Findlaw for Small Business
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, Oct. 12, 2008


CREDIT CARD PAYMENT PROCESSING SERVICES AGREEMENT

between

PAYPAL, INC.

and

WELLS FARGO BANK, N.A.

Effective as of May 1, 2002

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, [*], HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


Table of Contents

 
    
   Page
ARTICLE I DEFINITIONS AND INTERPRETATION   1
  Section 1.1   Definitions and Interpretation   1
ARTICLE II SCOPE OF AGREEMENT   1
  Section 2.1   Appointment and Acceptance   1
  Section 2.2   Wells Fargo as Payment Processor   1
ARTICLE III PAYPAL TRANSACTIONS   2
  Section 3.1   Credit Card Payment Processing Services   2
  Section 3.2   PayPal Transactions   2
  Section 3.3   Merchant of Record   2
  Section 3.4   Compliance and Chargeback Risk   2
  Section 3.5   Indemnity   2
  Section 3.6   Remedies   3
  Section 3.7   Technology   3
  Section 3.8   Information Security   3
ARTICLE IV PROCESSING RESPONSIBILITIES AND RESTRICTIONS   3
  Section 4.1   Types of Transactions   3
  Section 4.2   Limited Transactions   3
  Section 4.3   Prohibited Transactions   4
  Section 4.4   Data Requirements   4
  Section 4.5   Determination and Management of Transaction Approval Criteria   4
  Section 4.6   Registration Condition to Transactions   4
  Section 4.7   PayPal User Agreement   4
  Section 4.8   Reports   5
  Section 4.9   Out-bin Management   5
  Section 4.10   Direct Debit; Chargeback Processing   5
  Section 4.11   Legal and Credit Card Association Compliance   6
ARTICLE V PRICING AND RELATED MATTERS   6
  Section 5.1   Fees   6
  Section 5.2   DIAs   6

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ARTICLE VI OPERATIONS   7
  Section 6.1   Processing of Transactions   7
  Section 6.2   Bank Accounts   7
  Section 6.3   Information   9
ARTICLE VII OTHER AGREEMENTS   11
  Section 7.1   Confidentiality of Information   11
  Section 7.2   Use of the Names and Logos   12
  Section 7.3   Senior Business Relationship Manager   13
ARTICLE VIII EFFECTIVE DATE, TERM AND TERMINATION   13
  Section 8.1   Term of the Agreement   13
  Section 8.2   Termination for Cause   13
  Section 8.3   Termination by Wells Fargo Bank   13
  Section 8.4   Termination by PayPal   14
  Section 8.5   Effects of Termination by Either Party   14
ARTICLE IX OTHER MATTERS   14
  Section 9.1   Entire Understanding; Third-Party Beneficiaries   14
  Section 9.2   Assignment   15
  Section 9.3   Force Majeure   15
  Section 9.4   Governing Law   15
  Section 9.5   Waiver; Amendment; Consent   15
  Section 9.6   Expenses   15
  Section 9.7   Notices   15
  Section 9.8   Counterparts   16
  Section 9.9   Severability   17
  Section 9.10   Waiver of Jury Trial   17
  Section 9.11   Jurisdiction and Venue   17
  Section 9.12   No Special Damages; Limits on Liability   17

 
 
 
 
 
ANNEXES
ANNEX A   Definitions and Interpretation    
ANNEX B   Pricing and Related Information    
ANNEX C   Service Standards    
ANNEX D   PayPal Security Policy and Information Security Requirements    
ANNEX E   Security Agreement    

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        CREDIT CARD PAYMENT PROCESSING SERVICES AGREEMENT, dated as of May 1, 2002 (the "Effective Date"), among PAYPAL, INC., and WELLS FARGO BANK, N.A.


RECITALS

        A.    PayPal desires Wells Fargo Bank to provide Credit Card Payment Processing Services for certain transactions in which PayPal acts as a payment service provider for transactions between third parties and for which PayPal is the merchant of record, and Wells Fargo Bank desires to provide such Credit Card Payment Processing Services, as provided below.

        B.    The parties wish to enter into an arrangement under which Wells Fargo Bank will provide Credit Card payment Processing Services to PayPal.

        NOW, THEREFORE, the parties agree as follows:

ARTICLE I
DEFINITIONS AND INTERPRETATION

        1.1    Definitions and Interpretation.    Capitalized terms used herein shall have the meanings assigned to them in Annex A. This Agreement is to be interpreted as provided in Annex A.

ARTICLE II
SCOPE OF AGREEMENT

        2.1    Appointment and Acceptance.    Subject to the provisions of this Agreement:

        2.2    Wells Fargo as Payment Processor.    

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ARTICLE III
PAYPAL TRANSACTIONS

        3.1    Credit Card Payment Processing Services.    Subject to the terms and conditions of this Agreement, Wells Fargo Bank will provide Credit Card Payment Processing Services for PayPal Transactions. "Credit Card Payment Processing Services" means (a) the processing of Transactions using the credit card settlement process set forth in Section 6.1 that comply with all credit card association by-laws and rules and Applicable Laws, and (b) the technology development services to be provided by Wells Fargo Bank under Section 3.7.

        Section 3.2    PayPal Transactions.    "PayPal Transactions" means Transactions submitted by PayPal to Wells Fargo Bank for processing via the Credit Card Payment Processing Services under this Agreement.

        Section 3.3    Merchant of Record.    PayPal will be the merchant of record for each PayPal Transaction, and bear all responsibility for such PayPal Transaction as is normally borne by the merchant of record.

        Section 3.4    Compliance and Chargeback Risk.    Without limiting the generality of Section 3.3, PayPal agrees that Chargeback Losses which result from Chargebacks with respect to PayPal Transactions will be assumed by and are for the account of PayPal. PayPal will reimburse Wells Fargo Bank for the amount of any such Chargeback Losses, and Wells Fargo Bank is entitled to deduct such Chargeback Losses from the PayPal Operating Account when received. Further, PayPal shall be responsible, and shall reimburse Wells Fargo Bank, for any non-compliance fines, fees or penalties levied by any credit card association related to the PayPal Transactions, and Wells Fargo Bank is entitled to deduct such fines, fees or penalties from the PayPal Operating Account; provided, however that, PayPal shall not be responsible for such penalties to the extent that (a) Wells Fargo Bank required that PayPal take the actions specifically and directly resulting in the non-compliant activity giving rise to the penalties, or (b) PayPal has taken all steps necessary to ensure that the Transaction complies with the credit card association by-laws and rules, and the non-compliance giving rise to the penalties directly results from Wells Fargo Bank's processing error.

