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EXHIBIT 4.1  

 
  RESTATED CERTIFICATE OF INCORPORATION    
    
    OF    
    
    ADVANCED MEDICAL TECHNOLOGIES, INC.
  (Originally incorporated on September 28, 1988)    

        FIRST:    The name of the corporation is Advanced Medical Technologies, Inc. (hereinafter called the "Corporation"). 

        SECOND:    The
address of the Corporation's registered office in the State of Delaware is 229 South State Street, in the City of Dover, County of Kent. The name of its
registered agent at such address is The Prentice-Hall Corporation System, Inc. 

        THIRD:    The
nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware as presently in effect or as it may hereafter be amended. 

        FOURTH:    The
total number of shares of stock that the Corporation shall have authority to issue is 23,000,000 shares, of which 3,000,000 shares shall be Preferred Stock, par
value $.01 per share, and 20,000,000 shares shall be Common Stock, par value $.01 per share, and the voting powers, designations, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, in respect of the classes of stock of the Corporation are as follows: 

	1.
	Preferred
Stock 

        (a)  The
Preferred Stock may be issued from time to time in one or more series, each of which shall be distinctively designated, shall rank equally and shall be identical in
all respects except as otherwise provided pursuant to subsection 1(b) of this Article FOURTH. 

        (b)  Authority
is hereby vested in the Board of Directors to issue from time to time the Preferred Stock of any series and to state in the resolution or resolutions providing
for the issue of shares of any series, the voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions
thereof, of such series to the full extent permitted by this Certificate of Incorporation and the law of the State of Delaware in respect of the following: 

        (1)  the
number of shares to constitute such series, and the distinctive designations thereof; 

        (2)  the
voting powers, full or limited, if any, of such series; 

        (3)  the
redemption price or prices, if any, and the time or times at which, and the terms and conditions on which, shares of such series shall be redeemable; 

        (4)  the
rate of dividends payable on shares of such series, the conditions on which and the times when such dividends are payable, the preference to, or the relation to, the
payment of the dividends payable on any other class or classes or any other series of stock, whether cumulative or non-cumulative, and, if cumulative, the dates from which dividends on
shares of such series shall be cumulative; 

        (5)  the
rights of shares of such series upon the liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation; 

        (6)  the
rights, if any, of the holders of shares of such series to convert such shares into, or to exchange such shares for, shares of any other class, classes or series of
stock and the price or prices or the rates of exchange and the adjustments at which such shares shall be convertible or exchangeable, and any other terms and conditions of such conversion or exchange; 

        (7)  the
requirement of any sinking fund or funds to be applied to the purchase or redemption of shares of such series and, if so, the amount of such fund or funds and the
manner of application; and 

 

        (8)  any
other preferences and relative, participating, optional or other special rights of shares of such series, and the qualifications, limitations or restrictions
thereof, including, without limitation, any restriction on an increase in the number of shares of any series theretofore authorized and any qualifications, limitations or restrictions of rights and
powers to which shares of any future series shall be subject. 

	2.
	Common
Stock 

        (a)  The
rights of holders of Common Stock to receive dividends or to share in the distribution of assets in the event of liquidation, dissolution or winding up of affairs of
the Corporation shall be subject to the preferences and other rights of the Preferred Stock fixed in the resolution or resolutions of the Board of Directors providing for the issue of such Preferred
Stock. 

        (b)  The
holders of Common Stock shall be entitled to one vote for each share of Common Stock held by them of record at the time for determining the holders thereof entitled
to vote. 

        FIFTH:    The
name and mailing address of the sole incorporator is as follows: 

	Name
	 	Mailing Address

	

Jeanne E. Wham	
 	

30 Rockefeller Plaza

22nd Floor

New York, N.Y. 10112

        SIXTH:    At all elections of directors of the Corporation, each stockholder shall be entitled to as many votes which (except for such provision as to
cumulative voting) such stockholder would be entitled to cast for the election of directors with respect to his shares of stock multiplied by the number of directors to be elected by such stockholder,
and that such stockholder may cast all such votes for a single director or may distribute them among the number to be voted for, or for any two or more of them as such stockholder may see fit. 

        SEVENTH:    The
Board of Directors is authorized to adopt, amend or repeal the By-Laws of the Corporation. 

        EIGHTH:    Meetings
of stockholders shall be held at such place, within or without the State of Delaware, as may be designated by or in the manner provided in the
By-Laws, or, if not so designated or provided, at the registered office of the Corporation in the State of Delaware. Elections of Directors need not be by written ballot unless and to the
extent that the By-Laws so provide. 

        NINTH:    Any
act requiring the consent of the stockholders of the Corporation or any action taken by the stockholders of the Corporation must be done so at an annual or
special meeting of the stockholders of the Corporation. No action may be taken without a meeting, without prior notice or without a vote thereon. 

        TENTH:    The
Corporation reserves the right to amend, alter or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by
statute, and all rights of stockholders herein are subject to this reservation. 

        ELEVENTH:    No
Director of the Corporation shall be liable for monetary damages resulting from a breach of his or her fiduciary duty as a director, except to the extent
required by law as in effect at the time the claim of liability is asserted. 

        IN
WITNESS WHEREOF, this Restated Certificate of Incorporation which restates and integrates and further amends the provisions of the Certificate of Incorporation of the Corporation and
it having been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the 

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State of Delaware, has been executed by its Chairman of the Board and attested by its Secretary, as of this 4th day of December, 1988. 

	 	 	 	 	ADVANCED MEDICAL TECHNOLOGIES, INC.
	

 	
 	

 	
 	

By:	

/s/  Richard D. Propper      
 Richard D. Propper

Chairman of the Board	
 	

 
	ATTEST:	 	 	 	 	 	 	 
	

/s/  Randall D. Holmes      
 Randall D. Holmes

Secretary	
 	

 	
 	

 	

 	
 	

 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 

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CERTIFICATE OF VOTING POWERS, DESIGNATION,
  RIGHTS, PREFERENCES AND RESTRICTIONS
  OF 10% CUMULATIVE PREFERRED STOCK    
  

PURSUANT TO SECTION 151 OF THE GENERAL

CORPORATION LAW OF THE STATE OF DELAWARE  

        Advanced
Medical Technologies, Inc. (the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify that
pursuant to authority conferred upon the Board of Directors of the Corporation by its Certificate of Incorporation, and pursuant to the provisions of Section 151 of the General Corporation Law
of the State of Delaware, said Board of Directors, acting by Unanimous Written Consent on March 22, 1989, adopted the following resolution which remains in full force and effect as of the date
hereof: 

        RESOLVED,
that pursuant to authority expressly granted to and vested in the Board of Directors by the provisions of the Certificate of Incorporation, the Board of Directors does hereby
create, authorize and provide for the issue of a series of Preferred Stock, par value $0.01 per share, consisting of 1,800,000 shares having voting powers, designation, rights, preferences and
restrictions as follows: 

        1.    Designation.    The designation of the series of Preferred Stock fixed by this
resolution shall be "10% Cumulative Preferred Stock" (hereinafter referred to as the "10% Preferred Stock"). 

        2.    Dividends.    The dividend rate of the 10% Preferred Stock shall be $1.00 per share
per annum and no more. Dividends shall be payable semi-annually in arrears when, as and if declared by the Board of Directors out of funds legally available therefor (such
semi-annual period being hereinafter referred to
as "Dividend Period"), with the first dividend payable on the six-month anniversary of the date of original issue, and thereafter on the date that is six months after the date on which the
prior dividend was payable (the "Dividend Payment Dates"). If any such Dividend Payment Dates should fall on a day that is not a Business Day, then the Corporation shall pay the applicable dividend on
the next succeeding Business Day. "Business Day" shall mean a day other than a Saturday, Sunday or other day on which the New York Stock Exchange, or any other national securities exchange or
quotation system on which the common stock of the Corporation is traded or quoted, is authorized or required by law to close. Dividends on shares of 10% Preferred Stock shall be cumulative and shall
commence to accrue and be cumulative from the date such shares have been issued. Accrued and unpaid dividends shall not bear interest. No dividends shall be paid on any of the Corporation's equity
securities other than the 10% Preferred Stock unless all dividends accrued on the 10% Preferred Stock through the most recent Dividend Payment Date have been paid. 

        3.    No Conversion.    The shares of the 10% Preferred Stock shall not be convertible
into any other security. 

        4.    No Voting Rights.    Except as set forth in Section 7 below or as may
otherwise be required by law, the holders of the shares of 10% Preferred Stock shall not be entitled to any vote in respect of such shares. 

        5.    Liquidation Price.    In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the amount that shall be paid to the holder of each share of 10% Preferred Stock shall be $10.00 and an additional sum representing accrued
and unpaid dividends, if any (hereinafter called the "Redemption Price"). Upon any liquidation, dissolution or winding up of the Corporation, the holders of 10% Preferred Stock (the "Holders") will be
entitled to be paid, before any distribution or payment is made upon any of the Corporation's equity securities other than the 10% Preferred Stock, an amount in cash equal to the aggregate Redemption
Price of all shares outstanding, and the Holders will not be entitled to any further payment. If, upon any such liquidation, dissolution or winding up of the Corporation, 

 

the Corporation's assets to be distributed among the Holders are insufficient to permit payment to such Holders of the aggregate amount which they are entitled to be paid, then the available assets
to be distributed will be distributed ratably among such Holders based upon the aggregate Redemption Price of the 10% Preferred Stock held by each such Holder. The Corporation will mail written notice
of such liquidation, dissolution or winding up not less than 60 days prior to the payment date stated therein, to each Holder of record. Neither the consolidation or merger of the Corporation
into or with any other corporation or corporations, nor the sale or transfer by the Corporation of all or any part of its assets, nor the reduction of the capital stock of the Corporation will be
deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 5. 

        6.    Redemption.    (a)    Optional Redemption.    The 10% Preferred
Stock may be redeemed at any time at the option of the Corporation by action of the Board of Directors, in whole or in part at any time or from time to time upon notice and in the manner provided
below. Any such optional redemption shall be made ratably in accordance with the share holdings of the Holders and by payment of the Redemption Price. The Corporation may also, from time to time,
purchase or otherwise acquire, in open market or private transactions, issued and outstanding shares of 10% Preferred Stock without limitations as to price or amount. 

        (b)    Mandatory Redemption.    Notwithstanding the provisions of subsection
(a) above, the Corporation shall redeem the 10% Preferred Stock in the amount of 25% of all of the shares of 10% Preferred Stock originally issued, subject to the limitations set forth in
Section 6(c)(iv) and the last sentence of Section 6(c)(iii) below, on the second, third, fourth and fifth anniversary date of the original issuance of the 10% Preferred
Stock (any such anniversary date or any other date set for redemption of the 10% Preferred Stock, each a "Redemption Date"), upon the notice hereinafter provided for, by the payment therefor of the
Redemption Price. If a Redemption Date shall fall on a day that is not a Business Day, then the Corporation shall effectuate the redemption on the next succeeding Business Day. 

        (c)    Procedure For Redemption.    The 10% Preferred Stock shall be redeemed in the
following manner: 

        (i)    Shares
of 10% Preferred Stock redeemed, purchased or otherwise acquired by the Corporation shall be held as treasury shares (and may be sold or disposed of) or shall be
reclassified or retired and cancelled as may be determined by the Board of Directors. 

        (ii)  Notice
of redemption of any shares of 10% Preferred Stock shall be given by the Corporation not less than 15 nor more than 50 days prior to the Redemption Date,
by mail or delivery to the Holders of record of the shares to be redeemed at their respective addresses then appearing on the records of the Corporation. On or before the Redemption Date, each Holder
shall surrender to the Corporation or its designated agent, at such place as it may designate in the redemption notice, certificates evidencing a number of shares of 10% Preferred Stock at least equal
to the number of shares held by such Holder subject to the call for redemption. Upon such surrender, the Holder shall be entitled to receive payment of the Redemption Price, without interest, and, in
the event of a partial redemption, a certificate representing the balance, if any, of shares of 10% Preferred Stock covered by the surrendered certificate or certificates but not subject to the call
for redemption. 

