UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 17, 2015
eBay Inc.
(Exact name
of registrant as specified in its charter)
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Delaware |
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000-24821 |
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77-0430924 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(I.R.S. Employer
Identification No.) |
2065 Hamilton Avenue
San Jose, CA 95125
(Address of principal executive offices)
(408) 376-7400
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 |
Entry into a Material Definitive Agreement |
On July 17, 2015, in connection with
the separation of eBay Inc.s (eBay) payments business through the distribution of 100% of the outstanding common stock, par value $0.0001 per share, of PayPal Holdings, Inc., a wholly owned subsidiary of eBay
(PayPal), to eBays stockholders (the Distribution), eBay entered into several agreements with PayPal that govern the relationship of the parties following the Distribution, including the following:
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Transition Services Agreement; |
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Employee Matters Agreement; and |
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Intellectual Property Matters Agreement. |
A summary of certain material features of the
agreements can be found in the section entitled Certain Relationships and Related Party TransactionsAgreements with eBay in PayPals Information Statement dated June 29, 2015 (the Information
Statement), which is included as Exhibit 99.1 to eBays Current Report on Form 8-K filed with the Securities and Exchange Commission on June 30, 2015. This summary is incorporated by reference into this Item 1.01 as if
restated in full. This summary is qualified in its entirety by reference to the Operating Agreement, Transition Services Agreement, Tax Matters Agreement, Employee Matters Agreement and Intellectual Property Matters Agreement, which are included
with this report as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, each of which is incorporated herein by reference.
Item 2.01 |
Completion of Acquisition or Disposition of Assets |
At 11:59 p.m., New York City time,
on July 17, 2015, eBay effected the Distribution and completed the separation of PayPal from eBay. PayPal is now an independent public company trading under the symbol PYPL on The NASDAQ Stock Market. The Distribution was made to
eBay stockholders of record as of the close of business on July 8, 2015 (the Record Date), who received one share of PayPal common stock for each share of eBay common stock held as of the Record Date.
Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; |
Compensatory Arrangements of Certain Officers
Resignation and Appointment of Directors
As previously reported in the Current Report on Form 8-K filed by eBay on June 18, 2015, in connection with the Distribution, Jonathan
Christodoro, Scott D. Cook, David W. Dorman, John J. Donahoe, Gail J. McGovern, David M. Moffett and Frank D. Yeary resigned as directors of eBay effective as of the Distribution. In addition, as previously disclosed, and in each case effective as
of the Distribution:
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Robert H. Swan and Devin N. Wenig were appointed to the eBay board of directors (the eBay Board); |
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Pierre M. Omidyar resigned as Chairman of the eBay Board (while remaining a member of the eBay Board); and |
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Thomas J. Tierney was appointed as the Non-executive Chairman of the eBay Board. |
2
As a result of these resignations and appointments, the eBay Board currently consists of Fred D.
Anderson, Edward W. Barnholt, Anthony J. Bates, Bonnie S. Hammer, Kathleen C. Mitic, Pierre M. Omidyar, Robert H. Swan, Thomas J. Tierney, Perry Traquina and Devin N. Wenig. In connection with the resignations and appointments described above, the
Audit Committee, the Corporate Governance and Nominating Committee and the Compensation Committee of the eBay Board were reconstituted, effective as of the Distribution, as follows:
Audit Committee
Fred D. Anderson (Chair)
Bonnie S. Hammer
Perry Traquina
Corporate Governance and Nominating Committee
Kathleen
C. Mitic (Chair)
Thomas J. Tierney
Perry Traquina
Compensation Committee
Edward W. Barnholt (Chair)
Anthony J. Bates
Kathleen C. Mitic
Thomas J. Tierney
Resignation and Appointment of
Officers
As previously reported in the Current Report on Form 8-K filed by eBay on June 18, 2015, John J. Donahoe, eBays
President and Chief Executive Officer, Robert H. Swan, eBays Senior Vice President, Finance and Chief Financial Officer, Elizabeth L. Axelrod, eBays Senior Vice President, Human Resources, Michael R. Jacobson, eBays Senior Vice
President, Legal Affairs, General Counsel and Secretary, and Alan L. Marks, eBays Senior Vice President, Corporate Communications, resigned from their positions as executive officers of eBay effective immediately prior to the Distribution.
In addition, as previously reported in such Form 8-K, Devin N. Wenig was appointed as eBays President and Chief Executive Officer
and Scott Schenkel was appointed as eBays Senior Vice President, Chief Financial Officer, in each case effective immediately prior to the Distribution.
Item 9.01 |
Financial Statements and Exhibits |
(b)
The unaudited pro forma consolidated financial information of eBay giving effect to the Distribution, and the related notes thereto, have been
derived from its historical consolidated financial statements and are attached hereto as Exhibit 99.1
(d) Exhibits
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Exhibit Number |
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Description |
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10.1 |
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Operating Agreement by and among eBay Inc., eBay International AG, PayPal Holdings, Inc., PayPal, Inc., PayPal Pte. Ltd. and PayPal Payments Pte. Holdings S.C.S. dated July 17, 2015 |
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10.2 |
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Transition Services Agreement by and between eBay Inc. and PayPal Holdings, Inc. dated as of July 17, 2015 |
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10.3 |
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Tax Matters Agreement by and between eBay Inc. and PayPal Holdings, Inc. dated as of July 17, 2015 |
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10.4 |
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Employee Matters Agreement by and between eBay Inc. and PayPal Holdings, Inc. dated as of July 17, 2015 |
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10.5 |
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Intellectual Property Matters Agreement by and among eBay Inc., eBay International AG, PayPal Holdings, Inc., PayPal, Inc., PayPal Pte. Ltd. and PayPal Payments Pte. Holdings S.C.S. dated as of July 17, 2015 |
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99.1 |
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Unaudited pro forma consolidated financial information |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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Date: July 20, 2015 |
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EBAY INC. |
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/s/ Marie Oh Huber |
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Name: |
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Marie Oh Huber |
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Title: |
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Senior Vice President, Legal Affairs, General Counsel and Secretary |
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INDEX TO EXHIBITS
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Exhibit Number |
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Description |
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10.1 |
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Operating Agreement by and among eBay Inc., eBay International AG, PayPal Holdings, Inc., PayPal, Inc., PayPal Pte. Ltd. and PayPal Payments Pte. Holdings S.C.S. dated as of July 17, 2015 |
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10.2 |
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Transition Services Agreement by and between eBay Inc. and PayPal Holdings, Inc. dated as of July 17, 2015 |
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10.3 |
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Tax Matters Agreement by and between eBay Inc. and PayPal Holdings, Inc. dated as of July 17, 2015 |
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10.4 |
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Employee Matters Agreement by and between eBay Inc. and PayPal Holdings, Inc. dated as of July 17, 2015 |
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10.5 |
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Intellectual Property Matters Agreement between eBay Inc. and PayPal Holdings, Inc. dated as of July 17, 2015 |
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99.1 |
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Unaudited pro forma consolidated financial information |
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Exhibit 10.1
OPERATING AGREEMENT
BY AND
BETWEEN
EBAY INC.,
EBAY
INTERNATIONAL AG,
PAYPAL HOLDINGS, INC.,
PAYPAL, INC.,
PAYPAL PTE, LTD.
AND
PAYPAL PAYMENTS PTE.
HOLDINGS S.C.S.
DATED AS OF JULY 17, 2015
TABLE OF CONTENTS
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Page |
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ARTICLE I DEFINITIONS |
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1 |
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ARTICLE II SERVICES |
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11 |
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2.1 |
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Provision of Services; Scope |
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11 |
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2.2 |
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Terms and Conditions of Services |
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11 |
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2.3 |
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Services to Acquired Properties and Developed Properties |
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11 |
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2.4 |
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No Exclusivity |
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12 |
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2.5 |
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Additional Services |
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12 |
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ARTICLE III PRICING FOR EBAY MERCHANTS |
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13 |
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3.1 |
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Take Rate |
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13 |
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3.2 |
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Market Check |
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13 |
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3.3 |
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Response to Market Check |
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14 |
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3.4 |
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Competitive Platform Operators |
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14 |
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3.5 |
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Changes in Law |
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16 |
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ARTICLE IV PERFORMANCE OF SERVICES; SERVICE LEVELS |
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16 |
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4.1 |
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Manner of Performance |
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16 |
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4.2 |
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Facilities; Personnel |
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16 |
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4.3 |
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Subcontracting |
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17 |
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4.4 |
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Service Levels |
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17 |
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4.5 |
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Root Cause Analysis |
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17 |
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4.6 |
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Monitoring |
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17 |
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4.7 |
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Disaster Recovery |
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18 |
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ARTICLE V DATA SHARING; INFORMATION SECURITY; PRODUCT DEVELOPMENT |
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18 |
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5.1 |
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Data Sharing Addendum |
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5.2 |
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Access to Facilities |
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5.3 |
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Systems Policies |
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5.4 |
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Security and Stability |
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5.5 |
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Unauthorized Access |
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5.6 |
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Product Development Agreement |
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ARTICLE VI REFERRAL SERVICES FEES; USAGE OF SERVICES; MARKETING |
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20 |
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6.1 |
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Referral Services Fee |
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6.2 |
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Credit Services Referral Fees |
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6.3 |
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Penetration Rate Payments |
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6.4 |
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Aggregate Quarterly Fees |
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6.5 |
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Descriptions of PayPal on eBay Covered Properties |
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6.6 |
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Integration of New PayPal Products |
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ARTICLE VII FEES AND PAYMENT |
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7.1 |
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Payment Terms |
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7.2 |
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Taxes |
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ARTICLE VIII COMPLIANCE WITH LAW; AUDITS |
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25 |
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8.1 |
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Compliance with Law; Books and Records |
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8.2 |
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Audits |
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8.3 |
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Audit Responses |
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ARTICLE IX CONFIDENTIALITY; USER DATA |
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9.1 |
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Confidential Information |
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9.2 |
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Additional Confidentiality Provisions |
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9.3 |
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Competitive or Similar Materials |
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9.4 |
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User Data |
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9.5 |
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Privacy Policy |
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ARTICLE X TERM AND TERMINATION |
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10.1 |
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Term |
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10.2 |
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Termination by eBay or PayPal |
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10.3 |
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Replacement Services |
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10.4 |
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Effect of Termination |
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10.5 |
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Termination Assistance Services |
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10.6 |
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Survival |
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ARTICLE XI REPRESENTATIONS AND WARRANTIES |
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11.1 |
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Representations and Warranties by the Parties |
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11.2 |
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Representations and Warranties by PayPal |
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11.3 |
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Representations and Warranties by eBay |
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11.4 |
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Disclaimer of Warranty |
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ARTICLE XII INDEMNIFICATION |
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12.1 |
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PayPals Indemnification of eBay |
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12.2 |
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eBays Indemnification of PayPal |
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12.3 |
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Indemnification Procedures |
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12.4 |
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Infringement Claims |
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12.5 |
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Exclusion of Other Indemnification Remedies |
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ARTICLE XIII LIMITATION OF LIABILITY |
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13.1 |
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Limitation of Liability |
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ARTICLE XIV MERCHANT OF RECORD; NON-COMPETE |
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14.1 |
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Merchant of Record |
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14.2 |
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eBay Non-Compete |
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14.3 |
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PayPal Non-Compete |
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14.4 |
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Exceptions to Non-Compete |
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ARTICLE XV GOVERNANCE |
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15.1 |
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Designated Operational Representatives |
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15.2 |
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Quarterly Reviews |
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15.3 |
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Internal Audits; Security Review |
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15.4 |
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Operational Review |
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ARTICLE XVI DISPUTE RESOLUTION |
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38 |
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16.1 |
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Good Faith Negotiation |
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16.2 |
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Dispute Resolution Process |
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16.3 |
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Litigation and Unilateral Commencement of Arbitration |
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16.4 |
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Conduct During Dispute Resolution Process |
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ARTICLE XVII MISCELLANEOUS |
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17.1 |
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Mutual Cooperation |
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17.2 |
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Further Assurances |
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39 |
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17.3 |
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Relationship |
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39 |
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17.4 |
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No Third-Party Beneficiaries |
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17.5 |
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Amendment |
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17.6 |
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Compliance with Law |
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17.7 |
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Assignability |
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17.8 |
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Incorporation by Reference |
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40 |
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SCHEDULES
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Schedule 1.1 |
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Additional Jurisdictions |
Schedule 1.2 |
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Buyer-Only Jurisdictions |
Schedule 1.3 |
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eBay Covered Properties |
Schedule 1.4 |
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eBay Excluded Properties |
Schedule 1.5 |
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Excluded Jurisdictions |
Schedule 3.1 |
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Comparability |
Schedule 5.1 |
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Data Sharing Addendum |
-iv-
OPERATING AGREEMENT
This OPERATING AGREEMENT, dated as of July 17, 2015 (this Agreement), is made and entered into by and between PayPal
Holdings, Inc., a Delaware corporation, PayPal, Inc., a Delaware corporation, PayPal Pte Ltd., a company organized under the laws of Singapore, and PayPal Payments Pte Holdings, S.C.S., a company organized under the laws of Luxembourg, on the one
hand (collectively, PayPal), and eBay Inc., a Delaware corporation, and eBay International AG, a company organized under the laws of Switzerland, on the other hand (collectively, eBay). PayPal and eBay are
sometimes referred to herein individually as a Party and collectively as the Parties). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article
I.
WHEREAS, the board of directors of eBay has determined that it is appropriate and advisable to separate the PayPal Business from
the eBay Business;
WHEREAS, in order to effectuate the foregoing, eBay Inc. and PayPal Holdings, Inc. have entered into a Separation and
Distribution Agreement, dated as of June 26, 2015 (the Separation and Distribution Agreement), which provides for, among other things, the contribution from eBay to PayPal of certain assets, the assumption by PayPal of
certain Liabilities from eBay, the distribution by eBay of PayPal common stock to eBay stockholders, and the execution and delivery of certain agreements in order to facilitate and provide for the foregoing, in each case subject to the terms and
conditions set forth therein;
WHEREAS, PayPal currently provides certain Services to eBay and its customers;
WHEREAS, the Parties desire for PayPal to continue to provide such Services to eBay and its customers following the Distribution and for eBay
to encourage its customers to use the Services following the Distribution; and
WHEREAS, the Parties have agreed to cooperate in
fulfilling the purposes of this Agreement and to create a mutually beneficial strategic partnership.
NOW, THEREFORE, in consideration of
the premises, the mutual covenants, agreements and respective representations and warranties contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following capitalized terms will have the meanings ascribed to them below. All other capitalized terms
not otherwise defined in this Agreement have the meaning ascribed to them in the Separation and Distribution Agreement.
2014
Measurement Rate shall have the meaning set forth in Section 6.3(e).
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Account Nationality means the country in which an eBay Merchant or eBay User
is resident according to information given by the eBay Merchant or eBay User in registering for such eBay Merchants or eBay Users eBay account.
Acquired Property means a Property acquired by eBay after the Effective Time, by way of merger, acquisition, stock purchase
or similar transaction, or by acquiring all or substantially all of the assets of an entity or business line, including an e-commerce storefront or marketplace, such that such Acquired Property becomes an eBay Property.
Action shall have the meaning set forth in the Separation and Distribution Agreement.
Activated New User means, for any period, a PayPal User that had not sent or received any payments utilizing PayPals
payments network prior to the beginning of the period and that successfully sent or received at least one payment through PayPals payment networks during such period: (a) on an eBay Covered Property; or (b) on a Property that is not
an eBay Covered Property if such PayPal User was referred by eBay to PayPal through an eBay Covered Property or other trackable referral from eBay. A referral is trackable if eBay and/or PayPal is able to determine (using a methodology
to be mutually agreed upon by the Parties) whether the PayPal Users PayPal account was opened as a result of such referral.
Activated New Users Adjustment Amount shall have the meaning set forth in Section 6.1(b).
Additional Jurisdiction Property shall have the meaning set forth in Section 2.3(b).
Additional Jurisdictions means the jurisdictions listed on Schedule 1.1.
Affiliate shall have the meaning set forth in the Separation and Distribution Agreement.
Aggregate Quarterly Fee shall have the meaning set forth in Section 6.4.
Agreement shall have the meaning set forth in the preamble.
Ancillary Agreement shall have the meaning set forth in the Separation and Distribution Agreement.
API means an application programming interface.
Audit shall have the meaning set forth in Section 15.3(a).
Audit Committees shall have the meaning set forth in Section 15.3(a).
Audited Party shall have the meaning set forth in Section 8.2(a).
Baseline Rate means eighty percent (80%); provided, that, beginning with the second Calendar Year during the Term,
effective as of the first day of each such Calendar Year, the Baseline Rate shall be increased or decreased by an amount equal to (a) the Penetration Rate for
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the previous Calendar Year calculated using the foreign currency exchange rates used by eBay for its internal planning and budgeting purposes for the current Calendar Year (and not the actual
foreign currency exchange rates in effect during the previous Calendar Year) minus (b) the Penetration Rate for the previous Calendar Year. For example, if the Penetration Rate for the previous Calendar Year was 82% but the same
Penetration Rate, when calculated using the current Calendar Years foreign currency exchange rates used by eBay for its internal planning and budget purposes, equals 83%, then the Baseline Rate for the current Calendar Year will be increased
by 1% to 81%.
Baseline Referral Services Fee shall have the meaning set forth in Section 6.1(a).
Buyer-Only Jurisdictions means the jurisdictions listed in Schedule 1.2.
Calendar Year means the twelve (12)-Month period ending December 31; or, (a) with respect to the first such
twelve (12)-Month period that includes the Effective Time, the portion of such twelve (12)-Month period after the Effective Time, and (b) with respect to the twelve (12)-Month period that includes the last day of the Tail Period, the portion of
such twelve (12)-Month period before the last day of the Tail Period.
CEO Assessment shall have the meaning set forth
in Section 15.4.
Change of Control means, with respect to a Party, the occurrence after the Effective Time
of any of the following: (a) the sale, conveyance or disposition, in one or a series of related transactions, of all or substantially all of the assets of such Party to a third party that is not an Affiliate of such Party prior to such
transaction or the first of such related transactions; (b) the consolidation, merger or other business combination of a Party with or into any other Person, immediately following which the stockholders of the Party prior to such transaction
fail to own in the aggregate the Majority Voting Power of the surviving Party in such consolidation, merger or business combination or of its ultimate publicly traded parent Person; or (c) a transaction or series of transactions in which any
Person or group (as such term is used in Section 13(d) of the Exchange Act) acquires the Majority Voting Power of such Party (other than a reincorporation or similar corporate transaction in which each of such Partys
stockholders own, immediately thereafter, interests in the new parent company in substantially the same percentage as such stockholder owned in such Party immediately prior to such transaction).
Colocation Services Agreement shall have the meaning set forth in the Separation and Distribution Agreement.
Commercial Agreement shall have the meaning set forth in the Separation and Distribution Agreement.
Common User Data shall have the meaning set forth in Section 9.4(b).
Competing Business shall have the meaning set forth in Section 14.4(a).
Competitive Platform Operator means a PayPal Specified Person, together with such Persons wholly owned Subsidiaries.
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Confidential Information shall have the meaning set forth in
Section 9.1.
Contract means any loan or credit agreement, bond, debenture, note, mortgage, indenture,
lease, supply agreement, license agreement, development agreement or other contract, agreement, obligation, commitment or instrument, including all amendments thereto.
Covered Jurisdictions shall mean the jurisdictions (other than Buyer-Only Jurisdictions and Excluded Jurisdictions) that
are included in the determination of eBay Core GMV as of the Effective Time (based on user Account Nationality) and any Additional Jurisdictions from which eBay Merchants or eBay Users access Acquired Properties that have become eBay Covered
Properties (also based on user Account Nationality).
CPO Conditions shall have the meaning set forth in
Section 3.4(a).
CPO MFP shall have the meaning set forth in Section 3.4.
Credit Services means (a) all actions, activities and operations of PayPal that enable PayPal Users to make payments
to eBay or to eBay Merchants in connection with transactions effected through any service or offering available on an eBay Covered Property that are funded in whole or in part through credit extended through PayPal (including by credit issued by a
third Person) and (b) any applicable Related Services.
Credit Usage Fee shall have the meaning set forth in
Section 6.2.
Data Protection Laws means any data protection Laws, privacy Laws, or other Laws relating to
the protection of Personal Information or other data or information, including Laws relating to payment data security, whether currently in force or enacted during the Term.
Data Sharing Addendum shall have the meaning set forth in Section 5.1(a).
Designated Operational Representative shall have the meaning set forth in Section 15.1(a).
Developed Property means a Property established or developed by eBay after the Effective Time, including an e-commerce
storefront or marketplace (it being understood that Developed Properties excludes all Acquired Properties).
Development
Project shall have the meaning set forth in Section 5.6.
Disaster Recovery Plan shall have the
meaning set forth in Section 4.7.
Disclosing Party shall have the meaning set forth in
Section 9.1.
Dispute shall have the meaning set forth in Section 16.1.
eBay shall have the meaning set forth in the preamble. As used in this Agreement, all references to eBay shall
be deemed to refer to eBay and its Subsidiaries.
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eBay Addressable GMV means, for any period, (a) the eBay Core GMV for
such period minus (b) the GMV for all eBay Properties (other than eBay Excluded Properties) for such period that results from a transaction where (i) the eBay Merchants Account Nationality is a Buyer-Only Jurisdiction or
(ii) both the eBay Merchants and eBay Users Account Nationality is the same Excluded Jurisdiction minus (c) if eBay creates a localized Property in China, the GMV for such localized Property that results from a
transaction where both the eBay Merchants and eBay Users Account Nationality is China.
eBay Core GMV
means, for any period, (a) the GMV for all eBay Properties for such period minus (b) the GMV for all eBay Excluded Properties for such period.
eBay Covered Properties means (a) all eBay Properties in existence as of the Effective Time that are not eBay Excluded
Properties, including the eBay Properties set forth on Schedule 1.3, (b) all eBay Properties that become eBay Covered Properties pursuant to the terms and provisions of this Agreement and (c) any mobile applications made available
by eBay from which an eBay User may bid for, purchase, sell or list goods or services on or through the eBay Properties described in clauses (a) and (b).
eBay Excluded Properties means the eBay Properties set forth on Schedule 1.4.
eBay Group shall have the meaning set forth in Section 12.1.
eBay Merchant means a third Person seller, merchant or other provider of goods or services that makes use of or accesses
the Services through an eBay Covered Property.
eBay Name and eBay Marks shall have the meaning set forth in the
Separation and Distribution Agreement.
eBay Property means a Property that is directly or indirectly owned or
controlled by eBay (other than any such Property owned by a Person in which eBay does not directly or indirectly own the Majority Voting Power of such Person).
eBay Restricted Business shall have the meaning set forth in Section 14.2.
eBay User means a registered user of services offered by eBay identified by a unique account ID issued by eBay.
eBay User Data means customer or user information, including Personal Information, collected during the term of this
Agreement from an eBay Merchant or from an eBay User that makes use of or accesses the Services through an eBay Covered Property.
Effective Time shall have the meaning set forth in the Separation and Distribution Agreement.
Escalation Committee shall have the meaning set forth in the Separation and Distribution Agreement.
Estimated Activated New Users shall have the meaning set forth in Section 6.1(b).
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Excluded Jurisdictions shall mean the jurisdictions listed in Schedule
1.5.
External Audit shall have the meaning set forth in Section 8.2(a).
External Auditor shall have the meaning set forth in Section 8.2(a).
First-Party Transaction shall have the meaning set forth in Section 14.1(a).
GMV means, for any period, the total value of all successfully closed transactions between users on an eBay Property during
such period, regardless of whether the buyer and seller actually consummated the transaction, excluding vehicles and real estate. In the event that eBay significantly changes its definition of GMV for purposes of its public financial reporting, the
Parties will revisit the impact that any such change in definition could have on the Penetration Rate and make any appropriate adjustments so that the intent of the parties with respect to the Penetration Rate remains in effect.
Governmental Authority shall have the meaning set forth in the Separation and Distribution Agreement.
Group means the eBay Group or the PayPal Group, as applicable.
Highly Sensitive Information means, with respect to a Party, information confidential to such Party in the following
categories: (a) user data, including Personal Information, that is not anonymized or aggregated; (b) algorithms, Source Code, Object Code; and (c) specifications and technical documentation regarding system security, fraud and abuse
protection systems and detection of illegal or unusual activities that, in each case, relate primarily to the PayPal Business (in the case of eBay as the Receiving Party) or the eBay Business (in the case of PayPal as the Receiving Party), as
applicable. Highly Sensitive Information shall not, however, include any information which: (i) is or becomes commonly known within the public domain other than by breach of this Agreement or any other agreement that the Receiving
Party has with any Person; (ii) is obtained from a third Person (other than Personnel of the Receiving Party) who is lawfully authorized to disclose such information free from any obligation of confidentiality; or (iii) is independently
developed without reference to or use of any Highly Sensitive Information or Confidential Information of the Disclosing Party.
Indemnified Party shall have the meaning set forth in Section 12.3(a).
Indemnifying Party shall have the meaning set forth in Section 12.3(a).
Independent Expert shall have the meaning set forth in Section 3.2.
Initial Notice shall have the meaning set forth in Section 16.1.
Initial Term shall have the meaning set forth in Section 10.1.
Integration Work shall have the meaning set forth in Section 2.3(b).
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Intellectual Property Matters Agreement shall have the meaning set forth in
the Separation and Distribution Agreement.
Intellectual Property Rights shall have the meaning set forth in the
Intellectual Property Matters Agreement.
Interest Rate means a rate per annum equal to the Prime Rate plus two
percent (2%) or the maximum rate under applicable Law, whichever is lower.
Internal Audit shall have the meaning
set forth in Section 15.3(a).
Internal Audit Party shall have the meaning set forth in
Section 15.3(a).
Law shall have the meaning set forth in the Separation and Distribution Agreement.
Losses shall have the meaning set forth in the Separation and Distribution Agreement.
Majority Voting Power means a majority of the voting power in the election of directors of all outstanding voting
securities of the Person in question.
Market Check shall have the meaning set forth in Section 3.2.
Market Check Report shall have the meaning set forth in Section 3.2(c).
Merchant of Record means, except as otherwise agreed by the Parties, the entity that PayPal holds financially liable for
all full and partial returns as well as any chargebacks initiated by the customer.
Month means, unless the context
requires otherwise, a calendar month or, with respect to the first calendar month that includes the Effective Time, the portion of such calendar month after the Effective Time.
Non-eBay Merchants means sellers, merchants or other providers of goods or services that make use of or access
PayPals payment processing services other than through an eBay Property.
Object Code means the fully compiled,
machine-readable version of a software program that can be executed by a computer and used by an end user without further compilation.
Operational Review Group shall have the meaning set forth in Section 15.4.
Party shall have the meaning set forth in the preamble.
Payment Gateway means point of sale Software that links a merchants website or selling application to such
merchants processing network and merchant account.
Payment Services means (a) all actions, activities and
operations of PayPal that enable eBay Merchants to receive payments from PayPal Users, and/or other eBay buyers using a guest check-out flow or other PayPal processing service such as Braintree or Pro, in any manner offered by PayPal in connection
with transactions effected through any service or offering available on an eBay Covered Property and (b) any applicable Related Services.
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PayPal shall have the meaning set forth in the preamble. As used in this
Agreement, all references to PayPal shall be deemed to refer to PayPal and its Subsidiaries.
PayPal Group
shall have the meaning set forth in Section 12.2.
PayPal Net TPV means, for any period and of any
Property, the total U.S. dollar volume of payments, net of payment reversals, successfully completed during such period through Services available through such Property (but excluding payments sent or received through PayPals Payment Gateways
or through PayPal products that are not substantially similar to the PayPal products offered on eBay Properties).
PayPal Net TPV
Off eBay means, for any period, the PayPal Net TPV of all Properties other than eBay Properties for such period.
PayPal Restricted Business shall have the meaning set forth in Section 14.3.
PayPal User means a registered user of the payment processing services offered by PayPal that enable users to make or
receive payments using a PayPal account (also known as a PayPal wallet) identified by a unique account ID and/or an eBay Merchant.
PayPal User Data means customer or user information, including Personal Information, collected from merchants and users of
PayPals services during the term of this Agreement.
Penetration Rate means, for any period, (a) the eBay
Addressable GMV successfully completed through Services available through eBay Covered Properties (including Services executed utilizing a guest check-out feature but excluding payments sent or received through (i) PayPals
Payment Gateways or (ii) any PayPal product that the Parties agree from time to time should be excluded because the Take Rate for such product is calculated using a cost-plus formula) for such period divided by (b) the
eBay Addressable GMV for such period.
Penetration Rate Payment shall have the meaning set forth in
Section 6.3.
Permitted Recipient shall have the meaning set forth in Section 3.2(d).
Person shall have the meaning set forth in the Separation and Distribution Agreement.
Personal Information means any information that identifies, or could reasonably be used by or on behalf of the recipient of
such information to identify, any Person, including names, addresses, bank or other account numbers, and national identification numbers, but excludes anonymized and aggregated information that cannot be used to identify any Person.
Personnel means, with respect to any Person, any of such Persons directors, officers, employees, agents, independent
contractors, permitted subcontractors and consultants. Subcontractors of eBay shall be deemed Personnel of eBay, and subcontractors of PayPal shall be deemed Personnel of PayPal.
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Platform means the technology, software, content, functionality, equipment,
networks, Systems and any other materials delivered or used by PayPal in connection with providing the Services.
Product
Development Agreement shall have the meaning set forth in Section 5.6.
Product Development Plan
shall have the meaning set forth in Section 5.6.
Prohibited Conditions shall have the meaning set forth in
Section 3.4(b).
Property means a website or mobile application, including an e-commerce storefront or
marketplace.
Providing Party shall have the meaning set forth in Section 12.4(b).
Quarter means any of the following during any calendar year: the three (3)-Month period ending March 31, June 30,
September 30 or December 31; or, with respect to the first three (3)-Month period that includes the Effective Time, the portion of such three (3)-Month period after the Effective Time.
Quarterly Statement shall have the meaning set forth in Section 7.1(a).
Receiving Party shall have the meaning set forth in Section 9.1.
Referral Services Fee shall have the meaning set forth in Section 6.1(a).
Related Services means, with respect to Credit Services or Payment Services, as applicable, (a) providing an available
web or client-end application interface for eBay Merchants to accept payment and for PayPal Users to fund their accounts (where applicable) and transfer payments, processing and settling such payments, and maintaining records of transactions and
balances through and in the accounts of such eBay Merchants and PayPal Users, (b) any and all services, functions, or responsibilities not specifically described in the definition of the applicable Services that are within the scope of the
applicable Services and/or that are inherent in, required for, implied by, or incidental to the proper performance and provision by PayPal of the applicable Services and (c) any and all improvements and upgrades to, extensions of, successors to
or substitutes for any of the applicable Services or any of the foregoing developed or offered by PayPal at any time during the Term.
Renewal Term shall have the meaning set forth in Section 10.1.
Requesting Party shall have the meaning set forth in Section 8.2(a).
Residual Information means information in non-tangible form that may be retained in the unaided memory of Personnel of the
Receiving Party who have had access to the Confidential Information of the Disclosing Party.
Security Review shall
have the meaning set forth in Section 15.3(b).
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Separation and Distribution Agreement shall have the meaning set forth in the
recitals.
Service Levels shall have the meaning set forth in Section 4.4.
Services means the Credit Services, the Payment Services and the Related Services.
Source Code means the human-readable version of a software program that can be compiled into Object Code, including
programmers notes and materials and documentation, sufficient to allow a reasonably skilled programmer to understand the design, logic, structure, functionality, operation and features of such software program and to use, operate, maintain,
modify, support and diagnose errors pertaining to such software program.
Specified Change of Control means a Change of
Control of PayPal with any eBay Specified Person or their direct or indirect Subsidiaries or controlled Affiliates.
Subsidiary shall have the meaning set forth in the Separation and Distribution Agreement.
Systems means, with respect to a Person, such Persons computer equipment, software, servers, network infrastructure
and other hardware or information systems (and components thereof) used in the operation of each Partys respective business and otherwise used in connection with and/or necessary to provide or receive, as applicable, the Services hereunder.
Tail Period shall have the meaning set forth in Section 10.4(a).
Take Rate means the fee PayPal charges a merchant to process a payment using PayPals payment services or
offerings, measured as (a) net revenues received by PayPal from the transaction divided by (b) the amount of such payment (including any portion thereof paid to PayPal), in each case of clauses (a) and (b), in local
currency.
Take Rate Offset shall have the meaning set forth in Section 3.3.
Take Rate Overage shall have the meaning set forth in Section 3.3.
Tax means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social
security, workers compensation, unemployment, disability, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, value added, alternative minimum, estimated or other tax
(including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any governmental entity or political subdivision thereof, and any interest, penalties, additions to tax, or additional amounts in respect of the
foregoing.
Taxing Authority means, with respect to any Tax, the Governmental Authority or political subdivision
thereof that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such entity or subdivision.
Transaction Taxes shall have the meaning set forth in Section 7.2(a).
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Technology shall have the meaning set forth in the Intellectual Property
Matters Agreement (including Software).
Term shall have the meaning set forth in Section 10.1.
Termination Assistance Services shall have the meaning set forth in Section 10.5.
