibits attached hereto.  Additional services provided by eCollege to Customer shall be provided at eCollege’s then-current standard rates and prices or as otherwise agreed by the parties.  All prices are quoted in U.S. dollars and all payments shall be made in U.S. dollars.  The fees hereunder do not include any applicable sales, use, excise, VAT or other taxes or duties levied or based on this Agreement or the Products or Services provided hereunder, which shall be invoiced to Customer separately.  In no event will Customer be liable for income taxes or taxes based on eCollege’s income.

11)       Invoices; Late Fees; Interest

Customer shall pay all invoices issued by eCollege for the Products and Services and other services rendered within thirty (30) days of the date of the invoice.  Customer shall not make deductions of any kind from any payments due eCollege.  No payment by Customer to eCollege of any lesser amount than that due to eCollege shall be deemed to be other than a payment on account, and no endorsement or statement on any check or in any letter accompanying any check or other payment shall be deemed an accord and satisfaction.  eCollege may accept any payment without prejudice to eCollege’s right to recover any remaining balance or to pursue any other remedy provided in this Agreement, or by applicable law.

Notwithstanding the foregoing, if Customer has an objection to a charge or expense set forth in an invoice, Customer shall send written notice of its objection to eCollege, and the reasons therefor, within thirty (30) days of the date of the invoice.  Upon receipt of an objection, eCollege shall undertake to provide Customer with back-up documentation to support its charge for the services or expenses in dispute. If Customer does not continue to object to the charge or expense after reviewing the back-up documentation, Customer will forward payment immediately to eCollege, but in no event later than ten (10) days after receipt of the back-up documentation. If Customer still objects to the charge or expense after receiving and reviewing the back-up documentation, both Parties agree to the dispute resolution process described in Paragraph 23, prior to bringing any claim before any judicial or quasi-judicial entity. Any disputed

amounts shall not affect payment of non-disputed charges and expenses.

In the event that any invoice (which is not the subject of an objection by Customer as set forth above) is not paid in full within thirty (30) days of the invoice date, Customer shall pay simple interest at the rate of 12% per annum (or the maximum legal rate, whichever is lower) beginning sixty (60) days after the date of the invoice.  If Customer fails to pay an invoice within ninety (90) days after the date of the invoice, eCollege may, after providing fifteen (15) days written notice to Customer, suspend the provision of Products and Services, including turning off Customer’s access to the eCollege System.  Unless changed by written notice to eCollege, invoices and notice regarding invoices to Customer shall be delivered or mailed to:

Bridgepoint Education

13500 Evening Creek Dr North Suite 600

San Diego, CA 92128

Attn: Dan Devine, CFO

Tel: 858.668.2586

12)       eCollege Warranties and Representations

To the actual knowledge of eCollege as of the Effective Date, eCollege warrants that the use of its Products and Services does not infringe the U.S. copyright, patent, or trademark of a third party or constitute a misappropriation of trade secrets of a third party.  Indemnification for a breach of this warranty is set forth in Section 22.  eCollege warrants that the services provided hereunder will be performed with reasonable care and skill.  As Customer’s exclusive remedy and eCollege’s sole obligation for breach of this warranty, eCollege shall reperform any non-conforming services at no additional charge. ECOLLEGE MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PRODUCTS OR SERVICES PROVIDED BY ECOLLEGE HEREUNDER.  ECOLLEGE HEREBY DISCLAIMS ALL IMPLIED WARRANTIES AND CONDITIONS, WHETHER STATUTORY, ARISING FROM COURSE OF DEALING, USAGE OR TRADE PRACTICE, OR OTHERWISE, INCLUDING WITHOUT LIMITATION TERMS AS TO QUALITY, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE.

13)       Customer Warranties and Representations

Customer represents and warrants to eCollege that it owns the Customer Information or has obtained all rights in the Customer Information to provide the Customer Information to eCollege and convey the licenses granted herein to eCollege so that its use by eCollege to provide the Products and Services does not violate the rights of its Authorized Users.  Customer is responsible for meeting the then-current

hardware, operating system, browser and other technical requirements necessary to properly use and access the eCollege System.  eCollege will make written eCollege System requirements available to Customer at Customer’s request.