        Section 3.5    Indemnity.    PayPal will indemnify Wells Fargo Bank and its respective directors, officers, employees, agents and Affiliates (for the purposes of this paragraph, each an "Indemnitee") against, and hold each Indemnitee harmless from, any and all claims, liabilities, damages, losses, costs, charges and expenses (including reasonable fees and expenses of counsel) incurred by or asserted against any Indemnitee arising out of or related to (i) Chargeback Losses, (ii) any breach of Section 4.3 or 4.11, or (iii) any fines or fees levied against Wells Fargo Bank with respect to the PayPal Transactions. This indemnification will not apply to any claims, liabilities, damages, losses, costs, charges and expenses to the extent directly caused by Wells Fargo Bank's gross negligence or willful misconduct.

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        Section 3.6    Remedies.    Wells Fargo Bank reserves the right to pursue any and all remedies and seek recovery for any and all damages related to PayPal Transactions that it may have or incur as against Persons, including Customers and PayPal, and for that purpose or in that connection to pursue any and all remedies and to bring legal action in its own name. PayPal will take such action, including bringing suit, as Wells Fargo Bank may reasonably request to pursue on Wells Fargo Bank's behalf any claim against a Customer that Wells Fargo Bank may have or reasonably believe it has (whether for the return or payment of funds or for damages), including claims arising out of a Chargeback in a Transaction by credit card.

        Section 3.7    Technology.    In order for Wells Fargo Bank to provide the Credit Card Payment Processing Services, the parties must develop and implement a connection either through a direct connection or secure FTP connection. [*] resulting from any necessary development of the WFB Operating Systems to provide for such connection and Wells Fargo Bank will retain ownership of the results of such development. PayPal will be responsible for all development costs resulting from any necessary development of the PayPal Systems to provide for such connection. PayPal will pay the Installation Fee for the implementation of the connection as indicated on Annex B to Wells Fargo; such payment is due within thirty (30) days after the Effective Date of this Agreement.

        Section 3.8    Information Security.    PayPal acknowledges and agrees that Wells Fargo Bank will have no obligation to provide the Credit Card Payment Processing Services hereunder if PayPal's systems and procedures do not comply with the information security requirements as described in the Wells Fargo Bank Security Plan Overview, as provided by Wells Fargo Bank to PayPal; provided however that, if Credit Card Payment Processing Services are then being provided, Wells Fargo Bank shall provide PayPal with notice of changes to PayPal's systems and procedures necessary to comply with the Wells Fargo Bank Security Plan, and PayPal shall have a mutually agreed-upon number of days to make the changes necessary to comply therewith before Wells Fargo Bank suspends providing Credit Card Payment Processing Services. Wells Fargo Bank acknowledges and agrees that PayPal will not be obligated to transition to the Credit Card Payment Processing Services provided by Wells Fargo Bank hereunder unless and until Wells Fargo Bank's systems and procedures comply with PayPal security policy and information security requirements set forth on Annex D. The parties agree that the PayPal security policy and information security requirements shall be provided by PayPal and attached as Annex D to this Agreement within ten (10) days after the execution of this Agreement, subject to Wells Fargo Bank's reasonable approval of such requirements.

ARTICLE IV
PROCESSING RESPONSIBILITIES AND RESTRICTIONS

        Section 4.1    Types of Transactions.    Except as otherwise agreed by the parties in writing, Wells Fargo Bank will not be obligated to provide Credit Card Payment Processing Services other than for Domestic Transactions.

        Section 4.2    Limited Transactions.    Wells Fargo Bank will provide Credit Card Payment Processing Services for Domestic Transactions related to [*] as long as the quality and overall percentage of such Transactions remains below [*] of the total PayPal Transactions processed by Wells Fargo Bank under this Agreement during each calendar month. Overall percentage will be measured by the settlement transaction units related to [*] Transactions as a percentage of total settlement transaction units. Quality will be measured by the settlement transaction units related to [*] Transactions subject to Chargebacks as a percentage of the total settlement transaction units subject to Chargebacks. Regardless of the threshold, the Credit Card Chargeback Fee for chargeback processing related to Transactions related to [*] shall be [*] per item at all times during the term of this Agreement. If either quality or overall percentage is [*] during any calendar month, Wells Fargo Bank shall be entitled to discontinue providing Credit Card Payment Processing Services with respect to Transactions related to [*] upon ninety (90) days written notice to PayPal.

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        Section 4.3    Prohibited Transactions.    Wells Fargo Bank will not be obligated to provide Credit Card Payment Processing Services with respect to Transactions which are prohibited under the applicable credit card association by-laws and rules or other Applicable Law.

        Section 4.4    Transaction Information.    

        Section 4.5    Determination and Management of Transaction Approval Criteria.    Wells Fargo Bank shall determine and manage the Transaction Approval Criteria in its sole discretion in good faith. Without limiting the generality of the foregoing, Wells Fargo Bank may change any Transaction Approval Criteria (i) as reasonably necessary, based on information in writing from the applicable association, to maintain membership in good standing with a processing association of which Wells Fargo Bank is or proposes to become a member (i.e., VISA, MasterCard or an automated clearing house); of (ii) as reasonably necessary, after consultation with counsel, to stay within the Applicable Laws, including international, federal and state laws, rules and regulations.

        Section 4.6    Registration Condition to Transactions.    A Person must be Registered to effect or receive credit card payment via a Transaction processed under this Agreement. In order to Register as a Customer, a Person will be required to provide PayPal the Registration Information as to such Person and agree to the terms and conditions of the PayPal User Agreement. PayPal will not submit any Transaction to Wells Fargo Bank for Credit Card Payment Processing Services processing under this Agreement unless such Person has agreed to the terms and conditions of the PayPal User Agreement. PayPal will take reasonable steps, including but not limited to use of [*] for each Transaction, to ensure that each Customer's Registration Information is up to date at the time of each Transaction.

        Section 4.7    PayPal User Agreement.    

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        Section 4.8    Reports.    

        Section 4.9    Out-bin Management.    PayPal will be responsible for managing all out-bin Transactions (e.g. Transactions which are classified as "suspicious," "fraud" or "rejected") resulting from the PayPal Transactions. Wells Fargo will not be responsible for managing out-bin Transactions.

        Section 4.10    Direct Debit; Chargeback Processing.    Wells Fargo Bank will be entitled to directly debit any credit card processing charge-back fees set forth in items 3 and 4 of Annex B and Chargeback Losses related to PayPal Transactions from the PayPal Operating Accounts. PayPal will ensure that Wells Fargo Bank is technically able and legally entitled to directly debit such credit card processing chargeback fees and Chargeback Losses from the PayPal Operating Account. Wells Fargo Bank will also be entitled to process all other Chargebacks in accordance with the applicable credit card issuing bank's procedures.

        Section 4.11    Legal and Credit Card Association Compliance.    