Test Jurisdiction shall have the meaning set forth in Section 14.1(d).
Third-Party Claim means any Action, whether civil or criminal, at Law or in equity, made or brought by a third Person.
Transition Services Agreement shall have the meaning set forth in the Separation and Distribution Agreement.
User Data means eBay User Data together with PayPal User Data.
Viruses means any and all viruses and other contaminants (including code, commands, instructions, devices, techniques,
bugs, web bugs, or design flaws) that are intended to be used to access (without authorization), alter, delete, threaten, infect, assault, vandalize, defraud, disrupt, damage, disable, inhibit, or shut down either Partys Systems or other
information or property.
ARTICLE II
SERVICES
2.1 Provision of
Services; Scope. During the Term, PayPal shall provide the Services to eBay Merchants and eBay Users that make use of or access the Services through the eBay Covered Properties. This Agreement does not address PayPals provision of the
Services through any eBay Excluded Property. eBay and PayPal shall mutually agree on any additional Properties that should be included in the eBay Covered Properties or the eBay Excluded Properties and shall jointly amend Schedules 1.3 and
1.4 to reflect such mutual agreement.
2.2 Terms and Conditions of Services. The Services shall be subject to the terms and
conditions set forth herein and in the applicable User Agreement for each PayPal User, including the policies set forth therein. If any terms of this Agreement conflict with the terms and conditions of the applicable User Agreement, then as between
PayPal and such PayPal User, the terms of the User Agreement shall govern to the extent of the conflict.
2.3 Services to Acquired
Properties and Developed Properties. Except as set forth below, all Acquired Properties and all Developed Properties shall be Excluded Properties:
(a) If an Acquired Property or a Developed Property is incorporated into an eBay Covered Property or into a mobile application supporting or
relating to an eBay Covered Property in a Covered Jurisdiction, such Acquired Property or Developed Property shall be included in the eBay Covered Properties; if the Acquired Property or Developed Property continues to exist as a separate and
distinct Property, the Parties shall jointly amend Schedules 1.3 and 1.4, as applicable, to reflect such inclusion. For purposes of this Agreement, an Acquired Property or a Developed Property shall be incorporated into an
eBay Covered Property, as
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described in this Section 2.3(a), if: (i) eBay Users who attempt to access such Acquired Property or Developed Property are directed or redirected to an eBay Covered Property or
to a web page or series of web pages that directs such eBay Users to an eBay Covered Property; (ii) the functions available or previously available on or through such Acquired Property or Developed Property are made available on or through an
eBay Covered Property; or (iii) if such Acquired Property or Developed Property is primarily located in an Additional Jurisdiction, the total inventory of goods and services available on or through such Acquired Property or Developed Property
is substantially equivalent to the total inventory of goods and services available on or through an eBay Covered Property.
(b) If an
Acquired Property is primarily located in an Additional Jurisdiction and, as of the date eBay consummates the acquisition of such Acquired Property, PayPal provides payment processing services to non-eBay Merchants in such Additional Jurisdiction
(such Acquired Property, an Additional Jurisdiction Property), the Parties shall mutually cooperate in good faith to determine the scope and cost of the integration work that would be required to enable the Services to be made
available through such Additional Jurisdiction Property in a manner that is substantially equivalent to the manner in which the Services are made available through the eBay Covered Properties as of such date (Integration Work) and
shall use good faith efforts to negotiate any changes to the Product Development Plan required to complete the Integration Work; provided, that neither Party shall be required to agree to a change to the Product Development Plan that would
materially delay or impede the completion of any current or projected Development Project or require such Party to invest a materially higher amount of resources into the Product Development Plan. If the Parties mutually agree on the required
changes to the Product Development Plan in accordance with the immediately preceding sentence, the applicable Party or Parties shall perform the Integration Work on the timeline set forth in the revised Product Development Plan. Upon the completion
of such Integration Work, the Acquired Property shall be included (or shall be deemed to be included) in the eBay Covered Properties and the Parties shall jointly amend Schedules 1.3 and 1.4, as applicable, to reflect such inclusion.
(c) If an Acquired Property is a customer of PayPal at the time such Property is acquired by eBay, PayPal shall continue to provide to
such Property all Services provided by PayPal to such Property prior to its acquisition by eBay in accordance with the terms of the then-existing agreement(s) governing the provision of such Services for a period ending on the later of (i) the
expiration of the then-current term of any such existing agreement and (ii) the earlier of the completion of Integration Work for such Property and/or the incorporation of such Property into an eBay Covered Property.
2.4 No Exclusivity. This Agreement shall be non-exclusive, and any Party (and any Partys Subsidiaries) may, subject to Article
14, contract with other Persons for the procurement or provision of comparable (or unrelated) services, including the provision of services to eBay Merchants and eBay Users that are PayPal Users on eBay Excluded Properties.
2.5 Additional Services. PayPal may also provide through eBay Properties services different from and in addition to the Services as
eBay may reasonably request or require from time to time. The use of such additional services through eBay Properties will be governed by the terms and conditions of, and subject to the fees for, such additional services (a) as found on the
applicable PayPal website in the jurisdiction in which such additional services are provided or (b) as mutually agreed upon by the Parties.
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ARTICLE III
PRICING FOR EBAY MERCHANTS
3.1
Take Rate. It is the intention of the Parties that the Take Rate charged to eBay Merchants immediately following the Effective Time shall remain generally consistent with the Take Rates charged to such eBay Merchants as of immediately prior
to the Effective Time. Furthermore, following the Effective Time and at all times during the Term, PayPal shall use reasonable best efforts to cause the Take Rate charged to comparable eBay Merchants (determined on an aggregate or average basis) to
be comparable to the Take Rate charged to Non-eBay Merchants for comparable payment services in each Covered Jurisdiction using a methodology to be mutually agreed from time to time by eBay and PayPal. The Parties shall determine whether eBay
Merchants and Non-eBay Merchants are comparable by segmenting such eBay Merchants and Non-eBay Merchants using the characteristics set forth on Schedule 3.1.
3.2 Market Check. Annually during the Term (or more frequently as mutually agreed by the Parties), a third-party, independent expert
mutually agreed upon by the Parties (the Independent Expert) will, with respect to each Covered Jurisdiction, review the actual Take Rate for comparable (x) eBay Merchants with an Account Nationality in such Covered
Jurisdiction (determined on an aggregate or average basis) and (y) Non-eBay Merchants in such Covered Jurisdiction, including Non-eBay Merchants that use or access PayPals services through Properties operated by a Competitive Platform
Operator (other than Non-eBay Merchants that are also Competitive Platform Operators) (each such review, a Market Check), in accordance with the following procedures:
(a) The Independent Expert shall be an independent, external internationally recognized firm with appropriate qualifications and experience in
conducting reviews of this nature.
(b) Before beginning a Market Check for a Covered Jurisdiction, the Independent Expert shall execute a
confidentiality agreement with PayPal and eBay (or their respective Subsidiaries in such Covered Jurisdiction), the terms of which shall not frustrate or impede the purpose of the review or the disclosure of the results thereof to the Parties. If
the Independent Expert has executed a confidentiality agreement in accordance with this Section 3.2(b) during the Term and such confidentiality agreement remains in full force and effect, the Independent Expert shall not be required to
reexecute a second confidentiality agreement.
(c) The Independent Expert shall create a detailed written report of the results and
findings of the Market Check for such Covered Jurisdiction (each, a Market Check Report) and simultaneously provide copies of each Market Check Report to both eBay and PayPal. The Independent Expert shall not disclose any Highly
Sensitive Information that, if disclosed to eBay or PayPal, as applicable, would cause PayPal or eBay, as applicable, competitive harm, and shall not disclose any information to the extent disclosure of such information to such Party would violate
applicable Law (including the law of a Covered Jurisdiction). Neither Party shall be required to disclose to the Independent Expert any information to the extent disclosure of such information to such Independent Expert would violate applicable Law
(including the law of a Covered Jurisdiction).
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(d) The Independent Expert shall conduct the Market Check in a manner that does not unreasonably
interfere with eBays or PayPals business operations. Each Party and its respective Subsidiaries shall reasonably cooperate with the Independent Expert in connection with the Market Check, including by providing the Independent Expert
with access to relevant financial and accounting books and statements, management and operating data, records and sample or survey data previously collected by such Party, financial statements, Systems, facilities, operations, and management
Personnel and other Personnel, but only as reasonably necessary for the purposes of the Market Check, and ensure that its Personnel cooperate with the Market Check and all other reasonable requests by the Independent Expert for additional
information or documentation related to the Market Check.
(e) Each of the Parties acknowledges that the Market Check Reports will contain
information that is commercially sensitive and, accordingly, each Party agrees to restrict access to the Market Check Reports to its Personnel to whom disclosure is essential to execute their job responsibilities (each, a Permitted
Recipient), which Permitted Recipients shall be mutually agreed in writing by the Parties from time to time. Before receiving a Market Check Report, each Permitted Recipient shall agree in writing not to distribute the Market Check Report
to any Person that is not a Permitted Recipient. Upon the consummation of a Change of Control of eBay, eBay shall, at its option and as promptly as practicable after such Change of Control, either (i) return to PayPal all Market Check Reports
in its possession or (ii) confirm to PayPal that it has destroyed such Market Check Reports (other than any such information located in back-up, archival electronic storage that is accessed only by eBays information technology Personnel).
3.3 Response to Market Check. If the Independent Expert concludes following a Market Check for a Covered Jurisdiction that the
Take Rate charged to comparable eBay Merchants with an Account Nationality in such Covered Jurisdiction (determined on an aggregate or average basis) is higher than the Take Rate charged to Non-eBay Merchants for comparable payment services in such
Covered Jurisdiction (the amount of such excess, the Take Rate Overage), then (a) PayPal shall cause the Take Rate charged to comparable eBay Merchants with an Account Nationality in such Covered Jurisdiction (in aggregate)
for the remainder of the Term to be comparable to the Take Rate charged to Non-eBay Merchants for comparable payment services in such Covered Jurisdiction and (b) eBay and PayPal shall cooperate in good faith and mutually agree on actions to be
taken by PayPal and by eBay (if any) to communicate such change in the Take Rate to, and to remedy the Take Rate Overage during the previous year or years of the Term for, some or all of the eBay Merchants with an Account Nationality in such Covered
Jurisdiction, including by means of a refund, discount or otherwise (the Take Rate Offset). If the Parties cannot mutually agree on the Take Rate Offset for a Covered Jurisdiction, the Parties shall resolve such dispute through
the dispute resolution provisions set forth in Sections 16.1 and 16.2.
3.4 Competitive Platform Operators. In the
event that PayPal offers to Non-eBay Merchants that use or access PayPals services through Properties operated by a Competitive Platform Operator in a Covered Jurisdiction (other than Non-eBay Merchants that are also Competitive Platform
Operators) (a) overall economic terms that are more favorable than the
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economic terms offered at such time to eBay Merchants accessing the Services through the eBay Covered Properties primarily located in such Covered Jurisdiction or (b) any non-economic term
that is not offered at such time to eBay Merchants accessing the Services through the eBay Covered Properties primarily located in such Covered Jurisdiction (unless such non-economic term is exclusively offered at such time to Non-eBay Merchants who
use or access PayPals services through Properties operated by such Competitive Platform Operator in such Covered Jurisdiction and is not offered at such time to other Non-eBay Merchants) (any such term described in clauses (a) or (b),
whether temporary or permanent, a CPO MFP):
(a) Offer to eBay. Promptly after offering a CPO MFP to one or more
Competitive Platform Operator(s), PayPal shall offer to eBay, on behalf of comparable eBay Merchants in such Covered Jurisdiction, the same CPO MFP, along with all other terms and conditions directly related to such CPO MFP, including any terms and
conditions required to comply with applicable Law and any amendments or modifications to any Contracts to which eBay is a party (the CPO Conditions), other than any Prohibited Conditions. As part of such offer, PayPal shall
provide to eBay the material terms of the CPO MFP and of the CPO Conditions in sufficient detail to enable eBay to evaluate the material terms and determine whether to choose to accept the CPO MFP and to comply with the CPO Conditions (other than
the Prohibited Conditions). eBay shall notify PayPal in writing no later than ninety (90) days following eBays receipt of such material terms whether to accept the CPO Conditions (other than any Prohibited Conditions). If eBay chooses to
accept the CPO MFP, eBay shall use reasonable efforts to comply with the CPO Conditions (other than any Prohibited Conditions) as soon as commercially reasonable following the date eBay communicates its acceptance to PayPal, and the CPO MFP shall be
effective with respect to eBay Merchants immediately upon eBays compliance with the CPO Conditions (other than any Prohibited Conditions).
(b) Prohibited Conditions. If one or more of the CPO Conditions is: (i) a term or condition with which eBay is not reasonably
capable of complying, (ii) a term or condition applicable to merchants with which the eBay Merchants (in the aggregate) are not reasonably capable of complying, as described below; (iii) unique to such Competitive Platform Operator (such
that only the Competitive Platform Operator could comply); or (iv) designed or intended to, or operates to, frustrate or interfere with, or otherwise has the effect of, discriminating against eBay or eBay Merchants or frustrating or
circumventing the application of this Section 3.4 (collectively, the Prohibited Conditions), then eBay and the eBay Merchants shall receive the CPO MFP without having to comply with such CPO Condition (provided,
that eBay complies with all CPO Conditions that are not Prohibited Conditions). By way of example: (A) eBay and eBay Merchants will be deemed to be not reasonably capable of complying with any and all terms or conditions to the
extent that they (1) impose a condition or requirement of size or ranking (in aggregate or with respect to a specific jurisdiction) that is unrelated to the Competitive Platform Operators payments volume on PayPal and that exceeds the
size or ranking of the applicable eBay Covered Properties, (2) require eBay or eBay Merchants to violate any applicable Law or Contract (other than any Contract that may be amended by eBay without the consent of the other party or parties
thereto to eliminate such violation) or (3) would require eBay to operate a Property that is not an eBay Covered Property or own or control operations in a jurisdiction that is not a Covered Jurisdiction; and (B) subject to clause (A),
eBay shall not be deemed to be not reasonably capable of complying with a term or condition solely because such term or condition requires eBay to pay or commit to pay any amount or incur any obligation in favor of or offer or grant any
accommodation (financial or otherwise) to the Competitive Platform Operator or in respect of such CPO MFP.
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(c) In connection with the Market Check, the Independent Expert shall review the CPO MFPs, if
any, offered by PayPal during the year covered by such Market Check and PayPals compliance with the terms of this Section 3.4. The Independent Experts review shall be conducted in a manner consistent with the procedures and
policies for the Market Check set forth in Sections 3.2(b), (c) and (d), and PayPal shall provide the same level of cooperation to the Independent Expert that PayPal is required to provide in connection with the Market
Check.
3.5 Changes in Law. If PayPal changes the terms, conditions or manner of performing the payment processing services it
offers or the Take Rate charged to merchants for payment processing services in a Covered Jurisdiction in response to a change in Law, PayPal shall use its reasonable best efforts to implement such change in a manner that does not have a
disproportionately adverse effect on the Take Rate charged to, and the terms, conditions or manner of performing payment processing services for, eBay Merchants relative to the impact on Non-eBay Merchants.
ARTICLE IV
PERFORMANCE OF
SERVICES; SERVICE LEVELS
4.1 Manner of Performance. PayPal shall, at all times, ensure that the Services, and PayPals
obligations under this Agreement, are performed at the highest level of quality provided, or required to be provided, by PayPal with respect to comparable services provided to or for Non-eBay Merchants and PayPal Users, and by appropriately trained
and qualified Personnel in a timely, professional and workmanlike manner. PayPal shall promptly notify eBay upon becoming aware of any circumstances that could reasonably be expected to jeopardize the performance of the Services or PayPals
obligations under this Agreement in accordance with this Article 4, and eBay shall promptly notify PayPal upon becoming aware of any circumstances that could reasonably be expected to jeopardize the performance by eBay of its obligations
under this Agreement in accordance with this Article 4.
4.2 Facilities; Personnel. Except as otherwise expressly provided
herein, (a) each Party shall be responsible for providing all facilities, Personnel and other resources necessary to perform its obligations under this Agreement and (b) without limiting the foregoing, PayPal shall be responsible for
providing all facilities, Personnel and other resources necessary to perform the Services; provided, that if eBay has agreed pursuant to another Ancillary Agreement or Commercial Agreement to provide to PayPal any facilities, Personnel or
other resources used by PayPal in performing the Services, then eBay shall be responsible for providing such facilities, Personnel and other resources pursuant to the applicable Ancillary Agreement(s) and Commercial Agreement(s). Each Party shall
manage, supervise and provide direction to its respective Personnel in connection with this Agreement, and shall cause them to comply with all obligations and restrictions applicable to such Party under this Agreement and, to the extent set forth in
the proviso to clause (b) of the immediately preceding sentence, any other Ancillary Agreement or Commercial Agreement.
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4.3 Subcontracting. Each of eBay and PayPal shall remain fully responsible and liable for
the performance of all of its obligations under this Agreement even if performed, or failed to be performed, by a subcontractor. Each subcontracting arrangement entered into by either Party in connection with the performance of its obligations under
this Agreement shall be documented in a written Contract, and each Party shall use reasonable best efforts to cause any such Contract not to contain any provision that is inconsistent with the terms of this Agreement. Unless otherwise requested by
eBay, PayPal shall be eBays sole point of contact with respect to PayPals subcontractors and any subcontracting arrangements entered into by PayPal under this Agreement, and unless otherwise requested by PayPal, eBay shall be
PayPals sole point of contact with respect to eBays subcontractors and any subcontracting arrangements entered into by eBay under this Agreement.
4.4 Service Levels. Without limiting Section 4.1, during the Term, PayPal shall perform the Services in a manner that meets
or exceeds the applicable service level requirements agreed by the Parties from time to time (the Service Levels). The Parties shall cooperate in good faith to update the service level requirements from time to time in order to
reflect a Service Level that equals or exceeds the performance and quality standards set forth in Section 4.1, and PayPals provision of Services shall satisfy or exceed the requirements of the then-current Service Level.
4.5 Root Cause Analysis. Each time there occurs a failure to provide any Services due to system outages or interruptions, the Parties
shall each promptly use commercially reasonable efforts to: (a) conduct a root cause analysis of the failure and prepare a written report identifying and describing in reasonable detail such root cause(s), (b) discuss the root cause(s) of
the failure and each Partys position with regard to such root cause(s), (c) correct the problem and begin providing the impacted Services as soon as practicable and (d) regularly advise the other Party of the status of such
corrective efforts and respond promptly to any request by the other Party for an update regarding such efforts (it being agreed that, except as mutually agreed by the Parties, each Party may satisfy the requirements of the foregoing clauses
(a) through (d) by using the same degree of effort that such Party used to analyze and discuss system outages and interruptions prior to the Effective Time). Each Party shall prioritize any root cause analysis performed hereunder at a
level equal to or higher than that afforded to such Partys testing or quality assurance investigations or activities conducted internally or for any other of such Partys customers of services reasonably comparable to the Services. The
Parties shall apportion the cost of correcting the problem based on the results of the root cause analysis and the relative contribution of each Party to the root cause(s) of the failure. All Service Levels shall remain in effect notwithstanding the
subsequent correction of any performance problem.
4.6 Monitoring. As part of the Services, PayPal shall implement measurement and
monitoring tools and procedures necessary to measure its performance of the Services against the Service Levels on a monthly basis. Subject to the provisions of Article 15, PayPal shall provide eBay with information and documentation
regarding the measurement and monitoring tools necessary to verify compliance by PayPal with the Service Levels and shall provide eBay with such access to the measurement and monitoring tools as is necessary to conduct such analysis.
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4.7 Disaster Recovery. In order to facilitate an orderly transition in connection with the
Separation and Distribution, PayPal shall implement and maintain disaster recovery facilities and a written disaster recovery plan that is consistent with the terms of the Colocation Services Agreement and that is designed to ensure that in the case
of a disaster within or around the geographic location of PayPals Systems used in connection with the Services, PayPal shall be able to switch to a redundant site (or colocated site hosted by eBay or a third Person) capable of meeting the
requirements of this Agreement without disruption or lapse in service (such disaster recovery plan, the Disaster Recovery Plan). Subject to the foregoing, the Disaster Recovery Plan shall be consistent with, and be at least as
protective as, the most protective disaster recovery plan that PayPal then provides or is required to provide to any other customer (other than eBay) of PayPal or any of its Subsidiaries. Upon PayPals discovery of circumstances requiring
disaster recovery in connection with the Services, PayPal shall implement the Disaster Recovery Plan and shall promptly notify eBay of such circumstances. In the event that a disaster causes PayPal to allocate limited resources between or among its
customers, PayPal shall allocate such resources to eBay in a manner no less favorable to eBay than PayPal allocates such resources to its most favored customers.
ARTICLE V
DATA SHARING;
INFORMATION SECURITY; PRODUCT DEVELOPMENT
5.1 Data Sharing Addendum.
(a) eBay and PayPal shall execute and deliver a data sharing addendum in the form set forth on Schedule 5.1 (a Data Sharing
Addendum), effective as of the Effective Time, providing for each Party and its Subsidiaries to share data with the other Party and its Subsidiaries for use in risk, trust and fraud modeling and for the purpose of facilitating customer
transactions and customer service. If there is any inconsistency or conflict between the terms of this Agreement and the terms and conditions of the Data Sharing Addendum, then the terms of the Data Sharing Addendum shall govern to the extent of the
conflict.
(b) The Data Sharing Addendum shall provide that: (i) all data sharing will comply with all applicable Laws, including
Data Protection Laws; and (ii) notwithstanding anything to the contrary in the Data Sharing Addendum, neither Party shall be required to share any data with the other Party in violation of any applicable Law; provided, that the Parties
shall use commercially reasonable efforts to cooperate in seeking to find a way to permit compliance with the data sharing obligations contained in the Data Sharing Addendum to the extent and in a manner that avoids any violation of Law, including
through (A) the amendment of the applicable privacy policy or (B) the redaction or anonymization of data so that the provision of such redacted or anonymized data to the other Party pursuant to the Data Sharing Addendum does not violate
applicable Law.
(c) Upon the consummation of a Specified Change of Control, eBay can terminate all or any portion of the Data Sharing
Addendum (without triggering the termination of this Agreement or any related arrangements) by delivering a written notice to PayPal at any time beginning at the effective date of such Specified Change of Control and ending ninety (90) days
thereafter, with such termination to become effective on the date specified by eBay in such written notice.
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5.2 Access to Facilities. To the extent that eBays or PayPals Personnel will
access the other Partys sites or facilities in connection with this Agreement, such Party shall cause its Personnel, while working at such sites or facilities, to comply with all applicable safety and security policies and procedures that have
been provided to such Personnel, and shall be liable for any violation of any such policies and procedures by such Partys Personnel.
5.3 Systems Policies. To the extent that eBays (or its Subsidiaries) or PayPals (or its Subsidiaries) Personnel
will access the Systems of the other Party or its Subsidiaries in connection with this Agreement, that Party shall cause such Personnel, while accessing such Systems, to (a) comply with all applicable security policies and procedures that have
been provided to such Personnel, (b) not tamper with, compromise or circumvent any security or audit measures employed by the other Party and (c) if requested by the other Party, execute a confidentiality agreement in the form provided by
that Party. For clarity, access or use of APIs of a Party or its Subsidiaries shall not constitute access to Systems of such Party or its Subsidiaries. Each Party shall also:
(a) Ensure that only those of its Personnel who are specifically authorized to have access to the other Partys Systems gain such access,
prevent its Personnels unauthorized access to, or use, destruction, alteration or loss of, any information contained therein, and notify its Personnel of the restrictions set forth in this Agreement; and
(b) Use commercially reasonable efforts to ensure that its Personnel who are authorized to have access to the other Partys Systems shall
access and use only those Systems, and only such data and information within such Systems, to which such Personnel have been granted the right to access and use.
5.4 Security and Stability. Each Party acknowledges that it is in the best interests of all Parties for each Party maintain a secure
and stable environment and, to that end, except as set forth in the Data Sharing Addendum, each Party reserves the right to change at any time the method by which its applicable databases and/or data may be accessed by the other Party (and in the
case of PayPal, the eBay Merchants); provided, that such access method shall not negatively affect, in any material way, the quality of or provision of the Services or either Partys compliance with the obligations set forth in this
Agreement. Each Party shall provide the other Party with advance written notice of any such changes to the method of access to the applicable databases and/or data and shall ensure that any such change does not materially and adversely impact the
quality of or provision of the Services or either Partys compliance with the obligations set forth in this Agreement. Each Party also agrees that, in the event of degradation or instability of the Platform or the other Partys Systems or
an emergency with respect to the Platform or such Systems, the other Party may, in its sole discretion, temporarily suspend access to the applicable, API, database and/or data under this Agreement in order to minimize threats to and protect the
operational stability and security of the Platform and such other Partys Systems.
5.5 Unauthorized Access. Each Party shall
be responsible for implementing and appropriately updating reasonable policies, procedures and technology to prevent unauthorized access to the eBay Properties or PayPals Systems in connection with the usage or provision of the Services. Each
Party shall apply appropriate internal information security practices, including: using appropriate firewall and anti-virus software; maintaining such countermeasures,
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operating systems, and other applications with up-to-date virus definitions and security patches; installing and operating security mechanisms in the manner in which they were intended sufficient
to ensure that the eBay Properties or PayPals Systems will not be impacted nor operations disrupted in connection with the usage or provision of the Services; and permitting only authorized users access to computer systems and applications.
Each Party shall also use up-to-date anti-virus tools to remove known Viruses from any email message or data transmitted to an eBay Property or PayPals Systems in connection with the usage or availability of the Services. Each Party shall be
responsible for maintaining and providing the other Party with appropriate access to audit its policies, procedures and technology for safeguarding customer information. Each Party acknowledges and understands that such policies, procedures and
technology are considered Confidential Information. Additionally, each of PayPal and eBay shall not knowingly compromise the security of the other Partys Systems, including by tampering with, compromising, or attempting to circumvent any
physical or electronic security or audit measures employed by such Party in the course of its business operations.
5.6 Product
Development Agreement. eBay and PayPal shall execute and deliver a product development agreement (the Product Development Agreement), effective as of the Effective Time, that provides for eBay and PayPal to mutually discuss in
good faith and agree on a product development plan for improving the PayPal experience on eBay Covered Properties and to prioritize those improvements to be incorporated into the experience on the eBay Covered Properties (the Product
Development Plan). The Product Development Plan shall set forth, at a minimum, a description of each development project to which eBay and PayPal mutually agree (each such project, a Development Project), the primary
owner (eBay or PayPal), the Party with primary responsibility for the achievement of each action item or deliverable for each such Development Project, the expected timeline and key milestones for each such Development Project, the anticipated
budget for each such Development Project, and the resource commitments by eBay and PayPal towards completing each such Development Project. The Product Development Agreement shall also provide, among other things, for each of eBay and PayPal to
agree to commit resources and development staff, as mutually agreed by eBay and PayPal, to the Development Projects included in the Product Development Plan.
ARTICLE VI
REFERRAL SERVICES
FEES; USAGE OF SERVICES; MARKETING
6.1 Referral Services Fee.
(a) Baseline Referral Services Fee. eBay shall be entitled to receive from PayPal, for each Quarter during the Term in which the
Penetration Rate as of the beginning of such Quarter exceeds sixty percent (60%), an amount equal to $12,000,000 (the Baseline Referral Services Fee), subject to adjustment pursuant to Sections 6.1(b) (the Baseline Referral
Services Fee, as so adjusted, the Referral Services Fee).
(b) Adjustment Payments. Immediately following the
Effective Time, PayPal and eBay shall mutually determine in good faith an estimate of (i) the number of Activated New Users for the period commencing on such date and ending at the beginning of the following Quarter and (ii) the number of
Activated New Users for subsequent Quarters during the Term (clause (i) (with respect to the first Quarter following the Effective Time) and clause (ii) (with
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respect to all other Quarters during the Term), the Estimated Activated New Users). Within three (3) business days of the end of each Month and each Quarter, PayPal shall
calculate and deliver to eBay a report of the number of Activated New Users since the beginning of the previous Month or Quarter, as applicable. If the number of Activated New Users for a Quarter exceeds the Estimated Activated New Users, then the
Referral Services Fee for such Quarter shall equal (i) the Baseline Referral Services Fee plus (ii) an amount equal to (A) the absolute value of (I) the Activated New Users for such period minus (II) the Estimated
Activated New Users multiplied by (B) an amount that is mutually determined by eBay and PayPal (such amount for such Quarter, the Activated New Users Adjustment Amount). If the Estimated Activated New Users for a
Quarter exceeds the number of Activated New Users for such Quarter, then the Referral Services Fee for such Quarter shall equal (I) the Baseline Referral Services Fee for such Quarter minus (II) the Activated New Users Adjustment Amount
for such Quarter.
(c) Revisions to Baseline Referral Services Fee. If there occur three (3) or more consecutive Quarters in
which the Activated New Users Adjustment Amount for each such Quarter exceeds five percent (5%) of the Baseline Referral Services Fee for the corresponding Quarter and either (i) the Referral Services Fee for each such Quarter exceeds the
Baseline Referral Services Fee or (ii) the Referral Services Fee for each such Quarter is less than the Baseline Referral Services Fee, the Parties shall mutually adjust the Baseline Referral Services Fee for subsequent Quarters in the Term, in
a manner to be mutually agreed by the Parties, to reflect the average number of Activated New Users over such consecutive Quarters.
6.2
Credit Services Referral Fees. eBay shall be entitled to receive from PayPal, for each Quarter during the Term, an amount equal to 0.30% of the PayPal Net TPV of eBay Properties for such Quarter completed through the Credit Services (the
Credit Usage Fee). No later than three (3) business days following the end of each Month and each Quarter during the Term, the Parties shall calculate the PayPal Net TPV of eBay Properties for such Month or Quarter, as
applicable, completed through the Credit Services and the resulting Credit Usage Fee.
6.3 Penetration Rate Payments. Either eBay
or PayPal shall, subject to Section 6.3(d), be entitled to receive from the other Party, for each Quarter during the Term, a payment in respect of the Penetration Rate for such Quarter, calculated in accordance with this
Section 6.3 (the Penetration Rate Payment), as follows:
(a) Calculation. No later than the last
business day of each Month during the Term, eBay will provide to PayPal the following: the Penetration Rate for the previous Month and an estimate of the Penetration Rate for the Quarter in which the current Month is included. The data provided by
eBay will include country level detail of the Penetration Rate for at least the highest ten Covered Jurisdictions, measured by eBay Addressable GMV. In making its calculations, eBay will utilize foreign exchange rates consistent with those utilized
by eBay for its internal planning and budgeting purposes. Each Party acknowledges that the Penetration Rate data to be provided by eBay is commercially sensitive and, accordingly, each Party agrees to restrict access to the Penetration Rate data to
its senior executive team and those of its Personnel who need access to such information to execute their job responsibilities, including accounting and financial reporting Personnel.
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(b) Penetration Rate Above Baseline Rate. If the Penetration Rate for such Quarter exceeds
the Baseline Rate, eBay shall be entitled to a Penetration Rate Payment in an amount equal to (i) $3,250,000 multiplied by (ii) (A) the Penetration Rate for such Quarter minus (B) the Baseline Rate, (C) rounded
to the nearest hundredth of a percentage point, multiplied by (iii) one hundred (100). By way of example, if the Penetration Rate for a Quarter were 82.253%, eBay would be entitled to a Penetration Rate Payment for such Quarter equal to
$3,250,000 multiplied by 2.25% multiplied by 100, or $7,312,500.
(c) Penetration Rate Less than Baseline Rate (0 to
5%). If the Baseline Rate exceeds the Penetration Rate for such Quarter, PayPal shall be entitled to a Penetration Rate Payment in an amount equal to (i) $3,250,000 multiplied by (ii) the Baseline Rate minus the
Penetration Rate for such Quarter, (C) rounded to the nearest hundredth of a percentage point, multiplied by (iii) one hundred (100). By way of example, if the Penetration Rate for a Quarter were 78.253%, PayPal would be entitled to
a Penetration Rate Payment for such Quarter equal to $3,250,000 million multiplied by 1.75% multiplied by 100, or $5,687,500.
(d) Penetration Rate Less than Baseline Rate (More than 5%). If the Baseline Rate exceeds the Penetration Rate for such Quarter by more
than five percent (5%), then PayPal shall be entitled to a Penetration Rate Payment in an amount equal to (i) $16,250,000, (ii) plus (A) $12,500,000 multiplied by (B) (I) the Baseline Rate minus (II) the
Penetration Rate minus (III) five percent (5%), (IV) rounded to the nearest hundredth of a percentage point, multiplied by (C) one hundred (100). By way of example, if the Penetration Rate for a Quarter were 74.253%, PayPal would
be entitled to a Penetration Rate Payment equal to $16,250,000 (calculated pursuant to Section 6.3(c)) + $12,500,000 multiplied by 0.75 multiplied by 100 = $25,625,000.