        (iii)  If
on the Redemption Date (A) notice of redemption has been mailed or delivered as provided herein, (B) the Corporation has set aside all funds necessary
to pay the amount due for all shares of 10% Preferred Stock subject to redemption, and (C) all such funds are available for the sole purpose of paying such amount, then all shares of 10%
Preferred Stock subject to redemption shall, whether or not the certificates for such shares have been surrendered for cancellation, be deemed to be no longer outstanding for any purpose and all 

2

 

rights with respect to such shares shall cease, except the right of the Holder to receive the Redemption Price, without interest. If the Corporation shall not have funds legally available for the
redemption of the shares to be redeemed pursuant to this Section 6 on the Redemption Date, such redemption shall be made on the earliest practicable date next following the Business Day on
which the Corporation shall first have funds legally available for the redemption of such shares as shall be specified in the notice of redemption. 

        (iv)  If,
prior to any Redemption Date, the Corporation shall have purchased or otherwise acquired, in open market or private transactions or pursuant to Section 6(a)
above, issued and outstanding shares of 10% Preferred Stock, then the shares of 10% Preferred Stock so purchased or otherwise acquired shall be credited against the number of shares required to be
redeemed on such Redemption Date in accordance with Section 6(b) above; provided, however, that the shares so purchased or otherwise acquired by the Corporation
have been duly cancelled or retired; provided, further, that any such shares shall not be credited more than once against the Corporation's redemption obligations under
Section 6(b) above. 

        7.    Voting Rights.    (a) During any period that one of the hereinafter described
conditions ("Events of Default") shall exist (hereinafter referred to as a "Default Period"), the Holders shall possess full voting powers, voting as a single class (the Holders being entitled to one
vote per share thereon), immediately to elect two (2) directors on the Board of the Corporation: 

        (i)    if
any accumulated dividends on the 10% Preferred Stock shall be in arrears and remain unpaid with respect to two consecutive Dividend Periods; or 

        (ii)  if,
as of any Redemption Date the Corporation fails to redeem any shares of 10% Preferred Stock that are subject to mandatory redemption under Section 6(b)
above. 

        (b)  During
any Default Period, such voting rights may be exercised initially at a special meeting called pursuant to subsection (c) of this Section 7 or at any
annual meeting of stockholders, and thereafter at annual meetings of stockholders provided that such voting rights shall not be exercised unless the Holders of ten percent (10%) in number of shares of
Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the Holders of such voting rights. At any
meeting at which the holders shall exercise such voting rights initially during an existing Default Period, they shall have the right, voting as a class, to elect directors to fill such vacancies, if
any, in the Board of Directors as may then exist up to two (2) directors or, if such right is exercised at an annual meeting, to elect two (2) directors. If the number which may be so
elected at any special meeting does not amount to the required number, the Holders shall have the right to make such increase in the number of directors as shall be necessary to permit the election by
them of the required number. After the Holders shall have exercised their right to elect directors in any Default Period and during the continuance of such period, the number of directors shall not be
increased or decreased except by vote of the Holders as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the 10%
Preferred Stock. 

        (c)  Notwithstanding
anything to the contrary contained in the Corporation's Certificate of Incorporation or By-Laws, unless the Holders shall, during any
existing Default Period, have previously exercised their right to elect directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of 10% Preferred Stock outstanding may request, the calling of a special meeting of the Holders which meeting shall thereupon be called by the Chairman of
the Board, the President, a Vice-President or the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which Holders are entitled to vote pursuant to this
Section 7 shall be given to each Holder of record by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called
for a time not earlier then 

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10 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called
on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding. Notwithstanding the
provisions of this Section 7(c), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the
stockholders. 

        (d)  In
any Default Period, the holders of Common Stock, and other classes of stock of the Corporation, if applicable, shall continue to be entitled to elect the whole number
of directors until the Holders shall have exercised their rights to elect two (2) directors voting as a class, after the exercise of which right (i) the directors so elected by the
Holder shall continue in office until their successors shall have been elected by such Holders or until the expiration of the Default Period, and (ii) any vacancy in the Board of Directors may
(except as provided in Section 7(b)) be filled by vote of a majority of the remaining directors theretofore elected by the holders of the class of stock which elected the director whose office
shall have become vacant. References in this Section 7 to directors elected by the holders of a particular class of stock shall include directors elected by such directors to fill vacancies as
provided in clause (ii) of the foregoing sentence. 

        (e)  The
Default Period shall automatically terminate when: 

        (i)    all
accumulated and unpaid dividends on the then-outstanding 10% Preferred Stock shall have been paid to the Holders; and 

        (ii)  any
and all shares of 10% Preferred Stock subject to mandatory redemption shall have been redeemed as required under Section 6(b). 

        (f)    Upon
the termination of a Default Period, (i) the voting rights created by the occurrences of an Event of Default shall cease immediately and automatically,
(ii) the term of any directors elected by the Holders pursuant to this Section 7 shall terminate at such time, and (iii) the number of directors shall be such number as may be
provided for in the Certificate of Incorporation or By-Laws irrespective of any
increase made pursuant to the provisions of this Section 7, subject always, however, to the revesting of such voting power in the Holders upon the further occurrence of any of the Events of
Default. 

        (g)  Without
the consent of the Holders of at least two-thirds of the outstanding shares of 10% Preferred Stock, the Corporation may not: (i) create any
class or series of preferred stock which shall have preference as to dividends or distribution of assets over the 10% Preferred Stock, provided, however, that the consent
of the Holders of a majority of the outstanding shares of 10% Preferred Stock shall be required for the issuance of a class of preferred stock equal in preference as to dividends and distribution of
assets to the 10% Preferred Stock; or (ii) alter or change the provisions of the Corporation's Certificate of Incorporation, as amended and restated, so as to adversely affect the voting power,
preferences or special rights of the Holders. 

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        IN
WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by Richard D. Propper, its Chairman of the Board, and attested by Randall D. Holmes, its Secretary, as of
this 22nd day of March, 1989. 

	 	 	 	 	 	ADVANCED MEDICAL TECHNOLOGIES, INC.
	

 	

 	
 	

 	
 	

By:	

/s/  Richard D. Propper      
	
 	

 
	 	 	 	 	 	 	Name:	Richard D. Propper	 	 
	 	 	 	 	 	 	Title:	Chairman of the Board	 	 
	Attest:	 	 	 	 	 	 	 	 
	

/s/  Randall D. Holmes      
	
 	

 	
 	

 	

 	

 	
 	

 
	Name:	Randall D. Holmes	 	 	 	 	 	 	 	 
	Title:	Secretary	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 

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CERTIFICATE OF AMENDMENT    
    
    OF RESTATED CERTIFICATE OF INCORPORATION    
    
    OF    
    
    ADVANCED MEDICAL TECHNOLOGIES, INC.    
  

        Advanced Medical Technologies, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"),
hereby certifies that the amendments set forth below to the Corporation's Restated Certificate of Incorporation were adopted in accordance with Section 242 of the General Corporation Law of the
State of Delaware: 

        (1)  Article
FIRST shall be amended to read in its entirety as follows: 

"FIRST:
The name of the Corporation is Advanced Medical, Inc. (hereinafter the "Corporation)". 

        (2)  The
provisions of Article FOURTH set forth in the Restated Certificate of Incorporation filed on behalf of the Company on January 20, 1989 shall be amended to
read, in their entirety, as follows (the Certificate of Designation filed by the Corporation on March 23, 1989 shall not be affected by this amendment and shall remain in effect): 

FOURTH:    The
total number of shares of stock that the Corporation shall have authority to issue is 39,000,000 shares, of which 3,000,000 shares shall be Preferred Stock, par value $.01 per
share (the "Preferred Stock"), 6,000,000 shares shall be $.001 Preferred Stock, par value $.001 per share (the "$.001 Preferred Stock") and 30,000,000 shares shall be Common Stock, par value $.01 per
share, and the voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, in respect of the
classes of stock of the Corporation are as follows: 

	1.
	Preferred
Stock 

(a)    The
Preferred Stock may be issued from time to time in one or more series, each of which shall be distinctively designated, shall rank equally and shall be identical in all respects
except as otherwise provided pursuant to subsection 1(b) of this Article FOURTH. 

(b)    Authority
is hereby vested in the Board of Directors to issue from time to time the Preferred Stock of any series and to state in the resolution or resolutions providing for the issue
of shares of any series, the voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of
such series to the full extent permitted by this Certificate of Incorporation and the law of the State of Delaware in respect of the following: 

(1)
the number of shares to constitute such series, and the distinctive designations thereof; 

(2)
the voting powers, full or limited, if any, of such series; 

(3)
the redemption price or prices, if any, and the time or times at which, and the terms and conditions on which, shares of such series shall be redeemable; 

(4)
the rate of dividends payable on shares of such series, the conditions on which and the time when such dividends are payable, the preference to, or the relation to, the payment of the dividends
payable on any other class or classes or any other series of stock, whether cumulative or non-cumulative, and, if cumulative, the dates from which dividends on shares of such series shall
be cumulative; 

(5)
the rights of shares of such series upon the liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation; 

(6)
the rights, if any, of the holders of shares of such series to convert such shares into, or to exchange such shares for, shares of any other class, classes or series of stock and the price or
prices or the rates of exchange and the adjustments at which such shares shall be 

 

convertible or exchangeable, and any other terms and conditions of such conversion or exchange; 

(7)
the requirement of any sinking fund or funds to be applied to the purchase or redemption of shares of such series and, if so, the amount of such fund or funds and the manner of application; and 

(8)
any other preferences and relative, participating, optional or other special rights of shares of such series, and the qualifications, limitations or restrictions thereof, including, without
limitation, any restriction on an increase in the number of shares of any series theretofore authorized and any qualifications, limitations or restrictions of rights and powers to which shares of any
future series shall be subject. 

	2.
	$.001
Preferred Stock 

(a)    The
$.001 Preferred Stock may be issued from time to time in one or more series, each of which shall be distinctively designated, shall rank equally and shall be identical in all
respects except as otherwise provided pursuant to subsection 2(b) of this Article FOURTH. 

(b)    Authority
is hereby vested in the Board of Directors to issue from time to time the $.001 Preferred Stock of any series and to state in the resolution or resolutions providing for the
issue of shares of any series, the voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof,
of such series to the full extent permitted by this Certificate of Incorporation and the law of the State of Delaware; provided, that the number of authorized shares of
$.001 Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) without a separate vote of the holders of the $.001 Preferred Stock, or of any series
thereof, unless the certificate of designation creating such series expressly provides for such vote. 

	3.
	Common
Stock 

(a)    The
rights of holders of Common Stock to receive dividends or to share in the distribution of assets in the event of liquidation, dissolution or winding up of affairs of the
Corporation shall be subject to the preferences and other rights of the Preferred Stock and the $.001 Preferred Stock fixed in the resolution or resolutions of the Board of Directors providing for the
issue of such Preferred Stock or $.001 Preferred Stock. 

(b)    The
holders of Common Stock shall be entitled to one vote for each share of Common Stock held by them of record at the time for determining the holders thereof entitled to vote. 

        IN
WITNESS WHEREOF, Advanced Medical Technologies, Inc. has caused this certificate to be signed and attested by its duly authorized officers this 7th day of September, 1990. 

	 	 	 	 	ADVANCED MEDICAL TECHNOLOIGES, INC.
	