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ARTICLE V
PRICING AND RELATED MATTERS

        Section 5.1    Fees.    In consideration for the Credit Card Payment Processing Services provided by Wells Fargo Bank hereunder and Wells Fargo Bank's performance of its other duties hereunder, PayPal will pay Wells Fargo Bank the fees set forth on Annex B for each Transaction processed by Wells Fargo Bank. Wells Fargo Bank agrees to provide PayPal with a compensating balance reduction for funds held or placed by PayPal at Wells Fargo Bank in PayPal's primary Operating Account, via a credit against the fees to be paid under this Agreement, in an amount and via procedures to be mutually agreed upon; provided however that Wells Fargo Bank's obligation to provide such compensating balance reduction will be subject to Wells Fargo Bank's reasonable determination that such compensating balance reduction (a) can operationally be effectuated within the billing timeframes provided in this Section 5.1 and (b) does not and will not cause any incremental detriment or loss to any other division or business unit of Wells Fargo Bank. These fees are in addition to PayPal's obligation to reimburse Wells Fargo Bank for dues, interchange and assessments pursuant to Section 5.2 of this Agreement. Wells Fargo Bank will provide to PayPal within [*] days after the end of each calendar month, a reasonably detailed calculation of the fees payable for such calendar month (a "Fee Calculation Statement"). Wells Fargo Bank is authorized to effect payment to it of the fees as set forth in such Fee Calculation Statement by deducting the amount of such fees from the balance in the PayPal Operating Account at any time after 2:00 P.M., Pacific Time, on the second Business Day after PayPal received the related Fee Calculation Statement. If there are not sufficient funds in the PayPal Operating Account to effect any payment due under this Section 5.1, PayPal shall pay the remaining amount due to Wells Fargo Bank within 3 Business Days of receiving notice of such deficiency. For purpose of calculating transaction fees, each Transaction shall be deemed to occur on the last day of the related Remittance Period.

        Section 5.2    DIAs.    In addition to payment of fees pursuant to Section 5.1, PayPal will reimburse Wells Fargo Bank for dues, interchange and assessments ("DIAs") payable by Wells Fargo Bank in connection with, and reasonably allocable to its provision of Credit Card Payment Processing Services pursuant to, this Agreement. PayPal's reimbursement of Wells Fargo Bank for DIAs pursuant to this Section 5.2 shall be effected by Wells Fargo Bank deducting the amount of DIA from the gross Transaction Amounts required to be deposited by Wells Fargo Bank into the PayPal Operating Account in accordance with Section 6.2. If Wells Fargo Bank is unable to do so for any reason, then Wells Fargo Bank will be entitled to deduct the amount of DIA from the PayPal Operating Account. Wells Fargo Bank will provide to PayPal, within [*] days after the end of each calendar month, a reasonably

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detailed calculation of DIAs deducted by Wells Fargo Bank during such calendar month (a "DIA Calculation Statement").

ARTICLE VI
OPERATIONS

        Section 6.1    Processing of Transactions.    

        (a)  PayPal initiates Transactions by delivering to Wells Fargo Bank the Transaction Information for the PayPal Transaction. PayPal acknowledges and agrees that Wells Fargo Bank will control the authorization/approval process for each Transaction processed hereunder and that Wells Fargo Bank shall have the right to reject/decline any Transaction based on (i) card association by-laws and rules and Applicable Laws; and/or (ii) rejection/decline by the [*] systems, or other similar widely adopted basic system wide fraud tools, including any currently existing tools, and any similar tools introduced in the future.

        (b)  Upon a request by Wells Fargo Bank via electronic data file, PayPal will notify both the Customers involved in the Transaction that a credit card dispute or chargeback has arisen.

        Section 6.2    Bank Accounts.    

        (a)  In order to facilitate the arrangements contemplated by this Agreement, at all times during the term of this Agreement two or more bank accounts will be maintained at Wells Fargo Bank as described below.

        (b)  The Wells Fargo Bank Operating Account will be maintained at Wells Fargo Bank's office located at 420 Montgomery Street, San Francisco, or such other office of Wells Fargo Bank as PayPal and Wells Fargo Bank may from time to time agree. The Wells Fargo Bank Operating Account will be a non-interest bearing special account maintained in the name of Wells Fargo Bank. Wells Fargo Bank may establish more than one operating account in order to efficiently carry out the activities described herein (in which case the term "Wells Fargo Bank Operating Account" shall include all such accounts, taken together).

        (c)  The PayPal Operating Account and the PayPal Reserve Account will be maintained at Wells Fargo Bank's office at 420 Montgomery Street, San Francisco, or such other office of Wells Fargo Bank as PayPal and Wells Fargo Bank may from time to time agree. The PayPal Operating Account will be a general purpose transaction account of PayPal as agent for the benefit of its customers. If Wells Fargo Bank from time to time offers different types of transaction accounts to its corporate customers having different functionality, PayPal will have the right to elect among such types in the same manner as any other corporate customer of Wells Fargo Bank. The PayPal Operating Account will be funded with amounts transferred to it from the Wells Fargo Bank Operating Account pursuant to Section 6.2(d) and such other funds as PayPal may from time to time elect to deposit therein. PayPal may withdraw funds from the PayPal Operating Account, by check or otherwise, at any time and for any purpose. The PayPal Reserve Account will be an interest bearing account, the funds of which will be pledged to Wells Fargo Bank pursuant to the Security Agreement, as set forth below. The PayPal Reserve Account will be fully funded via FedWire in accordance with this Agreement by PayPal by the Business Day prior to the first day that Wells Fargo Bank provides Credit Card Processing Services to PayPal under this Agreement. At all times thereafter during the term of this Agreement, PayPal will maintain a balance in the PayPal Reserve Account of Three Million Dollars ($3,000,000) and through execution of a Security Agreement in the form attached hereto as Annex E pledge all of the funds in the PayPal Reserve Account to Wells Fargo Bank as security. (The parties agree to negotiate in good faith and mutually agree upon the form of Security Agreement and attach such form of Security Agreement as Annex E to this Agreement within ten (10) days after the execution of this Agreement. Wells Fargo Bank will not be obligated to provide Credit Card Payment Processing Services unless and until such

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Security Agreement has been executed by the parties.) Such required balance amount may be increased by Wells Fargo Bank upon [*] days written notice to PayPal, except that if PayPal terminates or significantly limits its business operations, is liquidated, dissolved, enters into receivership, makes an assignment for the benefit of creditors, is insolvent or unable to pay its debts as they mature in the ordinary course of business, or if there are any proceedings instituted by or against PayPal in bankruptcy or under any insolvency laws or for reorganization, receivership or dissolution, then Wells Fargo Bank may increase the amount of the required balance immediately upon written notice to PayPal. Any such increase in the amount of the required balance of the PayPal Reserve Account shall be reasonably related to the potential outstanding maximum liability related to the Transactions, and such maximum liability may be assessed based on the relative financial stability of PayPal, both as determined by Wells Fargo Bank in its reasonable discretion. PayPal shall increase the funds in the PayPal Reserve Account to comply with any increase in the required balance via FedWire, and if PayPal does not do so within [*] Business Days after receiving notice of such increase, then Wells Fargo Bank will be entitled to increase the funds in the PayPal Reserve Account to cover such obligation by deductions or offsets to payments otherwise due to PayPal or by debiting any other PayPal accounts wherever, and by whoever, held (except for accounts held by PayPal on behalf of others). The PayPal Operating Account and the PayPal Reserve Account are subject to their own separate terms and conditions, including fees ("PayPal Account Agreements"). PayPal will pay, in connection with the PayPal Operating Account and the PayPal Reserve Account, all normal fees and charges associated with accounts of such type maintained at Wells Fargo Bank, and such fees and payments are unrelated to and completely separate from the amounts due under this Agreement. Nothing in this Agreement will change or affect in any way the terms and conditions related to and the rules governing the PayPal Operating Account and the PayPal Reserve Account. Further, with respect to the operation of the PayPal Operating Accounts and the PayPal Reserve Account, in the event of a conflict between the PayPal Account Agreements and this Agreement, the terms, conditions and rules of the PayPal Account Agreements will prevail. Wells Fargo Bank expressly reserves all of its rights under the PayPal Account Agreements.