(e) Elimination of Penetration Rate Payment. Notwithstanding the foregoing: (i) PayPal shall not be entitled to any Penetration
Rate Payments for any Quarter ending after December 31, 2015 if PayPal Net TPV Off eBay in the calendar year ended December 31, 2015 is less than (A) eighty eight percent (88%) multiplied by (B) the PayPal Net TPV Off
eBay for the calendar year ending December 31, 2014 (such product, the 2014 Measurement Rate); (ii) PayPal shall not be entitled to any Penetration Rate Payments for any Quarter ending after December 31, 2016 if
PayPal Net TPV Off eBay in the calendar year ended December 31, 2016 is less than the greater of: (A) the 2014 Measurement Rate and (B) (I) eighty eight percent (88%) multiplied by (II) the highest PayPal Net TPV Off
eBay in the previous two (2) calendar years; and (iii) for the calendar years ending on December 31, 2017, December 31, 2018 or December 31, 2019, PayPal shall not be entitled to any Penetration Rate Payments for any
Quarter following the end of any calendar year in which PayPal Net TPV Off eBay is less than (A) eighty eight percent (88%) multiplied by (B) the highest PayPal Net TPV Off eBay in the previous three consecutive calendar years.
6.4 Aggregate Quarterly Fees. The Aggregate Quarterly Fee for each Quarter shall equal (a) the Referral
Services Fee for such Quarter plus (b) the Credit Usage Fee for such Quarter plus (c) if eBay is entitled to a Penetration Rate Payment for such Quarter, the Penetration Rate Payment for such Quarter minus (d) if
PayPal is entitled to a Penetration Rate Payment for such Quarter, the Penetration Rate Payment for such Quarter. At the end of every Quarter during the Term, PayPal shall pay to eBay, in accordance with the provisions of Article 7, the
Aggregate Quarterly Fee for such Quarter.
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6.5 Descriptions of PayPal on eBay Covered Properties. All text descriptions of PayPal on
the eBay Covered Properties pursuant to this section shall be preapproved in writing by PayPal.
6.6 Integration of New PayPal
Products. eBay agrees to review and consider in good faith implementation of any new PayPal products and related offerings but shall have no obligation, now or in the future, to implement any such PayPal products or related offerings.
ARTICLE VII
FEES AND PAYMENT
7.1 Payment Terms.
(a)
Within three (3) business days following the end of each Quarter, PayPal shall deliver to eBay (i) a calculation of the estimated Aggregate Quarterly Fee payable by eBay or PayPal, as applicable, for such Quarter, including each of the
component fees, and (ii) a calculation of the estimated Activated New Users for such Quarter, PayPal Net TPV on eBay Properties completed through the Credit Services for such Quarter and the PayPal Net TPV Off eBay for such Quarter (each such
statement and associated information, an Initial Quarterly Statement). The Initial Quarterly Statement shall also include the estimated Penetration Rate for such Quarter (calculated using the Penetration Rate for each Month
included in such Quarter that has been delivered by eBay to PayPal pursuant to Section 6.3(a)). Within thirty (30) days following the end of each Quarter, PayPal shall deliver to eBay (i) a calculation of the actual Aggregate
Quarterly Fee payable by eBay or PayPal, as applicable, for such Quarter, including each of the component fees, and (ii) true and complete statements of the actual Activated New Users for such Quarter, PayPal Net TPV on eBay Properties
completed through the Credit Services for such Quarter and the PayPal Net TPV Off eBay for such Quarter (each such statement and associated information, a Quarterly Statement). The Parties will determine amongst themselves what
additional information shall be included in the Quarterly Statements and the form, substance and recipients of any invoices issued in respect of the Aggregate Quarterly Fee or otherwise under this Article VII payable by eBay or PayPal, as
applicable, for each Quarter.
(b) Subject to Section 7.1(c), if a Quarterly Statement indicates that eBay is entitled to
receive a payment from PayPal, then PayPal shall, or shall cause its applicable Affiliates to, pay to eBay the undisputed amount due pursuant to such Quarterly Statement within thirty (30) days after PayPals delivery of such Quarterly
Statement. Subject to Section 7.1(c), if the Quarterly Statement indicates that PayPal is entitled to receive a payment from eBay, then eBay shall, or shall cause its applicable Affiliates to, pay to PayPal the undisputed amount due
pursuant to such Quarterly Statement within thirty (30) days after eBays receipt of such Quarterly Statement.
(c) Each Party
may dispute in whole or in part any Initial Quarterly Statement, any Quarterly Statement or any component thereof prepared by the other Party, by providing written notice to such other Party within thirty (30) days from the receipt of the
relevant Initial Quarterly Statement or Quarterly Statement (or component thereof), it being understood that any undisputed amounts on any Quarterly Statement (or components thereof) shall be paid when due by PayPal or eBay in accordance with
Section 7.1(b). eBay and PayPal shall attempt in
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good faith to negotiate a resolution of any dispute within thirty (30) days from the receipt of the written notice by the Party that prepared the disputed Quarterly Statement (or component
thereof). If the resolution of any such dispute with respect to a Quarterly Statement is that one Party owes a payment of any amount to the other Party or that one Partys payment was in excess of the actual amount due, the Party that owes such
payment or that received the excess payment, as applicable, shall pay such amount due or amount in excess to the other Party, plus interest accruing at the Interest Rate from the date that is thirty (30) days following the date set forth
in Section 7.3(a) for PayPal to deliver to eBay the Quarterly Statement to the time of the payment, promptly, and in any event within thirty (30) days, after eBay and PayPal agree to such resolution. If a dispute regarding any
Quarterly Statement is not resolved within such thirty (30)-day period, the dispute may be resolved in accordance with Section 16.2. The existence of a dispute (pursuant to this Section 7.1(c) or otherwise) shall not excuse
any Party from any other obligation under this Agreement, including eBays or PayPals applicable obligation to pay any undisputed amounts and PayPals obligation to continue to perform Services hereunder, unless and until this
Agreement is validly terminated pursuant to Section 10.2.
(d) The Parties hereby agree that the consideration payable
pursuant to this Agreement also constitutes compensation for the services rendered by each Party under the Product Development Agreement and the Data Sharing Addendum, and that no additional payments shall be required to be made by one Party to
another Party as consideration for such services.
7.2 Taxes.
(a) The amounts payable to eBay or PayPal, as applicable, pursuant to Section 7.1 shall be exclusive of any and all value added,
goods and services, sales, use, consumption, excise, service, transfer, stamp, documentary, filing, recordation taxes or similar taxes and any related interest and penalties (collectively, Transaction Taxes). The Party receiving
any services hereunder for which it would be required to pay a component fee but for the aggregation of such fees pursuant to Sections 6.4 and 7.1 shall be responsible for any Transaction Taxes imposed or assessed with respect thereto.
The Party providing any services hereunder shall issue proper invoices usable by the Party receiving any services hereunder in order to recover (by way of credit or refund) in jurisdictions where they are recoverable. The Parties shall cooperate to
minimize any Transaction Taxes and in obtaining any refund, return or rebate, or applying an exemption or zero-rating for services giving rise to any Transaction Taxes, including by filing any exemption or other similar forms or providing valid tax
identification number or other relevant registration numbers, certificates or other documents. The Parties shall cooperate regarding any requests for information, audit, or similar request by any Taxing Authority concerning Transaction Taxes payable
with respect to services provided pursuant to this Agreement.
(b) The Party receiving services hereunder shall be entitled to deduct and
withhold Tax required by applicable Law to be withheld on payments made to the Party providing any service hereunder. To the extent any amounts are so withheld, the Party receiving any service hereunder shall timely remit such deducted and withheld
amount to the relevant Taxing Authority and promptly provide the Party providing any services hereunder with evidence of such payment. The Party providing any services hereunder agrees to complete and provide to the Party receiving any services
hereunder or if required, to the relevant Taxing Authority, at least
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ten (10) days prior to the payment due date, such forms, certifications or other documents as may be reasonably requested by the Party receiving any services hereunder, in order to reduce or
exempt the withholding of any Tax with respect to payments made to the Party providing any services hereunder when and where applicable by Law. The Parties shall cooperate regarding any requests for information, audit, or similar request by any
Taxing Authority concerning the withholding of any Tax payable with respect to services provided pursuant to this Agreement.
(c) Any penalties or interested imposed on any Transaction Taxes described in Section 7.2(a) or Tax described
Section 7.2(b) shall be the responsibility of the Party receiving any services hereunder unless the penalties or interested are the result of an action or failure to act by the Party providing any services hereunder.
ARTICLE VIII
COMPLIANCE WITH LAW;
AUDITS
8.1 Compliance with Law; Books and Records.
(a) Each Party shall ensure that the performance of its obligations hereunder complies with all applicable Laws (including all Data Protection
Laws), and shall, at its sole expense, obtain and maintain in force all licenses, consents and permits required for it to comply with all such Laws. Without limiting the foregoing, neither Party shall be required to pay or commit to pay any amount
or incur any obligation in favor of or offer or grant any accommodation (financial or otherwise) to enable the other Party to comply with such applicable Laws. Each Party shall notify the other Party of any requirements under applicable Law that
require disclosures with respect to the Services to be made on any eBay Property or that require any other change to any such Property in connection with the Services, in each case to the extent such disclosure is required due to the nature of the
Services. Notwithstanding the foregoing, to the extent required by applicable Law, PayPal and eBay shall be jointly responsible for notifying any Governmental Authority of this Agreement and of any modification hereto. The Parties shall, upon the
reasonable request of the other Party, share information with each other as necessary to enable each Party to satisfy its obligations under this Section 8.1.
(b) Each Party and its Subsidiaries shall each maintain (and cause to be maintained) complete and accurate books and records for the purpose
of supporting and documenting the accuracy of the Quarterly Statements and the calculation of the Aggregate Quarterly Fees, eBay Addressable GMV, PayPal Net TPV on eBay Properties and PayPal Net TPV Off eBay, including any financial, operating and
market data with respect to the Services, and as otherwise reasonably necessary to confirm such Partys compliance with this Agreement (except for Sections 3.1 and 3.2). All such books and records will be retained at the
applicable Partys, or its applicable Subsidiarys, principal place of business for a period of at least eighteen (18) months after the payments to which they pertain have been made. Each Partys books and records will be open
for inspection and review (as set forth in this Article 8) during such eighteen (18)-month period for the purpose of verifying the accuracy of the payments and charges made hereunder and such Partys compliance with this Agreement.
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8.2 Audits.
(a) Each Party shall have the right (but not the obligation) to engage an independent auditor to conduct (and such Party shall be permitted to
cause such independent auditor to so conduct), at such Partys sole cost and expense, audits (each, an External Audit) of the other Party to confirm: the accuracy of the Quarterly Statements and any financial, operating and
market data used to determine the Aggregate Quarterly Fees. The Party causing the External Audit to be conducted is referred to herein as the Requesting Party, and the Party that that is the subject of the External Audit is
referred to herein as the Audited Party. The scope of the External Audit referred to in the preceding sentence shall be set forth in an auditors review instruction letter that the Requesting Party shall provide to the
auditor performing such External Audit (such auditor, the External Auditor). Any External Audit conducted pursuant to this Section 8.2 shall be conducted by an independent, external, internationally-recognized firm as
mutually agreed upon by the Parties with appropriate qualifications and experience in conducting audits of this nature. Before beginning an External Audit, the External Auditor shall execute a confidentiality agreement with the Audited Party, the
terms of which shall not frustrate or impede the purpose of the External Audit or the disclosure of the results thereof to the Requesting Party; provided, that if the External Auditor has executed a confidentiality agreement in accordance
with this Section 8.2(a) during the Term and such confidentiality agreement remains in full force and effect, the External Auditor shall not be required to reexecute a second confidentiality agreement. The External Auditor shall create a
detailed written report of the results and findings of each External Audit, and simultaneously provide copies of the report to both eBay and PayPal; provided, that such report shall not contain any Highly Sensitive Information that, if
disclosed to the Requesting Party, would cause the Audited Party competitive harm, and shall not disclose any information to the extent disclosure of such information to the Requesting Party would violate applicable Law.
(b) The Requesting Party may, through an External Auditor, conduct External Audits under Section 8.2(a) no more than once per
Calendar Year. The External Auditor shall conduct all audits during normal business hours and shall endeavor to conduct them in a manner that does not unreasonably interfere with the Audited Partys business operations. The Audited Party shall
reasonably cooperate with the External Auditor in connection with any External Audit, including by providing the External Auditor with access to financial and accounting books and statements, management and operating data, records, accounts,
financial statements and management Personnel and other Personnel, but only as reasonably necessary for the purposes of the External Audit, and ensure that its Personnel cooperate with any such External Audit and all other reasonable requests by the
External Auditor for additional information or documentation required to complete such External Audit. The Audited Party shall not be required pursuant to this Section 8.2 to disclose to the External Auditor any information to the extent
disclosure of such information to the External Auditor would violate applicable Law.
(c) If an audit by a Governmental Authority having
jurisdiction over either Party results in a finding that either Party is not in compliance with any generally accepted accounting principle or other audit or accounting requirement or any Law relating to the performance of its obligations under this
Agreement, the Party that is found to be non-compliant shall, at its own expense and within the time period specified by such Governmental Authority auditor, address and resolve the deficiencies identified by such Governmental Authority.
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8.3 Audit Responses.
(a) Subject to Section 8.3(c), if any External Audit conducted pursuant to Section 8.2 or any Internal Audit conducted
pursuant to Section 15.3 reveals that eBay overpaid any amount due or is owed any amount under this Agreement (except for any portion thereof disputed in good faith), PayPal shall within ten (10) business days after such
determination reimburse eBay the amount of such underpayment or pay to eBay the amount owed, in each case plus interest accruing at the Interest Rate from the date of payment by eBay or the date such payment should have been made to eBay to
the time of reimbursement or payment by PayPal. If any External Audit reveals any material inaccuracy of the Quarterly Statements or Aggregate Quarterly Fees resulting from the conduct of or information provided by PayPal that equals or exceeds two
hundred fifty thousand Dollars ($250,000) and also amounts to ten percent (10%) or more of the total amount payable by eBay for any period covered by the review, PayPal shall reimburse eBay for the cost of such External Audit.
(b) Subject to Section 8.3(c), if any External Audit conducted pursuant to Section 8.2 or any Internal Audit conducted
pursuant to Section 15.3 reveals that eBay underpaid any amount due or received any amount under this Agreement to which it was not entitled (except for any portion thereof disputed in good faith), eBay shall within ten
(10) business days after such determination pay to PayPal the amount of such underpayment or reimburse PayPal the amount to which eBay was not entitled, in each case plus interest accruing at the Interest Rate from the date such payment
originally should have been made by eBay or the date of payment by PayPal to the time of payment or reimbursement by eBay. If any External Audit reveals any material inaccuracy of the Quarterly Statements or Aggregate Quarterly Fees resulting from
the conduct of or information provided by eBay that equals or exceeds two hundred fifty thousand Dollars ($250,000) and also amounts to ten percent (10%) or more of the total amount payable by eBay for any period covered by the review, eBay
shall reimburse PayPal for the cost of such External Audit.
(c) Either Party may dispute the results of an Audit by providing written
notice to the other Party within thirty (30) days of the completion of the Audit and delivery of the applicable Audit report, in which case the Parties shall attempt in good faith to negotiate a resolution of any dispute within thirty
(30) days of the receipt of such written notice. If the Parties are unable to resolve any such dispute after such thirty (30)-day period, the Parties shall resolve the dispute pursuant to Section 16.2.
ARTICLE IX
CONFIDENTIALITY; USER
DATA
9.1 Confidential Information. Each of eBay (and its Affiliates) and PayPal (and its Affiliates) (in such capacity, the
Receiving Party) agrees to hold, and to cause its Personnel to hold, in strict confidence, the Confidential Information of the other Party (in such capacity, the Disclosing Party) using at least the same
standard of care to prevent the public disclosure and dissemination thereof as the Receiving Party uses to protect its own comparable Confidential Information. Confidential Information of the Disclosing Party means information
including marketing plans, product plans, business strategies, financial information, forecasts, Personal Information, Highly Sensitive Information, customer lists and customer data, technical documents and information and any similar materials and
information, regarding the Disclosing Party and its Affiliates, or their representatives or customers, disclosed by the Disclosing Party to
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the Receiving Party under or in connection with this Agreement, whether orally, electronically, in writing, or otherwise, including copies thereof, that is, in each case, (a) if disclosed in
a tangible form, marked using a legend such as Confidential or Proprietary or if not so marked, should be reasonably understood by the Receiving Party from the context of disclosure or from the information itself, to be
confidential, or (b) if disclosed orally or visually, declared to be confidential or, if not so declared, should be reasonably understood by the Receiving Party from the context of disclosure or from the information itself to be confidential.
Each of eBay and PayPal agrees, on its behalf and on behalf of its Affiliates, not to use any Confidential Information of the other Party other than for such purposes as shall be expressly permitted under this Agreement, except, in each case, to the
extent that such Confidential Information has been (i) in the public domain or generally available to the public, other than as a result of a disclosure by the Receiving Party or any of its Affiliates or any of their Personnel in violation of
this Agreement, (ii) later lawfully acquired from other sources by such Party (or any of its Affiliates) which sources are not themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of
confidentiality with respect to such Confidential Information or (iii) independently developed or generated without reference to or use of any proprietary or confidential information of the other Party or any of its Affiliates. If any
Confidential Information of one Party or any of its Affiliates is disclosed to the other Party or of its Affiliates in connection with providing the Services under this Agreement, then such disclosed Confidential Information shall be used by the
Receiving Party only as required to perform such Services.
9.2 Additional Confidentiality Provisions. Sections 6.9(b) and 6.10 of
the Separation and Distribution Agreement are incorporated by reference into this Agreement, mutatis mutandis, except that each reference in the Separation and Distribution Agreement to Section 6.9 or the confidentiality
provisions hereof shall be deemed to refer to Section 9.1. Notwithstanding anything to the contrary herein, the Receiving Party shall be free to use for any purpose the Residual Information resulting from access to any Confidential
Information of the Disclosing Party disclosed to it under this Agreement. Receiving Partys receipt of Confidential Information under this Agreement shall not create any obligation that in any way limits or restricts the assignment and/or
reassignment of the Receiving Partys Personnel. The Parties acknowledge and understand that the foregoing does not constitute a license under any patents or copyrights.
9.3 Competitive or Similar Materials. Subject to Article 14, and without relieving either Party of its obligations under this
Article 9, in no event shall either Party be precluded from discussing, reviewing, developing for itself, having developed, acquiring, licensing or developing for third parties, as well as marketing and/or distributing, materials that are
competitive with the other Partys products and/or services, regardless of their similarity to current products or services or products or services that may be developed after the date of this Agreement.
9.4 User Data.
(a) As
between the Parties, PayPal owns all PayPal User Data and PayPal does not in any way assign, transfer, or convey title to PayPal User Data. PayPal User Data may not be used by eBay for any reason other than for the purpose of carrying out
eBays obligations under this Agreement and the Data Sharing Addendum. As between the Parties, eBay owns all eBay User Data and eBay does not in any way assign, transfer, or convey title to PayPal to any
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eBay User Data. eBay User Data may not be used by PayPal for any reason other than for the purpose of carrying out PayPals obligations under this Agreement and the Data Sharing Addendum;
provided, that following the consummation of a Specified Change of Control, eBay User Data may not be used by the eBay Specified Person involved in such Specified Change of Control (or any of such Persons direct or indirect Subsidiaries
or controlled Affiliates, other than PayPal and its Subsidiaries existing as of the consummation of such Specified Change of Control) for any purpose.
(b) To the extent that eBay User Data includes information that also meets the definition of PayPal User Data, eBay and PayPal shall have
overlapping ownership rights in such information, and the information shall be deemed both eBay User Data and PayPal User Data. eBay and PayPal shall use eBay User Data and PayPal User Data, respectively, in accordance with their respective privacy
policies.
(c) In the event that the Disclosing Party discloses User Data to the Receiving Party that would not ordinarily be collected by
the Receiving Party in the course of performing its obligations under this Agreement or the Data Sharing Addendum, that information shall be the Confidential Information of the Disclosing Party and, except as set forth in the Data Sharing Addendum,
the Receiving Party shall keep such Confidential Information only as long as necessary to perform its obligations under this Agreement and shall not have the right to use, reproduce, display, perform, or modify such Confidential Information and any
derivative works thereof except as strictly required to perform Services under this Agreement.
9.5 Privacy Policy. The terms of
each Partys privacy policy shall be adequately displayed within such Partys respective websites and meet current legal and industry standards applicable within such Partys reasonable determination.
ARTICLE X
TERM AND TERMINATION
10.1 Term. This Agreement shall commence on the Effective Time and shall remain in full force and effect for an initial term of
five (5) years (the Initial Term). Thereafter, this Agreement may be renewed by mutual written agreement of the Parties for additional renewal terms of one (1) year each (each a Renewal Term). This
Agreement may otherwise be terminated only as expressly provided in this Article 10. Collectively, the Initial Term and any Renewal Term(s) constitute the Term; provided, that the Term shall end if and when this
Agreement is terminated in accordance with this Article 10.
10.2 Termination by eBay or PayPal. Neither Party shall have
any right to terminate this Agreement or any of the Services before the end of the Term except if the other Party (a) becomes insolvent or makes an assignment for the benefit of creditors; or (b) commits a material breach of this Agreement
that is not cured within one hundred twenty (120) days after the breaching Party receives of notice of such breach, or is incapable of being cured within one hundred twenty (120) days of the receipt of such notice; provided, that no
Party may terminate this Agreement pursuant to Section 10.2(b) until the Parties have completed the dispute resolution procedures set forth in Sections 16.1 and 16.2.
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10.3 Replacement Services. If either Party commits a material breach of this Agreement in
its provision or usage of Services that has a significant impact on the non-breaching Partys ability to conduct a material aspect of its business and the breaching Party is unable to cure such breach within twenty-four (24) hours of
notice of such breach, the non-breaching Party may obtain replacement services from a third party that are comparable to the Services until the breach is cured or this Agreement is terminated, and the breaching Party will reimburse all commercially
reasonable costs incurred by the non-breaching Party to obtain such replacement services until the breach is cured or this Agreement is terminated.
10.4 Effect of Termination. In connection with termination of this Agreement for any reason:
(a) Tail Period. During the one (1)-year period following the termination of this Agreement (the Tail Period), all
of the provisions of this Agreement will continue to apply as if the Tail Period was part of the Term, except for: (i) the Parties ability to extend the Agreement for additional Renewal Terms pursuant to Section 10.1; (ii) the
Parties obligations under the Product Development Agreement; (iii) Article 14 and (iv) eBays obligation to make Penetration Rate Payments if the Penetration Rate is less than the Baseline Rate.
(b) Unpaid Amounts. No Party shall be relieved from its obligation to pay any fees, payments or other amounts incurred and payable to
the other Party prior to termination of this Agreement, including, as applicable, the Aggregate Quarterly Fees.
10.5 Termination
Assistance Services. During the Tail Period, each Party shall use reasonable best efforts to cooperate in good faith with the other Party to transition off of the Services provided under this Agreement, including by providing each other with all
information and assistance necessary and requested by the other Party to assist in such transition, cooperating to develop a written disengagement plan and taking such other actions as may be reasonably required to allow the Parties to operate their
respective businesses without the mutual arrangements set forth in this Agreement (the Termination Assistance Services). The Parties will discuss and agree to the appropriate service levels applicable to the Termination Assistance
Services, which service levels may be different from the Service Levels applicable to the services provided under this Agreement; provided, that failure of the Parties to agree on a service level for Termination Assistance Services shall not
affect the Parties respective obligations to provide such Termination Assistance Services. Notwithstanding the foregoing, neither Party has any obligation to provide the other Party or any third Person with any (a) Highly Sensitive
Information pursuant to this Section 10.5 other than data regarding the eBay Merchants and PayPal Users to the extent (i) required for the purpose of facilitating any Services that are continuing to be provided pursuant to this
Agreement (provided, that such third Person shall not use such data for any other purpose), (ii) that disclosure of such data to a Party or a third Person, as the case may be, in accordance with this Agreement does not violate applicable
Law and (iii) disclosure of such data to a Party or a third Person, as the case may be, in accordance with this Agreement does not violate the terms of use or terms of service under which such data was collected, or (b) other information
or materials, to the extent that disclosure of such other information or materials to a Party or such third Person, as the case may be, would violate applicable Law.
10.6 Survival. Article 1, Section 7.1, Section 8.2 (for six (6) months after the payment due date
of the final Quarterly Statement issued in accordance with this Agreement), Article 9, Section 10.4, Section 10.5, this Section 10.6, Article 11, Article 12, Article 13, Article
16 and Article 17 shall survive any termination of this Agreement. Any and all liabilities accrued prior to termination shall survive any termination of this Agreement.
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ARTICLE XI
REPRESENTATIONS AND WARRANTIES
11.1 Representations and Warranties by the Parties. Each of eBay and PayPal hereby represents and warrants to the other Party as
follows:
(a) The execution and performance of this Agreement by such Party does not violate, conflict with, or result in a material
default under any other material Contract to which it is a party, or by which its assets or property is bound.
(b) It holds all the
necessary licenses, consents and authorizations required to engage in the sale and performance of the Services.
11.2 Representations
and Warranties by PayPal. PayPal hereby represents and warrants to eBay as follows:
(a) It has the skill and experience necessary to
perform its obligations under this Agreement, including performing the Services, in a professional manner.
(b) The Services will be
performed according to specifications set forth in any and all accompanying documents.
(c) The Services shall comply with all applicable
Laws, including all Data Protection Laws.
11.3 Representations and Warranties by eBay. eBay hereby represents and warrants to eBay
as follows:
(a) It has the skill and experience necessary to perform its obligations under this Agreement in a professional manner.
(b) The Services will be made available through the eBay Properties according to specifications set forth in any and all accompanying
documents.
(c) The eBay Properties shall comply with all applicable Laws in connection with the Services, including all Data Protection
Laws.
11.4 Disclaimer of Warranty. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 11, NO PARTY MAKES, AND EACH PARTY HEREBY
EXPRESSLY DISCLAIMS FOR ITSELF AND ON BEHALF OF ITS AFFILIATES, ANY REPRESENTATION OR WARRANTY, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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ARTICLE XII
INDEMNIFICATION
12.1
PayPals Indemnification of eBay. PayPal agrees to defend, indemnify, and hold harmless eBay, its Subsidiaries, and its and their respective directors, officers, employees, representatives and agents (the eBay Group)
from and against any and all Losses arising out of or resulting from any Third-Party Claim to the extent arising out of or resulting from (a) the violation by PayPal of any Data Protection Laws in connection with the Services, (b) any
breach (or a claim by a third Person that if true would be a breach) or alleged breach of any of PayPals representations or warranties set forth in Article 11 or the covenants of PayPal in this Agreement or (c) subject to
Section 12.4, the infringement or misappropriation of any Intellectual Property Right of any third Person as a result of the eBay Groups use of any Services, Systems, Platform or other Technology provided by PayPal under this
Agreement.
12.2 eBays Indemnification of PayPal. eBay agrees to defend, indemnify, and hold harmless PayPal, its
Subsidiaries, and its and their respective directors, officers, employees, representatives and agents (the PayPal Group) from and against any and all Losses arising out of or resulting from any Third-Party Claim to the extent
arising out of or resulting from (a) the violation by eBay of any Data Protection Laws in connection with the Services, (b) any breach (or a claim by a third Person that if true would be a breach) or alleged breach of any of eBays
representations or warranties set forth in Article 11 or the covenants of eBay in this Agreement or (c) subject to Section 12.4, the infringement or misappropriation of any Intellectual Property Right of any third Person as a
result of the PayPal Groups use of any Services, Systems, Platform or other Technology provided by eBay under this Agreement.
12.3
Indemnification Procedures.
(a) Promptly after receipt by the Party seeking indemnification pursuant to this Article 12
(the Indemnified Party) of notice of the commencement or threatened commencement of any Third-Party-Claim in respect of which such Indemnified Party intends to seek indemnification pursuant to Section 12.1 or
Section 12.2, the Indemnified Party shall notify the other Party (the Indemnifying Party) of such Third-Party Claim in writing. Any such notice shall describe the Third-Party Claim in reasonable detail, including the
facts and circumstances giving rise to such claim for indemnification, and include copies of all notices and documents (including court papers) received by the Indemnified Party relating to the Third-Party Claim. No failure to so notify the
Indemnifying Party shall relieve it of its obligations under this Agreement, except to the extent that it can demonstrate that it was prejudiced by such failure.
(b) The Parties shall resolve any Third-Party Claim for which indemnification is sought pursuant to this Article 12 in accordance with
the provisions, procedures and rules set forth in Sections 4.5(b) through (g), 4.6 and 4.7 of the Separation and Distribution Agreement.
12.4 Infringement Claims.
(a) Exclusions. Notwithstanding any other provision in this Agreement, PayPal and eBay, as applicable, shall not have any obligation
under Sections 12.1, 12.2 or otherwise to the extent that any Third-Party Claim of infringement (including direct infringement, inducement
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to infringe, or contributory infringement) or misappropriation of Intellectual Property Rights is based on or arises in whole or in part out of: (i) the other Partys (or any member of
its Groups) breach of this Agreement, where such infringement or misappropriation would not have occurred but for such breach; (ii) modifications of or enhancements to any of the Indemnifying Partys Services, Systems, Platform or
other Technology by any Person other than the Indemnifying Party (or any member of its Group), where such infringement or misappropriation would not have occurred but for such modifications or enhancements; (iii) the use of any of any of the
Indemnifying Partys Services, Systems, Platform or other Technology in combination with other software or technologies not provided by the Indemnifying Party, where such infringement or misappropriation would not have occurred but for such
combination; (iv) the other Partys (or any member of its Groups) willful infringement of any Intellectual Property Rights of any third Person, or (v) the other Partys (or any member of its Groups) use of any of the
Indemnifying Partys Services, Systems, Platform or other Technology not in accordance with this Agreement.
(b) Mitigation.
In addition to any other rights of or remedies available to the Parties, if the Services, Systems, Platform or any other Technology provided by eBay or PayPal (in such capacity, the Providing Party) is found or alleged to infringe
or misappropriate any Intellectual Property Right of any third Person, or, in the Providing Partys reasonable opinion is likely to be so found, then the Providing Party may, at its option and sole expense: (i) modify such infringing
Services, Platform or Technology to make it (or them) non-infringing, provided, that such modification does not adversely affect in any material way the functionality, completeness, or accuracy of any of the Services or any Service Levels
applicable thereto; (ii) procure for the other Party the right to continue using such Services, Systems, Platform or Technology; or, (ii) if neither (i) nor (ii) are possible within a reasonable time, replace such Services,
Systems, Platform or Technology with substantially equivalent services or Technology that are non-infringing. If, after using commercially reasonable efforts, the Providing Party determines that it cannot implement one of the foregoing steps (i),
(ii) or (iii) within a reasonable time, it shall promptly notify the other Party. Upon receiving any such notice, such other Party may, at its option and without limitation to any other rights of or remedies available to such Party, either
cease offering such Services, Systems, Platform or Technology on eBay Covered Properties and adjust the Services offered on eBay Covered Properties and calculation of Penetration Rate appropriately.
(c) Sole Remedy. This Article 12 states each Partys sole and exclusive remedy with respect to any direct or indirect
infringement (whether actual or alleged) or misappropriation of any Intellectual Property Rights of any other Person (and any claim or action relating thereto) based on any Services, Systems, Platform or other Technology provided by the other Party
under this Agreement.
12.5 Exclusion of Other Indemnification Remedies. The provisions of this Article 12 shall, to the
maximum extent permitted by applicable Law, be the sole and exclusive remedies of the eBay Group and the PayPal Group, as applicable, for any Liability arising out of or resulting from any Third-Party Claim arising out of or resulting from this
Agreement, whether such Third-Party Claim arises from statute, principle of common or civil law, principles of strict liability, tort, contract or otherwise under this Agreement.
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ARTICLE XIII
LIMITATION OF LIABILITY
13.1
Limitation of Liability.
(a) THE CUMULATIVE AGGREGATE LIABILITIES OF EACH PARTY AND ITS SUBSIDIARIES AND THEIR RESPECTIVE
REPRESENTATIVES UNDER THIS AGREEMENT DURING ANY CALENDAR YEAR FOR ANY ACT OR FAILURE TO ACT IN CONNECTION HEREWITH (INCLUDING THE PERFORMANCE OR BREACH OF THIS AGREEMENT), OR FOR ANY OTHER MATTER UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, SHALL NOT EXCEED FIFTY PERCENT (50%) OF THE AGGREGATE REVENUE RECEIVED BY PAYPAL DURING SUCH CALENDAR YEAR GENERATED BY PAYPAL NET TPV ON EBAY COVERED PROPERTIES.
(b) IN NO EVENT SHALL EITHER PARTY, ITS SUBSIDIARIES OR THEIR RESPECTIVE REPRESENTATIVES BE LIABLE TO THE OTHER PARTY (OR ANY MEMBER OF ITS
GROUP) FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, EXEMPLARY, REMOTE, SPECULATIVE OR SIMILAR DAMAGES IN EXCESS OF COMPENSATORY DAMAGES OF THE OTHER PARTY OR ANY MEMBER OF ITS GROUP (INCLUDING LOST PROFITS OR LOST REVENUES) IN
CONNECTION WITH THIS AGREEMENT (OTHER THAN ANY SUCH LIABILITY WITH RESPECT TO A THIRD-PARTY CLAIM), AND EACH PARTY HEREBY WAIVES ON BEHALF OF ITSELF, ITS SUBSIDIARIES AND ITS REPRESENTATIVES ANY CLAIM FOR SUCH DAMAGES, WHETHER ARISING IN CONTRACT,
TORT OR OTHERWISE.