 	
 	

 	
 	

By:	

/s/  Richard D. Propper      
 Richard D. Propper

Chairman of the Board	
 	

 
	ATTEST:	 	 	 	 	 	 	 
	

/s/  Stanley S. Anders III      
 Stanley S. Anders III

Secretary	
 	

 	
 	

 	

 	
 	

 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 

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CERTIFICATE OF VOTING POWERS, DESIGNATION,
  RIGHTS, PREFERENCES AND RESTRICTIONS
  OF CONVERTIBLE PREFERRED STOCK    
  

Pursuant to Section 151 of the General

Corporation Law of the State of Delaware  

        Advanced
Medical, Inc. (the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify that pursuant to
authority conferred upon the Board of Directors of the Corporation by its Certificate of Incorporation, and pursuant to the provisions of Section 151 of the General Corporation Law of the State
of Delaware, said Board of Directors, acting by Unanimous Written Consent on March 25, 1991, adopted the following resolution which remains in full force and effect as of the date hereof: 

        RESOLVED,
that pursuant to authority expressly granted to and vested in the Board of Directors by the provisions of the Certificate of Incorporation, the Board of Directors does hereby
create, authorize and provide for the issue of a series of Preferred Stock, par value $0.01 per share, consisting of 333,000 shares having voting powers, designation, rights, preferences and
restrictions as follows: 

        1.    Designation.    The designation of the series of Preferred Stock fixed by this
resolution shall be "Convertible Preferred Stock" (hereinafter referred to as the "Convertible Preferred Stock"). 

        2.    Rank.    All Convertible Preferred Stock shall rank: (i) junior to all of
the Corporation's 10% Cumulative Preferred Stock ("10% Preferred Stock") and any other preferred stock of the Corporation hereafter created specifically ranking by its terms senior to the Convertible
Preferred Stock (collectively with the
10% Preferred Stock, "Senior Securities") (provided that no such preferred stock may be created without the affirmative vote of the Holders (as defined in Section 4 hereof) of a majority of the
outstanding shares of the Convertible Preferred Stock pursuant to Section 9 hereof); (ii) prior to all of the Corporation's Common Stock, par value $.01 per share ("Common Stock") and
any other preferred stock of the Corporation hereafter created either specifically ranking by its terms junior to the Convertible Preferred Stock or not specifically ranking by its terms senior to or
on parity with the Convertible Preferred Stock ("Junior Securities"); and (iii) on parity with any other preferred stock of the Corporation hereafter created specifically ranking by its terms
on parity with the Convertible Preferred Stock ("Parity Securities") (provided that no such preferred stock may be created without the affirmative vote of the Holders of a majority of the outstanding
shares of the Convertible Preferred Stock pursuant to Section 9 hereof), in each case, as to redemption, as to payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up of the Corporation or otherwise, whether voluntary or involuntary (all such distributions being referred to collectively as "Distributions"). 

        3.    Dividends.    The dividend rate of the Convertible Preferred Stock shall be
computed at a rate of 15% per annum on the Base Amount as adjusted from time to time as hereinafter provided. The Base Amount shall initially be and shall never be less than $6.40 per share. Dividends
shall be payable semi-annually in arrears out of funds legally available therefor (such semi-annual period being hereinafter referred to as "Dividend Period"), with the first
dividend payable, beginning in September 1991, on the day following the date on which dividends are payable with respect to the 10% Preferred Stock, while shares of the 10% Preferred Stock are
still outstanding, and, at such time as no shares of 10% Preferred Stock are outstanding, on each date that in six months after the date on which the prior dividends were payable (the "Dividend
Payment Dates"). Dividends on shares of Convertible Preferred Stock shall be cumulative and shall commence to accrue and be cumulative from the date such shares have been issued. Accrued dividends
which are not paid on a Dividend Payment Date shall be added to the Base Amount on that date. The Base Amount shall be reduced (but not below $6.40 per share) by the amount of accrued and unpaid
dividends due but not paid on previous Dividend Payment Dates when such 

 

dividends shall have been paid. The Corporation shall be required to pay a mandatory dividend on the Convertible Preferred Stock on any Dividend Payment Date on which: (i) the Corporation
shall have paid all dividends which were accrued and are unpaid through the most recent semi-annual dividend period with the respect to the 10% Preferred Stock contemplated in
Section 2 of the Certificate of Voting Powers, Designation, Rights, Preferences and Restrictions of 10% Preferred Stock (the "Semi-Annual Payments") prior to such Dividend Payment
Date; (ii) the Corporation has satisfied any and all mandatory redemption obligations required to be satisfied with respect to the 10% Preferred Stock prior to such Dividend Payment Date;
(iii) the Corporation has funds legally available for the payment of such dividend; and (iv) the Corporation is not prohibited from paying dividends in accordance with the provisions of
(or would not as a result thereof be in default under) the loan agreement dated April 2, 1990, with Aenas Venture Corporation ("Aenas") as such agreement is existing as of the date shares of
the Convertible Preferred Stock are first issued or has not received the consent on Aenas to otherwise pay such dividends. If the Corporation is unable to pay a dividend on the Convertible Preferred
Stock on any Dividend Payment Date because on such date it is unable to satisfy
any one or more of the conditions set forth in clauses (i), (ii), (iii) or (iv) above, the Corporation shall be required to pay all accrued and unpaid dividends through such Dividend
Payment Date on the earliest date after such Dividend Payment Date on which the Corporation has satisfied all the conditions set forth in clauses (i), (ii), (iii) and (iv) above,
regardless of whether such date is a Dividend Payment Date, so long as, as of such date: (x) the Corporation shall have paid all accrued and unpaid Semi-Annual Payments on or prior
to such date; and (y) the Corporation has satisfied any and all mandatory redemption obligations required to be satisfied with respect to the 10% Preferred Stock on or prior to such date. In
order to determine the holders of Convertible Preferred Stock entitled to receive dividends, the Corporation shall fix a record date ("Record Date") not more than sixty days prior to any Dividend
Payment Date. If any such Dividend Payment Date should fall on a day that is not a Business Day, then the Corporation shall pay the applicable dividend on the next succeeding Business Day. "Business
Day" shall mean a day other than a Saturday, Sunday or other day on which the American Stock Exchange, or any other national securities exchange or quotation system on which the Common Stock of the
Corporation is traded or quoted, is authorized or required by law to close. 

        The
Corporation shall not, without the affirmative vote of the Holders of a majority of the outstanding shares of Convertible Preferred Stock: (i) pay or declare and set apart for
payment any dividends or Distributions on any of the Corporation's Junior Securities, other than dividends payable in the form of additional shares of the same Junior Security as that on which such
dividend is declared; or (ii) redeem, purchase or otherwise acquire any shares of Junior Securities or any right, warrant or option to acquire any Junior Securities, so long as any shares of
the Convertible Preferred Stock remain outstanding; provided, however, that, notwithstanding the foregoing, the Corporation may perform its obligations to repurchase those
warrants, or the Common Stock for which such warrants are exercisable, issued by the Corporation prior to the date on which shares of Convertible Preferred Stock are first issued, in accordance with
the terms of such warrants. 

        If
at any time any and all accrued dividends on any Senior Securities shall not have been paid through the most recent prior Semi-Annual Payment with respect to the 10%
Preferred Stock and the most recent prior scheduled dividend payment date with respect to any other Senior Securities, either in whole or in part, or if the Corporation shall have failed to satisfy
any and all of its mandatory redemption obligations of shares of the 10% Preferred Stock as of the last scheduled mandatory redemption date with respect to the 10% Preferred Stock, no dividend or
Distribution shall be paid or declared and set apart for payment on the Convertible Preferred Stock unless and until all accrued and unpaid dividends with respect to the Senior Securities as of the
then most recent prior Semi-Annual Payment with respect to the 10% Preferred Stock or the last scheduled 

- 2 -

 

dividend payment date with respect to any other Senior Securities, and until the Corporation's mandatory redemption obligations through the most recent prior redemption date with respect to the 10%
Preferred Stock have been satisfied. 

        No
full dividends shall be paid or declared and set apart for payment on any class or series of Parity Securities for any period unless full cumulative dividends have been, or
contemporaneously are, paid or declared and set apart for such payment on the Convertible Preferred Stock for all dividend payment periods terminating on or prior to the date of payment of such full
cumulative dividends. No full dividends shall be paid or declared and set apart for payment on the Convertible Preferred Stock for any period unless full cumulative dividends have been, or
contemporaneously are, paid or declared and
set apart for payment on the Parity Securities for all dividend periods terminating on or prior to the date of payment of such full cumulative dividends. When dividends are not paid in full upon the
Convertible Preferred Stock and the Parity Securities, all dividends paid or declared and set apart for payment upon shares of Convertible Preferred Stock and the Parity Securities shall be paid or
declared and set apart for payment pro rata, so that the amount of dividends paid or declared and set apart for payment per share on the Convertible Preferred Stock and the Parity Securities shall in
all cases bear to each other the same ratio that accrued and unpaid dividends per share on the shares of Convertible Preferred Stock and the Parity Securities bear to each other (without taking into
account the dividends so paid and those so declared and set apart for payment). 

        4.    No Voting Rights.    Except as may otherwise be provided herein or as required by
law, the holders of the shares of Convertible Preferred Stock ("Holders") shall not be entitled to any vote in respect of such shares. 

        5.    Conversion Rights.    

        (a)  The
Convertible Preferred Stock may be converted, at the option of each Holder, into fully-paid and non-assessable shares of Common Stock, at any
time prior to the close of business on a Redemption Date or Holder Redemption Date (as such terms are defined, and subject to the provisions of, Sections 7 and 8, respectively) and thereafter to the
extent provided in Sections 7 and 8 hereof. The number of shares of Common Stock to which the Holder of each share of Convertible Preferred Stock shall be entitled upon conversion shall be the product
obtained by multiplying the number of shares of Convertible Preferred Stock to be converted by the Conversion Rate. The "Conversion Rate" shall be a fraction: (x) the numerator of which shall
be the sum of $6.40 plus all accrued and unpaid dividends on a single share of Convertible Preferred Stock; and (y) the denominator of which is the Conversion Price (as hereinafter defined).
The conversion price ("Conversion Price") shall initially be $10-3/8 and shall be adjusted from time to time as set forth in subsection (b) hereof. Based upon the initial Conversion Price, the
initial Conversion Rate is .617 shares of Common Stock for each share of Convertible Preferred Stock. Notwithstanding the foregoing, if at the time the Convertible Preferred Stock is first issued by
the Corporation, the Common Stock of the Corporation is listed on the American Stock Exchange, or any other national securities exchange or quotation system, the Convertible Preferred Stock will not
be convertible into Common Stock until such time as the listing of such Common Stock into which such Convertible Preferred Stock is convertible is authorized by such exchange or quotation system. The
Corporation will seek authorization for such listing of such Common Stock as promptly as possible after the issuance of any shares of Convertible Preferred Stock. Unless exercised by a Holder prior to
the close of business on a Redemption Date or Holder Redemption Date the right to convert shares of Convertible Preferred Stock into Common Stock will expire at the close of business on such date with
respect to that number of shares of Convertible Preferred Stock of a Holder subject to such redemption, unless the Corporation shall default in making the required payment in which case such
conversion right shall continue uninterrupted. The Corporation shall not be required to issue fractional shares of Common Stock upon conversion of 

- 3 -

 

Convertible Preferred Stock and, at the Corporation's option, in lieu thereof, may pay to a Holder cash in an amount equal to such fraction multiplied by the Last Sale Price of the Common Stock on
the trading day prior to the date on which the shares are converted. "Last Sale Price" shall mean the reported last sale price regular way or, in case no such reported sale takes place on such day,
the
average of the reported closing bid and asked prices regular way, in either case on the New York Stock Exchange or the American Stock Exchange, as the case may be, or, if the Common Stock is not
listed or admitted to trading on either such Exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if not listed or admitted to trading
on any national securities exchange, on the National Association of Securities Dealers Automated Quotations National Market System or, if the Common Stock is not listed or admitted to trading on any
national securities exchange or quoted on such National Market System, the average of the closing bid and asked prices in the over-the-counter market as furnished by any New
York Stock Exchange member firm selected from time to time by the Board of Directors for that purpose. 