        (d)  Wells Fargo Bank shall deposit or cause to be deposited into the Wells Fargo Bank Operating Account, either

the gross Transaction Amount for each Transaction processed by Wells Fargo Bank hereunder, less deductions pursuant to Section 5.2. On each Business Day Wells Fargo Bank will (i) debit the Wells Fargo Bank Operating Account by an amount equal to the aggregate of the Transaction Amounts of the Transactions processed and received by Wells Fargo Bank for which the last day of the relevant Remittance Period occurred on the previous Business Day and as to which such a debit has not previously occurred, less deductions pursuant to Section 5.2, and (ii) credit such amount to the PayPal Operating Account. Wells Fargo Bank shall be entitled to deduct from the amounts debited from the Wells Fargo Bank Operating Account and credited to the PayPal Operating Account amounts due and payable to Wells Fargo Bank under this Agreement. No credits or debits may be made to the Wells Fargo Bank Operating Account except as provided in this Section 6.2(d).

        (e)  During the term of this Agreement, PayPal shall ensure that (i) Wells Fargo Bank is in receipt of a letter authorizing Wells Fargo Bank to effectuate the transfers and debits from the PayPal Operating Account and the PayPal Reserve Account as contemplated by this Agreement, (ii) that such letter continues to be in full force and effect and (iii) that Wells Fargo Bank is in receipt of any other

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authorization from PayPal with respect to the PayPal Operating Account required by any applicable law, rule or regulation, or by the generally applicable corporate policies and procedures of Wells Fargo Bank.

        (f)    When a Chargeback occurs, Wells Fargo Bank, exercising its authority under such authorization letter, will debit the amount of such Chargeback Losses from the PayPal Operating Account and any applicable fee as described in Annex B will be added to the Fee Calculation Statement provided to PayPal pursuant to Section 5.1. If the PayPal Operating Account does not contain sufficient funds to pay the amount of such Chargeback Losses, then PayPal will pay the amount to Wells Fargo Bank within [*] Business Days.

        Section 6.3    Information    

        (a)  PayPal will transmit or make available to Wells Fargo Bank the PayPal Sourced Information via an electronic transmission from the PayPal System to the WFB Operating System (or as otherwise agreed in writing between PayPal and Wells Fargo Bank). PayPal covenants that PayPal Sourced Information transmitted or made available by PayPal to Wells Fargo Bank pursuant to this Section will be as given by the respective Customer to PayPal, without the introduction by PayPal of errors. PayPal agrees to indemnify Wells Fargo Bank and its respective directors, officers, employees, agents and Affiliates (for purposes of this paragraph, each an "Indemnitee") against, and to hold each Indemnitee harmless from, any and all claims, liabilities, damages, losses, costs, charges and expenses (including fees and expenses of counsel)("Losses") incurred by or asserted against any Indemnitee arising out of any error or inaccuracy in any PayPal Sourced Information introduced by PayPal in transmitting such information to Wells Fargo Bank. Wells Fargo Bank will be entitled to rely on the PayPal Sourced Information and instructions received from PayPal in providing the Credit Card Payment Processing Services hereunder.

        (b)  Wells Fargo Bank will transmit or make available to PayPal, in such manner and at such times as PayPal and Wells Fargo Bank shall from time to time agree, Wells Fargo Bank Sourced Information. Wells Fargo Bank agrees to indemnify PayPal and its respective directors, officers, employees, agents and Affiliates (for purposes of this paragraph, each an "Indemnitee") against, and to hold each Indemnitee harmless from, any and all claims, liabilities, damages, losses, costs, charges and expenses (including fees and expenses of counsel)("Losses") incurred by or asserted against any Indemnitee arising out of any error or inaccuracy in any Wells Fargo Bank Sourced Information introduced by Wells Fargo Bank in transmitting such information to PayPal.

        (c)  Either party may use Registration Information and Identified Transaction Information (as defined below) for the sole purpose of performing its obligations under this Agreement unless such information is required to be used otherwise as a matter of law. For purposes of this Section 6.3(c), "Identified Transaction Information" means information of the following types to the extent it is acquired or developed by Wells Fargo Bank in connection with the conduct of its Credit Card Payment Processing Services business: whether the purchases and sales were consummated; the dates on which such purchases and sales, or related offers, occurred; and the dollar amount of the purchases and sales, or related offers.

        (d)  Notwithstanding anything to the contrary herein, Wells Fargo Bank may use Transaction Information conveyed to it hereunder (i) in connection with the provision of Credit Card Payment Processing Services hereunder or (ii) by including such information in data bases used by Wells Fargo Bank internally, whether for its own account or for the purposes of providing services to its clients; provided however, that (w) such transaction Information may not be used for marketing or solicitation purposes, (x) Wells Fargo Bank will not provide [*], or any Affiliate or Subsidiary of [*] that processes, effects processing or supports the processing of Transactions arising out of transactions between buyers and sellers (hereinafter "[*]") access to or use of such Transaction Information for use in management of [*] fraud losses or any other use, (y) Wells Fargo Bank will not knowingly provide access or use of

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Transaction Information to any third party entity that, to Wells Fargo Bank's actual knowledge, by virtue of a contract with [*], or any Affiliate or Subsidiary of [*] (hereinafter, "[*]"), processes Transactions between buyers and sellers for the purchase of goods or services on [*] websites, for use in such processing, and (z) except as provided by Sections 6.3(c) and 6.3(e), such information is not disclosed to third-parties outside of Wells Fargo Bank and its Affiliates.

        (e)  Wells Fargo Bank will not disclose any PayPal Sourced Information except for the explicit purpose of authorizing, completing and settling credit card Transactions and resolving any Chargebacks or retrieval requests or similar issues involving Transactions, other than pursuant to a regulatory, legal or government request.

        (f)    Wells Fargo Bank will use proper controls and limit access to PayPal Sourced Information only to relevant service and support staff, and to the extent reasonably practical, will make commercially reasonable efforts to have the Wells Fargo Bank employees who provide support to PayPal under this Agreement not be the same employees who are assigned to provide support to [*] under Wells Fargo Bank's agreement with [*]. PayPal acknowledges that such segregation of employees may not be commercially reasonable or practical.