ARTICLE XIV
MERCHANT OF RECORD; NON-COMPETE
14.1 Merchant of Record.
(a) During the Term, except as set forth in Sections 14.1(b), (c) and (d), eBay shall not declare itself as the
Merchant of Record for transactions between users effected through any service or offering available on (i) an eBay Covered Property (excluding transactions that are excluded from the definition of eBay Addressable GMV) or (ii) any third
party payments platform where the value of such transactions is included in the definition of eBay Addressable GMV (with all references in such definition to eBay being deemed to refer to such third party payments platform).
Notwithstanding the foregoing, if and to the extent that eBay is the owner of inventory sold on an eBay Covered Property and takes financial responsibility for all full and partial returns and any chargebacks initiated by the customer (a
First Party Transaction), eBay may elect to declare itself as the Merchant of Record solely with respect to such First Party Transaction.
(b) If PayPal provides payment processing services to a Competitive Platform Operator as a Merchant of Record for third party merchant
transactions effected by or on such Competitive Platform Operators platform, eBay shall also be permitted to become a Merchant of
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Record for transactions effected by eBay Merchants on eBay Covered Properties, and the Parties shall cooperate in good faith to mutually develop a transition plan and adjustment to the Product
Development Plan to enable eBay to become a Merchant of Record as described in this Section 14.1(b).
(c) Upon the
consummation of a Specified Change of Control, eBay may elect to become a Merchant of Record (without triggering the termination of this Agreement or any related arrangements) by delivering a written notice to PayPal at any time beginning at the
effective date of such Specified Change of Control and ending ninety (90) days thereafter, with such Merchant of Record election to become effective on a date, specified by eBay in such written notice, that is no less than fifteen
(15) months nor greater than twenty-one (21) months following the consummation of such Specified Change of Control.
(d)
Following the three (3) year anniversary of the Effective Time, eBay shall be permitted to declare itself as a Merchant of Record for transactions effected by third Persons in up to two (2) Covered Jurisdictions as selected by eBay in its
sole discretion (each, a Test Jurisdiction); provided, that (i) the GMV transacted as a Merchant of Record on all eBay Covered Properties in each Test Jurisdiction during the fourth (4th) year of the Term shall
not exceed five percent (5%) of the GMV on all eBay Covered Properties in such Test Jurisdiction during such year, and (ii) the GMV transacted as a Merchant of Record on all eBay Covered Properties in each Test Jurisdiction during each of
the fifth (5th) year of the Term and the Tail Period shall not exceed ten percent (10%) of the GMV on all eBay Covered Properties in such Test Jurisdiction during each such year.
14.2 eBay Non-Compete. During the Term, except as otherwise expressly contemplated in this Agreement or the Transition Services
Agreement, eBay and its controlled Affiliates shall not, directly or indirectly, engage in the business of marketing, distributing, promoting or selling their own proprietary payment solution for use (i) on the eBay Covered Properties or
(ii) on any Properties in the Covered Jurisdictions that are not eBay Properties (the eBay Restricted Business).
14.3 PayPal Non-Compete. During the Term, except as otherwise expressly contemplated in this Agreement or the Transition Services
Agreement, PayPal and its controlled Affiliates shall not, directly or indirectly, engage in the business of marketing, distributing, promoting or selling their own proprietary marketplace offering for the sale of physical goods, other than the
Tradera marketplace (the PayPal Restricted Business).
14.4 Exceptions to Non-Compete. Notwithstanding anything
to the contrary set forth in Section 14.2 or 14.3:
(a) Nothing in this Agreement shall prohibit, preclude or in any
way restrict eBay and its controlled Affiliates, on the one hand, or PayPal and its controlled Affiliate, on the other hand, from: (i) purchasing or acquiring, or being the holder or beneficial owner of, up to the greater of five percent
(5%) or $100 million of the outstanding equity securities of any Person; (ii) acquiring and, after such acquisition, owning an interest in any Person (or its successor) that is engaged in a business activity that would otherwise violate
Section 14.2 or Section 14.3, as applicable, (a Competing Business) if the annual revenue generated by such Competing
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Business in the last completed fiscal year of such Person did not exceed the greater of (A) ten percent (10%) of such Persons consolidated annual revenues for such fiscal
year and (B) the lesser of fifty percent (50%) of such Persons consolidated annual revenues for such fiscal year and $500 million.
(b) Nothing in this Agreement shall prohibit, preclude or in any way restrict any director of eBay or PayPal from, whether in such
directors personal capacity or as a manager, partner, director, officer or other control person of an investment fund, investing in, participating in or directing the investment in, serving on the board of directors or similar governing body
of, receiving information rights in or participating in other customary activities related to investments in, any Person that is engaged in the Competing Business.
(c) If the restrictions set forth in Section 14.2 are not enforceable for any portion of the Term or with respect to any portion
of the eBay Restricted Business in any jurisdiction under the antitrust/competition laws of such jurisdiction, the Parties shall negotiate in good faith and agree upon a suitable and equitable alternative that, to the fullest extent permitted under
the antitrust/competition laws of such jurisdiction, effects the original intent of Section 14.2. If the restrictions set forth in Section 14.3 are not enforceable for any portion of the Term or with respect to any portion of
the PayPal Restricted Business in any jurisdiction under the antitrust/competition laws of such jurisdiction, the Parties shall negotiate in good faith and agree upon a suitable and equitable alternative that, to the fullest extent permitted under
the antitrust/competition laws of such jurisdiction, effects the original intent of Section 14.3. Any such alternative agreed upon by the Parties pursuant to this Section 14.4 may include the payment of a fee or other lump
sum amount by one Party to the other Party.
ARTICLE XV
GOVERNANCE
15.1 Designated
Operational Representatives. eBay and PayPal shall each appoint and designate an individual to act as its initial designated representative (collectively, the Designated Operational Representative). Each Designated Operational
Representative shall be directly responsible for coordinating and managing the delivery and use of the Services and the compliance with the other obligations of the designating Party under this Agreement, and shall have authority to act on
eBays and PayPals behalf, as applicable with respect to the provision and use of such Services and such other obligations. Each Designated Operational Representative shall work with the Personnel of the Party appointing such Designated
Operational Representative to periodically address issues and matters raised by the other Party relating to the provision of Services. The Designated Operational Representatives shall meet at least once per Month to review and discuss the delivery
and use of the Services (including the results of any Account Review) and the Parties compliance with their respective obligations under this Agreement. In connection with such meetings, PayPal shall deliver to eBay, at least once per Month,
reports regarding PayPals ongoing performance under the Service Levels. All communications between the Parties pursuant to this Agreement regarding routine matters involving the Services and the other obligations of the Parties under this
Agreement shall be directed to the applicable Designated Operational Representative. Each Party shall notify the other Party of the resignation of its Designated Operational Representative or appointment of a new Designated Manager at least ten
(10) business days prior to such appointment.
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15.2 Quarterly Reviews.
(a) At least once per Quarter, the Parties shall review in good faith each then-current Service Level to evaluate PayPals performance
under such Service Level, including any remedial steps PayPal has taken to address any Service Level failures, during such period. As part of such review, the Parties shall discuss any ongoing improvements to the Services that are necessary to
ensure continued adherence to the applicable Service Levels (including the Service Levels as updated, if applicable). PayPal shall also use reasonable efforts to identify any processes used by PayPal in connection with other customers that would
benefit eBay to improve the performance of Services hereunder against the Service Levels, and shall consult with eBay as to the implementation of any such methods of improving such performance against the Service Levels approved by eBay.
(b) At least once per Quarter, the Chief Executive Officer of each of eBay and PayPal shall meet to review and discuss the Services, the
performance by each Party of its respective obligations under this Agreement and the other aspects of the relationship between the Parties set forth in this Agreement.
15.3 Internal Audits; Security Review.
(a) At least annually, each Party shall conduct, at its sole cost and expense, an internal audit of its compliance with this Agreement (each,
an Internal Audit and, together with an External Audit, an Audit). The Party conducting the Internal Audit is referred to herein as the Internal Audit Party. The Internal Audit shall be
conducted in accordance with the Internal Audit Partys customary internal audit procedures and policies. The Internal Audit Party shall create a detailed written report of the results and findings of each review, and simultaneously provide
copies of the report to the Audit Committees of the boards of directors of each of eBay and PayPal (the Audit Committees); provided, that such report shall not contain any Highly Sensitive Information that, if disclosed to
such Audit Committees, would cause the Internal Audit Party competitive harm, and shall not disclose any information to the extent disclosure of such information to the Audit Committees would violate applicable Law.
(b) At least annually, each Party shall complete a security review (a Security Review), or provide certification of such
Security Review, by an industry recognized third party firm agreed upon by the Parties that specializes in information systems security audits and assessments. The definition of passing criteria from the results of the Security Review shall include
vulnerability findings with no greater than a risk categorization of LOW. Any findings from the Security Review categorized as MEDIUM or HIGH must be resolved to the other Partys reasonable satisfaction as
promptly as practicable following the date of the review. The Parties shall use reasonable best efforts to coordinate with each other so that each Partys Security Review occurs at approximately the same time of the Calendar Year as such
Partys Internal Audit.
15.4 Operational Review. During the Month of December of each Calendar Year during the Term (or such
other Month as is mutually agreed by the Parties), the Chief Executive Officer of each of eBay and PayPal shall prepare a written assessment of each Partys compliance under this Agreement and the Product Development Agreement, the costs and
benefits
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of this Agreement and the Product Development Agreement to eBay or PayPal, as applicable, the Product Development Plan for the upcoming Calendar Year, the Parties performance of the
Development Projects included in the Product Development Plan for the current Calendar Year and any other aspect of the relationship between the Parties governed by this Agreement and the Product Development Agreement as such Chief Executive Officer
deems relevant (a CEO Assessment). The CEO Assessments shall be distributed to the Chairman of the board of directors, Chief Executive Officer and Chairman of the Audit Committee of eBay and PayPal as well as any member of the
eBay or PayPal board of directors who served as the Chief Executive Officer or Chief Financial Officer of eBay immediately prior to the Effective Time (the Operational Review Group). The Operational Review Group shall meet within
thirty (30) days of the distribution of the CEO Assessments to review the CEO Assessments and other aspects of the relationship between the Parties governed by this Agreement as the Operational Review Group shall deem relevant. The Operational
Review Group will also consider any findings noted in each Audit report produced in an External Audit or an Internal Audit and develop and agree upon an action plan to promptly address and resolve any deficiencies, concerns and/or recommendations in
such Audit report, and, unless mutually agreed by the Parties, the Party responding to a deficiency, concern and/or recommendation in an Audit report, shall, at its own expense, undertake remedial action in accordance with such action plan. During
the Month of June of each Calendar Year during the Term (or such other Month as is mutually agreed by the Parties), the boards of directors of each of eBay and PayPal shall meet with each other and discuss the aspects of the relationship between the
Parties governed by this Agreement, including opportunities for additional or expanded commercial relationships on arms length terms.
ARTICLE XVI
DISPUTE RESOLUTION
16.1 Good Faith Negotiation. Subject to Section 16.3, either Party seeking resolution of any dispute, controversy or
claim arising out of or relating to this Agreement, including the breach, termination or validity of this Agreement (a Dispute), shall provide written notice thereof to the other Party (the Initial Notice), and
within thirty (30) days of the delivery of the Initial Notice, the Parties shall attempt in good faith to negotiate a resolution of the Dispute. The negotiations shall be conducted by executives who hold, at a minimum, the title of senior vice
president or general counsel and who have authority to settle the Dispute. All such negotiations shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. If the Parties are
unable for any reason to resolve a Dispute within thirty (30) days after the delivery of such notice or if a Party reasonably concludes that the other Party is not willing to negotiate as contemplated by the preceding sentences of this
Section 16.1, the Dispute shall be resolved in accordance with Section 16.2.
16.2 Dispute Resolution
Process. Any Dispute that cannot be resolved by good faith negotiations between the Parties shall be submitted to the Escalation Committee and resolved in accordance with Sections 7.2 to 7.6 of the Separation and Distribution Agreement.
16.3 Litigation and Unilateral Commencement of Arbitration. Notwithstanding the foregoing provisions of this Article 16 or
Sections 7.2 to 7.4 of the Separation and Distribution Agreement, a Party may seek preliminary provisional or injunctive judicial relief with respect to a Dispute without first complying with the procedures set forth in Section 16.1,
Section 16.2 or Sections 7.2 to 7.4 of the Separation and Distribution Agreement if such action is reasonably necessary to avoid irreparable damage.
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16.4 Conduct During Dispute Resolution Process. Unless otherwise agreed in writing, the
Parties shall, and shall cause their respective Subsidiaries to, continue to honor all commitments under this Agreement to the extent required by this Agreement during the course of dispute resolution pursuant to the provisions of this Article
16, unless such commitments are the specific subject of the Dispute at issue. Notwithstanding the foregoing, PayPal agrees that its interruption of the Services may cause irreparable harm to eBay for which no adequate remedy exists at Law and
agrees, during the pendency of any Dispute not to deny, withdraw, restrict or delay its provision of the Services to eBay Merchants or PayPal Users except as required by court order, by the resolution of the Dispute or as a result of the termination
of this Agreement (subject to the Termination Assistance Services).
ARTICLE XVII
MISCELLANEOUS
17.1 Mutual
Cooperation. Each Party shall, and shall cause its Subsidiaries to, cooperate with the other Party and its Subsidiaries in connection with the performance of the Services hereunder; provided, that such cooperation shall not unreasonably
disrupt the normal operations of such Party or its Subsidiaries; provided, further, that this Section 17.1 shall not require such Party to incur any out-of-pocket costs or expenses unless and except as expressly provided in
this Agreement or otherwise agreed to in writing by the Parties.
17.2 Further Assurances. Each Party shall take, or cause to be
taken, any and all reasonable actions, including the execution, acknowledgment, filing and delivery of any and all documents and instruments that any other Party may reasonably request in order to effect the intent and purpose of this Agreement and
the transactions contemplated hereby.
17.3 Relationship. The Parties each acknowledge and agree that they are separate entities,
each of which has entered into this Agreement for its own independent business reasons. Nothing contained in this Agreement shall be construed as creating a joint venture, partnership, agency, fiduciary or employment relationship among or between
any of the Parties.
17.4 No Third-Party Beneficiaries. Except for the indemnification rights under this Agreement of any member of
the eBay Group or the PayPal Group in their respective capacities as such, (a) the provisions of this Agreement are solely for the benefit of the Parties and are not intended to confer upon any Person except the Parties any rights or remedies
hereunder, and (b) there are no third-party beneficiaries of this Agreement and neither this Agreement nor any Ancillary Agreement shall provide any third person with any remedy, claim, Liability, reimbursement, claim of action or other right
in excess of those existing without reference to this Agreement or any Ancillary Agreement.
17.5 Amendment. No provisions of this
Agreement shall be deemed waived, amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to enforce
such waiver, amendment, supplement or modification. If the Parties have
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each determined that it is necessary or advisable to amend this Agreement but cannot agree on the terms of such amendment, the Parties shall resolve the dispute pursuant to Sections 16.1
and 16.2.
17.6 Compliance with Law. Notwithstanding anything to the contrary in this Agreement, none of the covenants or
obligations in this Agreement shall require either Party to violate any applicable Law.
17.7 Assignability. This Agreement shall
be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided, that neither Party nor any such party thereto may assign its rights or delegate its obligations under this Agreement
without the express prior written consent of the other Party hereto or other parties thereto, as applicable. Notwithstanding the foregoing, no such consent shall be required for (i) the assignment of a Partys rights and obligations under
this Agreement in whole or in part to any of its Subsidiaries; provided, that no such assignment shall release such Party from any liability or obligation under this Agreement; or (ii) the assignment of all of a Partys rights and
obligations under in whole (i.e., the assignment of a partys rights and obligations under this Agreement, the Separation and Distribution Agreement and all other Ancillary Agreements all at the same time) in connection with a change of
control of a Party so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to the other Party.
Nothing in this Section 17.7 is intended to, or shall be construed to, prohibit eBay or PayPal from being party to or undertaking a change of control.
17.8 Incorporation by Reference. Sections 10.1 (excluding Sections 10.1(c)), 10.2, 10.5 through 10.14 and 10.16 through 10.19 of the
Separation and Distribution Agreement are incorporated by reference into this Agreement, mutatis mutandis, except that each reference to this Agreement, any Ancillary Agreement or each Ancillary Agreement
in the Separation and Distribution Agreement shall be deemed to refer to this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by persons duly authorized as
of the date and year first above written.
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EBAY INC. |
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By: |
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/s/ Devin N. Wenig |
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Name: |
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Devin N. Wenig |
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Title: |
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President and CEO-Designee, Marketplaces |
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EBAY INTERNATIONAL AG |
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By: |
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/s/ Anthony Glasby |
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Name: |
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Anthony Glasby |
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Title: |
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Authorized Signatory |
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PAYPAL HOLDINGS, INC. |
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By: |
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/s/ Daniel H. Schulman |
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Name: |
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Daniel H. Schulman |
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Title: |
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President and CEO-Designee |
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PAYPAL, INC. |
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By: |
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/s/ Daniel H. Schulman |
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Name: |
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Daniel H. Schulman |
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Title: |
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President |
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PAYPAL PTE. LTD. |
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By: |
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/s/ Anthony Glasby |
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Name: |
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Anthony Glasby |
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Title: |
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Authorized Signatory |
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PAYPAL PAYMENTS PTE. HOLDINGS S.C.S. |
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By: |
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/s/ Robert Caplehorn |
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Name: |
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Robert Caplehorn |
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Title: |
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Director |
[Signature Page to Operating Agreement]
Schedule 1.1
Additional Jurisdictions
Schedule 1.2
Buyer-Only Jurisdictions
Schedule 1.3
eBay Covered Properties
Schedule 1.4
eBay Excluded Properties
Schedule 1.5
Excluded Jurisdictions
Schedule 3.1
Comparability
1. |
Jurisdiction (i.e., the country in which the eBay Merchant or non-eBay Merchant is resident according to information given by such person in registering for such Persons PayPal account). |
2. |
Size of the eBay Merchant or non-eBay Merchant (measured by PayPal Net TPV). |
4. |
Average selling price. |
5. |
Such other factors as are mutually agreed by eBay and PayPal. |
Schedule 5.1
Data Sharing Addendum
DATA SHARING ADDENDUM
This Data Sharing Addendum (this Addendum) is incorporated by this reference as an addendum to the Operating Agreement
(Operating Agreement) entered into by and between eBay Inc., a Delaware corporation with its principal place of business at 2065 Hamilton Ave, San Jose, California 951255 and its Affiliates, and eBay International AG, a company
organized under the laws of Switzerland, on the one hand, (also collectively referred to as eBay) and PayPal Holdings, Inc., a Delaware corporation with its principal place of business at 2211 North First Street, San Jose,
California 95131, PayPal, Inc., a Delaware corporation, PayPal Pte Ltd., a company organized under the laws of Singapore, and PayPal Payments Pte Holdings, S.C.S., a company organized under the laws of Luxembourg, and their Affiliates, on the other
hand (also collectively referred to as PayPal), as of the Addendum Effective Time (defined below). eBay and PayPal are each a Party to this Agreement.
WHEREAS, as of the date hereof, eBay and PayPal are affiliate companies within the same corporate group. It is intended, however, that,
following the Effective Time, and pursuant to the transactions set forth in the Separation and Distribution Agreement, dated as of June 26, 2015, between eBay Inc. and PayPal Holdings, Inc. (also referred to as the Separation and
Distribution Agreement), the Parties will no longer form part of the same corporate group (Separation);
WHEREAS, eBay and PayPal, consistent with applicable Law, share certain data that may include information or data relating to an
identified or identifiable person, employee or customer (also referred to in the Operating Agreement as Personal Information), and each Party desires to continue, following the Separation, sharing certain data and Personal
Information with the other Party for the other Partys use for certain limited purposes, to the extent such sharing is consistent with applicable Law and is in accordance with the Partys respective privacy policies;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the Parties agree to the following terms and
conditions, which set forth the rights, duties and obligations of the Parties:
All capitalized terms not defined herein shall have
the meaning ascribed to them in the Operating Agreement.
1.1 Addendum Effective Time means 12:00:00 a.m. New
York City time immediately following the Effective Time.
1.2 Law has the meaning set forth in the Separation
and Distribution Agreement.
1.3 Effective Time has the meaning set forth in the Separation and Distribution
Agreement.
2. |
EACH PARTYS RIGHTS AND OBLIGATIONS |
2.1 Updated Privacy
Policies. Each Party has issued an updated user privacy notice/policy that will be effective at or before Separation that, among other things, explains the ways in which such Party may share its data with the other Party, including sharing with
the other Party for the uses permitted under Section 2.2 below (each, an Updated Privacy Policy).
1
2.2 Mutual Grant of Rights.
(a) Use of Data for Customer Service Purposes. Subject to the terms and conditions of this Addendum and any other applicable
agreement(s), each Party hereby grants the other Party a restricted, non-exclusive, personal, nontransferable, revocable license and right, during the Term, to access, view and use certain of the granting Partys data, including Personal
Information, to the extent consistent with applicable Law for the purpose of providing Customer Service. Customer Service means setting up an account, responding to questions from a customer relating to his/her account or
transactions, updating account information, and other similar customer service purposes.
(b) Use of Data for Fraud Prevention
Purposes. Subject to the terms and conditions of this Addendum and any other applicable agreement(s), each Party hereby grants the other Party a restricted, non-exclusive, personal, nontransferable, revocable license and right, during the Term,
to access, view and use certain of the granting Partys data, including Personal Information, to the extent consistent with applicable Law for the purpose of Fraud Prevention. Fraud Prevention means protecting against or
preventing actual or potential fraud, illegal conduct, unauthorized transactions, claims, credit risk, or other liability with respect to the Parties platforms and payment ecosystem, including by administering seller standards for specialized
seller programs, such as the Top Seller program (as may be modified) to protect the Parties payment ecosystem and the Parties platforms from actual or potential fraud, unauthorized transactions, claims and other liability,
and for other similar fraud prevention purposes.
(c) Use of Data for Employment Purposes. Subject to the terms and conditions of
this Addendum and any other applicable agreement(s), each Party hereby grants the other Party a restricted, non-exclusive, personal, nontransferable, revocable license and right, during the Term, to access, view and use certain of the granting
Partys data, including Personal Information to the extent consistent with applicable Law for purposes of processing employment related transactions, including, but not limited to, proper processing of payroll, obtaining employment history,
hiring and termination of employment, processing of employee benefits and equity compensation, and such other purposes as agreed by the Parties.
(d) Use of Data for Other Purposes. Subject to the terms and conditions of this Addendum and any other applicable
agreement(s), each Party hereby grants the other Party a restricted, non-exclusive, personal, nontransferable, revocable license and right, during the Term, to access, view and use certain of the granting Partys data, including Personal
Information to the extent consistent with applicable Law for purposes as agreed by the Parties.
2.3 Restrictions.
(a) Use Limitations & Prohibitions. Without limiting the restrictions set forth in Section 2.2 above, unless the Parties
have entered into a separate agreement that expressly permits a specific data use or disclosure or expressly authorizes specific conduct, a Party shall not, without the other Partys prior express written consent:
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(i) |
access, use or disclose the other Partys data, including Personal Information for any purpose not expressly permitted by this Addendum or other applicable agreement, including, without limitation, direct marketing
or interest-based advertising, or on behalf of any other person or entity; |
2
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(ii) |
access, use or disclose the other Partys data, including Personal Information to the extent that such access, use, or disclosure, is or becomes inconsistent with applicable Law or the order or direction of a
government entity; |
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(iii) |
use the other Partys Personal Information for purposes that would cause it to be deemed a consumer report for purposes of Section 603(d) of the Fair Credit Reporting Act (15 U.S.C. §
1681a(d)) or other similar Laws, including, without limitation, to use the other Partys Personal Information (excluding Personal Information comprised of information solely as to transactions or experiences between the consumer and the person
making the report, consistent with Section 603(d)(2)(A)(i) of the Fair Credit Reporting Act (15 U.S.C. § 1681a(d)(2)(A)(i))) to determine an individuals eligibility for credit, insurance, employment, or any other permissible
purpose provided in Section 604 of the Fair Credit Reporting Act (15 U.S.C. § 1681b). |
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(iv) |
use the other Partys Personal Information to take any action within the other Partys systems, whether or not on behalf of the customer to whom the data relate (including, without limitation, by entering a
transaction or expanding or limiting a customers ability to transact with the other Party); |
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(v) |
engage in any deceptive, misleading, unfair or otherwise illegal business practices that may reflect unfavorably on the other Party; |
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(vi) |
permit any unauthorized person or entity to have access to the other Partys data, database, systems or Personal Information; or |
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(vii) |
engage in any activity with respect to the other Partys database or systems that interferes with, disrupts, damages or accesses in an unauthorized manner the Personal Information or any servers, networks, systems,
products or other properties or services of the other Party or of any third party. |
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(viii) |
violate any policies or procedures adopted by the other Party pursuant to Section 2.1 above. |
(b) Data Limitations. In connection with accessing the granting Partys Personal Information for a use permitted under
Section 2.2 above, the accessing party shall not access any of the following data relating to the granting Partys customer:
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(i) |
any data, record, or file that could be deemed a consumer report or credit score as those terms are defined in Sections 603 and 609 of the Fair Credit Reporting Act (15 U.S.C. §§ 1681a, 1681g) or other
similar Laws; |
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(ii) |
any data relating to a specific customer(s) that the granting Party identifies as a customer(s) with respect to which access is not permitted; or |
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(iii) |
other specific data elements identified by the granting Party from time to time. In order to facilitate compliance with these limitations, each Party shall identify those data elements or customers within its customer
database that are covered by these limitations via a flag or similar notation and will provide at least ten days notice before modifying the list of specific data elements to which this clause applies. |
(c) Access Limitations. An accessing Party may not access the granting Partys data, including Personal Information for a use
permitted under Section 2.2 above unless the accessing Party: (i) adopts policies and procedures designed to ensure that the accessing Party accesses only those elements of the granting Partys data that are needed for the permitted
use, and does not access any data identified in Section 2.3(b) above; (ii) adopts policies and procedures designed to ensure that appropriate customer consent is obtained, when required; (iii) trains its relevant employees on such
policies and procedures; and (iv) monitors and documents employees compliance with such policies and procedures.
3
2.4 Use of Contractors.
(a) Engagement of Contractors. A Party shall not have its rights or licenses under this Addendum exercised by any third party, except a
Party may engage a third-party contractor (Contractor) to exercise such Partys rights under Section 2 on behalf, and solely for the benefit, of such Party, and the Contractor agrees in writing: (i) that the
exercise of such rights (including any access to or use of the other Partys Personal Information) must be for the sole benefit of the Party that engages it, and (ii) to confidentiality and non-disclosure requirements, including, without
limitation, restrictions on disclosure and use of, and requirements relating to the safeguarding of, the other Partys Personal Information, no less strict than those set forth in this Addendum and those required by all applicable Laws, as well
as by the engaging Party for its own comparable confidential and proprietary information (a Contractor that satisfies the foregoing requirements, an Authorized Contractor).
(b) Responsibility. Notwithstanding Section 2.4(a), (i) the Party that engages an Authorized Contractor will remain fully
responsible for any act or omission of any Authorized Contractor where such act or omission, if committed by the engaging Party, would be a breach of any obligation set forth in this Addendum, (ii) the engaging Party will actively monitor and
manage all Authorized Contractors for compliance with this Addendum, and (iii) the engaging Party will remain fully responsible for all payment obligations relating to all Authorized Contractors and (iv) the engaging Party will ensure that
all Personal Information is returned or destroyed following the instructions given by the Engaging Party and that the Authorized Contractor ceases the processing of such Personal Information upon the termination or expiration of the contract between
the Authorized Contractor and the engaging Party.
2.5 Means of Access. The Parties will work together in good faith to create the
means by which one Party may access the other Partys data or Personal Information to satisfy the terms of the Operating Agreement or other applicable agreement(s).
2.6 Historical Data. The Parties understand that the other Party will continue to use and otherwise process Personal Information shared
prior to the Separation in a manner and for a purpose in which such Personal Information was used prior to the Separation and in accordance with all applicable privacy notices and policies, applicable Laws, data retention limitations, and any
restrictions, obligations, and license limitations set forth in prior agreements between the Parties.
2.7 Cooperation and
Servicing. Service levels may be prescribed as agreed by the parties. In the absence of a defined service level or right to remediate within an applicable agreement one Party may request, upon fourteen (14) days of notice, that each Party
shall designate an employee to cooperate in good faith with the designated employee of the other Party to facilitate the data sharing contemplated by this Addendum and to address any issues that may arise in connection with it.
3.1 Self Audit. Each Party (the Audited
Party) shall annually perform a detailed and accurate review of all data uses and retention practices allowed under this Addendum, and other applicable agreement(s), including maintenance of appropriate records and documentation necessary
to provide verification to the other Party (the Auditing Party) that its use and deletion of accessed data is aligned with the purposes described within this Addendum, and other applicable agreement(s). All such records shall be
kept for at least two years or for such longer period as may be required by applicable Law.
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Promptly after any request by the Auditing Party, the Audited Party shall provide such information, in such manner as agreed to by the Parties. Each Party shall bear its own costs and expenses in
connection with such audit.
3.2 Right to Audit. The Audited Party shall permit the Auditing Party and the Auditing Partys
designated representatives (or their designated third-party auditors), upon reasonable notice to the Audited Party, to audit and inspect, at the Auditing Partys sole expense, and no more often than once per year (unless otherwise required by
the Auditing Partys regulators or as otherwise agreed): (a) the facilities of the Audited Party and any third-party service providers of the Audited Party previously approved by the Auditing Party where the Auditing Partys data or
Personal Information is received, accessed, stored or maintained by, or on behalf of, the Audited Party; (b) any computerized or paper systems used to access, use or otherwise handle the Auditing Partys data or Personal Information; and
(c) the Audited Partys security practices and procedures, facilities, resources, plans, procedures and books and records relating to the privacy and security of the Auditing Partys data or Personal Information, including any records
of the Audited Partys annual Self Audit. Such audit and inspection rights shall be, at a minimum, for the purpose of verifying the Audited Partys compliance with the Operating Agreement, and other applicable agreement(s).
4.1 The accessing Party shall, upon
termination of this Addendum, or upon the request of the granting Party, return to the granting Party, all data of the granting party, including Personal Information (together with all copies) in any media in its power, possession or control, and/or
securely delete and erase all of the data of the granting party, including Personal Information from the accessing Partys systems, except to the extent required to be maintained for transactional or regulatory purposes. If such return or
deletion is impracticable, the accessing Party will notify the granting Party and will ensure that proper technical, physical, and organizational security controls will continue to be employed with regard to control of any retained data. All data
retained by the accessing Party will be maintained only as long as necessary for legitimate business purposes and shall be securely destroyed in accordance with applicable Law, including, but not limited to, applicable data retention regulations.
5. |
INTELLECTUAL PROPERTY RIGHTS |
5.1 This Addendum shall not be
deemed to assign to either Party any Intellectual Property Rights that are owned or held by the other Party and existing at the Addendum Effective Time, or any Intellectual Property Rights that are otherwise created by such Party independently of
this Agreement. This Addendum shall not be deemed to grant to either Party any licenses or rights to such other partys Intellectual Property Rights other than those rights expressly granted in Section 2.2. All rights not expressly granted
by a Party are hereby reserved. Intellectual Property Rights means all rights of the following types, which may exist or be created under the Laws of any jurisdiction in the world: (a) rights associated with works of
authorship, including exclusive exploitation rights, copyrights and moral rights; (b) trademark and trade name rights and similar rights; (c) trade secret rights; (d) patent and industrial property rights; (e) any other
intellectual proprietary rights; and (f) rights in or relating to registrations, renewals, extensions, combinations, divisions, and reissues of, and applications for, any of the rights referred to in clauses (a) through (e) of this
definition.
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6.1 In performing the obligations under
this Agreement, each Party will comply with the provisions regarding the protection of confidential information (including Highly Sensitive Information) set forth in the Operating Agreement.
7.1 Each Party will establish and maintain
documented policies or standards appropriate to govern the handling of data of the granting party, including Personal Information, in compliance with this Addendum and any other applicable agreement(s).