        (b)  Procedure
for Conversion.    The Convertible Preferred Stock shall be converted into Common Stock in the following manner: 

        (i)    Shares
of Convertible Preferred Stock received by the Corporation in exchange for Common Stock may be held as treasury shares (and, subject to the limits of
Section 9 hereof, may be sold or disposed of) or may be reclassified or retired and cancelled as may be determined by the Board of Directors. 

        (ii)  A
Holder of Convertible Preferred Stock shall give notice to the Corporation by mail of its desire to convert all or a portion of the shares of Convertible Preferred
Stock owned by such Holder. Such notice shall be accompanied by certificates, duly endorsed for transfer, evidencing the number of shares of Convertible Preferred Stock such Holder desires to convert
and the Conversion Price payable in respect of such shares of Convertible Preferred Stock, as determined below. 

        (iii)  In
the event that shares of Convertible Preferred Stock are surrendered for conversion on any date during the period from the close of business on a Record Date to the
opening of business on the corresponding Dividend Payment Date, the Holder must also deliver to the Corporation an amount equal to the dividend payable with respect to such shares of Convertible
Preferred Stock on such Dividend Payment Date. In the event that the date on which the shares are converted is the Dividend Payment Date, such Holder will be entitled to receive the dividend payable
with respect to such Convertible Preferred Stock and shall not be required to include any payment in the amount of the dividend payable with respect to such converted shares of Convertible Preferred
Stock. 

        (iv)  If,
prior to the date on which all shares of Convertible Preferred Stock are converted, the Corporation shall issue or sell shares of Common Stock (including shares of
Common Stock deemed to be issued pursuant to subparagraph (vii) below) without consideration or for a consideration per share less than the greater of the Current Market Price (as hereinafter
defined) or the Conversion Price in effect immediately prior to such issue or sale, the Conversion Price in effect on the date of such issue or sale shall be reduced concurrently with such issue or
sale to a price (calculated to the nearest .001 of a cent) determined by multiplying the Conversion Price by a fraction: (x) the numerator of which shall be (i) the number of shares of
Common Stock outstanding immediately prior to such issue or sale plus (ii) the number of shares of Common Stock which the aggregate consideration received by the Corporation for the total
number of such shares of Common Stock so issued or sold would purchase at the greater of such Current Market Price and such Conversion Price; and (y) the denominator of which shall be the
number of shares of Common Stock 

- 4 -

 

outstanding immediately after such issue or sale. Notwithstanding the foregoing, no adjustment to the Conversion Price will be made pursuant to this subsection (iv) upon the exercise of:
(A) any warrants, options or rights to acquire shares of Common Stock outstanding as of the date shares of the Convertible Preferred Stock are first issued; or (B) any Options issued by
the Corporation pursuant to the Stock Option Plans (as hereinafter defined). For purposes of this subparagraph (iv), the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. 

        (v)  If,
prior to the date on which shares of Convertible Preferred Stock are converted, the Corporation shall declare, order, pay or make a dividend or other distribution
(including, without limitation any distribution of cash, other or additional stock or other securities or property or options, by way of a dividend or spin-off, reclassification,
recapitalization or similar corporate arrangement or otherwise) on the Common Stock, then the Conversion Price in effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other distribution shall be reduced, effective as of the close of business on such record date, to a price (calculated to the nearest
..001 of a cent) determined by multiplying such Conversion Price by a fraction: (x) the numerator of which shall be the Current Market Price in effect on such record date or, if the Common Stock
trades on an "ex" dividend basis, on the date prior to the commencement of ex-dividend trading, less the amount of such dividend or distribution (as determined in good faith by the Board
of Directors) applicable to one share of Common Stock and (y) the denominator of which shall be such Current Market Price. The Corporation shall not pay any such dividend or make any such
distribution on shares of Common Stock held in the treasury of the Corporation. 

        (vi)  If,
prior to the date on which shares of Convertible Preferred Stock are converted, the Corporation shall pay or make a dividend or other distribution on its Common
Stock (not being available on an equivalent basis to Holders of Convertible Preferred Stock upon conversion) in Common Stock, the Conversion Price in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be reduced, effective as of the close of business on such record date, to a
price (calculated to the nearest .001 of a cent) determined by multiplying such Conversion Price by a fraction: (x) the numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination; and (y) the denominator of which shall be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution. For the purposes of this subparagraph (vi), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury
of the Corporation but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Corporation will not pay any such dividend or make any
such distribution on shares of Common Stock held in the treasury of the Corporation. 

        (vii) If,
prior to the date on which all shares of Convertible Preferred Stock are converted, the Corporation shall issue, sell, grant or assume, or shall fix a record date
for the determination of holders of any class of securities entitled to receive, any Options or Convertible Securities (each as hereinafter defined), then, and in each such case, the maximum number of
shares of Common Stock (as set forth in the instrument relating thereto, without regard to any provisions contained therein for a subsequent
readjustment of such number the purpose of which is to protect against dilution) at any time issuable upon the exercise of such Options or, in the case of Convertible Securities and Option therefor,
the 

- 5 -

 

conversion or exchange of such Convertible Securities and Options therefor, shall be deemed to be shares of Common Stock issued at the time of such issue, sale, grant or assumption or, in case such a
record date shall have been fixed, as of the opening of business on the day following such record date (or if the Common Stock trades on an ex-dividend basis, on the date prior to
commencement of ex-dividend trading); provided, however, that such shares of Common Stock shall not be deemed to have been issued unless consideration per
share of such shares would be (calculated in accordance with clause (E) below) less than the greater of the Current Market Price or the Conversion Price in effect on the date of and immediately
prior to such issue, sale, grant or assumption or immediately prior to the close of business on such record date (or, if the Common Stock trades on an ex-dividend basis, on the date prior
to the commencement of ex-dividend trading), as the case may be, and provided, further, that: 

        (A)  whether
or not an adjustment of the Conversion Price is required in connection with the issuance, sale, grant or assumption of such Options or Convertible Securities, no
adjustment or further adjustment of the Conversion Price shall be made as a result of the exercise of such Options or the conversion or exchange of such Convertible Securities and the consequent issue
or sale of Convertible Securities or shares of Common Stock; 

        (B)  in
any case in which additional shares of Common Stock are deemed to be issued, if such Options or Convertible Securities by their terms provide, with the passage of
time or otherwise, for any increase in the consideration payable to the Corporation, or decrease in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof (by
change of rate or otherwise), the Conversion Price computed on the original issue, sale, grant or assumption thereof (or upon the occurrence of the record date, or data prior to the commencement of
ex-dividend trading; as the case may be, with respect thereof), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to
reflect such increase or decrease insofar as it affects such Options, or the rights of conversion or exchange under such Convertible Securities, which are outstanding at such time; 

        (C)  in
any case in which additional shares of Common Stock are deemed to be issued, upon the expiration (or purchase by the Corporation and cancellation or retirement) of
any such Options which shall not have been exercised, or the expiration of any rights of conversion or exchange under any such Convertible Securities the rights of conversion or exchange under which
shall not have been exercised, the Conversion Price computed upon the original issue, sale, grant or assumption thereof (or upon the occurrence of the record date, or date prior to the commencement of
ex-dividend trading, as the case may be, with respect thereto), and any subsequent adjustments based thereon, shall, upon (and effective as of) such expiration (or such cancellation or
retirement, as the case may be), be recomputed as if: 

- 6 -

  

        (x)  in
the case of Options or Convertible Securities, the only additional shares of Common Stock issued or sold were the additional shares of Common Stock, if any, actually
issued or sold upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received thereof or was the consideration actually received by the
Company upon such exercise, or for the issue or sale of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the
Corporation upon such conversion or exchange; and 

        (y)  in
the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued or sold upon the exercise of such Options were issued at the
time of the issue, sale, grant or assumption of such Options, and the consideration received by the Corporation for the additional shares of Common Stock deemed to have then been issued was the
consideration actually received by the Corporation for the issue, sale, grant or assumption of all such Options, whether or not exercised, plus the consideration deemed to have been received by the
Corporation upon the issue or sale of such Convertible Securities with respect to which such Options were actually exercised; and 

        (D)  no
readjustment pursuant to clause (B) or (C) above (either individually or cumulatively together with all prior readjustments as made in respect of such
Options or Convertible Securities) shall have the effect of increasing the Conversion Price by a proportion (relative to the Conversion Price in effect immediately prior to such readjustment) in
excess of the inverse of the aggregate proportional adjustment thereof made in respect of the issue, sale, grant or assumption of such Options or Convertible Securities or the fact that such Options
or Convertible Securities were outstanding at the time other shares of Common Stock, Option or Convertible Securities were issued; 

        (E)  Shares
of Common Stock deemed to have been issued pursuant to this subsection (vii) shall be deemed to have been issued for consideration per share determined by
dividing: (x) the total amount of cash and other property, if any, received and receivable by the Corporation as direct consideration for the issue, sale, grant or assumption of the Options or
Convertible Securities in question, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provisions contained therein
for subsequent adjustment of such consideration, the purpose of which is to protect against dilution) payable to the Corporation upon the exercise in full of such Options or the conversion or exchange
of such Convertible Securities or, in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible
Securities by (y) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment
of such number the purpose of which is to protect against dilution) issuable upon the exercise of such Option or the conversion or exchange of such Convertible Securities. 

        If
the consideration provided for in any Option or the additional consideration, if any, payable upon the conversion or exchange of any Convertible Security shall be reduced, or the rate
at which any Option is exercisable or any Convertible Security is convertible into or exchange for shares of Common Stock shall be increased, at any time under or by reason of provisions with respect
thereto designed to protect against dilution, then, effective concurrently with each such change, the Conversion Price then in effect shall first be adjusted to eliminate the effects (if any) of the
issuance (or deemed issuance) of such Option or Convertible Security on the Conversion Price and then readjusted as if such Option or Convertible Security had been issued on the date of such 

- 7 -

 

change with the terms in effect after such change, but only if as a result of such adjustment the Conversion Price then in effect hereunder is thereby reduced. For purposes of this subparagraph
(vii), "Options" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either shares of Common Stock or Convertible Securities other than options granted pursuant to
the Corporation's Amended and Restated 1988 Stock Option Plan and 1990 Non-Qualified Stock Option Plan for Non-Employee Directors, as the same may be amended from time to time
(the "Stock Option Plans"); provided, however, that the aggregate number of shares to be issued pursuant to any options granted pursuant to such plans, together with
shares of Common Stock issuable pursuant to the Corporation's Stock Purchase Plan, does not exceed 1,100,000, as proportionately adjusted in the case of stock splits and similar extraordinary events.
For purposes of this subparagraph (vii), "Convertible Securities" shall mean any evidence of indebtedness, shares of stock (other than Common Stock) or other securities directly or indirectly
convertible into or exchangeable for shares of Common Stock. For the purposes of the subparagraph (vii), the number of shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Company will not issue any rights or warrants
in respect of shares of Common Stock held in the treasury of the Company. 

        (viii)
If outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Price in effect at the opening of business
on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes
effective. 

        (ix)  If,
prior to the date on which the shares of Convertible Preferred Stock are converted, the Corporation shall (A) reorganize, reclassify or otherwise change the
number of outstanding shares of Common Stock, (B) consolidate with or merge with or into another person resulting in a reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock, (C) sell or otherwise transfer all or substantially all of the assets of the Corporation, then a Holder shall thereafter have the right to convert such Convertible
Preferred Stock into the kind and amount of stock, securities or assets, if any, such Holder would have been entitled to receive upon such reorganization, reclassification, consolidation, merger, sale
or transfer had such Holder converted its shares of Convertible Preferred Stock into Common Stock immediately prior to such transaction. 