        (g)  If PayPal requests that Wells Fargo Bank develop any process or technology under this Agreement, then the following procedures will apply:

        (h)  Each party's use hereunder of PayPal Sourced Information or Wells Fargo Bank Sourced Information shall be subject to the constraints of Applicable Law (including as to privacy) and the privacy policies of the each party, except to the extent that PayPal's privacy policy would restrict, limit or impose any additional burden on the use of information to perform Wells Fargo Bank's obligations, or exercise Wells Fargo Bank's rights, under this Agreement.

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ARTICLE VII
OTHER AGREEMENTS

        Section 7.1    Confidentiality of Information.    Each Party (each a "Receiving Party") acknowledges and represents that it will adhere to the following standards in relation to its receipt and handling of the Confidential Information of the other Party (each a "Disclosing Party") or Disclosing Party's Affiliates:

        (b)  "Confidential Information" shall mean and include the following:

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        (c)  Each Party, its employees, subcontractors, officers and agents shall not disclose to the other Party any information that such Party knows to be proprietary or confidential information or a trade secret of a third party. Each Party agrees to take all reasonable steps necessary to ensure fulfillment of this obligation. Each Party agrees to indemnify and hold the other Party harmless from and against all losses, claims, damages, penalties, costs and expense (including attorneys fees and expert witness fees) arising out of any disclosure made in violation of this provision.

        (d)  Each Party acknowledges and agrees that it would be difficult to fully compensate the other Party for damages resulting from the breach or threatened breach of the foregoing provisions and, accordingly, that each Party shall be entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions. This provision with respect to injunctive relief shall not, however, diminish such Party's right to claim and recover damages.

        Section 7.2    Use of the Names and Logos.    

        (a)  PayPal will not display or otherwise use trademarks, trade names, service marks, names, logos or other marks belonging to Wells Fargo Bank (the "Wells Marks") in communications with third parties so as to provide a designation of source or origin of goods or services or to imply an affiliation without the prior written consent of Wells Fargo Bank.

        (b)  Wells Fargo Bank will not display or otherwise use trademarks, trade names, service marks, names, logos or other marks belonging to PayPal (the "PayPal Marks") in communications with third parties so as to provide a designation of source or origin of goods or services or to imply an affiliation without the prior written consent of PayPal; provided, however, that Wells Fargo Bank and its Affiliates and agents may make reasonable use of the PayPal Marks in the context of making factual statements in connection with collection efforts undertaken pursuant to this Agreement, if any.

        (c)  Notwithstanding any term to the contrary contained in this Agreement, the parties agree (i) that any party's use of the name of another party in a public disclosure required by Applicable Law

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or consented to by the other party shall not be deemed to violate this Section 7.2 and (ii) the parties will work together in good faith to agree upon other circumstances where, in order to implement the arrangements provided for in this Agreement, (x) Wells Fargo Bank will permit PayPal to use the Wells Marks and (y) PayPal will permit Wells Fargo Bank to use the PayPal Marks.

        Section 7.3    Senior Business Relationship Manager.    Throughout the term of this Agreement, Wells Fargo Bank will provide a senior business relationship manager who will be available (subject to reasonable time and scheduling constraints) to PayPal management as reasonably necessary for discussion, consultation or escalated problem resolution as appropriate given the business need, as well as to act as Wells Fargo Bank's representative to the credit card associations with respect to PayPal matters. The senior business relationship manager will have a minimum of [*] payment industry experience, a strong understanding of the card acquiring industry, understanding of card association politics, processes and pricing, a strong understanding of how Wells Fargo is organized, a strong understanding of how PayPal processes and familiarity with PayPal's short term business goals. During the term of this Agreement, but only for so long as [*] remains employed by Wells Fargo Bank or its successor, [*] will remain the senior business relationship manager, even if [*] is promoted or moves to another role within Wells Fargo Bank.

ARTICLE VIII
EFFECTIVE DATE, TERM AND TERMINATION

        Section 8.1    Term of the Agreement.    This Agreement shall remain in full force and effect through the calendar month ending on May 1, 2004 unless terminated earlier pursuant to Section 8.2 or Section 8.3 below. Sections 1.1, 3.3-3.6, 4.7(c), 4.10, 4.11, 6.2(c), (e) and (f) (to extent set forth in Section 8.5), 6.3(a)-(e), (g) and (h), 7.1, 8.1, 8.5, 9.1-9.12 shall survive the expiration on termination of this Agreement.

        Section 8.2    Termination for Cause.    If either party (the "First Party") believes that the other party (the "Second Party") has breached in any material respect any of its covenants or agreements under this Agreement, then the First Party shall, promptly after becoming aware of such breach, give notice thereof to the Second Party, together with a reasonably detailed description of the alleged breach. If such breach is susceptible to cure, the Second Party will have 30 days to cure such breach. If such breach is not susceptible to cure, then the First Party will have the right to terminate this Agreement by giving written notice of termination to the Second Party by not later than 90 days after delivery of the first notice pursuant to the preceding sentence, and such termination shall become effective 90 days from the date of receipt of such notice. If such breach is susceptible to cure and has been cured within 30 days after the delivery of initial notice by the First Party, this Section 8.2 shall be of no further force and effect with respect to such breach. If such breach is susceptible to cure but has not been cured within such 30 day period, then the First Party shall have the right, by giving written notice to the Second Party within 90 days after the end of such 30-day period, to terminate this Agreement effective 90 days from the date of receipt of such notice. Without limiting the generality of the foregoing, the parties agree that a material breach by Wells Fargo Bank of Section 7.3 of this Agreement will constitute a material breach subject to the provisions of this Section 8.2.

        Section 8.3    Termination by Wells Fargo Bank.    Wells Fargo Bank shall be entitled to terminate this Agreement in the event that the Credit Card Payment Processing Services to be provided hereunder cannot be provided in compliance with the applicable credit card association by-laws and rules (based on information in writing from the applicable association, a copy of which will be provided to PayPal) or in compliance with Applicable Laws (after consultation with counsel). Such termination shall take effect 90 days after Wells Fargo Bank delivers written notice to PayPal of such event. In addition, if, for any reason, PayPal fails to implement a proposed change to the PayPal User Agreement pursuant to Section 4.7(b) within the thirty (30) day period provided in Section 4.7(b),

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Wells Fargo Bank shall have the right to terminate this Agreement upon ninety (90) days written notice to PayPal.