7.2 Each Party shall implement and shall maintain appropriate and sufficient technical, physical, and organizational security measures
to protect the data of the granting party, including Personal Information in any form or media, whether electronic, hardcopy or otherwise, against accidental, unauthorized, or unlawful destruction, loss, damage, alteration, disclosure, access,
acquisition or other processing, including without limitation with respect to processing that involves the transmission of data over a network, which security measures shall meet or exceed those required or appropriate under applicable Law. Without
limiting the generality of the forgoing, each Party agrees to implement a Security Program as follows:
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(a) |
Scope and Content. Each Party will develop, implement, maintain and enforce a written information privacy and security program (Security Program) that (i) complies with an Industry
Recognized Framework, (ii) includes administrative, technical and physical safeguards reasonably designed to protect the confidentiality, integrity and availability of Personal Information and (iii) is appropriate to the nature, size and
complexity of each Partys business operations. Industry Recognized Framework means a global industry recognized information security management system (ISMS), such as ISMS standard ISO/IEC 27001:2005
Information technology Security techniques Information security management systems Requirements, as published by the International Organization for Standardization and the International Electrotechnical Commission
(ISO 27001) and the Control Objectives for Information and related Technology best practices framework established by the Information Systems and Control Association and the IT Governance Institute
(COBIT). |
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(b) |
Security Program Changes. Each Party will provide details of any major changes to its Security Program that may affect the security of any Personal Information. Such details must be communicated in writing to the
Security Operations Center of each Party within ten (10) business days prior to the effectiveness of any changes. |
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(c) |
Security Officer. Each Party has and will continue to designate a senior employee to be responsible for overseeing and carrying out its Security Program and for communicating with the other Party on information
security matters (the Security Officer). Each Partys Security Officer will provide the other Party with the contact information of one or more representatives who will be available to discuss any security concerns (e.g.,
discovered vulnerability, exposed risk, reported concern) with such other Party and to communicate the level of risk associated with such concerns and any remediation thereof. A representative for each Party must be available during normal business
hours. Any changes to the contact information of a Security Officer or any designated representatives must be communicated to the other Partys Security Officer. |
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(d) |
Training. Each Party will provide training on its Security Program and any other data privacy and security policies at its own expense, to all of its employees who assist in the performance of services or other
activities for eBay under the Addendum and who may have access to Personal Information. Each Party will maintain records documenting the name of each such employee who receives data privacy and security training and the date on which the training
was completed and will make such records available for the other Partys inspection upon request. |
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(e) |
Vulnerability Management. Each Party must run internal and external network vulnerability scans at least quarterly and after any material change in the network configuration (e.g., new system component
installations, changes in network topology, firewall rule modifications, or product upgrades). Vulnerabilities identified and rated as high risk by the scanning Party will be remediated within ninety (90) days of discovery. |
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(d) |
For all Internet-facing applications that collect, transmit or display the other Partys Personal Information, each Party agrees to conduct an application security assessment review to identify common security
vulnerabilities as identified by industry-recognized organizations (e.g., OWASP Top 10 Vulnerabilities; CWE/SANS Top 25 vulnerabilities) annually or for all major releases, whichever occurs first. The scope of the security assessment will
primarily focus on application security, including, but not limited to, a penetration test of the application, as well as a code review. |
7.3 Each Party agrees to comply with all data protection obligations applicable to each Party. Where the Personal Information shall be
construed as Personal Data under EU Directive 95/46/EC, or any subsequent legislation, the Parties shall act as data controller with respect to their own Personal Information and the Personal Information they access from the other Party.
The accessing Party shall access and process the Personal Information of the granting Party solely for the purposes stipulated in this Addendum and any other applicable agreement(s), and in compliance with the obligations set forth in applicable
data protection legislation and other applicable Laws. If the granting Party is considered a Data Controller and the accessing Party a Data Processor, Data Processor shall act also in accordance with Data Controllers written instructions
regarding the processing of the Personal Data. Any perceived conflict in obligations under applicable Law or contract shall be escalated to the other Partys Privacy Officer or other representative as may be designated, with a copy to its
General Counsel.
7.4 Each Party represents and warrants that it has fulfilled and will continue to fulfill, in relation to the
Personal Information granted to the accessing Party, all formal and substantive obligations under the applicable Law, including, but not limited to, those requiring the notification of a breach of their data systems to the competent authorities
and/or the individuals who are the subject of the data, as applicable, the collection of Personal Data in compliance with the duties of informed and adequate consent, the adoption of the technical, physical and organizational measures and the
nondisclosure of Personal Data to third parties (except as consistent with applicable data protection legislation and other applicable Law). Any perceived conflict in obligations under Law or contract should be escalated to the other Partys
Privacy Officer, with a copy to its General Counsel.
7.5 If the accessing Party intends to transfer the Personal Data to a Country
outside of the European Economic Area, the accessing Party shall maintain a mechanism to legally transfer data as prescribed in Article 26(2) of Directive 95/46/EC by the European Commission, or applicable subsequent legislation. The accessing Party
represents and warrants that it shall comply with the Laws of all jurisdictions from which and to which it transfers, or causes to be transferred, Personal Information.
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7.6 Each Party will establish a procedure by which individuals can exercise their rights of data
access, correction, deletion and blocking of data, consistent with applicable Law. Where the accessing Party is not legally obligated to respond to an individual request(s), the procedure required to be adopted by the accessing Party will include a
mechanism to refer the individual to the other Party to allow the individual to make a request concerning his/her Personal Data, if applicable.
7.7 The accessing Party shall notify the granting Party in the most expedient time possible under the circumstances and without
unreasonable delay of any accidental, unauthorized, or unlawful destruction, loss, damage, alteration, or disclosure of, access to, acquisition of, or other processing of the granting Partys data, including Personal Information
(Security Breach) upon becoming aware or developing a reasonable suspicion of such Security Breach. The accessing Party shall also provide the granting Party with a detailed description of the Security Breach, the type of data
that was the subject of the Security Breach and the identity of each affected person (or an identification of the group of potentially affected persons, if individual identities cannot be reasonably known) as soon as such information can be
collected or otherwise becomes available, as well as any other information the granting Party may reasonably request relating to the Security Breach. The accessing Party agrees to take action immediately to investigate the Security Breach and to
identify, prevent and make reasonable efforts to mitigate the effects of any such Security Breach, with the granting Partys prior agreement, and to carry out any recovery or other action necessary to remedy the Security Breach, all of which
shall be at the accessing Partys own cost and expense. Except as otherwise required by Law, the accessing Party may not release or publish any filing, communication, notice, press release, or report concerning any Security Breach in respect of
the granting Partys Personal Information without the granting Partys prior approval. Except as otherwise required by Law, if the granting Party reasonably determines that notification to its customers should occur, the accessing Party
must ensure that affected third parties are notified of the Security Breach, at the granting partys sole discretion, either by notifying such third parties after the granting Party has reviewed and approved the language and method of notice,
or by enabling the granting Party to notify such third parties itself. The accessing Party agrees to cover the costs of any such notification, including reimbursing the granting Party for any reasonable costs such as to provide credit monitoring
services to affected customers.
8.1 Mutual Warranties. Each Party hereby
represents and warrants to the other Party that: (a) it has all necessary power and authority to execute and deliver this Addendum and to perform its obligations under this Addendum; (b) the execution and delivery of this Addendum have
been duly and validly authorized by all necessary corporate action applicable to such party, and no other corporate action is necessary to authorize such partys execution and performance of this Addendum; (c) it is not a party to any
agreement or understanding with any third party that interferes with or will interfere with its performance of its obligations under this Addendum; and (d) it will comply with all applicable Laws, rules and regulations in its performance of its
rights and obligations pursuant to this Addendum, including, without limitation, in connection with its use of the other Partys Personal Information.
8.2 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, AND TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, NEITHER PARTY
MAKES, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NONINFRINGEMENT OF THIRD PARTY RIGHTS, OR
WARRANTIES ARISING FROM A COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OR TRADE PRACTICE. WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY ACKNOWLEDGES THAT THE OTHER PARTYS PERSONAL INFORMATION, AND THE ACCESS TO
SAME, ARE PROVIDED ON AN AS-IS BASIS.
8
The term of this Addendum (the
Addendum Term) shall commence on the Effective Date and, unless sooner terminated by either Party in accordance with the Operating Agreement, shall continue in full force and effect for the period of the Operating Agreement.
Termination of this Addendum shall not affect Sections 2.3, 3, 4, 5, 6 or 7.
10.1 Relationship of the Parties.
Nothing contained in this Addendum shall be deemed or construed as creating a joint venture, partnership, agency, employment or fiduciary relationship between the Parties. Neither Party nor its agents has any authority of any kind to bind the other
Party in any respect whatsoever, and the relationship of the Parties is, and at all times shall continue to be, that of independent contractors.
10.2 Entire Agreement. This Addendum, and the Operating Agreement constitute the entire agreement between the Parties concerning the
subject matter hereof and supersedes all prior or contemporaneous representations, discussions, proposals, negotiations, conditions, agreements and communications, whether oral or written, between the Parties relating to the subject matter of this
hereof.
10.3 Incorporation by Reference. Sections 17.1, 17.2 and 17.4 through 17.8 of the Operating Agreement are incorporated by
reference into this Addendum, mutatis mutandis, except that (a) any such provision that conflicts with this Addendum shall not be so incorporated, and (b) each reference to this Agreement in the Operating Agreement shall
be deemed to refer to this Addendum.
9
IN WITNESS WHEREOF, the Parties have caused this Addendum to be executed by duly
authorized representatives of the Parties as of the Effective Date.
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EBAY INC. |
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PAYPAL HOLDINGS, INC. |
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BY: |
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BY: |
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NAME: |
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Devin N. Wenig |
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NAME: |
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Daniel H. Schulman |
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TITLE: |
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President and CEO-Designee, eBay Marketplaces |
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TITLE: |
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President and CEO-Designee |
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EBAY INTERNATIONAL AG |
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PAYPAL, INC. |
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BY: |
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BY: |
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NAME: |
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Anthony Glasby |
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NAME: |
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Daniel H. Schulman |
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Authorized Signatory |
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President |
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PAYPAL PTD. LTD. |
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NAME: |
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Anthony Glasby |
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Authorized Signatory |
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PAYPAL PAYMENTS PTE. HOLDINGS SCS. |
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Robert Caplehorn |
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[Signature Page to Data Sharing Addendum]
Exhibit 10.2
TRANSITION SERVICES AGREEMENT
BY
AND BETWEEN
EBAY INC.
AND
PAYPAL HOLDINGS, INC.
DATED
AS OF JULY 17, 2015
TABLE OF CONTENTS
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Page |
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ARTICLE I DEFINITIONS |
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1 |
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Section 1.01. |
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Definitions |
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1 |
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ARTICLE II SERVICES |
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4 |
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Section 2.01. |
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Services |
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4 |
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Section 2.02. |
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Additional Services |
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4 |
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Section 2.03. |
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Performance of Services |
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4 |
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Section 2.04. |
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Charges for Services |
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6 |
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Section 2.05. |
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Reimbursement for Out-of-Pocket Costs and Expenses |
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6 |
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Section 2.06. |
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Changes in the Performance of Services |
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6 |
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Section 2.07. |
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Transitional Nature of Services |
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6 |
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Section 2.08. |
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Subcontracting |
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6 |
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Section 2.09. |
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TSA Managers and Service Managers |
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7 |
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Section 2.10. |
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Services Not Included |
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7 |
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ARTICLE III OTHER ARRANGEMENTS |
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7 |
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Section 3.01. |
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Access |
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Section 3.02. |
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System Security and Data Protection |
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8 |
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ARTICLE IV PAYMENTS; BILLING; TAXES |
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8 |
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Section 4.01. |
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Procedure |
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8 |
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Section 4.02. |
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Late Payments |
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8 |
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Section 4.03. |
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Taxes |
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Section 4.04. |
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Audit Rights |
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ARTICLE V TERM AND TERMINATION |
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Section 5.01. |
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Term |
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Section 5.02. |
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Early Termination |
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Section 5.03. |
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Interdependencies |
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Section 5.04. |
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Effect of Termination |
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ARTICLE VI CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS |
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Section 6.01. |
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eBay and PayPal Obligations |
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Section 6.02. |
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No Release; Return or Destruction |
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Section 6.03. |
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Privacy and Data Protection Laws; Residual Information |
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Section 6.04. |
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Protective Arrangements |
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ARTICLE VII LIMITED LIABILITY AND INDEMNIFICATION |
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Section 7.01. |
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Limitations on Liability |
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Section 7.02. |
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Recipient Indemnity |
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Section 7.03. |
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Provider Indemnity |
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Section 7.04. |
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Indemnification Procedures |
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Section 7.05. |
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Liability for Payment Obligations |
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Section 7.06. |
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Exclusion of Other Remedies |
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ARTICLE VIII DISPUTES |
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Section 8.01. |
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Dispute Resolution |
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Section 8.02. |
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Disputes Over Charges and Termination Charges |
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Section 8.03. |
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Litigation and Unilateral Commencement of Arbitration |
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Section 8.04. |
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Conduct During Dispute Resolution Process |
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ARTICLE IX MISCELLANEOUS |
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Section 9.01. |
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Mutual Cooperation |
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Section 9.02. |
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Further Assurances |
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Section 9.03. |
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Audit Assistance |
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Section 9.04. |
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Title to Intellectual Property |
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Section 9.05. |
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License |
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Section 9.06. |
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Independent Contractors |
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Section 9.07. |
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Assignability |
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Section 9.08. |
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Third-Party Beneficiaries |
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Section 9.09. |
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Force Majeure |
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Section 9.10. |
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No Set-Off |
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Section 9.11. |
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Incorporation by Reference |
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15 |
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Exhibit A Services
ii
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT, dated as of July 17, 2015, (this Agreement), is by and between eBay Inc., a
Delaware corporation (eBay), and PayPal Holdings, Inc., a Delaware corporation (PayPal). This Agreement is effective as of immediately following the Effective Time (i.e., 12:00:00 a.m. Eastern Time on the
day immediately following the Distribution Date) (the TSA Effective Time).
R E C I T A L S:
WHEREAS, the board of directors of eBay (the eBay Board) has determined that it is in the best interests of eBay and its
shareholders to create a new publicly traded company that shall operate the PayPal Business;
WHEREAS, in furtherance of the
foregoing, the eBay Board has determined that it is appropriate and desirable to separate the PayPal Business from the eBay Business (the Separation) and, following the Separation, make a distribution, on a pro rata basis,
to holders of eBay Shares on the Record Date of all the outstanding PayPal Shares owned by eBay (the Distribution);
WHEREAS, to effectuate the Separation and the Distribution, eBay and PayPal have entered into a Separation and Distribution Agreement, dated
as of June 26, 2015, (the Separation and Distribution Agreement); and
WHEREAS, to facilitate and provide for an
orderly transition in connection with the Separation and the Distribution, the Parties desire to enter into this Agreement to set forth the terms and conditions pursuant to which each of the Parties shall provide Services to the other Party for a
transitional period.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
A G R E E M E N T:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
Action has the meaning set forth in the Separation and Distribution Agreement.
Affiliate has the meaning set forth in the Separation and Distribution Agreement.
Agreement has the meaning set forth in the Preamble.
Ancillary Agreements has the meaning set forth in the Separation and Distribution Agreement.
Approvals has the meaning set forth in the Separation and Distribution Agreement.
Change of Control shall mean, with respect to a Party, the occurrence after the Effective Time of any of the following:
(a) the sale, conveyance or disposition, in one or a series of related transactions, of all or substantially all of the assets of such Party to a third party that is not an Affiliate of such Party prior to such transaction or the first of such
related transactions; (b) the consolidation, merger or other business combination of a Party with or into any other Person, immediately following which the stockholders of the Party prior to such transaction fail to own in the aggregate the
Majority Voting Power of the surviving Party in such consolidation, merger or business combination or of its ultimate publicly traded parent Person; or (c) a transaction or series of transactions in which any Person or group (as
such term is used in Section 13(d) of the Exchange Act) acquires the Majority Voting Power of such Party (other than a reincorporation or similar corporate transaction in which each of such Partys stockholders own, immediately thereafter,
interests in the new parent company in substantially the same percentage as such stockholder owned in such Party immediately prior to such transaction).
Charge and Charges have the meaning set forth in
Section 2.04.
Confidential Information shall mean all Information that is either confidential or
proprietary.
Dispute has the meaning set forth in Section 8.01.
Distribution has the meaning set forth in the Recitals.
Distribution Date has the meaning set forth in the Separation and Distribution Agreement.
Divested Asset has the meaning set forth in Section 9.07(c).
Divested Asset Acquirer has the meaning set forth in Section 9.07(c).
eBay has the meaning set forth in the Preamble.
eBay Board has the meaning set forth in the Recitals.
eBay Business has the meaning set forth in the Separation and Distribution Agreement.
eBay Shares has the meaning set forth in the Separation and Distribution Agreement.
eBay Specified Person has the meaning set forth in the Separation and Distribution Agreement.
Effective Time has the meaning set forth in the Separation and Distribution Agreement.
Escalation Committee has the meaning set forth in the Separation and Distribution Agreement.
Force Majeure has the meaning set forth in the Separation and Distribution Agreement.
Governmental Authority has the meaning set forth in the Separation and Distribution Agreement.
Independent Auditor has the meaning set forth in Section 4.04(a).
Information has the meaning set forth in the Separation and Distribution Agreement.
Information Technology has the meaning set forth in the Separation and Distribution Agreement.
Intellectual Property Matters Agreement has the meaning set forth in the Separation and Distribution Agreement.
Intellectual Property Rights has the meaning set forth in the Intellectual Property Matters Agreement.
Interest Payment has the meaning set forth in Section 4.02.
Law has the meaning set forth in the Separation and Distribution Agreement.
Liability and Liabilities have the meaning set forth in the Separation and Distribution Agreement.
Losses has the meaning set forth in the Separation and Distribution Agreement.
Majority Voting Power shall mean a majority of the voting power in the election of directors of all outstanding voting
securities of the Person in question.
Parties and Party shall mean the parties to this Agreement.
PayPal has the meaning set forth in the Preamble.
PayPal Business has the meaning set forth in the Separation and Distribution Agreement.
PayPal Shares has the meaning set forth in the Separation and Distribution
Agreement.
PayPal Specified Person has the meaning set forth in the Separation and Distribution Agreement.
Person has the meaning set forth in the Separation and Distribution Agreement.
Personnel means, with respect to any Person, any of such Persons directors, officers, employees, agents, independent
contractors, permitted subcontractors and consultants. Subcontractors of any Person shall be deemed Personnel of that Person.
Provider shall mean, with respect to any Service, the Party identified on Exhibit A hereto as the
Provider of such Service.
Provider Indemnitees has the meaning set forth in Section 7.02.
Provider Systems shall mean, with respect to each Service, the Information Technology, Information, Software or other
Technology owned or controlled by Provider or any of its Affiliates that is required for Recipients use of the Services.
Recipient shall mean, with respect to any Service, the Party receiving such Service hereunder.
Recipient Indemnitees has the meaning set forth in Section 7.03.
Recipient Systems shall mean, with respect to each Service, the Information Technology, Information, Software or other
Technology owned or controlled by Recipient or any of its Affiliates that is required for its use of the Services or the Providers provision of the Services.
Record Date has the meaning set forth in the Separation and Distribution Agreement.
Representatives has the meaning set forth in the Separation and Distribution Agreement.
Residual Information has the meaning set forth in the Separation and Distribution Agreement.
Separation has the meaning set forth in the Recitals.
Separation and Distribution Agreement has the meaning set forth in the Recitals.
Service Change has the meaning set forth in Section 2.03(c).
Service Interruption has the meaning set forth in Section 2.03(a).
Service Manager has the meaning set forth in Section 2.09.
Service Period shall mean, with respect to any Service, the period commencing at the TSA Effective Time and ending on the
earlier of (a) the date that a Party terminates the provision of such Service pursuant to Section 5.02 or (b) the date that is set forth opposite such Service on Exhibit A.
Services has the meaning set forth in Section 2.01.
Software has the meaning set forth in the Separation and Distribution Agreement.
Subsidiary has the meaning set forth in the Separation and Distribution Agreement.
Tax has the meaning set forth in the Tax Matters Agreement.
Tax Matters Agreement has the meaning set forth in the Separation and Distribution Agreement.
Taxing Authority has the meaning set forth in the Tax Matters Agreement.
Technical Information shall have the meaning set forth in the Intellectual Property Matters Agreement.
Technology has the meaning set forth in the Separation and Distribution Agreement.
-3-
Term has the meaning set forth in Section 5.01.
Termination Charges shall mean, with respect to the termination of any Service pursuant to Section 5.02(a)(i),
the sum of (a) any and all costs, fees and expenses (other than any severance or retention costs paid to Personnel, except as permitted by clause (b) below) payable by the Provider of such Service to a Third Party that directly result from
the early termination of such Service; provided, that the Provider shall use commercially reasonable efforts to minimize any costs, fees or expenses payable to any Third Party in connection with such early termination of such Service and
credit any such reductions against the Termination Charges payable by the Recipient; and (b) any and all unreimbursed upfront or start-up fees and expenses incurred by Provider (supported by adequate documentation) to provide or to enable the
provision of the Services (it being agreed that the costs set forth in this clause (b) shall only be the amount, if any, in excess of the upfront or start-up fees and expenses that such Provider would not have recovered from the Recipient if
the Service had been provided for the full period during which such Service would have been provided hereunder but for such early termination).
Third Party shall mean any Person other than the Parties or any of their Affiliates.
Third-Party Claim shall mean any Action commenced by any Third Party against any Party or any of its Affiliates.
Transaction Taxes has the meaning set forth in Section 4.03(a).
TSA Effective Time has the meaning set forth in the Preamble.
TSA Manager has the meaning set forth in Section 2.09.
ARTICLE II
SERVICES
Section 2.01. Services. Commencing as of the TSA Effective Time, the Provider agrees to provide, or to cause one or more of its
Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient, the applicable services (the Services) set forth on Exhibit A hereto (which exhibit shall be signed by the applicable Subsidiaries of the
Provider and the Recipient named therein), and the Provider shall also perform those sub-tasks that are integral to and a necessary part of the proper discharge of the Services in accordance with standard industry practice.
Section 2.02. Additional Services. If during the period commencing on the TSA Effective Time and ending on the date that is one
hundred and eighty (180) days following the Distribution Date, either Party identifies (i) (A) a service that was provided or performed by eBay or its Affiliates to or for PayPal or its Affiliates during the twelve (12)-month period
immediately prior to the Distribution Date that PayPal or its Affiliates reasonably needs in order for the PayPal Business to continue to operate in substantially the same manner in which the PayPal Business operated prior to the Distribution Date,
but is not listed on Exhibit A (other than because the Parties have otherwise agreed in writing that such service shall not be provided), or (B) a service that was provided or performed by PayPal or its Affiliates to or for eBay or its
Affiliates during the twelve (12)-month period immediately prior to the Distribution Date that eBay or its Affiliates reasonably needs in order for the eBay Business to continue to operate in substantially the same manner in which the eBay Business
operated prior to the Distribution Date, but is not listed on Exhibit A (other than because the Parties have agreed in writing that such service shall not be provided), and (ii) submits a written request describing such service to the
applicable Manager(s), then such other Party shall consider in good faith the request to provide such additional services (such requested additional services, the Additional Services). If the Parties agree on such
Additional Services, then the terms of such Additional Service and the associated service fees shall be documented in writing by the Parties as an amendment to Exhibit A, and such Additional Service shall be a Service provided under this
Agreement, subject to the terms of this Agreement. The Recipients costs for any such Additional Service shall be Charges to be calculated in accordance with Section 2.04.
Section 2.03. Performance of Services.
(a) Except as set forth on Exhibit A, the Provider (i) shall perform, or shall cause one or more of its Subsidiaries to perform,
all Services to be provided by the Provider in a commercially reasonable manner consistent with the nature, quality, standard of care and service levels at which the same or similar services were performed by or on behalf of Provider during the
twelve (12)-month period immediately prior to the Distribution Date; and (ii) upon receipt of written notice from the Recipient identifying any outage, interruption, disruption, downturn or other failure of any Service (a Service
Interruption), shall use commercially reasonable efforts to respond, or to cause one or more of its Subsidiaries to respond, to such Service Interruption in a manner that is substantially similar to the manner in which such Provider or its
Affiliates responded to any Service Interruption of the same or similar services during the twelve (12)-month period prior to the Distribution Date. Except as set forth on Exhibit A, with respect to Services for which the same or similar
services were not provided prior to the Distribution Date, the Provider:
-4-
(A) shall perform, or shall cause one or more of its Subsidiaries to perform, such Services in a commercially reasonable manner consistent with the nature, quality, standard of care and
service levels at which the same or similar services are performed by or on behalf of Provider to Provider, its Affiliates or its other business units; and (B) upon receipt of written notice from the Recipient identifying any Service
Interruption with respect to such Services, shall use commercially reasonable efforts to respond, or to cause one or more of its Subsidiaries to respond, to such Service Interruption in a manner that is substantially similar to the manner in which
such Provider or its Affiliates responds with respect to internally provided services.
(b) Nothing in this Agreement shall require the
Provider to perform or cause to be performed any Service to the extent that the manner of such performance would constitute a violation of any applicable Law or any existing contract or agreement with a Third Party. If the Provider is or becomes
aware of any potential violation on the part of the Provider, the Provider shall use commercially reasonable efforts to promptly advise the Recipient of such potential violation, and the Provider and the Recipient will mutually seek a reasonable
alternative that addresses such potential violation. The Parties agree to cooperate in good faith and use commercially reasonable efforts to obtain any necessary Third Party Approvals required under any existing contract or agreement with a Third
Party to allow the Provider to perform, or cause to be performed, all Services to be provided by the Provider hereunder in accordance with the standards set forth in this Section 2.03; provided, that neither Party shall be
required to accept any terms or conditions, commit to pay any amount, incur any obligation in favor of or offer or grant any accommodation (financial or otherwise, regardless of any provision to the contrary in the existing contract or agreement) to
any Third Party to obtain any such Approval. Unless otherwise agreed in writing by the Parties, all reasonable and documented out-of-pocket costs and expenses (if any) incurred by any Party or any of its Subsidiaries in connection with obtaining any
such Third Party Approval (including, if agreed by the Parties, the amount paid, obligation incurred or accommodation granted to Third Parties to obtain such Approval) that is required to allow the Provider to perform or cause to be performed such
Services shall be incurred by the Recipient. If, with respect to a Service, the Parties, despite the use of such commercially reasonable efforts, are unable to obtain a required Third Party Approval, or the performance of such Service by the
Provider would constitute a violation of any applicable Law, the Parties shall use commercially reasonable efforts to develop a reasonable alternative arrangement that enables Provider to perform or cause to be performed such Service or an analogous
service without obtaining such required Third Party Approval or violating any applicable Law.
(c) Except as set forth on Exhibit A,
if Provider is required to (i) increase staffing; (ii) acquire, lease or license additional facilities, equipment or software; (iii) engage in significant capital expenditures; or (iv) apply for or obtain one or more Approval
from Third Parties (other than renewals of any preexisting permits, licenses or authorizations) (clauses (i) to (iv), collectively, the Service Changes) in order to accommodate an increase in the use of any Service beyond the
level of use of such Service by the Recipient during the twelve (12) month period immediately prior to the Distribution Date, including (A) as a result of a change in the manner in which the Recipients business is being conducted by
such Recipient after the Distribution Date, but (B) excluding ordinary course expansion of the volume or the geographic scope of such business (such as ordinary-course increases in headcount, customers, supplier relationships and transaction
volumes), then the Provider shall inform the Recipient in writing of the Service Change and propose a plan for implementing the Service Change before incurring any costs or expenses resulting from such Service Change. The Parties shall negotiate in
good faith and mutually agree to adjust or change the Services, including the Charges, if necessary, before Provider is required to undertake any Service Change. If the Parties determine that the Provider shall undertake the Service Change, then
such Service Change, together with any other adjustments or changes to the Services, including to the Charges, shall be documented in a written agreement signed by the Parties, and the Parties shall jointly amend Exhibit A to reflect such
written agreement. Each amended section of Exhibit A, as agreed to in writing by the Parties, shall be deemed part of this Agreement as of the date of such written agreement and the Service Changes set forth in such amended section of
Exhibit A shall be deemed a part of the Services provided under this Agreement, in each case subject to the terms and conditions of this Agreement.
(d) (i) Except as set forth on Exhibit A, neither the Provider nor any of its Subsidiaries shall be required to perform or to cause
to be performed any of the Services for the benefit of any Third Party or any other Person other than the Recipient and its Subsidiaries, and (ii) EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 2.03 OR SECTION 7.03, EACH PARTY
ACKNOWLEDGES AND AGREES THAT ALL SERVICES ARE PROVIDED ON AN AS-IS BASIS, AND THAT THE PROVIDER MAKES NO OTHER REPRESENTATIONS OR GRANTS ANY WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE,
WITH RESPECT TO THE SERVICES. EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR THE
NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
(e) Each Party shall be responsible for its own compliance with any
and all Laws applicable to its performance under this Agreement. No Party shall knowingly take any action in violation of any such applicable Law that results in Liability being imposed on the other Party. If a change in or addition to Law
applicable to the Provider or the Recipient causes the Provider to change the Services provided or incur additional expenses in providing such Services, the Provider shall use commercially reasonable efforts to promptly advise the Recipient of such
additional expenses, and the Provider and the Recipient will mutually seek an alternative that minimizes such additional expenses. The Recipient shall be responsible for any and all such additional expenses.
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Section 2.04. Charges for Services. Except as set forth on Exhibit A, the
Recipient shall pay the Provider of the Services a fee (either one-time or recurring) for such Services (or category of Services, as applicable) (each fee constituting a Charge and, collectively, Charges). The
Charges for each Service shall equal (x) the cost of providing such Services, which shall be consistent with the Providers direct costs, determined in a manner consistent with allocation methodology used by the Parties during the twelve
(12) month period immediately prior to the Distribution Date, plus (y) seven percent (7%), unless otherwise agreed to by the Parties. During the Term, the amount of a Charge for any Service may be modified to the extent of
(a) any adjustments mutually agreed to by the Parties, (b) any Service Change requested by the Recipient and agreed upon by the Provider pursuant to Section 2.03(c), and (c) any adjustment in the rates or charges imposed
by any Third-Party provider that is providing Services (proportional to the respective use of such Services by each Party); provided, that the rates or charges imposed by such Third-Party provider shall be passed through to the Recipient
without adding any margin or mark-up. Together with any invoice for Charges, the Provider shall provide the Recipient with reasonable documentation to support the calculation of such Charges, including any additional documentation reasonably
requested by the Recipient to the extent that such documentation is in the Providers or its Subsidiaries possession or control.
Section 2.05. Reimbursement for Out-of-Pocket Costs and Expenses. The Recipient shall reimburse the Provider for reasonable and
documented out-of-pocket costs and expenses incurred by the Provider or any of its Subsidiaries in connection with providing the Services (including incremental license fees incurred by the Provider in connection with the performance of the Services
and reasonable travel-related expenses) to the extent that such costs and expenses are not reflected in the Charges for such Services; provided, that any such cost or expense in excess of one thousand ($1,000.00), in the aggregate, that is
not consistent with the historical practice between the Parties during the twelve (12) month period immediately prior to the Distribution Date for any Service shall require advance written approval of the Recipient. Any authorized
travel-related expenses incurred in performing the Services shall be incurred and charged to the Recipient in accordance with the Recipients then-applicable business travel policies as provided to the Provider from time to time.
Section 2.06. Changes in the Performance of Services. Except as set forth on Exhibit A, subject to the performance
standards for Services set forth in Sections 2.03(a), 2.03(b) and 2.03(c) and subject to Section 2.08, the Provider may make changes from time to time in the manner of performing the Services if the Provider
furnishes to the Recipient reasonable prior written notice (in content and timing) of such changes. No such change shall materially reduce the quality or service level of, or increase the Charges for, the applicable Service. Subject to
Section 2.03(e), if any such change by the Provider reasonably requires the Recipient to incur a material increase in costs and expenses, in the aggregate, to continue to receive and utilize the applicable Services in the same manner as
the Recipient was receiving and utilizing such Service prior to such change, the Provider shall be required to reimburse the Recipient for all such reasonable increase in costs and expenses. Upon request, the Recipient shall provide the Provider
with reasonable documentation, including any additional documentation reasonably requested by the Provider to the extent such documentation is in the Recipients or its Subsidiaries possession or control, to support the calculation of
such increase in costs and expenses.
Section 2.07. Transitional Nature of Services. The Parties acknowledge the transitional
nature of the Services. The Recipient shall use commercially reasonable efforts to transition each Service from the Provider to the Recipient (or its designee) as soon as commercially practicable after the Distribution Date, but in any event before
the end of the Service Period for such Service (as described in Section 5.01). The Parties agree to use reasonable efforts to assist and cooperate in good faith with each other in to effectuating such transition of the Services from the
Provider to the Recipient (or its designee) in a timely and orderly manner.
Section 2.08. Subcontracting. The Provider may
hire or engage one or more Third Parties to perform any or all of its obligations under this Agreement without the consent of the Recipient; provided, that, subject to Section 2.03(e), (a) the hiring or engagement of such
Third Party does not decrease the quality or level of services provided to the Recipient to below that provided by the Provider, (b) the use of such Third Party will not increase the Charges payable by the Recipient in connection with such
Services, (c) the use of such Third Party will not change the manner in which the Services are delivered in a way that increases the Recipients costs of receiving the Services; provided, further, that if such Third Party has
been engaged by Provider to perform the same or similar services prior to the Distribution Date, then clauses (a), (b) and (c) shall be deemed satisfied. The Provider shall in all cases remain primarily responsible for all of its
obligations under this Agreement with respect to the scope of the Services, the performance standard for Services set forth in Section 2.03 or Exhibit A and the content of the Services provided to the Recipient, except that if a
Third Party provides all or part of any Service pursuant to a written agreement with the Recipient, the Recipient agrees to be bound by, and to cause its Affiliates to comply with, those obligations that such agreement places on the Recipient, and
the Provider shall not be responsible for its obligations under this Agreement that are specified in such agreement to be obligations of the Third Party provider. Subject to the confidentiality provisions set forth in Article VI, each Party
shall, and shall cause their respective Affiliates to, provide, upon ten (10) business days prior written notice, any Information within such Partys or its Affiliates possession that the requesting Party reasonably requests in
connection with any Services being provided to such requesting Party by a Third Party, including any applicable invoices, agreements documenting the arrangements between such Third Party and the Provider and other supporting documentation.