14)       Third Party Services

eCollege may recommend or provide Customer with access to products and services from a third party provider or integration with third party applications for the use of a third party’s products or services, which products and services are (a) provided by a party other than as a subcontractor of eCollege and (b) not sold to Customer on an eCollege contract (collectively, the “ Third Party Services ”).  The privacy policies and other terms and conditions applicable to the use of such Third Party Services may differ from those applicable to the use of the eCollege System or the Products and Services, and Customer’s access to and use of the Third Party Services shall be subject to such policies and terms and conditions.  To the extent that Customer’s use of such Third Party Services requires the transfer of, or access to, any Customer Information or other Customer data by the third party, Customer hereby expressly consents to such transfer and/or access.  eCollege makes no representations or warranties as to the Third Party Services, either express or implied, including any implied warranties of merchantability, quality, accuracy, performance, fitness for a particular purpose, or non-infringement, and eCollege shall not be liable to Customer for any claims, expenses, costs or other damages of any kind, arising out of or relating to the Third Party Services or Customer’s use thereof.

15)       Limited Liability

EXCEPT FOR FRAUD, BREACHES OF SECTIONS 16 AND 18 AND EACH PARTY’S INDEMNITY OBLIGATIONS IN SECTION 22, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER, SUFFERED BY THE OTHER PARTY, INCLUDING WITHOUT LIMITATION LOST PROFITS OR GOODWILL, BUSINESS INTERRUPTIONS OR OTHER ECONOMIC LOSS ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY USE OF OR FAILURE TO BE ABLE TO USE THE ECOLLEGE SYSTEM OR THE ECOLLEGE SERVICES.   DURING THE FIRST TWELVE MONTHS FOLLOWING THE EFFECTIVE DATE, ECOLLEGE’S MAXIMUM AGGREGATE LIABILITY UNDER THIS AGREEMENT FOR DIRECT DAMAGES WILL IN NO EVENT EXCEED THE TOTAL FEES PAID TO ECOLLEGE BY CUSTOMER DURING THAT FIRST TWELVE MONTHS.  THEREAFTER, ECOLLEGE’S

MAXIMUM AGGREGATE LIABILITY UNDER THIS AGREEMENT DURING EACH SUBSEQUENT TWELVE MONTH PERIOD FOR DIRECT DAMAGES WILL IN NO EVENT EXCEED THE TOTAL FEES PAID BY CUSTOMER TO ECOLLEGE PURSUANT TO THIS AGREEMENT DURING THE IMMEDIATELY PRECEDING TWELVE MONTH PERIOD.  THE LIMITATIONS SET FORTH IN THIS SECTION SHALL APPLY WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT, OR OTHERWISE, EVEN IF THE PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE, AND EVEN IF ANY OF THE LIMITED REMEDIES IN THIS AGREEMENT FAILS OF THEIR ESSENTIAL PURPOSE.

No action, regardless of form, arising under this Agreement may be brought by either party more than three (3) years after the facts supporting the cause of action become known, or reasonably should have become known, to the claimant.

16)       FERPA and Data Privacy

eCollege’s use and maintenance of any educational records containing personally identifiable student information (“Student Data”) that is provided to it by Customer pursuant to this Agreement and any Exhibit hereto remains subject to the direct control of Customer.  eCollege is familiar with, and will comply with in all material respects, all applicable laws and regulations pertaining to student educational records and privacy, including without limitation the Family Educational Rights and Privacy Act (“FERPA”), 20 U.S.C. § 1232g and subsequent codes, and its implementing regulations at 34 C.F.R. Part 99; eCollege will promptly notify Customer in the event it receives notice of any investigation, inquiry or proceeding concerning privacy of student information, as defined in the implementing regulations at 34 C.F.R. Part 99, received by it from Customer; and eCollege will not make available or distribute any  Student Data in violation of FERPA.