        Section 8.4    Termination by PayPal.    PayPal shall have the right at its sole discretion to terminate this Agreement upon thirty (30) days written notice to Wells Fargo Bank if PayPal pays Wells Fargo Bank an additional lump sum fee in consideration of the exercise of its right hereunder, as follows: (a) if such termination occurs within the first six (6) months after the first Transaction is processed by Wells Fargo Bank under this Agreement, then the amount of the additional fee will be [*], and (b) if such termination occurs after such six (6) month period, the amount of the fee will be the present value (based on discount calculated based on the three-month Treasury bill rate at the time of termination) of the average total fees due per calendar month during the preceding six (6) months, multiplied times the calendar months or portions thereof from the date of the termination through the end of the remainder of the original term of the Agreement as set forth in Section 8.1.

        Section 8.5    Effects of Termination by Either Party.    Following termination of this Agreement, Wells Fargo Bank agrees to continue to provide settlement and chargeback services to PayPal in accordance with Article VI of this Agreement and Section 7 of the Service Standards, for all Transactions received by Wells Fargo Bank prior to the effective date of termination. Wells Fargo Bank agrees to continue to furnish to PayPal Chargeback information on all Transactions submitted to Wells Fargo Bank prior to the effective date of termination which result in a Chargeback, until such Chargebacks cease to be received by Wells Fargo Bank, and the information described in Section 4.8 on all Transactions submitted to Wells Fargo Bank prior to the effective date of termination. PayPal shall be obligated to promptly pay processing fees to Wells Fargo Bank for any applicable services following termination, at the rates set forth in Annex B. Upon termination, Wells Fargo Bank shall continue to be authorized to deduct any Chargeback Losses and associated fees from the reserve held in the PayPal Reserve Account. If the PayPal Reserve Account balance is insufficient to cover such obligations, (i) PayPal will remit funds via Fedwire to Wells Fargo Bank within two (2) business days after PayPal is notified, provided that if PayPal fails to remit funds via Fedwire within two (2) business days Wells Fargo Bank will be entitled to cover such obligations by deductions or offsets to payments otherwise due to PayPal or by debiting any other PayPal accounts wherever and by whoever held (except for accounts held by PayPal on behalf of others). PayPal shall be entitled to receive regular statements to support any activity processed through the PayPal Reserve Account and the PayPal Operating Account after termination. Wells Fargo Bank agrees to release a portion of the balance of the reserve on the first day of each calendar month following termination, based on the required balance of the PayPal Reserve Account being reasonably related to the potential outstanding maximum liability related to the Transactions, as determined by Wells Fargo Bank in its reasonable discretion, and the expiration of Chargeback or other liability (including, Chargebacks, Chargeback Losses, fines, fees and penalties and outstanding settlements) for Transactions reasonably attributable to such portion in accordance with the applicable credit card association by-laws and rules; the potential outstanding maximum liability and the expiration of such liability may be assessed based on the relative financial stability of PayPal, as determined by Wells Fargo Bank in its reasonable discretion. PayPal shall be required to maintain the PayPal Operating Account and the PayPal Reserve Account until the end of ten months following the later of termination of this Agreement or the completion of the last Transaction processed by Wells Fargo Bank under this Agreement, and at the end of such period, Wells Fargo shall release the remaining balance of the reserve in full to PayPal.

ARTICLE IX
OTHER MATTERS

        Section 9.1    Entire Understanding; Third-Party Beneficiaries.    This Agreement constitutes the entire agreement among the parties with respect to the transactions contemplated hereby and supersedes all prior agreements, written or oral, among the parties with respect to the subject matter of this

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Agreement. No representation, warranty, inducement, promise, understanding or condition not set forth in this Agreement has been made or relied on by any party in entering into this Agreement. Nothing in this Agreement, expressed or implied, is intended to confer on any Person, other than the parties hereto or their respective successors, any rights, remedies, obligations or liabilities.

        Section 9.2    Assignment.    Neither this Agreement nor any of the rights, interests or obligations under it may be assigned by any of the parties (whether by operation of law or otherwise) without the prior written consent of the other parties; provided, however, (i) either party may assign its rights and obligations hereunder to an Affiliate without obtaining the prior consent of the other party if the assigning party, in a manner reasonably acceptable to the other party, guarantees the performance of its Affiliate's obligations hereunder, (ii) no prior consent of either party shall be required in connection with an assignment affected by merger, consolidation or otherwise by operation of law, and (iii) no prior consent of either party shall be necessary in connection with an assignment where the assigning party is involved in a transaction in which it is transferring all or substantially all of its assets (or of the assets of the business unit to which this Agreement primarily relates, together with the related liabilities) to another Person. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. Any purported assignment in violation of this Section 9.2 will be void.

        Section 9.3    Force Majeure.    The performance of this Agreement by a party shall be excused during any delay, and such a party shall not be liable for any non-performance of this Agreement, caused by acts of God, war, internet or electrical power disruptions, acts or omissions of the other party, acts or omissions of any third party or other acts or events of force majeure under Applicable Law.

        Section 9.4    Governing Law.    This Agreement and its enforcement will be governed by, and interpreted in accordance with, the laws of the State of California applicable to agreements made and to be performed entirely within such State.

        Section 9.5    Waiver; Amendment; Consent.    Any provision of this Agreement may be amended or waived, but only if the amendment or waiver is in writing and signed, in the case of an amendment, by all parties, or in the case of a waiver, by the party that would have benefited by the provision waived. In order to be effective, any consents required under this Agreement must be in writing and signed by the party granting the consent.

        Section 9.6    Expenses.    Except as otherwise provided herein, each party will bear all expenses incurred by it in connection with this Agreement and the performance of its obligations hereunder.

        Section 9.7    Notices.    All notices, requests and other communications under this Agreement will be in writing and will be deemed given (a) on the Business Day sent, when delivered by hand, facsimile transmission (with confirmation) or electronic mail (without receiving a notice of non-delivery) during normal business hours, (b) on the Business Day following the Business Day of sending, if delivered by nationally recognized overnight courier, or (c) on the third Business Day following the Business Day of sending, if mailed by registered or certified mail return receipt requested, in each case to such party at its address (or number) set forth below or such other address (or number) as the party may specify by notice to the other parties hereto.

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        Section 9.8    Counterparts.    This Agreement may be executed in two or more counterparts, each of which will constitute an original and all of which, when taken together, will constitute one agreement.

        Section 9.9    Severability.    If any of the provisions of this Agreement is found by a Governmental Authority of competent jurisdiction to be in violation of Applicable Law or unenforceable for any reason, then it is the intention of the parties that (a) the provisions be deemed to be automatically amended to the extent necessary to comply with Applicable Law and permit enforcement and (b) the finding not affect the finding effect of the other provisions of this Agreement; unless the amendment or the finding (after giving effect to any permitted amendment) materially impairs the economic benefit to be derived by a party from the transactions contemplated by this Agreement, taken as a whole.

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        Section 9.10    Waiver of Jury Trial.    To the fullest extent permitted by law, each party waives any and all rights the party may have to a jury trial with respect to any dispute arising under this Agreement or in connection with it.