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Section 2.09. TSA Managers and Service Managers. eBay and PayPal shall each appoint
and designate an individual to act as its initial manager with overall responsibility for all Services (the TSA Managers). eBay and PayPal shall provide each other with written notice of the identity and title of its TSA Manager
upon execution of this Agreement. eBay and PayPal shall also each appoint and designate an individual holding the title set forth in the applicable sections of Exhibit A to act as the service manager for a particular Service (each, a
Service Manager). Unless otherwise specified in Exhibit A, with respect to each Service, the Service Manager shall have primary responsibility for coordinating and managing the delivery and use of that Service and shall
have authority to act on eBays or PayPals behalf, as applicable, with respect to the provision and use of such Service. In overseeing its Service Managers, the TSA Managers shall have all of the authority of each of their respective
Service Managers across all Services, will be responsible for resolving any disputes that cannot be resolved between each Partys Service Managers and will be responsible for ensuring that each of their respective Service Managers fulfills its
responsibilities in connection with the Services and this Section 2.09. The TSA Managers and applicable Service Managers shall work with the Personnel and Third Party providers to periodically address issues and matters raised by the other
Party relating to the provision of Services. All communications between the Parties pursuant to this Agreement regarding routine matters involving a Service shall be directed to the applicable Service Manager with a copy to the TSA Managers, and all
other communications between the Parties pursuant to Article II of this Agreement (other than the negotiation and execution of any written agreement that amends Exhibit A) shall be directed to the applicable TSA Manager. Each Party shall
notify the other Party of any change in the status of any of its TSA Manager or any of its Service Managers that would affect such TSA Managers or Service Managers ability to carry out the responsibilities set forth in this
Section 2.09 at least ten (10) business days prior to such change.
Section 2.10. Services Not Included. It
is not the intent of the Provider to render to the Recipient, nor of the Recipient to receive from the Provider, professional advice or opinions, whether with regard to Tax, legal, treasury, finance, employment or other business, technical and
financial matters; and the Recipient shall not rely on, or construe, any Service rendered by or on behalf of the Provider as such professional advice or opinions or technical advice.
ARTICLE III
OTHER ARRANGEMENTS
Section 3.01. Access.
(a) PayPal shall, and shall cause its Subsidiaries to, allow eBay and its Subsidiaries and their respective Representatives reasonable access
to the facilities of PayPal and its Subsidiaries that is necessary for eBay and its Subsidiaries to fulfill their obligations under this Agreement. In addition to the foregoing right of access, PayPal shall, and shall cause its Subsidiaries to,
afford eBay, its Subsidiaries and their respective Representatives, upon reasonable advance written notice, reasonable access during normal business hours to the facilities, Information, systems, infrastructure and Personnel of PayPal and its
Subsidiaries as reasonably necessary for eBay to verify the adequacy of internal controls over information technology, reporting of financial data and related processes employed in connection with the Services being provided by PayPal or its
Subsidiaries, including in connection with verifying compliance with Section 404 of the Sarbanes-Oxley Act of 2002; provided, that (i) such access shall not unreasonably interfere with any of the business or operations of PayPal or
any of its Subsidiaries, (ii) if PayPal determines that providing such access could violate any applicable Law or agreement or waive any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit such access
in a manner that avoids each of such harm and consequence, and (iii) if PayPal determines that providing such access requires a Third Party Approval, such access shall be subject to the receipt of such Third Party Approval. eBay agrees that all
of its and its Subsidiaries employees shall, and that it shall use commercially reasonable efforts to cause its Representatives employees to, when on the property of PayPal or its Subsidiaries, or when given access to any facilities,
Information, systems, infrastructure or Personnel of PayPal or its Subsidiaries, conform to the reasonable policies and procedures of PayPal and its Subsidiaries, as applicable, concerning health, safety, conduct and security that are made known or
provided to eBay from time to time.
(b) eBay shall, and shall cause its Subsidiaries to, allow PayPal and its Subsidiaries and their
respective Representatives reasonable access to the facilities of eBay and its Subsidiaries that is necessary for PayPal and its Subsidiaries to fulfill their obligations under this Agreement. In addition to the foregoing right of access, eBay
shall, and shall cause its Subsidiaries to, afford PayPal, its Subsidiaries and their respective Representatives, upon reasonable advance written notice, reasonable access during normal business hours to the facilities, Information, systems,
infrastructure and Personnel of eBay and its Subsidiaries as reasonably necessary for PayPal to verify the adequacy of internal controls over information technology, reporting of financial data and related processes employed in connection with the
Services being provided by eBay or its Subsidiaries, including in connection with verifying compliance with Section 404 of the Sarbanes-Oxley Act of 2002; provided, that (i) such access shall not unreasonably interfere with any of
the business or operations of eBay or any of its Subsidiaries, (ii) if eBay
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determines that providing such access could violate any applicable Law or agreement or waive any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit
such access in a manner that avoids each of such harm and consequence, and (iii) if eBay determines that providing such access requires a Third Party Approval, such access shall be subject to the receipt of such Third Party Approval. PayPal
agrees that all of its and its Subsidiaries employees shall, and that it shall use commercially reasonable efforts to cause its Representatives employees to, when on the property of eBay or its Subsidiaries, or when given access to any
facilities, Information, systems, infrastructure or Personnel of eBay or its Subsidiaries, conform to the reasonable policies and procedures of eBay and its Subsidiaries, as applicable, concerning health, safety, conduct and security that are made
known or provided to PayPal from time to time.
Section 3.02. System Security and Data Protection. Each Party agrees that its
and its Subsidiaries employees having access to the Information Technology, Software or other Technology of the other Party and its Subsidiaries in connection with the performance, receipt or delivery of a Service, shall, and that it shall use
commercially reasonable efforts to cause its Representatives employees having such access to, comply with all security guidelines (including physical security, network access, internet security, confidentiality and personal data security
guidelines) of such other Party and its Subsidiaries that are made known or provided to such Party from time to time. Each Party shall ensure that any access described by this Section 3.02 shall be used by its and its Subsidiaries
Personnel, and shall use commercially reasonable efforts to ensure that any such access shall be used by its Representatives Personnel, only for the purposes contemplated by, and subject to the terms of, this Agreement. Subject to Article VI
of the Separation and Distribution Agreement and any applicable provisions of the other Ancillary Agreements and the Commercial Agreements, the Provider shall only process personal data which it may receive from the Recipient while carrying out its
duties under this Agreement: (a) in such a manner as is necessary to carry out those duties; (b) in accordance with (i) applicable instructions in Exhibit A and (ii) any instructions otherwise communicated by the Recipient; and
(c) using appropriate technical and organizational measures to prevent the unauthorized or unlawful processing of such personal data or the accidental loss or destruction of, or damage to, such personal data.
ARTICLE IV
PAYMENTS; BILLING;
TAXES
Section 4.01. Procedure. Charges for the Services shall be charged to and payable by the Recipient. Amounts payable
pursuant to this Agreement shall be paid by wire transfer (or such other method of payment as may be agreed between the Parties from time to time) to the Provider (as directed by the Provider), on a monthly basis in the case of recurring fees, which
amounts shall be due within sixty (60) days of the Recipients receipt of each such invoice, including reasonable documentation pursuant to Section 2.04. Except as set forth on Exhibit A, all amounts due and payable
hereunder shall be invoiced and paid in U.S. dollars.
Section 4.02. Late Payments. Charges not paid when due pursuant to this
Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within sixty (60) days of the receipt of such bill, invoice or other demand) shall accrue interest at a rate per annum equal to the Prime
Rate plus two percent (2%) or the maximum rate under applicable Law, whichever is lower (the Interest Payment).
Section 4.03. Taxes.
(a) All Charges for Services shall be exclusive of any value added, goods and services, sales, use, consumption, excise, service, transfer,
stamp, documentary, filing, recordation taxes or similar taxes (Transaction Taxes). Without limiting any provision of this Agreement, the Recipient shall be responsible for all Transaction Taxes imposed or assessed with respect to
the provision of Services by the Provider. The Provider shall issue proper invoices usable by the Recipient to recover (by way of credit or refund) Transaction Taxes in jurisdictions where they are recoverable. The Provider and the Recipient shall
cooperate to minimize any Transaction Taxes and in obtaining any refund, return or rebate, or applying an exemption or zero-rating for Services giving rise to any Transaction Taxes, including by filing any exemption or other similar forms or
providing valid tax identification number or other relevant registration numbers, certificates or other documents. The Recipient and the Provider shall cooperate regarding any requests for information, audit, or similar request by any Taxing
Authority concerning Transaction Taxes payable with respect to Services provided pursuant to this Agreement.
(b) The Recipient shall be
entitled to deduct and withhold Tax required by applicable Law to be withheld on payments made to the Provider pursuant to this Agreement. To the extent any amounts are so withheld, the Recipient shall timely remit such deducted and withheld amount
to the relevant Taxing Authority and promptly provide the Provider with evidence of such payment. Provider agrees to complete and provide to Recipient or if required, to the relevant Taxing Authority, at least ten (10) days prior to the payment
due date, such forms, certifications or other documents as may be reasonably requested by Recipient, in order to reduce or exempt the withholding of any Tax with respect to payments made to Provider when and where applicable by Law. The Recipient
and the Provider shall cooperate regarding any requests for information, audit, or similar request by any Taxing Authority concerning the withholding of any Tax payable with respect to Services provided pursuant to this Agreement.
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(c) Any penalties or interest imposed on any Transaction Taxes described in
Section 4.03(a) or Tax described Section 4.03(b) shall be the responsibility of the Recipient unless the penalties or interest are the result of an action or failure to act by the Provider.
Section 4.04. Audit Rights.
(a) During the Term and for eighteen (18) months thereafter, the Recipient shall be permitted to request, at the Recipients sole
cost and expense, periodic (but no more frequently than annually) audits of the books and records of the Provider reasonably relating to the Services that the Provider is obligated to provide under this Agreement. Any review conducted pursuant to
this Section 4.04 shall be conducted by an independent, external, internationally-recognized firm to be mutually agreed upon by the Recipient and the Provider with appropriate qualifications and experience in conducting reviews of this
nature (the Independent Auditor). Before beginning its review, the Independent Auditor shall execute a confidentiality agreement with the Provider, the terms of which shall not frustrate or impede the purpose of the audit or the
disclosure of the results thereof to the Recipient; provided, that if the Independent Auditor has executed a confidentiality agreement in accordance with this Section 4.04(a) during the Term and such confidentiality agreement
remains in full force and effect, the Independent Auditor shall not be required to reexecute a second confidentiality agreement. The Independent Auditor shall create a detailed written report of the results and findings of its audit, and
simultaneously provide copies of the audit to both Parties.
(b) The Provider may dispute the results of an audit conducted pursuant to
Section 4.04(a), in which case the Parties shall attempt in good faith to negotiate a resolution of any dispute within thirty (30) days of the Recipients demand for compensation or reimbursement arising out of the result of
such audit. If the Parties are unable to resolve any such dispute after such thirty (30)-day period, the Parties shall resolve the dispute pursuant to Section 8.01 and Section 8.02.
(c) The Provider shall reasonably cooperate with the Independent Auditor in connection with any audit under Section 4.04(a),
including by providing the Independent Auditor with access to financial and accounting books and statements, management and operating data, records, working papers of the Providers auditors (to the extent permitted by such auditors, provided,
that the Provider shall not withhold any consents necessary to permit the Independent Auditor from providing access to such working papers), accounts, financial statements, systems, facilities, operations, and management Personnel and other
Personnel, but only as reasonably necessary for the purposes set forth in Section 4.04(a), and ensure that its Personnel cooperate with any such audit and all other reasonable requests by the Independent Auditor for additional
information or documentation required to complete such audit. The Provider shall not be required pursuant to this Section 4.04 to disclose to the Independent Auditor any Information to the extent disclosure of such Information to the
Independent Auditor would violate applicable Law.
(d) If any audit reveals that the Recipient overpaid any amount due (except for any
portion thereof disputed in good faith), the Provider shall within ten (10) business days after such determination reimburse the Recipient an amount of cash equal to such overpayment, plus the Interest Payment, accruing from the date of payment
by the Recipient to the time of reimbursement by the Provider. If any audit reveals that the Recipient has underpaid any amount due under this Agreement (except for any portion thereof disputed in good faith), the Recipient shall within ten
(10) business days after such determination reimburse the Provider an amount of cash equal to such underpayment, plus the Interest Payment, accruing from the date such payment originally should have been made by the Recipient to the time of
payment by the Recipient, subject to Section 4.04(c). If any such overpayment or underpayment equals or exceeds two hundred and fifty thousand Dollars ($250,000) and also amounts to ten percent (10%) or more of the total amount
payable by the Recipient for any period covered by the review, the Provider shall reimburse the Recipient for the cost of such review.
ARTICLE V
TERM AND TERMINATION
Section 5.01. Term. This Agreement shall commence at the TSA Effective Time and shall be in effect until terminated in
accordance with this Article V (the Term). This Agreement shall terminate upon the earlier to occur of (a) the last date on which either Party is obligated to provide any Service to the other Party in accordance with
the terms of this Agreement; (b) the mutual written agreement of the Parties to terminate this Agreement in its entirety; or (c) the date that is the twenty-fourth (24th) month anniversary of the Distribution Date. Unless otherwise
terminated pursuant to Section 5.02, this Agreement shall terminate with respect to each Service as of the close of business on the last day of the Service Period for such Service.
Section 5.02. Early Termination.
(a) Without prejudice to the Recipients rights with respect to Force Majeure, the Recipient may from time to time terminate this
Agreement with respect to the entirety of any individual Service but not a portion thereof:
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(i) Except as set forth on Exhibit A, for any reason or no reason, upon the giving of at
least thirty (30) days prior written notice to the Provider of such Service; provided, that if Exhibit A sets forth a different notice period, then the Recipient shall comply with such different notice period;
provided, further, that any such termination shall be subject to the obligation to pay any applicable Termination Charges pursuant to Section 5.04; or
(ii) if the Provider of such Service has failed to perform any of its material obligations under this Agreement with respect to such Service,
and such failure shall continue to be uncured for a period of at least thirty (30) days after receipt by the Provider of written notice of such failure from the Recipient; provided, that the Recipient shall not be entitled to terminate
this Agreement with respect to the applicable Service if, as of the end of such period, there remains a good-faith Dispute between the Parties as to whether the Provider has cured the applicable breach.
(b) The Provider may terminate this Agreement with respect to any individual Service, but not a portion thereof, at any time upon prior written
notice to the Recipient if the Recipient has failed to perform any of its material obligations under this Agreement relating to such Service, including making payment of Charges for such Service when due, and such failure shall continue to be
uncured for a period of at least thirty (30) days after receipt by the Recipient of a written notice of such failure from the Provider; provided, that the Provider shall not be entitled to terminate this Agreement with respect to the
applicable Service if, as of the end of such period, there remains a good-faith Dispute between the Parties as to whether the Recipient has cured the applicable breach.
(c) Exhibit A hereto shall be updated to reflect any terminated Service.
Section 5.03. Interdependencies. The Parties acknowledge and agree that (a) there may be interdependencies among the Services
being provided under this Agreement; (b) upon the request of either Party, the Parties shall cooperate and act in good faith to determine whether (i) any such interdependencies exist with respect to the particular Service that a Party is
seeking to terminate pursuant to Section 5.02 and (ii) in the case of such termination, the Providers ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by such
termination of another Service; and (c) if the Parties have determined that such interdependencies exist (and, in the case of such termination that the Providers ability to provide a particular Service in accordance with this Agreement
would be materially and adversely affected by such termination), the Parties shall negotiate in good faith to amend Exhibit A hereto with respect to such termination of such impacted Service, which amendment shall be consistent with the terms
of comparable Services.
Section 5.04. Effect of Termination. Upon the termination of any Service pursuant to this Agreement,
the Provider of the terminated Service shall have no further obligation to provide the terminated Service, and the Recipient of such Service shall have no obligation to pay any future Charges relating to such Service; provided, that the
Recipient shall remain obligated to the Provider for (a) the Charges owed and payable in respect of Services provided prior to the effective date of termination for such Service, and (b) any applicable Termination Charges (which, in the
case of each of clauses (a) and (b), shall be payable only if the Recipient terminates any Service pursuant to Section 5.02(a)(i)). In connection with the termination of any Service, the provisions of this Agreement not relating
solely to such terminated Service shall survive any such termination, and in connection with a termination of this Agreement, Article I, Section 4.04, this Article V, Article VII and Article IX, all
confidentiality obligations under this Agreement and Liability for all due and unpaid Charges and Termination Charges shall continue to survive indefinitely.
ARTICLE VI
CONFIDENTIALITY;
PROTECTIVE ARRANGEMENTS
Section 6.01. eBay and PayPal Obligations. Subject to Section 6.04, until the five
(5) year anniversary of the date of the termination of this Agreement (other than in the case of any item of Technical Information, for which the obligations in this Section 6.01 will continue until such time as any of the
exceptions set forth in clauses (a) through (c) of this Section 6.01 have been satisfied with respect to such item of Technical Information), each of eBay and PayPal, on behalf of itself and each of its Subsidiaries, agrees to
hold, and to cause its Representatives to hold, in strict confidence, using at least the same standard of care to prevent the public disclosure and dissemination thereof that applies to eBays Confidential Information pursuant to policies in
effect as of the TSA Effective Time, all Confidential Information concerning the other Party or its Subsidiaries or their respective businesses that is either (a) in its possession (including Confidential Information in its possession prior to
the date hereof) or (b) furnished by any such other Party or such other Partys Subsidiaries or their respective Representatives at any time pursuant to this Agreement, and shall not use any Confidential Information of the other Party
other than for such purposes as expressly permitted hereunder, except, in each case, to the extent that such Confidential Information is or was (i) in the public domain or generally available to the public, other than as a result of a
disclosure by such Party or any of its Subsidiaries or any of their respective Representatives in violation of this Agreement; (ii) later lawfully acquired from other sources by such Party or any of its Subsidiaries, which sources are not
themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such Confidential Information; or (iii) independently developed or generated without reference to or use of
the Confidential Information of the other Party or any of its Subsidiaries. If any Confidential Information of a Party or any of its Subsidiaries is disclosed to the other Party or any of its Subsidiaries in connection with providing the Services,
then such disclosed Confidential Information shall be used by the receiving Party only as required to perform such Services.
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Section 6.02. No Release; Return or Destruction. Each Party agrees (a) not to
release or disclose, or permit to be released or disclosed, any Confidential Information of the other Party addressed in Section 6.01 to any other Person, except its Representatives who need to know such Confidential Information in their
capacities as such (who shall be advised of their obligations hereunder with respect to such Confidential Information) and except in compliance with Section 6.04, and (b) to use commercially reasonable efforts to maintain such
Confidential Information in accordance with Section 6.4 of the Separation and Distribution Agreement. Without limiting the foregoing, when any such Confidential Information is no longer needed for the purposes contemplated by the Separation and
Distribution Agreement, this Agreement or any other Ancillary Agreements, each Party will promptly after request of the other Party either return to the other Party all such Confidential Information in a tangible form (including all copies thereof
and all notes, extracts or summaries based thereon) or notify the other Party in writing that it has destroyed such information (and such copies thereof and such notes, extracts or summaries based thereon); provided, that such Partys
Representatives may retain one (1) copy of such information to the extent required by applicable Law or professional standards, and shall not be required to destroy any such information located in back-up, archival electronic storage.
Section 6.03. Privacy and Data Protection Laws; Residual Information. Each Party shall comply with all applicable state, federal
and foreign privacy and data protection Laws that are or that may in the future be applicable to the provision of the Services under this Agreement and any additional data protection requirements set forth on Exhibit A with respect to each
Service. Notwithstanding anything to the contrary herein, each Party and its Subsidiaries shall be free to use for any purpose the Residual Information resulting from access Representatives of such Party or its Subsidiaries have had to confidential
and proprietary information concerning the other Party or its Subsidiaries. The Parties acknowledge and understand that the foregoing does not constitute a license under any patents or copyrights.
Section 6.04. Protective Arrangements. If a Party or any of its Subsidiaries either determines on the advice of its counsel that
it is required to disclose any information pursuant to applicable Law or receives any request or demand under lawful process or from any Governmental Authority to disclose or provide information of the other Party (or any of its Subsidiaries) that
is subject to the confidentiality provisions hereof, such Party shall notify the other Party (to the extent legally permitted) as promptly as practicable under the circumstances prior to disclosing or providing such information and shall cooperate,
at the expense of the other Party, in seeking any appropriate protective order requested by the other Party. If such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand
reasonably determines that its failure to disclose or provide such information shall actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide information to
the extent required by such Law (as so advised by its counsel) or by lawful process or such Governmental Authority, and the disclosing Party shall promptly provide the other Party with a copy of the information so disclosed, in the same form and
format so disclosed, together with a list of all Persons to whom such information was disclosed, in each case to the extent legally permitted.
ARTICLE VII
LIMITED LIABILITY AND
INDEMNIFICATION
Section 7.01. Limitations on Liability.
(a) THE CUMULATIVE AGGREGATE LIABILITIES OF THE PROVIDER AND ITS SUBSIDIARIES AND THEIR RESPECTIVE REPRESENTATIVES, COLLECTIVELY, UNDER THIS
AGREEMENT FOR ANY ACT OR FAILURE TO ACT IN CONNECTION HEREWITH (INCLUDING THE PERFORMANCE OR BREACH OF THIS AGREEMENT), OR FROM THE SALE, DELIVERY, PROVISION, USE OF OR FAILURE TO PROVIDE ANY SERVICES PROVIDED UNDER OR CONTEMPLATED BY THIS
AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, SHALL NOT EXCEED THE AGGREGATE CHARGES PAID AND PAYABLE TO SUCH PROVIDER FOR ALL SERVICES BY THE RECIPIENT PURSUANT TO THIS AGREEMENT THROUGHOUT THE TERM.
(b) IN NO EVENT SHALL EITHER PARTY, ITS SUBSIDIARIES OR THEIR RESPECTIVE REPRESENTATIVES BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT,
INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, EXEMPLARY, REMOTE, SPECULATIVE OR SIMILAR DAMAGES IN EXCESS OF COMPENSATORY DAMAGES OF THE OTHER PARTY (INCLUDING LOST PROFITS OR LOST REVENUES) IN CONNECTION WITH THE SALE, DELIVERY, PROVISION OR USE OF
OR FAILURE TO PROVIDE SERVICES PROVIDED UNDER OR CONTEMPLATED BY THIS AGREEMENT (OTHER THAN ANY SUCH LIABILITY WITH RESPECT TO A THIRD-PARTY CLAIM), AND EACH PARTY HEREBY WAIVES ON BEHALF OF ITSELF, ITS SUBSIDIARIES AND ITS REPRESENTATIVES ANY CLAIM
FOR SUCH DAMAGES, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE.
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(c) The limitations in Section 7.01(a) and Section 7.01(b) shall not
apply in respect of any Liability arising out of or in connection with (i) either Partys obligations under Section 7.02 or Section 7.03, (ii) the gross negligence, willful misconduct, or fraud of or by the
Party to be charged or (iii) either Partys obligations or Liabilities under the Intellectual Property Matters Agreement.
(d)
The limitations in Section 7.01(a) shall not apply in respect of any Liability arising out of or in connection with either Partys Liability for breaches of confidentiality under Article VI.
Section 7.02. Recipient Indemnity. Subject to Section 7.01, Recipient hereby releases and agrees to indemnify, defend
and hold harmless the Provider, its Subsidiaries and each of their respective Representatives, and each of the successors and assigns of any of the foregoing (collectively, the Provider Indemnitees), from and against any and all
Liabilities arising from, relating to or in connection with the Recipients breaches of confidentiality obligations under Article VI, gross negligence, willful misconduct or fraud.
Section 7.03. Provider Indemnity. Subject to Section 7.01, the Provider agrees to indemnify, defend and hold harmless
the Recipient, its Subsidiaries and each of their respective Representatives, and each of the successors and assigns of any of the foregoing (collectively, the Recipient Indemnitees), from and against any and all Liabilities
arising from, relating to or in connection with the sale, delivery, provision or use of any Services provided by such Provider hereunder, but only to the extent that such Liabilities relate to, arise out of or are a consequence of the
Providers breaches of confidentiality obligations under Article VI, gross negligence, willful misconduct or fraud.
Section 7.04. Indemnification Procedures. The procedures for indemnification set forth in Sections 4.5, 4.6 and 4.7 of the
Separation and Distribution Agreement shall govern claims for indemnification under this Agreement.
Section 7.05. Liability for
Payment Obligations. Nothing in this Article VII shall be deemed to eliminate or limit, in any respect, either Partys express obligation in this Agreement to pay Charges for Services rendered in accordance with this Agreement.
Section 7.06. Exclusion of Other Remedies. The provisions of Section 7.02 and Section 7.03 shall, to the
maximum extent permitted by applicable Law, be the sole and exclusive remedies of the Provider Indemnitees and the Recipient Indemnitees, as applicable, for any Liability, whether arising from statute, principle of common or civil law, principles of
strict liability, tort, contract or otherwise under this Agreement.
ARTICLE VIII
DISPUTES
Section 8.01.
Dispute Resolution. In the event of any controversy, dispute or claim arising out of or relating to any Partys rights or obligations under this Agreement (whether arising in contract, tort or otherwise), calculation or allocation of the
costs of any Service or otherwise arising out of or relating in any way to this Agreement (including the interpretation or validity of this Agreement) (a Dispute), the Parties agree that each Partys TSA Manager and each
Partys applicable Service Manager (or such other persons as the Parties may designate) shall negotiate in good faith in an attempt to resolve such Dispute amicably. If such Dispute has not been resolved to the mutual satisfaction of the
Parties within forty-five (45) days after the initial written notice of the Dispute (or such longer period as the Parties may agree), then such Dispute shall be submitted to the Escalation Committee and resolved in accordance with Sections 7.2
to 7.6 of the Separation and Distribution Agreement, which shall be the sole and exclusive procedures for the resolution of any such Dispute unless otherwise specified herein or in Article VII of the Separation and Distribution Agreement.
Section 8.02. Disputes Over Charges and Termination Charges. In any Dispute regarding the amount of a Charge or a Termination
Charge, if such Dispute is finally resolved by the applicable Service Managers, the TSA Managers or pursuant to the dispute resolution process set forth or referred to in Section 8.01 and it is determined that the Charge or the
Termination Charge, as applicable, that the Provider has invoiced the Recipient, and that the Recipient has paid to the Provider, is greater or less than the amount that the Charge or the Termination Charge, as applicable, should have been, then
(i) if it is determined that the Recipient has overpaid the Charge or the Termination Charge, as applicable, the Provider shall within five (5) business days after such determination reimburse the Recipient an amount of cash equal to such
overpayment, plus the Interest Payment, accruing from the date of payment by the Recipient to the time of reimbursement by the Provider; and (ii) if it is determined that the Recipient has underpaid the Charge or the Termination Charge, as
applicable, the Recipient shall within five (5) business days after such determination reimburse the Provider an amount of cash equal to such underpayment, plus the Interest Payment, accruing from the date such payment originally should have
been made by the Recipient to the time of payment by the Recipient.
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Section 8.03. Litigation and Unilateral Commencement of Arbitration. Notwithstanding
the foregoing provisions of this Article VIII or Sections 7.2 to 7.4 of the Separation and Distribution Agreement, a Party may seek preliminary provisional or injunctive judicial relief with respect to a Dispute without first complying with
the procedures set forth in Section 8.01 of this Agreement or Sections 7.2 to 7.4 of the Separation and Distribution Agreement if such action is reasonably necessary to avoid irreparable damage.
Section 8.04. Conduct During Dispute Resolution Process. Unless otherwise agreed in writing, the Parties shall, and shall cause
their respective Subsidiaries to, continue to honor all commitments under this Agreement to the extent required by this Agreement during the course of Dispute resolution pursuant to the provisions of this Article VIII, unless such commitments
are the specific subject of the Dispute at issue. Notwithstanding the foregoing, the Provider agrees that its interruption of the Services may cause irreparable harm to the Recipient for which no adequate remedy exists at Law and agrees, during the
pendency of any Dispute, not to deny, withdraw, restrict or delay its provision of the Services to the Recipient except as required by court order, by the resolution of the Dispute or as a result of the termination of this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Mutual Cooperation. Each Party shall, and shall cause its Subsidiaries to, cooperate with the other Party and its
Subsidiaries in connection with the performance of the Services hereunder; provided, that such cooperation shall not unreasonably disrupt the normal operations of such Party or its Subsidiaries; provided, further, that this
Section 9.01 shall not require such Party to incur any out-of-pocket costs or expenses unless and except as expressly provided in this Agreement or otherwise agreed to in writing by the Parties.
Section 9.02. Further Assurances. Each Party shall take, or cause to be taken, any and all reasonable actions, including the
execution, acknowledgment, filing and delivery of any and all documents and instruments that any other Party may reasonably request in order to effect the intent and purpose of this Agreement and the transactions contemplated hereby.
Section 9.03. Audit Assistance. Each of the Parties and their respective Subsidiaries are or may be subject to regulation and
audit by a Governmental Authority (including a Taxing Authority), standards organizations, customers or other parties to contracts with such Parties or their respective Subsidiaries under applicable Law, standards or contract provisions. If a
Governmental Authority, standards organization, customer or other party to a contract with a Party or its Subsidiary exercises its right to examine or audit such Partys or its Subsidiarys books, records, documents or accounting practices
and procedures pursuant to such applicable Law, standards or contract provisions, and such examination or audit relates to the Services, then the other Party shall provide, at the sole cost and expense of the requesting Party, all assistance
reasonably requested by the Party that is subject to the examination or audit in responding to such examination or audits or requests for Information, to the extent that such assistance or Information is within the reasonable control of the
cooperating Party and is related to the Services.
Section 9.04. Title to Intellectual Property. Except as expressly provided
for under the terms of this Agreement, the Separation and Distribution Agreement or the Intellectual Property Matters Agreement, the Recipient acknowledges that it shall acquire no right, title or interest (except for the express license rights set
forth in Section 9.05(a)(ii)) in any Intellectual Property Rights, Information Technology, Information, Software or other Technology which are owned or licensed by the Provider by reason of the provision of the Services hereunder. The
Recipient shall not remove or alter any copyright, trademark, confidentiality or other proprietary notices that appear on any Information Technology, Information, Software or other Technology owned or licensed by the Provider, and the Recipient
shall reproduce any such notices on any and all copies thereof. The Recipient shall not attempt to decompile or reverse engineer copies of any Software owned or licensed by the Provider that is provided in object code form only, and the Recipient
shall promptly notify the Provider of any such attempt, regardless of whether by the Recipient or any Third Party, of which the Recipient becomes aware.
Section 9.05. License.
(a) Without affecting the rights and obligations of the Parties in the Separation and Distribution Agreement and the Intellectual Property
Matters Agreement, with respect to each of the Services set forth in Exhibit A:
(i) Recipient hereby grants to Provider, and
Provider hereby accepts, a non-exclusive, non-transferable (subject to Section 9.07), worldwide right during the Service Period to use Recipient Systems only to the extent necessary and for the sole purpose of performing Providers
obligations under this Agreement, and not for any other purpose; and
(ii) Provider hereby grants to Recipient, and Recipient hereby
accepts, a non-exclusive, non-transferable (subject to Section 9.07), worldwide right during the Service Period to use the Provider Systems only to the extent necessary and for the sole purpose of receiving the Services under this
Agreement, and not for any other purpose.
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(b) For clarity, the limited rights to use the Recipient Systems and Provider Systems granted in
this Section 9.05 for each of the Services will terminate at the end of the applicable Service Period and will under no circumstances survive the termination or expiration of this Agreement.
Section 9.06. Independent Contractors. The Parties each acknowledge and agree that they are separate entities, each of which has
entered into this Agreement for its own independent business reasons. The relationships of the Parties hereunder are those of independent contractors and nothing contained herein shall be deemed to create a joint venture, partnership or any other
relationship between the Parties. Personnel performing services hereunder do so on behalf of, under the direction of, and as Personnel of, the Provider, and the Recipient shall have no right, power or authority to direct such Personnel.
Section 9.07. Assignability.
(a) This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns;
provided, that except as set forth in Section 9.07(b) and Section 9.07(c), neither Party nor any such party thereto may assign its rights or delegate its obligations under this Agreement without the express prior
written consent of the other Party.