        (x)  For
the purpose of any computation under this paragraph (b), the Current Market Price per share of Common Stock on any day shall be deemed to be the average of
the Last Sale Prices for the 5 consecutive trading days (i.e., Business Days on which the Common Stock is traded) selected by the Board of Directors commencing not more
than 20 trading days before, and ending not later than, the earlier of the day in question and the day before the "ex" date with respect to the issuance or distribution requiring such computation. For
this purpose, the term "ex date", when used with respect to any issuance or distribution, shall mean the first date on which the Common Stock trades regular way on the applicable exchange or in the
applicable market without the right to receive such issuance or distribution. 

        (xi)  No
adjustment in the Conversion Price shall be required unless such adjustment (plus any adjustments not previously made by reason of this subparagraph (xi)), would
require an increase or decrease of at least one-tenth (1/10) of one percent (1%) in such price; provided, 

- 8 -

 

however,
that any adjustments which by reason of this subparagraph (xi) are not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this subparagraph (xi) shall be made to the nearest cent. 

        (xii) The
Corporation may in its sole discretion, but need not, make such reductions, in the Conversion Price, in addition to those required by this paragraph as it
considers to be advisable in order to avoid or diminish any income tax to any Holders of shares of Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants
to purchase or subscribe for stock or from any event treated as such for income tax purposes or for any other reasons. 

        6.    Liquidation Price.    In the event any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the amount that shall be paid to the Holder of each share of Convertible Preferred Stock shall be the Base Amount and an additional sum
equal to all accrued and unpaid dividends which have not been added to the Base Amount, if any (hereinafter called the "Liquidation Price"), and no more. Upon any liquidation, dissolution or winding
up of the Corporation, the Holders of Convertible Preferred Stock will be entitled to be paid, after payment or provision for payment upon any outstanding shares of Senior Securities and of the debts
and other liabilities of the Corporation but before any distribution or payment is made upon any Junior Securities, an amount in cash equal to the aggregate Liquidation Price of all shares
outstanding, and the Holders will not be entitled to any further payment. If, upon any such liquidation, dissolution or winding up of the Corporation, the Corporation's assets to be distributed among
the Holders and the holders of Parity Securities ("Parity Holders") are insufficient to permit payment to such Holders and Parity Holders of the aggregate amount which they are entitled to be paid,
then the available assets to be distributed will be distributed ratably among such Holders and Parity Holders based upon the aggregate Liquidation Price of the Convertible Preferred Stock and the
aggregate liquidation preference of any Parity
Securities held by each such Holder and Parity Holders, respectively. The Corporation will mail written notice of such liquidation, dissolution or winding up not less that 60 days prior to the
payment date stated therein, to each Holder of record. Neither the consolidation or merger of the Corporation into or with any other corporation or corporations, nor the sale or transfer by the
Corporation of all or any part of its assets, nor the reduction of the capital stock of the Corporation will be deemed to be a liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 6. 

        7.    Redemption by the Corporation.    

        (a)  Optional
Redemption.    All (but not less than all) of the Convertible Preferred Stock may be redeemed (subject to the rights of
any outstanding Senior Securities), out of funds legally available therefor, at the option of the Corporation by action of the Board of Directors, at any time on or after the later to occur of (the
"First Redemption Date"): (i) the third anniversary of the date on which shares of the Convertible Preferred Stock are first issued; or (ii) the first date on which all outstanding
shares of 10% Preferred Stock have been redeemed or otherwise acquired by the Corporation and all accrued and unpaid dividends on the 10% Preferred Stock have been paid, upon notice and in the manner
provided below ("Optional Redemption"). The Holders of the Convertible Preferred Stock shall be entitled to receive upon such Optional Redemption thereof the sum of: (x) the Base Amount;
(y) $1.50 per share; and (z) an amount equal to all accrued and unpaid dividends which have not been added to the Base Amount, if any (the "Optional Redemption Price"), and no more. (Any
such date which is a Business Day designated in the notice for optional redemption of the Convertible Preferred Stock, an "Optional Redemption Date"). 

        (b)  Mandatory
Redemption.    Notwithstanding the provisions of subsection (a) above, the Corporation shall mandatorily redeem
all of the Convertible Preferred Stock, out of funds 

- 9 -

 

legally available therefor, on the later to occur of: (i) the First Redemption Date; or (ii) March 28, 1998 (the "Mandatory Redemption Date" and together with the Optional
Redemption Date, a "Redemption Date"), upon notice and in the manner provided below. The Holders of the Convertible Preferred Stock shall be entitled to receive upon such mandatory redemption thereof
the Base Amount plus an amount equal to all accrued and unpaid dividends which have not been added to the Base Amount, if any (the "Redemption Price") and no more. 

        (c)  Procedure
for Optional Redemption.    The Convertible Preferred Stock shall be redeemed by the Corporation in the following
manner: 

        (i)    Shares
of Convertible Preferred Stock redeemed, purchased or otherwise acquired by the Corporation may be held as treasury shares (and, subject to Section 9
hereof, may be sold or disposed of) or may be reclassified or retired and cancelled as may be determined by the Board of Directors. 

        (ii)  Notice
of redemption of all shares of Convertible Preferred Stock shall be given by the Corporation not less than 15 nor more than 50 days prior to the
Redemption Date, by mail to the Holders of record of such shares at their respective addresses then appearing on the records of the Corporation. Each such notice of redemption shall specify the
Redemption Date and the Redemption Price or the Optional Redemption Price, as the case may be, and the place or places of payment. The conversion rights of the Holders shall continue until the
Redemption Date (provided no default by the Corporation in the payment of the Optional Redemption Price or the Redemption Price, as the case may be, shall have occurred and be continuing, and in the
event of any such default the Holders' conversion rights shall continue until such shares are actually redeemed or converted) and such notice shall state the then effective Conversion Price and that
the right of Holders to exercise their conversion rights shall terminate at the close of business on the Redemption Date (provided no default by the Corporation in the payment of the Optional
Redemption Price or the Redemption Price, as the case may be, shall have occurred and be continuing). On or before the Redemption Date, each Holder shall surrender to the Corporation or its designated
agent, at such place as it may designate in the redemption notice, certificates, duly endorsed for transfer, evidencing the number of shares of Convertible Preferred Stock held by such Holder. Upon
such surrender, the Holder shall be entitled to receive payment of the Optional Redemption Price or the Redemption Price, as the case may be, without interest. 

        (iii)  If
on the Redemption Date (A) notice of redemption has been mailed or delivered as provided herein, (B) the Corporation has set aside all funds necessary
to pay the amount due for all shares of Convertible Preferred Stock subject to redemption, and (C) all such funds are available for the sole purpose of paying such amount, then, unless the
Corporation defaults on the payment of the Optional Redemption Price or the Redemption Price, as the case may be, all shares of Convertible Preferred Stock subject to redemption shall, whether or not
the certificates for such shares have been surrendered for cancellation, be deemed to be no longer outstanding for any purpose and all rights with respect to such shares shall cease, except the right
of the Holder to receive the Optional Redemption Price or the Redemption Price, as the case may be, without interest. If the Corporation shall not have funds legally available for redemption of shares
to be redeemed pursuant to this Section 7 on the Redemption Date, such redemption shall be made on the earliest practicable date next following the Business Day on which the Corporation shall
first have funds legally available for the redemption of such shares as shall be specified in the notice of redemption; provided, however, that the Corporation 

- 10 -

 

shall not have to so redeem any shares of Convertible Preferred Stock which have been converted into Common Stock prior to the date of such redemption. 

        8.    Redemption of Options of Holders.    

        (a)  At
any time and from time to time from and after the First Redemption Date, a Holder of shares of Convertible Preferred Stock shall be entitled to require the
Corporation to redeem, out of funds legally available therefor, any or all of the shares of Convertible Preferred Stock held by such Holder upon notice and in a manner provided below. Any such Holder
of the Convertible Preferred Stock shall be entitled to receive upon any such redemption thereof an amount per share equal to the Redemption Price and no more. 

        (b)  Procedures
for Redemption.    The Convertible Preferred Stock shall be redeemed pursuant to subsection (a) above in the
following manner: 

        (i)    Shares
of Convertible Preferred Stock redeemed, purchased or otherwise acquired by the Corporation may be held as treasury shares (and, subject to Section 9
hereof, may be sold or disposed of) as may be reclassified, retired and cancelled as may be determined by the Board of Directors. 

        (ii)  Notice
of redemption of any shares of Convertible Preferred Stock shall be given by the Holder to the Corporation by mail at the Corporation's principal offices (the
"Holder Redemption Notice"). Each such Holder Redemption Notice shall specify the number of shares to be redeemed. Any such redemption shall be made on the tenth (10th) business day following receipt
by the Corporation of a Holder Redemption Notice (the "Holder Redemption Date"). The right of Holders to exercise their conversion rights shall terminate as to shares indicated in the Holder
Redemption Notice at the close of business on the Holder Redemption Date (provided no default by the Corporation in the payment of the Redemption Price shall have occurred and be continuing). On or
before the Holder Redemption Date, each Holder who has delivered a Holder Redemption Notice to the Corporation shall surrender to the Corporation or its designated agent, at such place as it may
designate in a written notice delivered by the Corporation to such Holders (which notice shall be delivered by the Corporation to such Holders within two (2) business days of receipt of the
Holder Redemption), certificates duly endorsed for transfer, evidencing a number of shares of Convertible Preferred Stock at least equal to the number of shares held by such Holder indicated in such
Holder's Redemption Notice. Upon such surrender, the Holder shall be entitled to receive payment of the Redemption Price, without interest, and, in the event of partial redemption, a certificate
representing the balance, if any, of shares of Convertible Preferred Stock covered by the surrendered certificate or certificates but not subject to the mandatory redemption. 

        (iii)  If
on the Holder Redemption Date (A) notice of redemption has been mailed or delivered as provided herein, (B) the Corporation has set aside funds
necessary to pay the amount due for all shares of Convertible Preferred Stock subject to such redemption, and (C) all such funds are available for the sole purpose of paying such amount, then,
unless the Corporation defaults on the payment of the Redemption Price, all shares of Convertible Preferred Stock subject to redemption shall, whether or not the certificates for such shares have been
surrendered for cancellation, be deemed to be no longer outstanding for any purpose and all rights with respect to such shares shall cease, except the right of the Holder to receive the Redemption
Price, without interest. If the Corporation shall not have funds legally available for redemption of shares to be redeemed pursuant to this Section 8 on the Holder Redemption Date, such
redemption shall be made on the earliest practicable date next following the Business Day on which the Corporation shall first have funds legally available for redemption of such shares as 

- 11 -

 

shall be specified on the notice of redemption; provided, however, that the Corporation shall not have to so redeem any shares of Convertible Preferred Stock which have
been converted to Common Stock prior to the date of such redemption. 

        9.    Additional Preferred Stock.    The Corporation may not, without the affirmative
vote of the Holders of a majority of the outstanding shares of the Convertible Preferred Stock: (i) create and/or issue any shares of any class or series of Senior Securities, Parity Securities
or other preferred stock which, in any such case, has a preference, as to dividends, Distributions, liquidation and/or redemption, senior or on parity with the Convertible Preferred Stock;
(ii) enter into any agreement, document or instrument, including, without limitation, any indenture or loan agreement, or any amendment or modification of any of the foregoing, which will in
any way limit, prevent or restrict the Corporation's right and/or ability to pay dividends on or redeem shares of the Convertible Preferred Stock as provided herein, or limit, prevent or restrict the
Convertible Preferred Stock as provided herein, or limit, prevent or restrict the Convertible Preferred Stock from being converted into shares of Common Stock as provided herein; (iii) alter or
change the provisions of the Corporation's Certificate of Incorporation, as amended and restated, so as to adversely effect the preferences or special rights of the Holders; or (iv) increase
the par value of the Common Stock receivable upon conversion of the Convertible Preferred Stock above the then applicable Conversion Price. The Corporation will take all such actions as may be
necessary or appropriate in order that the Corporation may validity and legally issue fully-paid and non-assessable shares of Common Stock on the conversion of all shares of
Convertible Preferred Stock from to time to time outstanding. 