        Section 9.11    Jurisdiction and Venue.    With respect to any dispute arising under this Agreement or in connection herewith, each of the parties irrevocably (a) submits to the exclusive jurisdiction of the courts of the State of California and the United States, in each case located in the Northern District of California, and (b) waives any objection that it may have at any time to the laying of venue of any such dispute brought in any such court, waives any claim that such dispute has been brought in an inconvenient forum, and waives the right to object, with respect to any such dispute, that such court does not have jurisdiction over such party.

        Section 9.12    No Special Damages; Limits on Liability.    Each of the parties agrees that there will be no liability for special, indirect, incidental, consequential or punitive damages (including damages for the interruption of business or loss of business except to the extent that such damages are held to be direct damages, or damages for the loss of profits) caused by, or arising out of, any party's performance or breach of this Agreement (notwithstanding that a breaching party may have been informed of the potential of such damages) unless such damages are the direct result of gross negligence or willful misconduct. Except with respect to monetary damages directly caused by Wells Fargo Bank's gross negligence or willful misconduct, in no event will Wells Fargo Bank's aggregate liability arising under this Agreement exceed an amount equal to the Transaction Fees paid to Wells Fargo Bank hereunder.

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        IN WITNESS WHEREOF, the parties hereto have caused this Credit Card Payment Processing Services Agreement to be duly executed in counterparts.

  PAYPAL, INC.

 
 
 
 
 
 
  By:   /s/  TODD PEARSON      
      Name:   Todd Pearson
      Title:   Senior Vice President

 
 
 
 
 
 
  WELLS FARGO BANK, N.A.

 
 
 
 
 
 
  By:   /s/  MICHELLE BANAUGH      
      Name:   Michelle Banaugh
      Title:   Senior Vice President

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ANNEX A

DEFINITIONS AND INTERPRETATION

        For the purposes of this Agreement, except as otherwise expressly provided:

the terms defined in this Annex A have the meanings assigned to them in this Annex A and include the plural as well as the singular;

all references to "this Agreement", the Recitals, Sections or Annexes in this Agreement are to the Agreement itself or to a Recital or Section of, or an Annex to, this Agreement, respectively, unless otherwise indicated;

the words "herein", "hereof" and "hereunder" and other words of similar import refer to the Agreement as a whole and not to any particular Article, Section or other subdivision;

the words "include", "includes" or "including" will be deemed to be followed by the words "without limitation";

all references to "dollars" or "$" are to U.S. dollars;

all references to any statute or regulation are to the statute or regulation as amended, modified, supplemented or replaced from time to time (and, in the case of statutes, include any rules and regulations promulgated under the statute) and to any section of any statute or regulation include any successor to the section;

the Table of Contents of this Agreement and the various headings contained herein are for reference purpose only and do not limit or otherwise affect any of the provisions hereof; and

it is the intention that no provision be construed more strictly with regard to one party than with regard to any other party.

        "Affiliate" of any specified Person means any other Person that shares an "ultimate parent entity" (within the meaning of rules under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 as of this Agreement) with the specified Person.

        "Applicable Law" means, as to any party, any law, rule or regulation or any judgment, decree, order, governmental permit, license, certificate of authority, order or governmental approval (including any of a self-regulatory organization) that, in the reasonable determination of the party, is applicable to it, its Subsidiaries or any of their respective businesses.

        "Approval Criteria" means the criteria for accept, reject and review decisions on Transactions applied by Wells Fargo Bank from time to time.

        "Business Day" means between the hours of 08:00 a.m. and 05:00 p.m. on any day other than a Saturday, a Sunday or a day on which banks located in San Francisco, California generally are authorized or required by law or regulation to close.

        "Chargeback Loss" means (i) the amount of the chargeback, (ii) any fee assessed by the applicable credit card association or bank for the chargeback, and (iii) any other loss or damage associated with the chargeback.

        "Confidential Information" has the meaning assigned to it in Section 7.1.

        "Credit Card Payment Processing Services" has the meaning assigned to it in Section 3.1.

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        "Credit Card Pricing Provisions" means the transaction fees, maximum Remittance Periods, maximum Transaction Amounts (both per Transaction and on a monthly basis), processing charge back fees and other provisions set forth in Annex B and the related footnotes, as in effect from time to time.

        "Customer" means Persons who use PayPal's services to make or receive payments.

        "DIA" has the meaning set forth in Section 5.2 of this Agreement.

        "Disclosing Party" has the meaning assigned to it in Section 7.1(a).

        "Domestic Transaction" means a Transaction where (1) the relevant Registration Information provides addresses in the United States; and (2) the credit card (i) was issued by a bank that is a region member of the applicable credit card association's designated U.S. region and (ii) has a number that indicates (based on information provided by the applicable credit card association) that the credit card was issued within such U.S. region.

        "Governmental Authority" means any domestic or foreign government (or political subdivision), governmental or regulatory authority, agency, court, commission or other governmental or regulatory entity (including any self-regulatory organization).

        "Hold Period" means, as to a Transaction, the number of days from and including the Transaction Commencement Date for the related Transaction to and including the date on which Wells Fargo Bank makes a payment to PayPal.

        "Internet" means the network connecting many computer networks that is commonly referred to as the "Internet" and that is currently based on the TCP/IP addressing system and communications protocol (or any successor network).

        "Payor" means, as to a Transaction, a Person who is making the payment.

        "Payor Registration Information" means, as to a Person who proposes to act as a Payor, such Person's (1) name; (2) telephone number; (3) e-mail address; (4) credit card billing address; (5) credit card information (card association, card number and expiration date); (6) internet protocol address; and (7) such additional information as Wells Fargo Bank may reasonably request.

        "PayPal User Agreement" means the agreement between PayPal and a Customer, the form of which as it exists at any point in time is posted on PayPal's website, establishing the terms of service between PayPal and its Customers.

        "PayPal Operating Account" means a deposit account maintained by PayPal at Wells Fargo Bank pursuant to Section 6.1 of this Agreement.

        "PayPal Services" means the services that PayPal provides to its Customers via which Customers can make and receive payments from each other.

        "PayPal Sourced Information" means any of the following information disclosed from time to time by PayPal to Wells Fargo Bank in connection with this Agreement and the matters covered and contemplated thereby:

provided that PayPal Sourced Information will not include any Wells Fargo Sourced Information.

        "PayPal System" means the hardware and software systems operated by PayPal that, taken together, operate the PayPal Services.

        "PayPal Transactions" has the meaning set forth in Section 3.2 of this Agreement.

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        "Person" means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization, joint-stock company or Governmental Authority.

        "Recipient" means, as to a Transaction, the Customer that is receiving the payment.

        "Recipient Registration Information" means, as to a Person proposing to act as a Recipient, such Person's (1) name, (2) credit card billing address (including zip code), (3) telephone number, (4) e-mail address, (5) if applicable, account information for deposit of funds (name and address of bank, account number, ABA routing information), (6) credit card information (card association, card number and expiration date), (7) internet protocol address and (8) such additional information as Wells Fargo Bank may reasonably request.