Except as expressly provided for under this Agreement, eCollege represents to Customer that during the term of this Agreement and thereafter, it will not, directly or indirectly, use, disseminate or disclose Student Data to any person or entity (other than to employees, agents and contractors who are bound by similar obligations of confidentiality and to whom such disclosure is necessitated in order to facilitate eCollege’s performance under this Agreement).

eCollege shall develop, implement, maintain and use appropriate administrative, technical and physical security measures in accordance with eCollege’s established policies and practices which

have been reviewed by Customer, to prevent unauthorized access to the eCollege System and Customer Information, Customer Course Content and Student Data stored on the eCollege System. eCollege shall notify Customer promptly of any security breach of the eCollege system that results in the unauthorized disclosure or misuse of Customer Information, Customer Course Content or Student Data stored on the eCollege System, including the nature of the unauthorized use or disclosure, the Student Data disclosed, what eCollege has done to mitigate any damage caused by the unauthorized use and disclosure, and what corrective action has been taken by eCollege.

However, Customer acknowledges and agrees that, by granting user identifications and passwords, Customer controls, defines and manages access by Authorized Users to all Customer Information and related records and data that will be used within the System.  Customer is responsible for (a) compliance with all foreign and domestic privacy and student record laws and regulations that may be applicable to Customer’s use of the eCollege System or the Products and Services; (b) securing all necessary prior consents (if any are required) for the collection, storage and use of education records, data and personal information within the eCollege System; and (c) the creation of, and compliance with, applicable policies regarding the access and use by Customer’s Authorized Users of Student Data stored on the eCollege System.

17)       Cooperation

eCollege shall not be responsible for any delay in, or inability to perform, any services to the extent such delay or inability to perform results from a delay or failure in performance by Customer.  Customer will make its management and technical personnel, who will work with eCollege and will perform those activities described as Customer’s responsibility in this Agreement or any Statement of Work, reasonably available to eCollege.

18)       Confidentiality

During the term of this Agreement, a party (“ Receiving Party ”) may have disclosed to it or come in contact with information of the other party (“ Disclosing Party ”) of a sensitive (as determined by the nature of the information itself or due to the circumstances of disclosure) or proprietary nature (all such information, “ Confidential Information ”).  Confidential Information of eCollege shall include the terms and conditions of this Agreement, as well as the eCollege System and eCollege’s proprietary information, materials and trade secrets.  Each party hereto represents to the other party that during the term of this Agreement and thereafter, it will not,

directly or indirectly, use, disseminate or disclose the Confidential Information to any person or entity (other than to employees, agents and contractors who are bound by similar obligations of confidentiality) for any purpose or at any time, except as expressly authorized by the Disclosing Party or as needed to perform its obligations under this Agreement.  The Receiving Party shall use the same standard of care to avoid disclosure of any Confidential Information as it uses with respect to its own confidential or proprietary information, provided that in no event shall the Receiving Party employ less than reasonable efforts to protect any Confidential Information of the other party.  Confidential Information shall not include information which: i) is or becomes publicly known or available to the Receiving Party at or after the time of disclosure through no act of the Receiving Party in breach of this Section 18; ii) is in the possession of or known to the Receiving Party at the time of disclosure; iii) is lawfully obtained by the Receiving Party from a third party; or iv) is independently developed by the Receiving Party.

In addition, a party will not be considered to have breached its obligations under this section for disclosing Confidential Information of the Disclosing Party to the extent required to satisfy any legal requirement of a competent governmental authority, including, without limitation, the rules and regulations of the Securities and Exchange Commission (“ SEC ”), provided that promptly upon receiving any such request and to the extent that it may legally do so, such party advises the Disclosing Party prior to making such disclosure in order that the Disclosing Party may object to such disclosure, take action to ensure confidential treatment of the Confidential Information, or take such other action as it considers appropriate to protect the Confidential Information disclosed pursuant to the requirement or request of a governmental agency or disclosure is required by operation of law.

Notwithstanding anything in this Section 18 to the contrary, eCollege acknowledges and agrees that: (i) Customer is a publicly-traded company with securities registered under the Securities and Exchange Act of 1934, as amended, (ii) Customer may deem this Agreement (together with its exhibits) to be a material contract that needs to be filed as an exhibit to one or more of Customer’s public filings with the SEC, in which case Customer will file this Agreement (together with its exhibits) as an exhibit to one or more of Customer’s public filings with the SEC, with such redactions of competitively sensitive information in the exhibit to the extent Customer deems advisable and appr