        IN
WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by Henry Green, its President, and attested by Stanley S. Anders III, its Secretary, as of this 26th day of
March, 1991. 

	 	 	 	 	 	ADVANCED MEDICAL, INC.	 	 
	

 	

 	
 	

 	
 	

By	

/s/  Henry Green      
	
 	

 
	 	 	 	 	 	 	Name:	Henry Green	 	 
	 	 	 	 	 	 	Title:	President	 	 
	ATTEST	 	 	 	 	 	 	 	 
	

/s/  Stanley S. Anders III      
	
 	

 	
 	

 	

 	

 	
 	

 
	Name:	Stanley S. Anders III	 	 	 	 	 	 	 	 
	Title:	Secretary	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 

- 12 -

 
 

CERTIFICATE OF AMENDMENT    
    
    OF RESTATED CERTIFICATE OF INCORPORATION    
    
    OF    
    
    ADVANCED MEDICAL, INC.    
    
    Pursuant to Section 242 of the General
Corporation Law    
    
    of the State of Delaware    
  

        Advanced Medical, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify as follows: 

        FIRST:    That
the name of the Corporation is Advanced Medical, Inc. 

        SECOND:    That
the Certificate of Incorporation of the Corporation was filed with the Secretary of State on behalf of the Company on September 28, 1988, a Restated
Certificate of Incorporation was filed with the Secretary of State on January 20, 1989 and that an Amendment to the Certificate of Incorporation was filed with the Secretary of State on
September 7, 1990. 

        THIRD:    That
the Board of Directors of the Corporation by a special meeting of the Board of Directors adopted a resolution proposing and declaring it advisable to amend the
Certificate of Incorporation to increase the authorized number of shares of Common Stock, par value $.01 per share of the Corporation, from thirty million (30,000,000) shares to seventy five million
(75,000,000) shares. 

        FOURTH:    That
said amendment has been consented to and authorized by the required percentage of the issued and outstanding stock entitled to vote in accordance with
Section 228 of the General Corporation Law of the State of Delaware. 

        FIFTH:    That
in connection with the foregoing, Article Fourth of the Certificate of Incorporation of the Corporation is hereby deleted in its entirety and substituted
therefor is the following new Article Fourth (the Certificate of Designation filed by the Corporation on March 23, 1989 and March 26, 1990 shall not be effected by this amendment and
shall remain in effect): 

"FOURTH:
The total number of shares of stock that the Corporation shall have authority to issue is 84,000,000 shares, of which 3,000,000 shares shall be Preferred Stock, par value $.01 per share (the
"Preferred Stock"), 6,000,000 shares shall be $.001 Preferred Stock, par value $.001 per share (the "$.001 Preferred Stock") and 75,000,000 shares shall be Common Stock, par value $.01 per share, and
the voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, in respect of the classes of
stock of the Corporation are as follows: 

	1.
	Preferred
Stock 

(a)    The
Preferred Stock may be issued from time to time in one or more series, each of which shall be distinctively designated, shall rank equally and shall be identical in all respects
except as otherwise provided pursuant to subsection 1(b) of this Article FOURTH. 

(b)    Authority
is hereby vested in the Board of Directors to issue from time to time the Preferred Stock of any series and to state in the resolution or resolutions providing for the issue
of shares of any series, the voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of
such series to the full extent permitted by this Certificate of Incorporation and the law of the State of Delaware in respect of the following: 

(1)    the
number of shares to constitute such series, and the distinctive designations thereof; 

(2)    the
voting powers, full or limited, if any, of such series; 

 

(3)    the
redemption price or prices, if any, and the time or times at which, and the terms and conditions on which, shares of such series shall be redeemable; 

(4)    the
rate of dividends payable on shares of such series, the conditions on which and the time when such dividends are payable, the preference to, or the relation to, the payment of the
dividends payable on any other class or classes or any other series of stock, whether cumulative or non-cumulative, and, if cumulative the dates from which dividends on shares of such
series shall be cumulative; 

(5)    the
rights of shares of such series upon the liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation; 

(6)    the
rights, if any, of the holders of shares of such series to convert such shares into, or to exchange such shares for, shares of any other class, classes or series of stock and the
price or prices or the rates of exchange and the adjustments at which such shares shall be convertible or exchangeable, and any other terms and conditions of such conversion or exchange; 

(7)    the
requirement of any sinking fund or funds to be applied to the purchase or redemption of shares of such series and, if so, the amount of such fund or funds and the manner of
application; and 

(8)    any
other preferences and relative, participating, optional or other special rights of shares of such series, and the qualifications, limitations or restrictions thereof, including,
without limitation, any restriction on an increase in the number of shares of any series theretofore authorized and any qualifications, limitations or restrictions of rights and powers to which shares
of any future series shall be subject. 

	2.
	$.001
Preferred Stock 

(a)    The
$.001 Preferred Stock may be issued from time to time in one or more series, each of which shall be distinctively designated, shall rank equally and shall be identical in all
respects except as otherwise provided pursuant to subsection 2(b) of this Article FOURTH. 

(b)    Authority
is hereby vested in the Board of Directors to issue from time to time the $.001 Preferred Stock of any series and to state in the resolution or resolutions providing for the
issue of shares of any
series, the voting powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such series to the
full extent permitted by this Certificate of Incorporation and the law of the State of Delaware; provided, that the number of authorized shares of $.001 Preferred Stock
may be increased or decreased (but not below the number of shares thereof then outstanding) without a separate vote of the holders of the $.001 Preferred Stock, or of any series thereof, unless the
certificate of designation creating such series expressly provides for such vote. 

	3.
	Common
Stock 

(a)    The
rights of holders of Common Stock to receive dividends or to share in the distribution of assets in the event of liquidation, dissolution or winding up of affairs of the
Corporation shall be subject to the preferences and other rights of the Preferred Stock and the $.001 Preferred Stock fixed in the resolution or resolutions of the Board of Directors providing for the
issue of such Preferred Stock or $.001 Preferred Stock. 

(b)    The
holders of Common Stock shall be entitled to one vote for each share of Common Stock held by them of record at the time for determining the holders thereof entitled to vote." 

2

 

        SIXTH:    That
this Amendment to the Certificate of Incorporation of the Corporation was made pursuant to Sections 228 and 242 of the Delaware General Corporation Law. 

        IN
WITNESS WHEREOF Advanced Medical, Inc. has caused this certificate to be signed by its duly authorized officer this 11th day of August, 1994. 

	 	 	ADVANCED MEDICAL, INC.
	

 	
 	

By:	

/s/  Joseph W. Kuhn      
 Vice President, Chief

Financial Officer	
 	

 
	 	 	 	 	 	 
	 	 	 	 	 	 

3

 
 

CERTIFICATE OF AMENDMENT OF
  RESTATED CERTIFICATE OF INCORPORATION
  OF
  ADVANCED MEDICAL, INC.
  
  
  PURSUANT TO SECTION 242 OF THE
  GENERAL CORPORATION LAW OF THE STATE OF DELAWARE    

        Advanced Medical, Inc. (the "Corporation"), a corporation organized and existing under the laws of Delaware, does hereby certify as follows: 

        FIRST:    That
the name of the Corporation is Advanced Medical, Inc. 

        SECOND:    That
the Certificate of Incorporation was originally filed with the Secretary of State on September 28, 1988 under the name Advanced Medical
Technologies, Inc., a Restated Certificate of Incorporation was filed with the Secretary of State on January 20, 1989 and that an Amendment to the Certificate of Incorporation was filed
with the Secretary of State on September 7, 1990. 

        THIRD:    The
Board of Directors of the Corporation, at a meeting held in accordance with Section 141 of the General Corporation Law of the State of Delaware
("DGCL"), adopted a resolution proposing and declaring it advisable to amend the Certificate of Incorporation of the Corporation to change the name of the Corporation to ALARIS
Medical, Inc. 

        FOURTH:    That
said amendment has been consented to and authorized by the written consent of the holders of the required percentage of the Company's issued and outstanding
common stock in accordance with the provisions of Sections 228 and 242 of DGCL. 

        FIFTH:    That
in connection with the foregoing, Article FIRST of the Certificate of Incorporation of the Corporation is hereby deleted in its entirety and substituted therefor
is the following new Article FIRST. 

        "First:
The name of the corporation is ALARIS Medical, Inc." 

        SIXTH:
That this Amendment to the Certificate of Incorporation was made pursuant to Sections 228 and 242 of the Delaware Corporation Law. 

        IN
WITNESS WHEREOF, said Corporation has caused this Certificate to be signed by its duly authorized officer this 25th day of April, 1997. 

	 	 	/s/  William J. Mercer      
 William J. Mercer, President

and Chief Executive Officer	 	 
	 	 	 	 	 
	 	 	 	 	 

QuickLinks

RESTATED CERTIFICATE OF INCORPORATION OF ADVANCED MEDICAL TECHNOLOGIES, INC. (Originally incorporated on September 28, 1988)

CERTIFICATE OF VOTING POWERS, DESIGNATION, RIGHTS, PREFERENCES AND RESTRICTIONS OF 10% CUMULATIVE PREFERRED STOCK

CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF ADVANCED MEDICAL TECHNOLOGIES, INC.

CERTIFICATE OF VOTING POWERS, DESIGNATION, RIGHTS, PREFERENCES AND RESTRICTIONS OF CONVERTIBLE PREFERRED STOCK

CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF ADVANCED MEDICAL, INC. Pursuant to Section 242 of the General Corporation Law of the State of Delaware

CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF ADVANCED MEDICAL, INC. PURSUANT TO SECTION 242 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWAREQuickLinks
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EXHIBIT 10.20    
  

       

 
 

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

i

 

	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	 	 

ii

  

        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: 

        (a)  PayPal
appoints and retains Wells Fargo Bank as its provider of Credit Card Payment Processing Services with respect to Domestic Transactions; and 

        (b)  Wells
Fargo Bank accepts such appointment and retention and agrees to provide such Credit Card Payment Processing Services with respect to Domestic Transactions during
the term of this Agreement. 

        2.2    Wells Fargo as Payment Processor.    

        (a)  PayPal
and Wells Fargo Bank each acknowledge and agree that the Credit Card Payment Processing Services to be provided by Wells Fargo Bank hereunder include credit card
payment through Visa, MasterCard, American Express and DiscoverCard only. 

        (b)  PayPal
acknowledges and agrees that the Credit Card Payment Processing Services provided hereunder do not include risk or fraud management, dispute management or
electronic check services. 

        (c)  Within
six (6) months after the Effective Date, PayPal shall complete the transition, with respect to Domestic Transactions, of all credit card payment processing
offered or used by PayPal and its Affiliates to the Credit Card Payment Processing Services provided by Wells Fargo Bank hereunder. After such six (6) month period, with respect to Domestic
Transactions only, neither PayPal nor any of its Affiliates will offer to its Customers or use Credit Card Payment Processing Services provided by any Person other than Wells Fargo Bank. If PayPal
fails to complete the transition to Credit Card Payment Processing Services provided by Wells Fargo Bank hereunder, PayPal shall pay Wells Fargo Bank an additional fee in the amount of
[*] within thirty (30) days after the end of such six (6) month period. No payment shall be due if the delay is caused primarily by: (i) the action or inaction of Wells
Fargo or (ii) refusal of the card associations to allow processing of Transactions by Wells Fargo Bank as contemplated hereunder. 

        (d)  PayPal,
for itself and on behalf of its Affiliates, agrees that during the term of this Agreement neither PayPal nor any of its Affiliates will enter into an agreement
with any Person 

1

 

other than Wells Fargo Bank under which such other Person would provide, directly or indirectly, Domestic Credit Card Payment Processing Services (i) to PayPal or (ii) its Customers for
PayPal Transactions, except that PayPal may enter into an agreement with a Person other than Wells Fargo Bank for Credit Card Payment Processing Services solely for Transactions with respect to
[*] transactions. 

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. 

2

 

        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. 

3

 

        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.    