        "Recipient Transaction Information" means Transaction Information with respect to the Recipient in a Transaction.

        "Register" means the process by which a Person submits Registration Information to PayPal, executes the applicable PayPal User Agreement and applies to become and is accepted as a PayPal Customer. "Registration" and "Registered" have correlative meanings.

        "Registration Information" means Recipient Registration Information, or Payor Registration Information, as applicable.

        "Remittance Period" means, as to a Transaction involving PayPal Customers effected by Wells Fargo Bank pursuant to this Agreement, the applicable period specified in Annex B to this Agreement, measured from and including the Transaction Commencement Date for the Transaction to and including the date on which Wells Fargo Bank will credit the PayPal Operations Account with funds in the amount of such Transaction (net of DIA) pursuant to Section 6.2(d) of this Agreement.

        "Subsidiary" means, as to any Person, a Person more than 50% of the outstanding voting equity of which is owned, directly or indirectly, by the initial Person. For the purposes of this definition, "voting equity" means equity that ordinarily has voting power for the election of directors or Persons performing similar functions (such as a general partner of a partnership or the manager of a limited liability company), whether at all times or only so long as no senior class of equity has such voting power by reason of any contingency.

        "Transaction" means a payment (and requested payments that are rejected/declined) by or to a Customer effected by credit card through the Credit Card Payment Processing Services.

        "Transaction Commencement Date" means, as to an eligible Transaction for which Wells Fargo Bank has received all relevant information, (A) the next Business Day in the case where Wells Fargo Bank receives all related Transaction Information before the cutoff time on a Business Day and (B) the second Business Day after the date on which Wells Fargo Bank receives all the related Transaction Information in all other cases.

        "Transaction Information" means the following information in electronic format in a form approved by Wells Fargo Bank with respect to each Transaction: (1) the dates on which such purchases and sales occurred; (2) the dollar amount of the purchases and sales; (3) the Transaction Amount; (4) the minimum amount of information necessary in order to process a transaction through the relevant credit card network (e.g., VISA, MasterCard, DiscoverCard or American Express), including the applicable MCC code and applicable POS code; (5) Payor Registration Information; and (6) Recipient Registration Information.

        "United States" means the United States of America, not including its possessions and territories.

        "Wells Fargo Bank" means Wells Fargo Bank, National Association.

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        "Wells Fargo Bank Sourced Information" means any of the following information disclosed by Wells Fargo Bank to PayPal in connection with this Agreement and the matters covered and contemplated thereby:

        "WFB Operating System" means the hardware and software systems operated by Wells Fargo Bank that, taken together, enable Wells Fargo Bank to process payments in connection with its provision of Credit Card Payment Processing Services.

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ANNEX B


PRICING AND RELATED INFORMATION

1.   Transaction Fee(1):
  
    Credit Card Authorization(2)
  
    Settlement Fee(3)		  
  
[*]
  
[*]
2.   Maximum Remittance Period—Credit Card   [*]
3.   Credit Card Charge-back Fee (for Transactions not designated as set forth in item 4 below)   [*]
4.   Credit Card Charge-back Fee (for Transactions designated as related to [*] by the required credit card association codes identifying such transactions)   [*]
5.   Installation Fee   [*]
(1)
Such Fees are payable per Transaction irrespective of the Transaction Amount.

(2)
Such Credit Card Authorization Fee is due irrespective of whether the Transaction is approved/authorized or rejected/declined.

(3)
Such Settlement Fee is due only if the Transaction is submitted for settlement.

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ANNEX C


SERVICE STANDARDS

        1.    SERVICE:    This Annex details the Service Standards to be provided as set forth in this Agreement. These Service Standards are effective for the term. For quality and performance review purposes, these Services Standards will be reviewed quarterly.

        2.    TECHNICAL:    

        3.    SECURITY PROCEDURES:    

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        4.    SUPPORT COVERAGE:    Wells Fargo Bank and PayPal will supply each other with primary contact information for their respective designated Client Managers and Technical Support Personnel. Wells Fargo Bank will provide a dedicated service representative who i) has a strong understanding of the card acquiring industry; ii) understands card association politics and processes; iii) has a strong understanding of how Wells Fargo Bank is organized; iv) has a strong understanding of how PayPal processes; v) and is dedicated full time to the PayPal account.

        5.    PARTNERSHIP MANAGEMENT:    Wells Fargo Bank and PayPal will conduct weekly (or other mutually agreed timeframe) conference calls to review:

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        6.    PROBLEM RESOLUTION:    

Problem Classification Table

Classification
   Article X Criteria
Severity 1
(Critical)		   The Services are at a standstill. The system is completely unusable and no work around is currently known.
Severity 2
(Serious)		   The Services are significantly impaired and impacting 30% or more normal processing volumes. Key business processes, such as Authorizations, cannot be conducted without significant delay or business/financial impact. No known work around is currently available.
Severity 3
(Degraded)		   The Services do not function as designed. However, PayPal Customers can register or use the Services without significant delay. Transactions can be sent and payments can be made; and customers have access to their payment information.
Severity 4
(Minimal)		   Minor Bug Fixes—this group includes problems that have little or no impact on daily business process.

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Step 1.   Represents the acknowledgment of the problem to the other party and the beginning of information gathering process.

Step 2.
 
Represents the timeframe during which the problem is being actively addressed and a temporary patch, correction, or work around is provided that allows processing to continue as normal with no direct financial or operational impact. The goal will be to provide a fix or a work around for a problem as soon as possible. Critical problems will be worked on continually until a satisfactory problem resolution can be reached. Both Parties will apply immediate and continuing best efforts to achieve problem resolution.

Step 3
 
Represents the timeframe from the original identification by which a permanent solution will be available.

Response Expectation Table

Severity
   Step 1 (Identify)
   Step 2 (Temporary fix)
   Step 3 (Fix)
1 (Critical)   10 minutes   Immediate and continuing best efforts to restore operations within 3 hours   [*]
2 (Serious)   30 minutes   Immediate and continuing best efforts to restore operations within 12 hours   [*]
3 (Degraded)   1 hour during normal business hours, 2 hours otherwise   5 calendar days   [*]
4 (Minimal)   1 business day   Worked on a time available basis   As appropriate

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        7.    CHARGEBACK PROCESSING:    Wells Fargo Bank shall ensure that all details from chargebacks received via VisaNet or MasterCom shall be made available for viewing by PayPal within [*] of receipt. Wells Fargo Bank shall process debits of chargebacks when received from Visa or MasterCard. Wells Fargo Bank shall process credits for reversals within [*] days of receipt of such dispute. Wells Fargo Bank shall make available to PayPal the following services:

        8.    CHANGE MANAGEMENT:    Wells Fargo will notify PayPal within [*] hours in the event that an emergency fix is administered that may indirectly affect PayPal's processing environment. Wells Fargo Bank will notify PayPal in writing no less th