(b) No consent of the other Party shall be required for: (i) the assignment of a Partys
rights and obligations under this Agreement in whole or in part to any of its Subsidiaries; provided, that no such assignment shall release such Party from any liability or obligation under this Agreement; or (ii) the assignment of all
of a Partys rights and obligations in whole (i.e., the assignment of a partys rights and obligations under this Agreement, the Separation and Distribution Agreement and all Ancillary Agreements all at the same time) under this
Agreement in connection with a change of control of a Party so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance
reasonably satisfactory to the other Party; provided, that, (A) in the event of a Change of Control of eBay in which such acquirer is a PayPal Specified Person, PayPal shall, in its capacity as a Provider, have the right to terminate
this Agreement solely as it relates to any service for which continued provision of such service by PayPal would materially and adversely affect PayPals competitive position with respect to such PayPal Specified Person (and will have no other
separate right to terminate this Agreement), and (B) in the event of a Change of Control of PayPal in which such acquirer is an eBay Specified Person, eBay shall, in its capacity as a Provider, have the right to terminate this Agreement solely
as it relates to any service for which continued provision of such service by eBay would materially and adversely affect eBays competitive position with respect to such eBay Specified Person (and will have no other separate right to terminate
this Agreement).
(c) If there occurs a divestiture or other disposition of any Subsidiary, division or business that is a Recipient or
Provider of Services (a Divested Asset), the Party that is divesting or disposing of such Divested Asset shall assign all of its rights and obligations under this Agreement, in respect of the Divested Asset, to the Person that
acquired control of such Divested Asset (such Person, the Divested Asset Acquirer), without any requirement to obtain the consent of the other Party, and the Divested Asset Acquirer shall accept in writing the terms of the
Agreement and the applicable Services with respect to such Divested Asset; provided, that if such Divested Asset is a Recipient of Services and the Divested Asset Acquirer is a PayPal Specified Person (if eBay is divesting or disposing of
such Divested Asset) or an eBay Specified Person (if PayPal is divesting or disposing of such Divested Asset), as applicable, the Provider of such Services to the Divested Asset may terminate this Agreement with respect to the Divested Asset.
Section 9.08. Third-Party Beneficiaries. Except as provided in Article VII with respect to the Provider Indemnitees and the
Recipient Indemnitees in their capacities as such, (a) the provisions of this Agreement are solely for the benefit of the Parties and are not intended to confer upon any other Person except the Parties any rights or remedies hereunder; and
(b) there are no other third-party beneficiaries of this Agreement and this Agreement shall not provide any other Third Party with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without
reference to this Agreement.
Section 9.09. Force Majeure. No Party shall be deemed in default of this Agreement for any delay
or failure to fulfill any obligation hereunder (other than a payment obligation) so long as and to the extent to which any delay or failure in the fulfillment of such obligations is prevented, frustrated, hindered or delayed as a consequence of
circumstances of Force Majeure. In the event of any such excused delay, the time for performance (other than a payment obligation) shall be extended for a period equal to the time lost by reason of the delay unless this Agreement has previously been
terminated under Article V. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such Force Majeure, (a) provide written notice to the other Party of the nature and extent of
any such Force Majeure; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement as soon as reasonably practicable (and in no event later than the date that the affected Party resumes
providing analogous services to, or otherwise resumes analogous performance under any other agreement for, itself, its Affiliates or any Third Party) unless this Agreement has previously been terminated under Article V. The Recipient shall be
(i) relieved of the obligation to pay Charges for the affected Service(s) throughout the duration of such Force Majeure and (ii) if any Force Majeure prevents, hinders, or delays the performance by the Provider, the Recipient may procure
the affected Services from an alternate source, including the Recipients Personnel (with the Provider reimbursing the Recipient for the cost of procuring the affected Services from such alternate source) throughout the duration of such Force
Majeure, and the Provider shall cooperate in good faith with, provide any required Information to, and take such other action as may be reasonable required to enable such alternate source to provide the affected Services.
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Section 9.10. No Set-Off. Except as mutually agreed to in writing by the Parties,
neither Party shall have any right of set-off or other similar rights with respect to (a) any amounts received pursuant to this Agreement; or (b) any other amounts claimed to be owed to the other Party arising out of this Agreement.
Section 9.11. Incorporation by Reference. Sections 10.1 (excluding Section 10.1(c)), 10.2, 10.5, 10.6, and 10.8 through
10.16, 10.18 and 10.19 of the Separation and Distribution Agreement are incorporated by reference into this Agreement, mutatis mutandis, except that (a) each reference to this Agreement, any Ancillary Agreement or
each Ancillary Agreement, in such sections of the Separation and Distribution Agreement shall be deemed to refer to this Agreement, and (b) all notices regarding routine matters involving a Service under this Agreement shall be
directed to the applicable Services Manager(s) or TSA Managers, as specified in Section 2.09, and notices regarding all other matters under this Agreement shall be directed as required under Section 10.5 of the Separation and
Distribution Agreement with a copy to each Partys TSA Manager.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by persons duly authorized as
of the date and year first above written.
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EBAY INC. |
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By: |
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/s/ John J. Donahoe |
Name: John J. Donahoe |
Title: President and Chief Executive Officer |
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PAYPAL HOLDINGS, INC. |
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By: |
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/s/ Daniel H. Schulman |
Name: Daniel H. Schulman |
Title: President and CEO-Designee |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(1)
EXHIBIT A(1): HR
APPLICATION SUPPORT SERVICES
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Provider: |
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Service Period: |
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Extension Periods: |
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PayPal, Inc. |
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3 Months |
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Successive 1 month service periods (no more than 15 months) |
The purpose of this Exhibit A(1) is to allow Recipient to leverage
Providers Human Resources Delivery Systems (HRDS) team after Separation for any support issues related to Recipients HR applications.
As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or
to cause one or more of its Subsidiaries to provide, to Recipient, or any Subsidiary of Recipient, the Services.
Accordingly, during the Service Period,
Provider will provide, and Recipient will use, the Services in a manner consistent with how similar Services were provided and used prior to Separation and in conformance with the terms and conditions of this Exhibit A(1) and the Agreement. This
Exhibit A(1) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
2. |
SERVICES: SUPPORTED APPLICATIONS |
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2.1 |
Provider will make available to Recipient the support services for certain HR applications in a manner mutually agreed by the Parties (the Services). |
3. |
HRDS APPLICATION SUPPORT: SERVICE LEVELS |
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3.1 |
Service Failure Support. Provider will attempt to diagnose and fix any failure of the Services to function as designed (each, a Service Failure), as agreed in good faith by the Parties.
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4.1(a) |
Any Charges for all Services will be subject to Recipients prior written approval following Providers estimate of alternative workforce (AWF) resources needed. Provider and Recipient are not sure of the
extent of the Services that may be required, and estimate that from 1 - 3 people may be needed for anywhere from 1- 25 hours per week. The average hourly charge is expected to be approximately $115 per hour per person. |
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4.1(b) |
All Charges for Services incurred in any month, if any, will be invoiced to Recipient monthly by Provider and subject to the payment terms of the Agreement. |
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4.1(c) |
Additionally, in the event required to address System Failures, Provider will supply Recipient with an estimate of any labor and services fees associated with third-parties application efforts and such fees will
be subject to Recipients prior written approval; upon completion of such efforts, Recipient shall reimburse Provider for any labor or service fees charged by such application Vendors and paid by Provider in the course of addressing a System
Failure reported by Recipient up to the estimate supplied by Provider. |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(1)
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5.1 |
Provider Service Manager: Sr. Director HR Delivery Solutions, eBay Inc. |
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5.2 |
Recipient Service Manager: VP Global Talent Acquisition, PayPal, Inc. |
6. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (1) and for the purposes of the
signature below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set
forth above, no Provider Subsidiary or Provider Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient
Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be
bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
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Provider: eBay Inc. |
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Recipient Subsidiary: PayPal, Inc. |
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By: |
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Name Printed: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(2)
EXHIBIT A(2)
SEPARATION OF COMINGLED ASSETS
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Provider: |
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Recipient Subsidiary: |
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Service Period: |
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No Extension Period: |
eBay Inc. |
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PayPal, Inc. |
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24 Months |
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No Extension Period |
The purpose of this Exhibit A(2) is to
provide additional time to separate data center assets. In preparation for Separation, Provider has worked towards complete logical and physical separation of the data center assets of Recipient from those of Provider, and will need additional time
after Separation to complete such room separation services (the Services). As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide,
or to cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services. Accordingly, during the Service Period, Provider will provide, and Recipient will receive, the Services in a manner consistent
with how similar Services were provided and used prior to Separation and in conformance with the terms and conditions of this Exhibit A(2) and the Agreement. This Exhibit A(2) is hereby incorporated by this reference into Exhibit A of the Agreement.
Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
The Services for room separation will be
provided in a manner to be agreed in good faith by the Parties.
Consideration for Providers performance of
the Services is provided by the Colocation Services Agreement with Recipient for the relevant Location. Provider declares that no additional expenses will be incurred to complete these transition services over and above the normal expenses
contemplated by the applicable Colocation Services Agreement.
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4.1 |
Provider Service Manager: VP Global Foundation Services, eBay Inc. |
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4.2 |
Recipient Service Manager: Senior Director GPI Business Operations, PayPal, Inc. |
5. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A(2) and for the purposes of the
signature below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set
forth above, no Provider Subsidiary or Recipient Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient
Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be
bound by any resolution resulting therefrom.
TRANSITION SERVICES AGREEMENT
EXHIBIT A(2)
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ACCEPTED AND AGREED: |
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Provider: EBAY INC. |
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By: |
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Recipient Subsidiary: PAYPAL, INC. |
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By: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(3.1)
EXHIBIT A(3.1)
CS INTERIM CUSTOMER SERVICE INTERACTIONS
(EBAY TO PAYPAL)
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Provider/Provider Subsidiary: |
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Recipient Subsidiaries: |
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Service Period: |
eBay Inc. |
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PayPal, Inc. |
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18 Months |
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eBay International AG |
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PayPal Pte. Ltd. |
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PayPal Payments Pte. Holdings S.C.S. |
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The purpose of this Exhibit A(3.1) is for
Recipient to continue working with Provider to assist Recipient in providing customer service to its customers (the Services).
As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees
to provide, or to cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services. Accordingly, during the Service Period, Provider will provide, and Recipient will receive, the Services in a
manner consistent with how similar Services were provided and used prior to Separation and in conformance with the terms and conditions of this Exhibit A(3.1) and the Agreement. This Exhibit A(3.1) is hereby incorporated by reference into Exhibit A
of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
2. |
SERVICES In providing the Services, Provider will make available to Recipient tools (Provider Tools), services and data to be agreed in good
faith by the Parties. |
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3.1 |
Service Failure Support. Provider will attempt to diagnose and fix any failure of the Services to function as designed (each, a Service Failure), as agreed in good faith by the Parties.
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4. |
CHARGES There will be no Charges for the Services because Provider declares that no additional expenses will be incurred to complete these Services.
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5. |
TERM AND TERMINATION The Service Period for this Exhibit A(3.1) shall not exceed eighteen (18) months from the Effective Time
of the Agreement. |
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6.1 |
Provider Service Manager: SVP of Customer Experience, eBay Inc. |
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6.2 |
Recipient Service Manager: SVP of Customer Experience, PayPal, Inc. |
7. |
RIGHTS AND OBLIGATIONS OF RECIPIENT SUBSIDIARY AND/OR PROVIDER
SUBSIDIARY |
For the purpose of this Section of this Exhibit A(3.1) and for the purposes
of the signature below, the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient and the term Provider Subsidiary may be used to reference a subsidiary entity of Provider. Except
as set forth above, no Recipient Subsidiary or Provider Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Recipient Subsidiary and Provider, between a Provider Subsidiary and Recipient, or between a
Recipient Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Recipient Subsidiary and/or the Provider Subsidiary, as the case may be
agrees to be bound by any resolution resulting therefrom.
TRANSITION SERVICES AGREEMENT
EXHIBIT A(3.1)
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ACCEPTED AND AGREED: |
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Recipient Subsidiary: PayPal, Inc. |
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Provider: eBay Inc. |
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By: |
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By: |
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Name Printed: |
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Recipient Subsidiary: PayPal Pte. Ltd. |
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Provider Subsidiary: eBay International AG |
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By: |
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By: |
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Name Printed: |
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Name Printed: |
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Recipient Subsidiary: PayPal Payments Pte. Holdings S.C. |
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By: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(3.2)
EXHIBIT A(3.2)
CS INTERIM CUSTOMER SERVICE INTERACTIONS
(PAYPAL TO EBAY)
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Provider Subsidiaries: |
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Recipient/Recipient Subsidiary: |
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Service Period: |
PayPal, Inc. |
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eBay Inc. |
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18 Months |
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PayPal Pte. Ltd. |
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eBay International AG |
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PayPal Payments Pte. Holdings S.C.S. |
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The purpose of this Exhibit A(3.1) is for
Recipient to continue working with Provider to assist Recipient in providing customer service to its customers (the Services).
As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees
to provide, or to cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services. Accordingly, during the Service Period, Provider will provide, and Recipient will receive, the Services in a
manner consistent with how similar Services were provided and used prior to Separation and in conformance with the terms and conditions of this Exhibit A(3.2) and the Agreement. This Exhibit A(3.2) is hereby incorporated by reference into Exhibit A
of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
2. |
SERVICES In providing the Services, Provider will make available to Recipient tools (Provider Tools), services and data to be agreed in good
faith by the Parties. |
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3.1 |
Service Failure Support. Provider will attempt to diagnose and fix any failure of the Services to function as designed (each, a Service Failure), as agreed in good faith by the Parties.
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5.1 |
Charges. The Charges are $100,000.00 plus 7% annually. |
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5.2 |
Payment. The Charges will be invoiced to Recipient monthly during the Service Period on a pro-rata basis by Provider and subject to the payment terms of the Agreement. |
Provider Service
Manager: SVP of Customer Experience, eBay Inc.
Recipient Service Manager: SVP of Customer Experience, eBay Inc.
6. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR PROVIDER
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (3.2) and for the purposes of the
signature below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set
forth above, no Provider Subsidiary or Provider Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider Subsidiary and Recipient, or between a Recipient
Subsidiary and a
TRANSITION SERVICES AGREEMENT
EXHIBIT A(3.2)
Provider Subsidiary shall be resolved between
Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Provider Subsidiary, as the case may be, agrees to be bound by any resolution resulting therefrom.
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ACCEPTED AND AGREED: |
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Provider Subsidiary: PayPal, Inc. |
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Recipient: eBay Inc. |
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By: |
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By: |
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Name Printed: |
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Name Printed: |
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Title: |
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Title: |
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Provider Subsidiary: PayPal Pte. Ltd. |
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Recipient Subsidiary: eBay International AG |
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By: |
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By: |
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Name Printed: |
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Name Printed: |
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Title: |
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Title: |
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Provider Subsidiary: PayPal Payments Pte. Holdings S.C. |
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By: |
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Name Printed: |
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Title: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(4)
EXHIBIT A(4)
THIRD PARTY GATEWAY HOSTING SERVICES
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Provider Entity: |
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Recipient: |
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Initial Service Period: |
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Extensions: |
PayPal, Inc. |
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eBay Inc. |
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12 months |
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Successive 1 month service periods (no more than 6 months) |
The purpose of this Exhibit A(4) is to provide Recipients Risk
team time to scope and migrate its instance of an identity verification tool used during seller and buyer onboarding. As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement),
Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services.
Provider will provide, and Recipient will use, the Services in a manner consistent with how similar Services were provided and used prior to Separation and in
conformance with the terms and conditions of this Exhibit A(4) and the Agreement. This Exhibit A(4) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Agreement.
2. |
GATEWAY HOSTING SERVICES DESCRIPTION |
The Provider will host the gateway (the Gateway) that the Recipient will use to access services provided by the third-party application
vendor in a manner to be agreed in good faith by the Parties.
3. |
SERVICES STANDARDS: Service Failure Support. Provider will attempt to diagnose and fix any failure of the Services to function as designed (each, a Service
Failure), as agreed in good faith by the Parties. |
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4.1 |
The parties agree to split the monthly cost payable to the third-party at the rate of 60/40, being 60% to Recipient and 40% to Provider. The parties agree to determine a different split should the overall volume
changes by more than 10% in any given month. Because the volume is not known at this time, Recipient estimate of the 40% of the total amount based on 2015 actuals to date will be approximately $8,000 per month. The actual amount for future
months will be invoiced and Recipient will provide the detail support along with the invoice. |
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4.2 |
The overall charge from the third-party vendor will be invoiced monthly to Recipient. Recipient will then invoice Providers monthly cost, 40% of the overall cost as the Charges under this Exhibit A(4), and
Recipients reimbursement will be subject to the payment terms for Charges of the Agreement. |
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5.1 |
Provider: Program Manager, Data Strat Management |
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5.2 |
Recipient: Sr Product Manager Technical Trust and Senior Manager, MMP Trust, Trust-Eng-Bangalore |
6. |
RIGHTS AND OBLIGATIONS OF PROVIDER ENTITY |
For the purpose of this Section of this Exhibit A (4) and for the purposes of the signature below, the term Provider Entity may be used
to reference a subsidiary entity of Provider. As the Provider Entity will be performing some or all of the Services provided pursuant this Exhibit A(4), Recipient hereby agrees to pay to the Provider Entity the
TRANSITION SERVICES AGREEMENT
EXHIBIT A(4)
Charges set forth in Section 7 of this Exhibit
A(4), and Provider hereby agrees to the payment of such Charges to the Provider Entity, which will be in full satisfaction of Recipients obligation to pay Charges for the Services provided pursuant this Exhibit A(4). Except as set forth above,
the Provider Entity is not a party or a third-party beneficiary of the Agreement. Any dispute between Recipient and the Provider Entity shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this
Agreement, and the Provider Entity agrees be bound by any resolution resulting therefrom.
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ACCEPTED AND AGREED: |
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PayPal, Inc.: |
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By: |
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Name Printed: |
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Title: |
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eBay Inc.: |
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By: |
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Name Printed: |
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Title: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(5)
EXHIBIT A(5)
GATEWAY HOSTING SERVICES
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Provider Entity: |
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Recipient: |
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Initial Service Period: |
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Extensions: |
PayPal, Inc. |
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eBay Inc. |
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12 months |
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Successive 1 month service periods (no more than 6 months) |
The purpose of this Exhibit A(5) is to allow Recipients Risk team
time to scope and migrate its instance of a subscription service application used for risk decision processes. The Provider will make available to Recipient the services (the Services) in a manner to be agreed in good faith by the
Parties. As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to the Recipient, or any
Subsidiary of the Recipient the Services.
Provider will provide, and Recipient will use, the Services in a manner consistent with how similar Services
were provided and used prior to Separation and in conformance with the terms and conditions of this Exhibit A(5) and the Agreement. This Exhibit A(5) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Agreement.
2. |
GATEWAY HOSTING SERVICES DESCRIPTION |
The Provider will host the gateway (the Gateway) that the Recipient will use to access services provided by a third-party application
vendor.
3. |
SERVICES STANDARDS: Service Failure Support. Provider will attempt to diagnose and fix any failure of the Services to function as designed (each, a
Service Failure) in a manner to be agreed in good faith by the Parties. |
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4.1 |
There will be no Charges for the Services because Recipient and Provider will each respectively receive independent invoices from the vendor. There is no other cost associated with the Services from Provider to
Recipient. |
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5.1 |
Provider: Program Manager, Data Strat Management |
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5.2 |
Recipient: Senior Director, Risk Management |
6. |
RIGHTS AND OBLIGATIONS OF PROVIDER ENTITY |
For the purpose of this Section of this Exhibit A (5) and for the purposes of the signature below, the term Provider Entity may be used
to reference a subsidiary entity of Provider. Except as set forth above, the Provider Entity is not a party or a third-party beneficiary of the Agreement. Any dispute between Recipient and the Provider Entity shall be resolved between Recipient
and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Entity agrees be bound by any resolution resulting therefrom.
TRANSITION SERVICES AGREEMENT
EXHIBIT A(5)
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ACCEPTED AND AGREED: |
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PayPal, Inc.: |
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By: |
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Name Printed: |
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Title: |
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eBay Inc.: |
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By: |
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Name Printed: |
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Title: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(6.1)
EXHIBIT A(6.1)
EBAY-PAYPAL SHIPPING
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Provider: |
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Recipient Subsidiary: |
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Service Period: |
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Extensions: |
eBay Inc. |
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PayPal, Inc. |
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18 months |
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None |
The purpose of this Exhibit A(6.1) is to give Provider
and Recipient transition time to remove their shipping-related function dependencies. Provider will make available to Recipient the services described in this Exhibit A(6.1) (the Services). As referenced in Section 2.01 of
the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to Recipient, or any Subsidiary of Recipient, the Services.
Accordingly, Provider will provide, and Recipient will use, the Services in a manner consistent with how they were provided and used prior to Separation and
in conformance with the terms and conditions of this Exhibit A(6.1) and the Agreement. This Exhibit A(6.1) is incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Agreement.
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2.1 |
Provider will make available to Recipient the tools and data and provide the Services in a manner to be agreed in good faith by the Parties. |
3. |
SERVICES: SERVICE LEVELS |
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3.1 |
Service Failure Support. Provider will attempt to diagnose and fix any failure of the Services to function as designed (each, a Service Failure), as agreed in good faith by the Parties.
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4.1 |
The Charges for the Services will be $4,800 (+7%) on a monthly basis. |
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5.1 |
The Service Period for this Exhibit shall not exceed eighteen (18) months from Effective Time of the Agreement. |
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6.1 |
Provider Service Mangers: |
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Product Marketing for C2C Shipping |
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6.2 |
Recipient Service Manager: |
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Product General Manager |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(6.1)
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/ OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (6.1) and for the purposes of the signature below,
the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth herein,
Recipient Subsidiary is not a party or a third-party beneficiary of the Agreement.
Any dispute between Recipient Subsidiary and Provider, between a
Provider Subsidiary and Recipient, or between a Recipient Subsidiary and a Provider Subsidiary in shall be resolved between Provider and Recipient the manner set forth under the Section 8 of this Agreement, and Recipient Subsidiary agrees be
bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
Provider: eBay Inc.
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By: |
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Name Printed: |
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Title: |
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Recipient Subsidiary: PayPal, Inc.: |
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By: |
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Name Printed: |
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Title: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(6.2)
EXHIBIT A(6.2)
PAYPAL-EBAY SHIPPING
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Provider Subsidiary: |
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Recipient: |
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Service Period: |
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Extensions: |
PayPal, Inc. |
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eBay Inc. |
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18 months |
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None |
The purpose of this Exhibit A(6.2) is to give Provider
and Recipient transition time to remove their shipping-related function dependencies.
Provider will make available to Recipient the services described in
this Exhibit A(6.2) (the Services). As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its
Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services.
Accordingly, Provider will provide, and Recipient will use,
both the Services and the Reconciliation Support (defined in Section 4.1) in a manner consistent with how they were provided and used prior to Separation and in conformance with the terms and conditions of this Exhibit A(6.2) and the Agreement.
This Exhibit A(6.2) is incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
2. |
SERVICES: SERVICE DESCRIPTION |
|
2.1 |
Provider will make available to Recipient the tools and data and provide the Services in a manner to be agreed in good faith by the Parties. |
3. |
SERVICES: SERVICE LEVELS |
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3.1 |
Service Failure Support. Provider will attempt to diagnose and fix any failure of the Services to function as designed (each, a Service Failure), as agreed in good faith by the Parties.
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4. |
RECONCILIATION SUPPORT |
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4.1 |
Service Description. Provider will make available to Recipient the tools and data and provide the shipping-related reconciliation support services described in a manner to be agreed in good faith by the Parties.
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5.1 |
The Charges for the Services will be $40,857 (+ 7%) on a monthly basis. |
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6.1 |
The Service Period shall not exceed eighteen (18) months from the Effective Time of the Agreement. |
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7.1 |
Provider Service Manager: |
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Product General Manager |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(6.2)
7.2 |
Recipient Service Managers: |
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Group Product Manager and Product Marketing for C2C Shipping |
8. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/ OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (6.2) and for the purposes of the
signature below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set
forth herein, Provider Subsidiary is not a party or a third-party beneficiary of the Agreement.
Any dispute between a Recipient Subsidiary and Provider,
between a Provider Subsidiary and Recipient, or between a Recipient Subsidiary and a Provider Subsidiary shall be resolved between Provider and Recipient in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary
and/or the Recipient Subsidiary, as the case may be, agrees to be bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
Provider Subsidiary: PayPal, Inc.
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By: |
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Name Printed: |
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Title: |
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Recipient: eBay Inc. |
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By: |
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Name Printed: |
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Title: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(7)
EXHIBIT A(7)
LOYALTY INCENTIVE PLATFORM
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Provider Subsidiary: |
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Recipient: |
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Service Period: |
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Extension Period: |
PayPal, Inc. |
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eBay Inc. |
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18 Months |
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No Extension Period |
The purpose of this Exhibit A(7) is to allow Recipient
required time to develop a tool which will enable Recipient to continue to offer its loyalty products including coupons, vouchers, gift certificates, and gift cards. Provider will make available to Recipient the tools, functions and data (the
Services) in a manner to be agreed in good faith by the Parties. As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to
cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services.
Provider will
provide, and Recipient will use, the Services in a manner consistent with how similar Services were provided and used prior to Separation and in conformance with the terms and conditions of this Exhibit A(7) and the Agreement. This Exhibit A(7) is
hereby incorporated by reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
|
2.1 |
Provider will make available to Recipient all Provider systems, tools and customer service necessary and consistent with the provision of the Services that were provided prior to Separation, to support the
Recipients loyalty products |
|
3.1 |
Service Failure Support. Provider will attempt to diagnose and fix any failure of the Services to function as designed (each, a Service Failure), as agreed in good faith by the Parties
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4.1 |
Charges are as follows: $10,700/month. |
|
4.2 |
All Charges for Services incurred in any month, if any, will be invoiced to Recipient monthly by Provider and subject to the payment terms of the Agreement. |
|
5.1 |
Provider Service Managers: |
Director Credit Product Experience
Senior Product Manager- DG
Director Software Development
TRANSITION SERVICES AGREEMENT
EXHIBIT A(7)
|
5.2 |
Recipient Service Managers: |
Director Product Management
Director Product Management
Director Software Development
Manager Software Development
6. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A(7) and for the purposes of the signature below, the
term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth above, no
Provider Subsidiary or Recipient Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient Subsidiary and a
Provider Subsidiary shall be resolved between Provider and Recipient in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or Recipient Subsidiary, as the case may be, agrees to be bound by any
resolution resulting therefrom.
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ACCEPTED AND AGREED: |
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Provider Subsidiary: PayPal, Inc. |
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By: |
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Name Printed: |
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Title: |
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Recipient: eBay Inc. |
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By: |
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Name Printed: |
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Title: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(8)
EXHIBIT A(8)
GIFT CARDS
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Provider: |
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Recipient: |
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Service Period: |
PayPal, Inc. (as Subsidiary of PayPal) |
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eBay Gift Card Services, Inc. (a Subsidiary of eBay and fka PayPal Gift Card Services, Inc.) |
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18 months |
The purpose of this Exhibit A(8) is to describe the accounting and reconciliation
services provided by Provider related to eBay branded, stored value (prepaid) cards issued by Recipient which are redeemable by consumers for merchandise or services at the eBay website (Gift Cards). Provider will make available
to Recipient the services described in this Exhibit A(8) (the Services). As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), eBay or PayPal (as the case
may be) agrees to provide, or to cause one or more of its Subsidiaries to provide, to the other, or any Subsidiary of the other, the Services.
Provider
will provide, and Recipient will use, the Services in a manner consistent with how similar Services were provided and used prior to Separation and in conformance with the terms and conditions of this Exhibit A(8) and the Agreement. This Exhibit A(8)
is hereby incorporated by reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
|
2.1 |
Provider will make available to Recipient the Services, which will include the tools, services and data related to Gift Card reconciliation to be agreed in good faith by the Parties. |
3. |
SERVICE LEVEL OBJECTIVES (SLO) |
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3.1 |
Service Failure Support. Service Failures will be diagnosed and fixed as agreed in good faith by the Parties. |
|
4.1 |
Charges are as follows: $27,188.70 monthly. |
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4.2 |
All Charges for Services incurred in any month, if any, will be invoiced to Recipient monthly by Provider and subject to the payment terms of the Agreement. |
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5.1 |
Recipient or Provider may terminate any of the Services provided in this Exhibit in accordance with Section 5 of the Agreement. |
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6.1 |
Recipient Service Managers: |
Manager, MP Accounting
Controller, MP North America, MP Accounting
TRANSITION SERVICES AGREEMENT
EXHIBIT A(8)
|
6.2 |
Provider Service Managers: |
Finance Project Management, Accounting
Director, Accounting
Manager,
Specialty Accounts, Accounting
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
Any dispute arising under this Exhibit A(8) shall be resolved between eBay and PayPal in
the manner set forth under the Section 8 of this Agreement, and the Provider and/or the Recipient, as the case may be, agrees to be bound by any resolution resulting therefrom.
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ACCEPTED AND AGREED: |
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Provider: PayPal, Inc. |
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By: |
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Name Printed: |
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Title: |
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Recipient: eBay Gift Card Services, Inc. |
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By: |
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Name Printed: |
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Title: President and Secretary of eBay Gift Card Services, Inc. |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(9)
EXHIBIT A(9)
FRAUD RESEARCH (PAYPAL TO STUBHUB)
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Provider Subsidiaries: |
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Recipient Subsidiaries: |
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Service Period: |
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Extensions: |
PayPal, Inc. |
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StubHub, Inc. |
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18 Months |
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None |
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|
PayPal Pte. Ltd. |
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eBay International AG |
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|
The purpose of this Exhibit A (9) is for Recipient
to continue working with Provider so that Recipient can receive Provider data in support of Recipients fraud research activities (the Services).
As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to
provide, or to cause one or more of its Subsidiaries to provide, to Recipient, or any Subsidiary of Recipient, the Services. Accordingly, during the Service Period, Provider will provide, and Recipient will receive, the Services in a manner
consistent with how similar Services were and the Transition Services Agreement between the Parties. This Exhibit A(9) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Agreement.
|
2.1(a) |
In providing the Services, Provider will provide read only access to the Provider Tool, services, and data in a manner to be agreed in good faith by both Parties. |
Service
Failure Support. Provider will attempt to diagnose and fix any failure of the Services to function as designed (each, a Service Failure) in a manner to be agreed in good faith by the Parties.
Provider declares that no additional expenses will be
incurred to complete these Services and therefore no Charges will be invoiced by Provider to Recipient.
|
5.1 |
The Service Period for this Exhibit shall not exceed eighteen (18) months from the Effective Time of the Agreement. |
|
6.1 |
Provider PayPal Service Manager: SVP of Customer Experience |
|
6.2 |
Recipient StubHub Service Manager: Head of Trust and Safety |
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A(9) and for the purposes of the signature
below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be
TRANSITION SERVICES AGREEMENT
EXHIBIT A(9)
used to reference a subsidiary entity of Recipient.
Except as set forth above, no Provider Subsidiary or Provider Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between
a Recipient Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be,
agrees to be bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
|
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Provider Subsidiary: PayPal, Inc. |
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Recipient Subsidiary: StubHub, Inc. |
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By: |
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By: |
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Name Printed: |
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Title: |
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Provider Subsidiary: PayPal, Pte. Ltd. |
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Recipient Subsidiary: eBay International AG |
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By: |
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By: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(10)
EXHIBIT A(10)
AVIATION CONSULTING
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Provider: |
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Recipient Subsidiary: |
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Service Period: |
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Extensions: |
eBay Inc. |
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PayPal, Inc. |
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9 months |
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Successive 1 month terms (no longer than 9 months total in extensions) |
The purpose of this Exhibit A(10) is to make available to Recipient the
services of Providers employee, Director of Corporate Aviation Services (the Provider Employee), for the purposes of rendering certain aviation consulting services that Recipient reasonably requests (the
Services) until Recipient is able to locate and hire an appropriately qualified aviation director (Aviation Director) to perform this service for Recipient.
As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or
to cause one or more of its Subsidiaries to provide, to Recipient, or any Subsidiary of Recipient the Services. This Exhibit A(10) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Agreement.
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2.1 |
Recipient may reasonably request certain services related to aviation operations to be agreed in good faith by the Parties. |
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2.2 |
In any given month, Provider Employee will dedicate between thirty percent (30%) and seventy percent (70%) of his time during normal working hours per month, with an expected average of fifty percent
(50%), in providing the Services. |
3. |
CHARGES AND EXPENSES FOR CONSULTING SERVICES |
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3.1 |
The Charges for the Services under this Exhibit A(10) will be $15,000 + 7% per month. |
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4.1 |
The Service Period will have an expected term of nine (9) months. The Parties may agree to extend the Service Period for additional one month terms, not to exceed a total of eighteen (18) months.