        (a)  For
each Transaction, PayPal will provide Wells Fargo Bank with complete Transaction Information. Wells Fargo Bank will not be obligated to process any Transaction with
respect to which complete Transaction Information has not been provided or for which the Transaction Information cannot be confirmed. 

        (b)  In
order to facilitate the provision of the Credit Card Payment Processing Services by Wells Fargo Bank, PayPal will: 

          (i)  transmit
or make available to Wells Fargo Bank the Transaction Information in accordance with Section 4.4(a) promptly upon receipt from each prospective Customer
(but, only if such prospective Customer has agreed to be bound by the applicable PayPal User Agreement); and 

        (ii)  cause
the PayPal System to interface with the WFB Operating System, as contemplated by Section 3.7. 

        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.    

        (a)  The
form of each PayPal User Agreement with respect to the terms related to the Credit Card Payment Processing Services shall be as from time-to-time mutually agreed
upon by PayPal and Wells Fargo Bank. Each of PayPal and Wells Fargo Bank agrees that (i) if the other party requests a change to such form of PayPal User Agreement that relates to the terms of
this Agreement, the non-requesting party shall promptly review the proposed change and (ii) the non-requesting party shall not unreasonably delay or withhold consent to a proposed change.
PayPal will use reasonable efforts to implement the revised PayPal User Agreement (once final language respecting the proposed revision has been mutually agreed to) by posting the revised PayPal User
Agreement to its website, at the next scheduled content release occurring at least [*] days after the final language has been mutually agreed upon, but shall in any event
implement the revised PayPal User Agreement no later than the date that is [*] days after the date that the final language has been mutually agreed upon. 

4

 

        (b)  Without
limiting Section 4.7(a), if Wells Fargo Bank requests a proposed change to the PayPal User Agreement that it believes is required by the rules or by-laws
of a credit card association or by Applicable Law and so indicates in its initial submission of such request to PayPal, (x) PayPal will review the proposed change and indicate its acceptance or
rejection thereof within [*] Business Days of receipt of notice of the proposed change from Wells Fargo Bank, provided however that PayPal may only reject the proposed change
if PayPal reasonably believes that such change is not so required, (y) if PayPal does not accept the proposed change, each of PayPal and Wells Fargo Bank will negotiate in good faith to reach
agreement with respect to an acceptable change that accommodates the interests of each party within [*] Business Days of PayPal's receipt of notice of the proposed change from
Wells Fargo Bank, and (z) PayPal will implement the revised PayPal User Agreement (once final language respecting the proposed revision has been mutually agreed to) by posting the revised
PayPal User Agreement to its website, as appropriate, no later than [*] calendar days after receipt of notice of the proposed change from Wells Fargo Bank under this
Section 4.7(b). 

        (c)  PayPal
will indemnify Wells Fargo Bank, and hold it harmless from, any Covered Costs arising from or related to its failure to implement a change to the PayPal User
Agreement requested by Wells Fargo Bank under this Section 4.7 within the applicable time frames provided by this Section 4.7. 

        Section
4.8    Reports.    

        (a)  Wells
Fargo Bank will provide PayPal with a daily report with respect to PayPal Transactions processed by Wells Fargo Bank. This Beginning of Day (BOD) report will
include information related to any exceptions that occurred during the prior Business Day. Each exception contains the Customer ID and Order ID for the Transaction resulting in the exception. The BOD
file may include exceptions in connection with: 

          (i)  credit
card Transaction settlement requests that were rejected by the credit card settlement system; and 

        (ii)  Chargebacks,
retrieval requests and chargeback reversals. 

        (b)  Wells
Fargo Bank will also provide PayPal with an automated Acknowledgement (ACK) report upon receipt and processing of each credit card settlement file received from
PayPal; such ACK report shall contain a detailed log comprised of a single status record for each Transaction/settlement request submitted by PayPal in such file. 

        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.    

        (a)  Wells
Fargo Bank agrees (x) to use reasonable efforts to provide PayPal with notice of changes to credit card association by-laws and rules applicable to PayPal
within [*] days after receiving notice thereof, but to provide such notice in no event later than [*] days after receiving notice from the applicable
credit card association thereof, and (y) if Wells Fargo Bank receives 

5

 

notice from any credit card association that any Transaction processed by Wells Fargo Bank under this Agreement is not in compliance with any rules of such credit card association, to notify PayPal
within [*] Business Days after receiving such notice from a credit card association. 

        (b)  PayPal
will ensure that each Transaction submitted to Wells Fargo Bank for processing under this Agreement is able to be processed hereunder as submitted, and complies
with Applicable Law as well as any credit card association by-laws or rules, as they may be amended from time to time, and PayPal will be responsible, and promptly reimburse Wells Fargo Bank, for any
fees, fines or penalties related to any breach of its agreement set forth in this sentence; provided, however that if (i) an amendment to association by-laws and rules is not communicated to
PayPal in accordance with Section 4.11(a) and (ii) as a result, PayPal fails to comply with such amendment, then PayPal will not be responsible for fees, fines or penalties that directly
result from the failure to comply with such amendment, which failure occurs within [*] days after the time in which PayPal is notified of such amendment. Wells Fargo Bank will
be entitled to directly debit the PayPal Operating Account for the amount of any such fees and penalties. 

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 

6

 

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 

7

 

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 

	(i)
	by
Wells Fargo Bank's instruction to the relevant Buyer or its bank or credit card issuer to deposit, or

	(ii)
	by
itself depositing such funds on the Business Day following the Business day on which such funds were received by Wells Fargo Bank, if a Buyer or its
bank or credit card issuer makes payment to Wells Fargo Bank in some other manner, 

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 

8

 

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 

9

 

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: 

        (i)    PayPal
will deliver scope of work to Wells Fargo Bank who will return to PayPal a project sizing along with commercially reasonable development fees. Wells Fargo Bank
and PayPal will discuss the development, and if the parties agree to undertake the development, the parties will enter into a separate agreement or amend this Agreement with respect thereto. If PayPal
and Wells Fargo Bank mutually agree to proceed with such development, PayPal will reimburse Wells Fargo Bank for its development cost. Wells Fargo Bank will bill such fees and expenses as part of the
Fee Calculation Statement, and such fees and expenses will be payable via the same procedures as the payment of the Transaction Fees hereunder. Unless otherwise agreed, Wells Fargo Bank agrees that
any intellectual property provided by PayPal to Wells Fargo Bank for use in, or directly resulting from, the development of any process or technology funded by PayPal pursuant to this Section will not
be disclosed by Wells Fargo Bank to [*], will not be provided by Wells Fargo Bank to [*] for any use, nor will the request for such development be
disclosed directly, or indirectly, to [*] 

        (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. 

10

   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: 

        (i)    Each
Receiving Party acknowledges that, in the course of its relationship with Disclosing Party, Receiving Party and its employees, subcontractors, officers and agents
will acquire or have access to information of various kinds respecting Disclosing Party, its business and its customers as well as the businesses and customers of its Affiliates. Receiving Party
acknowledges that all information disclosed by Disclosing Party to Receiving Party or its employees, subcontractors, officers or agents, for the purposes of work, or which comes to the attention of
Receiving Party, its employees, subcontractors, officers and agents, during the course of such work, is confidential in nature, constitutes a valuable asset of Disclosing Party, is proprietary to
Disclosing Party, and is properly the subject of protection. Each Receiving Party also acknowledges that Disclosing Party and Disclosing Party's Affiliates have a responsibility to their customers to
keep customer records strictly confidential and proprietary. Each Receiving Party further acknowledges that Disclosing Party and its Affiliates may have proprietary or confidential information of
third parties that they may rightfully use in the course of their businesses. Each Receiving Party further agrees that any entity or person who obtains or is provided access to Confidential
Information (as defined below) as an agent or contractor of Disclosing Party may obtain or have access to such Confidential Information only for the purpose of carrying out the performance of specific
terms of this Agreement, and, in such case, the agent or contractor (other than employees of the Receiving Party): (1) must be approved by Disclosing Party in writing in advance; and (2) must agree in
writing, independently, to be bound by the terms set forth in this Section; and (3) must agree in writing, independently, to use such Confidential Information only for the purpose of carrying out the
performance of specific terms of this Agreement. 

        (ii)  Each
Receiving Party agrees that neither it nor any of its employees, subcontractors, officers or agents shall, during the term of this Agreement or thereafter, without
the prior written consent of Disclosing Party, use, disclose or otherwise make available to any person or entity (except as permitted under Section 6.3(c)-(d) or as required in performing Receiving
Party's services or other obligations under this Agreement) any Confidential Information (as defined below) of Disclosing Party or any of its Affiliates. Each Receiving Party further agrees that it
will instruct its employees, subcontractors, officers and agents not to use (except for the purposes of this Agreement), disclose, sell, lease, assign,
transfer, copy or reveal any Confidential Information obtained pursuant to this Agreement without the prior written consent of Disclosing Party. Each Receiving Party will take all steps necessary to
ensure fulfillment of this obligation including the establishment and maintenance of such policies and procedures as may be necessary to ensure compliance with these obligations. Each Receiving Party
shall return, or certify the destruction of, all confidential information to Disclosing Party when it is no longer required by Receiving Party in order to carry out its performance under this
Agreement. 

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

        (i)    Any
and all information or data, provided by, through, or on behalf of Disclosing Party or any of its Affiliates to Receiving Party (or any of Receiving Party's agents
and contractors approved by Disclosing Party in advance under this Agreement), about or relating to any customer or prospective or former customer of Disclosing Party or any of its Affiliates (whether
an individual, business entity, governmental unit, or otherwise) or any consumer of Disclosing Party or any of its Affiliates, including (without limitation) any and all non-public personal
information of 

11

 

Disclosing Party or any of its Affiliates on their consumers or customers (within the meaning of Title V of the Gramm-Leach-Bliley Act and its implementing regulations) made available to
Disclosing Party (or such agents and contractors of Disclosing Party). 

        (ii)  Any
and all confidential business, technical or data processing information, trade secret or other proprietary information acquired by Receiving Party or any consultant
in the course of performance of this Agreement or as a result of access to the premises of Disclosing Party or any of its Affiliates, whether or not conceived of or prepared by Receiving Party or any
consultant, whether or not reduced to writing, and whether or not in human readable or machine readable form, including, without limitation, any information concerning data processing concepts,
techniques, or procedures, software in various stages of development, discoveries, ideas, inventions, operations, data, designs, drawings, diagrams, specifications, documentation, research, know-how,
compilations of information, records, costs, purchasing data, financial data, payment volumes, chargeback rates, accounting, marketing and development plans, sales, pricing, profits, business plans or
procedures, data, employee information and other information not generally known to non-Disclosing Party personnel. Proprietary and Other Confidential Information also includes any and all information
described in this subsection (ii) which Disclosing Party obtains from another party and treats as proprietary or designates as confidential information, whether or not owned or developed by
Disclosing Party. Proprietary and Other Confidential Information (but not the information described in subsection (i) above) shall cease to be Confidential Information after it has been
voluntarily disclosed to the public by Disclosing Party or independently developed and disclosed by others without any violation of confidentiality obligation, or has otherwise entered the public
domain through lawful means. In any dispute with respect to these exclusions, the burden of proof will be on Receiving Party to show that the exclusion applies. 

        (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 

12

 

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), 

13

 

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 

14

 

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. 

        If
to PayPal to: 

Todd
Pearson

Senior Vice President

PayPal, Inc.

303 Bryant St.

Mountain View, CA 94041

Email: todd@paypal.com 

15

 

        With
copy to: 

John
Muller

General Counsel

PayPal, Inc.

303 Bryant St.

Mountain View, CA 94041

Email: jmuller@paypal.com 

        If
to Wells Fargo Bank to: 

Debra
B. Rossi

Executive Vice President

Wells Fargo Bank, N.A.

MAC A0347-023

1200 Montego Way

Walnut Creek, CA 94598

Email: drossi@wellsfargo.com 

John
D. Wright

Vice President and Assistant General Counsel

Wells Fargo Law Department

MAC A0149-077

633 Folsom Street, 7th Floor

San Francisco, CA 94107-3618

Email: johnw@wellsfargo.com 

Michelle
Banaugh

Senior Vice President

Wells Fargo Bank, N.A.

MAC A0347-023

1200 Montego Way

Walnut Creek, CA 94598

Email: banaugh@wellsfargo.com 

        With
a copy to: 

Christine
F. Nakagawa

Pillsbury Winthrop LLP

2550 Hanover Street

Palo Alto, CA 94304

Facsimile: (650) 233-4545

Email: cnakagawa@pillsburywinthrop.com 

        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. 

16

 

        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. 

[REMAINDER
OF THE PAGE LEFT BLANK INTENTIONALLY] 

17

 

        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

18

  

 
 

ANNEX A    
  

 
  DEFINITIONS AND INTERPRETATION    
  

 Interpretations.  

        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. 

 Certain Defined Terms.  

        "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. 

A-1

 

        "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: 

	(i)
	Registration
Information; and

	(ii)
	Transaction
Information; 

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. 

A-2

 

        "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. 

A-3

 

        "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: 

	(i)
	authorization
and/or approval response(s) for transaction requests; and

	(ii)
	reason(s)
and/or reason code(s) associated with such response(s). 

        "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. 

A-4

  

 
 

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. 

B-1

  

 
 

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:    

        2.1.    SYSTEMS AVAILABILITY:    Availability refers to the availability of the WFB Operating Systems under Wells
Fargo Bank's operational responsibility in both production and test. Wells Fargo Bank will maintain appropriate staffing to meet the stated availability for services provided. 

Production Authorization Services: Wells Fargo Authorization Services will be operational, a minimum of [*] of the time over 365
days, except for scheduled down times and special requests mutually agreed to by both parties. Any unscheduled downtime shall not exceed [*] at any time, and shall not exceed
[*] hours within a rolling twenty-four (24) hour period commencing with receipt of notification of the first outage. Scheduled downtimes shall not occur during the hours of
5:00 am through 10:00 pm Pacific Monday thru Friday. 

Development/Test Authorization Services: Wells Fargo Authorization Services will be operational, a minimum of [*] of the time
over 365 days, except for scheduled down times and special requests
mutually agreed to by both parties. Scheduled downtimes shall not occur during the hours of 5:00 am through 10:00 pm Pacific Monday thru Friday as mutually agreed between parties. 

        2.2.    AVERAGE RESPONSE TIME:    Using the Direct Connect (Private Network) architecture, the Average Response Time
for Wells Fargo Bank's server to send authorization responses to PayPal shall not exceed [*] on average over any 60 minute period. If the Average Response Time exceeds
[*], and Wells Fargo Bank can attribute the excessive time to PayPal's connectivity to Wells Fargo Bank, the card associations, Issuing Banks or other third parties beyond
Wells Fargo Bank's control, Wells Fargo Bank shall not be responsible. Expected response time for the Internet/XML connection will [*] noting high-usage variability that is
beyond Wells Fargo Bank's control. 

        3.    SECURITY PROCEDURES:    

	1.
	PayPal
agrees that Wells Fargo Bank personnel will be responsible for determining and maintaining all levels of security residing on Wells Fargo Bank's hardware or systems. Wells Fargo
Bank agrees that PayPal personnel will be responsible for determining and maintaining all levels of security residing on PayPal's hardware or systems.

	2.
	PayPal
agrees that the security provided at PayPal's end of the connection will not allow unauthorized traffic to pass into PayPal networks from the common Internet or other
connection. Wells Fargo Bank agrees that the security provided at Wells Fargo Bank's end of the connection will not allow unauthorized traffic to pass into Wells Fargo Bank's networks from the common
Internet or other connection.

	3.
	PayPal
agrees that any Wells Fargo Bank server access required by the PayPal staff through outside security products will be in a READ-ONLY mode unless there has been prior, written
approval of a security plan for more intrusive access. Wells Fargo Bank agrees that any PayPal server access required by the Wells Fargo Bank staff through 

C-1

 

outside
security products will be in a READ-ONLY mode unless there has been prior, written approval of a security plan for more intrusive access. 

	4.
	Each
party agrees there will be no extraneous access to their respective systems from platforms or use of protocols other than those in the current configuration. Any changes to the
system configuration related to Wells Fargo Bank system access or PayPal system access will not be implemented without approval in writing from the respective party.

	5.
	Each
party agrees to maintain an alert status regarding all vulnerabilities and security patches or corrective actions through an industry-recognized service issuing security
advisories. Both parties will adhere to the strictest security provisions related to the Internet. If any potential security loopholes are identified, by whatever means, including but not limited to
external security audits, both parties will mitigate the risk based on the Response Expectation Table and the Escalation Process noted in as part of these Service Standards.

	6.
	Each
party agrees to maintain documented disaster recovery strategy/capability. This strategy/capability will address actions to be taken in the event of an extended outage of service
(such an outage could be caused by a number of events ranging from technical hardware/software/network related malfunctions to a catastrophic disaster).

	7.
	PayPal
agrees that Wells Fargo Bank may, upon 90 days prior notice and during normal business hours, at its expense, conduct or arrange for an annual audit of PayPal's computer systems
and processing environment that relate to the products and services provided within the context of this contract for purposes of verifying compliance with those security requirements approved in
advance by both parties, and as required for card processing purposes, OCC guidelines, or for compliance with Applicable Law (as the may be amended, modified or otherwise in effect from time to time.
Such annual audit would be conducted by a mutually agreeable third party. 

        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. 

Business
hours support will be available 08:00am - 05:00pm Pacific for business and operational questions Monday through Friday. 

Partner
Desk will be available 08:00 - 5:00 p.m. Pacific, Monday through Friday. 

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

	•
	all
outstanding issues/problems

	•
	product
enhancements planned by either party

	•
	systems
changes/upgrades and applicable launch scheduled

	•
	post
mortem on problem resolution 

C-2

 

        6.    PROBLEM RESOLUTION:    

        6.1.    Problem Classification.    The following Problem Classification Table definitions are used for classifying
performance issues: 

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.

        6.2.    Response Expectations.    If services for which Wells Fargo Bank is responsible fail to operate in conformance
with the agreed specification or applicable documentation, either Wells Fargo Bank will itself note the problem or PayPal may notify Wells Fargo Bank by calling the Cassie Hill Operations at
800-600-8753, Option 2, available on a 24×7 basis. If services for which PayPal is responsible fail to operate in conformance with the agreed specification on applicable documentation,
either PayPal will itself note the problem or Wells Fargo Bank may notify PayPal's Senior Director of Financial Systems of the problem by email or by telephone. Wells Fargo Bank or PayPal, as the case
may be, will immediately classify the problem and assign engineers to resolve problems at the level of effort indicated by the Response Expectation Table. New cases will be classified at
level 3 until a determination can be made. Wells Fargo Bank or PayPal, as the case may be, may reclassify a problem as work arounds are developed or the severity is diminished, subject to the
consent of the other of PayPal or Wells Fargo Bank, as the case may be, (such consent not to be unreasonably withheld or delayed). Both parties will make best efforts to provide ongoing and timely
updates on the status and progress of problem resolution. 

        6.3.    Response Expectation Table.    The following Response Expectation Table specifies the level of response that
will be given to a problem at each step of the process based upon the 

C-3

 

assigned severity of the problem. The table specifies the maximum amount of time elapsed to complete each step. 

	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.

        6.4.    Problem Resolution.    Once a problem with Severity 1 or 2 is identified and resolved through Step 2 of the
Response Expectation Table an email will be initiated within 24 hours with the details of the trouble ticket between the appropriate individuals designated pursuant to the Service Standards Section 4
above. These individuals will then review and agree on the Severity type, the company which is responsible for the error/bug/outage (as the case may be), and the action required to permanently fix the
problem. If there is a dispute as to Severity type or the party responsible for fixing the problem or
the permanent fix, the respective business manager for PayPal and Wells Fargo Bank will resolve such dispute. 

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

        6.5.    Escalation Process.    All problems with a severity level of 1 to 3 will be escalated if a solution or plan of
resolution cannot be achieved within the designated amount of time as described above. PayPal or Wells Fargo Bank management, as the case may be, will be made aware of issues according to the
following timeframes. As succeeding level of PayPal or Wells Fargo Bank management, as applicable, become involved in the resolution process, the other of PayPal or Wells Fargo Bank will provide
contacts at proper levels within its organization to consult in resolving the problem. 

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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: 

	•
	All
chargeback representments submitted to Wells Fargo Bank will be processed without challenges provided that PayPal complies with Association rules,
submits appropriate documentation, and submits within the agreed-up timeframes.

	•
	Wells
Fargo Bank will provide full-time chargeback coverage from 08:00 a.m. to 5:00 p.m. Eastern.

	•
	PayPal
will be provided up to [*] calendar days to respond to a chargeback notice. The [*] day timeframe
starts from the date PayPal is notified by Wells Fargo Bank that a chargeback has been received.

	•
	All
cardholder documentation sent by Wells Fargo Bank to PayPal will be sent via certified mail.

	•
	Wells
Fargo Bank will automatically return to the issuing bank any chargebacks received for any of the following reasons:

	(a)
	Submitted
beyond timeframe as mandated by the associations' rules and regulations except for foreign credit.

	(b)
	PayPal
has already issued a credit to customer. Note: credits must exactly match the original sales amount. 

	•
	To
the extent permitted by the applicable credit card associations, Wells Fargo Bank will provide to PayPal Visa and MasterCard existing compliance
information relating to procedures, rules, and regulations. 

        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 than [*] in advance in the
event that any changes are administered which directly affect their processing environment. Wells Fargo Bank will not make any
changes until [*] after PayPal has received such notice from Wells Fargo Bank. Examples of direct change include—changes to the standard application product or
changes that would require PayPal to change their interaction with Wells Fargo Bank. Wells Fargo Bank will ensure that all changes will have a roll-back plan to be utilized to return the system to a
pre-change state, if it is determined that the specific change is responsible for causing a material performance issue. 

        9.    MONITORING:    Wells Fargo Bank will perform multiple levels and types of monitoring to maintain a continuous
pulse on the production environment on behalf of PayPal. Such services will range from on-going automated observations to manual checkpoints performed by Wells Fargo Bank. Such monitoring will be
performed on the following components of the WFB Operating System: 

	•
	Telecommunications/Networks

	•
	Servers:
includes application, database and web servers (both production and failover)

	•
	Systems:
includes core systems software

	•
	Applications:
includes Wells Fargo Software

	•
	Data:
includes processing data from applications and data transfers from Wells Fargo Bank to Acquiring Banks and Associations 

C-5

 

        10.    FAILED EVENTS:    In the event that a Failed Event occurs the Client Manager of Wells Fargo Bank will provide a
written explanation for the specific failed event to the PayPal within [*] of said event. After [*] of Failed Events as defined by these Service
Standards, PayPal may terminate this Agreement upon written notice to Wells Fargo Bank. 

        FAILED
EVENTS ARE DEFINED AS: 

	•
	A
violation within section (2.1) Availability: authorization system uptime and scheduled downtimes

	•
	A
violation within section (2.2) Response Time: average of five seconds over a sixty minute period, provided the delay is directly attributable to
Wells Fargo Bank's system

	•
	A
violation within section (5) Problem Resolution 

C-6

  

 
 

ANNEX D    
  

 
 

PAYPAL SECURITY POLICY AND INFORMATION SECURITY REQUIREMENTS    
  

D-1

  

 
 

ANNEX E    
  

 
 

SECURITY AGREEMENT    
  

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. 

E-1

QuickLinks

EXHIBIT 10.20

CREDIT CARD PAYMENT PROCESSING SERVICES AGREEMENT

Table of Contents

RECITALS

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}]]