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5.1 |
Provider Service Manager: VP Financial Planning & Analysis, eBay Inc. |
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5.2 |
Recipient Service Manager: SVP and General Counsel, PayPal Inc. |
6. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A(10) and for the purposes of the signature below, the
term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth herein,
Recipient Subsidiary is not a party or a third-party beneficiary of the Agreement. Any dispute between Recipient Subsidiary and Provider, between a
TRANSITION SERVICES AGREEMENT
EXHIBIT A(10)
Provider Subsidiary and Recipient, or between a
Recipient Subsidiary and a Provider Subsidiary in shall be resolved between Provider and Recipient in the manner set forth under the Section 8 of this Agreement, and Recipient Subsidiary agrees be bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
Provider: eBay Inc.:
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By: |
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Name Printed: |
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Title: |
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Recipient Subsidiary: PayPal, Inc.: |
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By: |
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Name Printed: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(11)
EXHIBIT A(11)
EPRO PO HISTORICAL DATA
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Provider Entity: |
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Recipient Subsidiary: |
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Service Period: |
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Extension Service Period: |
eBay Inc. |
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PayPal, Inc. |
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9 Months |
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Successive 1 month service periods (no more than 18 months) |
The purpose of this Exhibit A(11) is for Provider to fulfill historical
data requests by Recipients team, regarding purchase orders (PO) located on the Providers ePro Purchase Order Display database (ePro) until Provider has duplicated ePro for Recipients use after
the term of this Exhibit A(11). The Provider will make available to Recipient the services described in this Exhibit A(11) (the Services). As referenced in Section 2.01 of the Transition Services Agreement between the Parties
(the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services. The goal will be for Provider to provide Recipient with a
duplicate all of its POs for its own use. However, Provider will not be able to create a complete duplicated instance for at least another 6 months. As a result, Provider will provide this Service of fulfilling Recipient PO data requests in
the interim.
Provider will provide, and Recipient will use, the Services in a manner consistent with how similar Services were provided and used prior to
Separation and in conformance with the terms and conditions of this Exhibit A(11) and the Agreement. This Exhibit A(11) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Agreement.
2. |
SERVICES: SERVICE DESCRIPTION |
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2.1 |
Provider will provide the Services related to the ePro database in a manner to be agreed in good faith by the Parties. |
3. |
SERVICES: SERVICE LEVELS |
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3.1 |
Provider shall perform, or shall cause one or more of its Subsidiaries to perform, all Services to be provided by the Provider as agreed in good faith by the Parties. |
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4.1 |
The Provider will create an interface replicating the dataset on the ePro database for the Recipient, as agreed in good faith by the Parties. |
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5.1 |
There will be no Charges for the Services. |
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6.1 |
The Term for the Services provided under this Exhibit A(11) will include the Initial Service Period and any extended service periods, renewable in successive one (1) month intervals. However, the Term for
this Exhibit shall not exceed eighteen (18) months from the Effective Time of the Agreement. |
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7.1 |
Provider Service Managers, Senior Manager Technology and Manager Finance. |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(11)
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7.2 |
Recipient Service Managers: Senior Manager Business Solutions and Manager Information Management. |
8. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (11) and for the purposes of the signature below,
the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth above, no
Provider Subsidiary or Recipient Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient Subsidiary and a
Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be bound by any
resolution resulting therefrom.
ACCEPTED AND AGREED:
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eBay Inc.: |
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By: |
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Name Printed: |
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Title: |
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PayPal, Inc.: |
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By: |
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Name Printed: |
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Title: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(12)
EXHIBIT A(12)
DONATION SERVICES
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Provider Subsidiary: |
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Recipient: |
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Service Period: |
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Extensions: |
PayPal, Inc. |
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eBay Inc. |
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12 months |
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No extensions |
The purpose of this Exhibit A(12) is for Provider to
continue to operate and host the legacy donation software systems, and to give Recipient access to such legacy systems (the Services) while Recipient develops its own donation collection platform and new features wholly within the
Recipient user experience. As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to
Recipient, or any Subsidiary of Recipient the Services.
Accordingly, during the Service Period, Provider will provide, and Recipient will use, the
Services in a manner consistent with how similar Services were provided and used prior to Separation and in conformance with the terms and conditions of this Exhibit A(12) and the Agreement. This Exhibit A(12) is hereby incorporated by this
reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
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2.1 |
Provider will continue to operate and host the legacy donation system and make available to Recipient all software, systems and information technology required to make use of the legacy systems as is to be agreed
in good faith by the Parties. |
3. |
SERVICES STANDARDS: Service Failure Support. Provider will attempt to diagnose and fix any failure of the Services to function as designed (each, a Service
Failure), as agreed in good faith by the Parties. |
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4.1 |
The Charges for Providers provisioning of the Services shall be $20,404.49 per month. |
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5.1 |
Provider Service Manager: Director, Product Management Head of Global Cause-Related Products. |
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5.2 |
Recipient Service Manager: Senior Global Product Manager, Social Ventures Giving Works US. |
6. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A(12) and for the purposes of the signature below,
the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth herein,
Recipient Subsidiary is not a party or a third-party beneficiary of the Agreement. Any dispute between Recipient Subsidiary and Provider, between a Provider Subsidiary and Recipient, or between a Recipient Subsidiary and a Provider Subsidiary in
shall be resolved between Provider and Recipient the manner set forth under the Section 8 of this Agreement, and Recipient Subsidiary agrees be bound by any resolution resulting therefrom.
TRANSITION SERVICES AGREEMENT
EXHIBIT A(12)
ACCEPTED AND AGREED:
Provider Subsidiary: PayPal, Inc.
Recipient: eBay Inc.
TRANSITION SERVICES AGREEMENT
EXHIBIT A(13)
EXHIBIT A(13)
TRADERA BILLING
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Provider: |
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Recipient Subsidiary: |
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Service Period: |
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Extensions: |
eBay Inc. |
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Tradera Sweden AB |
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18 months |
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No extensions |
The purpose of this Exhibit A(13) is to
give Recipient transition time to set up its own billing as a service (BaaS) platform. As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees
to provide, or to cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services.
This Exhibit A(13) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Agreement.
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2.1 |
Provider will make available to Recipient the tools and data and provide the services in a manner to be agreed in good faith by the Parties (the Services). |
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3.1 |
Charges. The Charges for Providers provisioning of the Services to be paid per month shall be $40,125. Additional costs for work beyond what is in scope in this Exhibit A(13) shall be billed at an hourly
rate of $175. |
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3.2 |
Payment. The Charges will be invoiced to Recipient and subject to the payment terms for Charges of the Agreement. |
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4.1 |
Provider Service Managers: |
Director, eBay Global Billing and Payments, Technology and
Production
Sr. Director, eBay Global Billing and Payments
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4.2 |
Recipient Service Managers: |
General Manager, Tradera
Chief Technology Officer, Tradera
5. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (13) and for the purposes of the signature below,
the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth above, no
Provider Subsidiary or Recipient Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient Subsidiary and a
Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this
TRANSITION SERVICES AGREEMENT
EXHIBIT A(13)
Agreement, and the Provider Subsidiary and/or the
Recipient Subsidiary, as the case may be, agrees to be bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
Recipient Subsidiary: Tradera Sweden AB
Provider: eBay Inc.
TRANSITION SERVICES AGREEMENT
EXHIBIT A(15)
EXHIBIT A(15 )
SAP BASIS SUPPORT
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Provider: |
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Recipient Subsidiary: |
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Initial Service Period: |
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Extension Service Period: |
eBay Inc. |
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PayPal, Inc. |
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6 Months |
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Successive 1 month service periods (no more than 18 months total) |
The purpose of this Exhibit A(15) is to provide Recipient resources to
maintain SAP Basis Support (the BASIS Support) after Separation. Notwithstanding anything in this Exhibit A(15), the Provider will make available to Recipient the maintenance, configuration, monitoring, and troubleshooting of an
inventory of SAP application types and other services described in this Exhibit A(15) (the Services) for the Initial Service Period.
In addition, the Providers agreement with SAP (the SAP Agreement) has not been duplicated for Recipient, and as such, Recipient
requires the Services under this Exhibit A(15) until Recipient can negotiate its own agreement with SAP.
As referenced in Section 2.01 of the
Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services.
Provider will provide, and Recipient will use, the Services in a manner consistent with how similar Services were provided and used prior to Separation and in
conformance with the terms and conditions of this Exhibit A(15) and the Agreement. This Exhibit A(15) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Agreement.
2. |
SERVICES: SERVICE DESCRIPTION |
In
providing the Services, Provider will make available to Recipient, as to be agreed upon in good faith by the Parties, all Provider systems, tools, Providers full inventory of Application Types, Services, and any Additional Services necessary
and consistent with the provision of such Services that were provided prior to Separation, to provide Recipient with the BASIS Support.
3. |
SERVICES: SERVICE LEVELS |
Service Failure Support.
Provider will attempt to diagnose and fix any failure of the Services to function as designed (each, a Service Failure), as to be agreed upon in good faith by the Parties
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4.1 |
The Charges for the Services are estimated to be $570,012 on a monthly basis. |
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5.1 |
The Term for the Services provided under this Exhibit will include the Initial Service Period. After the Initial Service Period, both Parties shall confer and decide, in good faith, if an additional service term
is needed. If both Parties agree, then the Initial Service Period shall be renewable in successive one (1) month intervals, unless the Parties mutually agree otherwise. However, the aggregate Term for this Exhibit shall not exceed eighteen
(18) months from the Effective Time of the Agreement. |
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5.2 |
Recipient or Provider may terminate any of the Services provided in this Exhibit in accordance with Article 5 of the Agreement. |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(15)
|
6.1 |
Provider Service Manager: Senior Director, Information Technology |
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6.2 |
Recipient Service Manager: VP, Transformation, Finance |
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A(15) and for the purposes of the signature below,
the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth herein,
Recipient Subsidiary is not a party or a third-party beneficiary of the Agreement. Any dispute between Recipient Subsidiary and Provider, between a Provider Subsidiary and Recipient, or between a Recipient Subsidiary and a Provider Subsidiary in
shall be resolved between Provider and Recipient in the manner set forth under the Section 8 of this Agreement, and Recipient Subsidiary agrees be bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
Provider: eBay, Inc.
Recipient Subsidiary: PayPal, Inc.
TRANSITION SERVICES AGREEMENT
EXHIBIT A(16.1)
EXHIBIT A(16.1)
CUTOVER / ACCOUNTING CLOSE
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Provider: |
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Recipient Subsidiary: |
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Service Period: |
eBay Inc. |
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PayPal, Inc. |
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Varied (See Section 6 of this Exhibit A(16.1)) no longer than 18 months. |
The purpose of this Exhibit A(16.1) is to allow Recipients Office
of the Chief Information Officer team (OCIO) and Recipients accounting and finance teams (Finance) time to access to certain software, systems and data owned by Provider in order to effectuate the full
Separation of the Parties. Provider will make available to Recipient the services described in this Exhibit A(16.1) (the Services). As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the
Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to Recipient, or any Subsidiary of Recipient the Services.
Provider will provide, and Recipient will use, the Services in a manner consistent with how similar Services were provided and used prior to Separation and in
conformance with the terms and conditions of this Exhibit A(16.1) and the Agreement. This Exhibit A(16.1) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Agreement.
2. |
SERVICES: FINANCE MONTH END CLOSE |
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2.1 |
For up to forty-five (45) days after Separation, Provider will make available to Recipient all software, systems and data reasonably necessary in a manner to be mutually agreed in good faith by the Parties.
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2.2 |
From the Effective Time and for seven (7) calendar months, the Parties Finance teams will work together to make all necessary changes and corrections to their internal finance and accounting procedures
in a manner to be mutually agreed in good faith by the Parties. |
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2.3 |
The Parties will work together to ensure that system access is restricted to appropriate individuals in a manner to be mutually agreed in good faith by the Parties. |
3. |
SERVICES: OCIO SEPARATION |
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3.1 |
Provider will make available to Recipient all software, systems and data reasonably necessary in a manner to be mutually agreed in good faith by the Parties. |
There will be no Charges for the Services as both
parties have a responsibility to ensure the accuracy of the books and records, and to close the relevant financial period.
The Service
Period provided under this Exhibit shall include the following:
|
5.1 |
Section 2.1 of this Exhibit A(16.1) shall commence on the Effective Time and continue for forty-five (45) days; |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(16.1)
|
5.2 |
Section 2.2 of this Exhibit A(16.1) shall commence on the Effective Time and continue for seven (7) calendar months; and |
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5.3 |
Section 3.1 of this Exhibit A(16.1) shall commence on the Effective Time and continue until the parties mutually agree to end the Services. |
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5.4 |
Any Service (or subset of a Service) may be extended upon agreement of each Parties Service Managers, in successive one (1) month intervals. However, the Service Period for this Exhibit A(16.1) shall
not exceed eighteen (18) months from the Effective Time of the Agreement |
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5.5 |
Recipient or Provider may terminate any of the Services provided in this Exhibit A(16.1) in accordance with Section 5.02 of the Agreement. |
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6.1 |
Finance Service Managers |
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a. |
Provider Service Manager: Senior Manager, Reporting and Consolidations |
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b. |
Recipient Service Manager: Senior Manager, Accounting; Currently |
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6.2 |
OCIO Service Managers |
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a. |
Provider Service Manager: Sr. Director, Information Technology |
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b. |
Recipient Service Manager: VP Finance |
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A(16.1) and for the purposes of the
signature below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set
forth above, no Provider Subsidiary or Provider Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient
Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be
bound by any resolution resulting therefrom.
[signature page follows]
TRANSITION SERVICES AGREEMENT
EXHIBIT A(16.1)
ACCEPTED AND AGREED:
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Provider: eBay Inc. |
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By: |
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Name Printed: |
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Title: |
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Recipient Subsidiary: PayPal, Inc.
TRANSITION SERVICES AGREEMENT
EXHIBIT A(16.2)
EXHIBIT A(16.2)
CUTOVER / ACCOUNTING CLOSE
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Provider Subsidiary: |
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Recipient: |
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Service Period: |
PayPal, Inc. |
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eBay Inc. |
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Varied (See Section 6 of this Exhibit A(16.2)) no longer than 18 months. |
The purpose of this Exhibit (16.2) is to allow Recipients
Office of the Chief Information Officer team (OCIO) and Recipients accounting and finance teams (Finance) access to certain software, systems and data owned by Provider in order to effectuate the full
Separation of the Parties. Provider will make available to Recipient the services described in this Exhibit A(16.2) (the Services). As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the
Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to Recipient, or any Subsidiary of Recipient the Services.
Provider will provide, and Recipient will use, the Services in a manner consistent with how similar Services were provided and used prior to Separation and in
conformance with the terms and conditions of this Exhibit A(16.2) and the Agreement. This Exhibit A(16.2) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Agreement
2. |
FINANCE MONTH END CLOSE |
|
2.1 |
For up to forty-five (45) days after Separation, Provider will make available to Recipient all software, systems and data reasonably necessary in a manner to be mutually agreed in good faith by the Parties.
|
|
2.2 |
From the Effective Time and for seven (7) calendar months, the Parties Finance teams will work together to make all necessary changes and corrections to their internal finance and accounting procedures
in a manner to be mutually agreed in good faith by the Parties. |
|
2.3 |
The Parties will work together to ensure that system access is restricted to appropriate individuals in a manner to be mutually agreed in good faith by the Parties. |
|
3.1 |
Provider will make available to Recipient all software, systems and data reasonably necessary in a manner to be mutually agreed in good faith by the Parties. |
There will be no Charges for the Services as both
parties have a responsibility to ensure the accuracy of the books and records, and to close the relevant financial period.
The Service Period provided under this Exhibit shall include the following:
|
5.1 |
Section 2.1 of this Exhibit A(16.2) shall commence on the Effective Time and continue for forty-five (45) days; |
|
5.2 |
Section 2.2 of this Exhibit A(16.2) shall commence on the Effective Time and continue for seven (7) calendar months; and |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(16.2)
|
5.3 |
Section 3.1 of this Exhibit A(16.2) shall commence on the Effective Time and continue until the Parties mutually agree to end the Services. |
|
5.4 |
Any Service (or subset of a Service) may be extended upon agreement of each Partys Service Managers, in successive one (1) month intervals. However, the Service Period for this Exhibit A(16.2) shall
not exceed eighteen (18) months from the Effective Time. |
|
5.5 |
Recipient or Provider may terminate any of the Services provided in this Exhibit A(16.2) in accordance with Section 5.02 of the Agreement. |
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6.1 |
Finance Service Managers |
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c. |
Provider Service Manager: Senior Manager, Accounting |
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d. |
Recipient Service Manager: Senior Manager, Reporting and Consolidations |
|
6.2 |
OCIO Service Managers |
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c. |
Provider Service Manager: VP Finance |
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d. |
Recipient Service Manager: Sr. Director Information Technology |
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A(16.2) and for the purposes of the
signature below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set
forth above, no Provider Subsidiary or Provider Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient
Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be
bound by any resolution resulting therefrom.
[signature page follows]
TRANSITION SERVICES AGREEMENT
EXHIBIT A(16.2)
ACCEPTED AND AGREED:
Provider Subsidiary: PayPal, Inc.
Recipient: eBay Inc.
TRANSITION SERVICES AGREEMENT
EXHIBIT A(17.1)
EXHIBIT A(17.1)
EMAIL & CALENDAR MIGRATION
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Provider: |
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Recipient Subsidiary: |
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Initial Service Period: |
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Extension Service Period: |
eBay, Inc. |
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PayPal, Inc. |
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3 Months |
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Successive 1 month service periods (no more than 18 months) |
The purpose of this Exhibit A(17.1) is to provide for the transferring
of emails and email accounts of Recipients employees from Providers servers to Recipients servers (Migration). However, the Migration will not be completed by the date of Separation. The Provider will make
available to Recipient the services described in this Exhibit A(#) (the Services). As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to
provide, or to cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services. The Recipient understands and agrees that during the Initial Service Period, it will possess all required and
necessary equipment to receive the Services from Provider and Recipient represents that to its knowledge, Recipient is not aware of any impediment which would prevent Provider from performing the Services as set forth herein. It is fully expected
that the Services will be completed within the Initial Service Period of 3 months and Provider does not foresee the need for an Extension Service Period.
Provider will provide, and Recipient will use, the Services in a manner consistent with how similar Services were provided and used prior to Separation and in
conformance with the terms and conditions of this Exhibit A(17.1) and the Agreement. This Exhibit A(17.1) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Agreement.
2. |
SERVICES: SERVICE DESCRIPTION |
Due to
the fact that the Migration cannot be fully completed prior to Separation, Provider will continue the Migration during the Initial Service Period, to be agreed in good faith by the Parties.
|
3.1 |
The Charges for the Services shall be $2,675.00. All Charges for Services incurred in any month, if any, will be invoiced to Recipient monthly by Provider and subject to the payment terms of this Agreement.
|
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4.1 |
The Term for the Services provided under this Exhibit will include the Initial Service Period and any extended service periods, renewable in successive one (1) month intervals. However, the Term for this
Exhibit shall not exceed eighteen (18) months from the Effective Time of the Agreement. |
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4.2 |
At any time throughout the Initial Service Term, Recipient may terminate any of the Services provided in this Exhibit with five (5) days written notice to Provider. |
|
5.1 |
Provider Service Manager: Senior Manager, Technology |
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5.2 |
Recipient Service Manager: Director, Software Development |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(17.1)
6. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (17.1) and for the purposes of the signature
below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth
above, no Provider Subsidiary or Recipient Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient
Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be
bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
Provider eBay, Inc.:
Recipient Subsidiary PayPal, Inc.:
TRANSITION SERVICES AGREEMENT
EXHIBIT A(17.2)
EXHIBIT A( 17.2
) EMAIL & CALENDAR MIGRATION
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Provider Subsidiary: |
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Recipient: |
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Initial Service Period: |
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Extension Service Period: |
PayPal, Inc. |
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eBay, Inc. |
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3 Months |
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Successive 1 month service periods (no more than 18 months) |
The purpose of this Exhibit A(17.2) is to provide for the transferring
of emails and email accounts of Recipients employees from Providers servers to Recipients servers (Migration). However, the Migration will not be completed by the date of Separation. The Provider will make
available to Recipient the services described in this Exhibit A(#) (the Services). As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to
provide, or to cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services. The Recipient understands and agrees that during the Initial Service Period, it will possess all required and
necessary equipment to receive the Services from Provider and Recipient represents that to its knowledge, Recipient is not aware of any impediment which would prevent Provider from performing the Services as set forth herein. It is fully expected
that the Services will be completed within the Initial Service Period of 3 months and Provider does not foresee the need for an Extension Service Period.
Provider will provide, and Recipient will use, the Services in a manner consistent with how similar Services were provided and used prior to Separation and in
conformance with the terms and conditions of this Exhibit A(17.2) and the Agreement. This Exhibit A(17.2) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Agreement.
2. |
SERVICES: SERVICE DESCRIPTION |
Due to
the fact that the Migration cannot be fully completed prior to Separation, Provider will continue the Migration during the Initial Service Period, to be agreed in good faith by the Parties.
|
3.1 |
The Charges for the Services shall be $2,675.00. All Charges for Services incurred in any month, if any, will be invoiced to Recipient monthly by Provider and subject to the payment terms of this Agreement.
|
|
4.1 |
The Term for the Services provided under this Exhibit will include the Initial Service Period and any extended service periods, renewable in successive one (1) month intervals. However, the Term for this
Exhibit shall not exceed eighteen (18) months from the Effective Time of the Agreement. |
|
4.2 |
At any time throughout the Initial Service Term, Recipient may terminate any of the Services provided in this Exhibit with five (5) days written notice to Provider. |
|
5.1 |
Provider Service Manager: Director, Software Development |
|
5.2 |
Recipient Service Manager: Senior Manager, Technology |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(17.2)
6. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (#) and for the purposes of the signature below,
the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth above, no
Provider Subsidiary or Recipient Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient Subsidiary and a
Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be bound by any
resolution resulting therefrom.
ACCEPTED AND AGREED:
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Provider PayPal, Inc.:
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By: |
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Name Printed: |
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Title: |
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Recipient eBay, Inc.:
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By: |
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Name Printed: |
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Title: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(18.1)
EXHIBIT A(18.1)
CORPORATE NETWORK ACCESS
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Provider Subsidiary: |
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Recipient: |
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Initial Service Period: |
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Extensions: |
PayPal, Inc. |
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eBay Inc. |
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24 months |
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None |
In preparation for Separation, Recipient has entered into Transition
Service Agreement Exhibits (TSAs) and Commercial Agreements (CAs) with Provider that require Recipient to have access to certain of Providers systems. Provider will give to Recipient the opportunity to access these
systems and provide the services described in this Exhibit A(18.1) (the Services). Provider understands that, to fulfill the terms of these TSAs and CAs, Recipient will need to have access to Providers systems for a period
of up to twenty four (24) months.
Provider will make available to Recipient the services described in this Exhibit A(18.1) (the
Services). As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to
Recipient, or any Subsidiary of Recipient the Services.
Provider will provide, and Recipient will use, the Services in conformance with the terms and
conditions of this Exhibit A(18.1) and the Agreement. This Exhibit A(18.1) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the
Agreement.
2. |
SYSTEM SERVICES: SERVICE DESCRIPTION |
Provider will provide the Services in a manner to be mutually agreed in good faith by the Parties.
The Service Provider will use
commercially reasonable efforts to work with the Provider and Recipient to diagnose and fix any failure of the Service Providers service which impacts the Recipients ability to access Providers systems and help resolve any
technical issues resulting in a system failure (System Failure).
Since it is the responsibility of Provider to provide
access to its systems there will be no Charges to Recipient for the Services.
The Term for
the Services provided under this Exhibit will include the Initial Service Period. Provider agrees that as long as any of the TSAs or CAs remain active, Provider will not terminate this agreement. However, the Term for this Exhibit A(18.1) shall not
exceed twenty four (24) months from the Effective Time of the Agreement.
|
6.1 |
Provider Service Manager: Director, Information Technology |
|
6.2 |
Recipient Service Manager: Sr. Manager Technology |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(18.1)
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/ OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (18.1) and for the purposes of the signature
below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth
above, no Provider Subsidiary or Recipient Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient
Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be
bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
Provider Subsidiary: PayPal, Inc.:
Recipient: eBay Inc.:
TRANSITION SERVICES AGREEMENT
EXHIBIT A(18.2)
EXHIBIT A(18.2)
CORPORATE NETWORK ACCESS
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Provider: |
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Recipient Subsidiary: |
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Initial Service Period: |
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Extensions: |
eBay Inc. |
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PayPal, Inc. |
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24 months |
|
None |
In preparation for Separation, Recipient has entered into Transition
Service Agreement Exhibits (TSAs) and Commercial Agreements (CAs) with Provider that require Recipient to have access to certain of Providers systems. Provider will give to Recipient the opportunity to access these
systems and provide the services described in this Exhibit A(18.2) (the Services). Provider understands that, to fulfill the terms of these TSAs and CAs , Recipient will need to have access to Providers systems for a period
of up to twenty four (24) months.
Provider will make available to Recipient the services described in this Exhibit A(18.2) (the
Services). As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to
Recipient, or any Subsidiary of Recipient the Services.
Provider will provide, and Recipient will use, the Services in conformance with the terms and
conditions of this Exhibit A(18.2) and the Agreement. This Exhibit A(18.2) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the
Agreement.
2. |
SYSTEM SERVICES: SERVICE DESCRIPTION |
Provider will provide the Services in a manner to be mutually agreed in good faith by the Parties.
The Service Provider will use
commercially reasonable efforts to work with the Provider and Recipient to diagnose and fix any failure of the Service Providers service which impacts the Recipients ability to access Providers systems and help resolve any
technical issues resulting in a system failure (System Failure).
Since it is the responsibility of Provider to provide
access to its systems there will be no Charges to Recipient for the Services.
The Term for
the Services provided under this Exhibit will include the Initial Service Period. Provider agrees that as long as any of the TSAs or CAs remain active, Provider will not terminate this agreement. However, the Term for this Exhibit A(18.2) shall not
exceed twenty four (24) months from the Effective Time of the Agreement.
|
6.1 |
Provider Service Manager: Sr. Manager Technology |
|
6.2 |
Recipient Service Manager: Director, Information Technology |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(18.2)
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (18.2) and for the purposes of the signature
below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth
above, no Provider Subsidiary or Recipient Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient
Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be
bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
Provider: eBay Inc.:
Recipient Subsidiary: PayPal, Inc.:
TRANSITION SERVICES AGREEMENT
EXHIBIT A(19)
EXHIBIT A(19)
FACEBOOK INTEGRATION HOSTING SERVICES
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Provider Subsidiary: |
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Recipient: |
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Service Period: |
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Extensions: |
PayPal, Inc. |
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eBay Inc. |
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Up to 18 months |
|
No extensions |
The purpose of this Exhibit A(19) is to provide Recipients team
time to migrate its storage of Facebook credentials from its customers (Sellers) out of Providers hosting platform (Trinity).
The Provider will make available to Recipient the services described in this Exhibit A(19) (the Services). As referenced in
Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient
the Services.
Provider will provide, and Recipient will use, the Services in a manner consistent with the terms and conditions of this Exhibit A(19) and
the Agreement. This Exhibit A(19) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
2. |
FACEBOOK INTEGRATION HOSTING SERVICES: |
Provider shall provide hosting and maintenance of the Trinity platform that stores
the Facebook credentials of Sellers in a manner to be agreed in good faith by the Parties.
3. |
SRE, NOC, TECH OPS, AND PD SUPPORT SERVICES |
|
3.1 |
Scope of Support Services |
Provider will attempt to diagnose and fix any failure of the
Gateway to function as designed (each, a System Failure), as agreed in good faith by the Parties.
There shall be no Charges charged to Recipient for these
Services.
|
5.1 |
The Service Period will be for a maximum of eighteen (18) months with no extension. |
|
5.2 |
Recipient may terminate the Services at any time with fifteen (15) days written notice. Except as expressly set forth in this Agreement, Provider may not terminate the Services. |
|
6.1 |
Provider: Director, Software Development 2 |
|
6.2 |
Recipient: Director Software Development 1 |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(19)
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (19) and for the purposes of the signature below,
the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth above, no
Provider Subsidiary or Recipient Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient Subsidiary and a
Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be bound by any
resolution resulting therefrom.
ACCEPTED AND AGREED:
|
|
|
Provider Subsidiary PayPal, Inc.: |
|
|
TRANSITION SERVICES AGREEMENT
EXHIBIT A(20)
EXHIBIT A(20)
SAM SYSTEM SERVICES
|
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Provider: |
|
Recipient Subsidiary: |
|
Initial Service Period: |
|
Extensions: |
eBay Inc. |
|
PayPal, Inc. |
|
Two (2) weeks |
|
No extensions |
The purpose of this Exhibit A(20) is for Provider Secure Account
Management (SAM) Team to provide system support for Recipients SAM system (the System), which manages all associates, alternative work force (AWF), customer service representative (CSR), third-party access (TPA) accounts,
during the Term of this Exhibit A(20).
Provider will make available to Recipient the services described in this Exhibit A(20) (the
Services). As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to
Recipient, or any Subsidiary of Recipient the Services.
Provider will provide, and Recipient will use, the Services in conformance with the terms and
conditions of this Exhibit A(20) and the Agreement. This Exhibit A(20) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
2. |
SYSTEM SERVICES: SERVICE DESCRIPTION |
Provider will provide the Services, which shall be restricted to the System itself, in a manner to be mutually agreed in good faith by the Parties.
|
3.1 |
System Support. Provider will make available to Recipient the support services for System Outages in a manner to be mutually agreed in good faith by the Parties. |
|
5.1 |
Charges. The Charges for Providers provisioning of the Services set forth herein are $14,400.00 plus 7% for a total of $15,504.00. |
|
5.2 |
Payment. The Charges will be invoiced to Recipient and subject to the payment terms for Charges of the Agreement. |
|
5.1 |
The Service Period for this Exhibit A(20) shall not exceed two (2) weeks from the Effective Time of the Agreement. |
|
5.2 |
Recipient or Provider may terminate any of the Services provided in this Exhibit in accordance with Section 5.02 of the Agreement. |
|
6.1 |
Provider Service Manager: Director, Business Systems 1, EFShared Services Technology |
|
6.2 |
Recipient Service Manager: Director, ISMEngineering, Delivery and Access Management |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(20)
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (20) and for the purposes of the signature below,
the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth above, no
Provider Subsidiary or Recipient Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient Subsidiary and a
Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be bound by any
resolution resulting therefrom.
ACCEPTED AND AGREED:
Provider: eBay Inc.:
Recipient Subsidiary: PayPal, Inc.:
TRANSITION SERVICES AGREEMENT
EXHIBIT A(21)
EXHIBIT A(21)
SAM INTEGRATION
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Provider: |
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Recipient Subsidiary: |
|
Initial Service Period: |
|
Extension Periods: |
eBay Inc. |
|
PayPal, Inc. |
|
Two (2) weeks |
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Daily, not to exceed a total of 6 months |
The purpose of this Exhibit A(21) is to support Providers Secure
Account Management (SAM) Team to deliver phases of the SAM go-live, with Recipient assuming SAM operations/maintenance/trouble-shooting of SAM after delivery (the Services).
Provider will make available to Recipient the services described in this Exhibit A(21) (the Services). As referenced in Section 2.01
of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to Recipient, or any Subsidiary of Recipient the Services.
Provider will provide, and Recipient will use, the Services in conformance with the terms and conditions of this Exhibit A(21) and the Agreement. This Exhibit
A(21) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
Provider will provide the Services, which shall
be restricted to the System itself, in a manner to be mutually agreed in good faith by the Parties.
|
3.1 |
System Support. Provider will make available to Recipient the support services for System Outages in a manner to be mutually agreed in good faith by the Parties. |
|
4.1 |
Charges. The Charges for Providers provisioning of the Services set forth herein are $28,762.00 for two (2) full weeks. If this Exhibit A(21) is extended as provided in Section 5.1, a daily rate
of $2,054.40 shall be charged. |
|
4.2 |
Payment. The Charges will be invoiced to Recipient and subject to the payment terms for Charges of the Agreement. |
The Term for
the Services provided under this Exhibit A(21) will include the Initial Service Period and any extended service periods, renewable in successive one (1) day intervals, as necessarily until the Success Exit Criteria (to be agreed by the parties)
are met, in Recipients discretion. However, the Term for this Exhibit shall not exceed six (6) months from the Effective Time of the Agreement. Recipient or Provider may terminate any of the Services provided in this Exhibit in accordance
with Section 5.02 of the Agreement.
TRANSITION SERVICES AGREEMENT
EXHIBIT A(21)
|
6.1 |
Provider Service Manager: Director, Business Systems 1, EFShared Services Technology. |
|
6.2 |
Recipient Service Manager: Director, ISMEngineering, Delivery and Access Management. |
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR RECIPIENT
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (21) and for the purposes of the signature below,
the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set forth above, no
Provider Subsidiary or Recipient Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider and Recipient Subsidiary, or between a Recipient Subsidiary and a
Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Recipient Subsidiary, as the case may be, agrees to be bound by any
resolution resulting therefrom.
ACCEPTED AND AGREED:
Provider: eBay Inc.:
Recipient Subsidiary: PayPal, Inc.:
TRANSITION SERVICES AGREEMENT
EXHIBIT A(22)
EXHIBIT A(22):
SYNCHRONY SUPPORT SERVICES
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Provider: |
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Recipient: |
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Initial Service Period: |
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Extension Periods: |
PayPal, Inc. |
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eBay Inc. |
|
6 Months |
|
Successive 1 month service periods (no more than 12 months) |
The purpose of this Exhibit A(22) is to allow Recipient
to leverage Providers services in managing the program under an agreement with Synchrony Bank (Synchrony) for a private label and co-branded revolving credit under both the Provider and Recipient brands (the
Program), while Provider and Recipient work on an amendment to that agreement (Synchrony Agreement) with Synchrony. Additionally, until such Synchrony Agreement is amended or is terminated, the Parties need to
confirm each Partys requirement to perform its obligations under such agreement and to allocate certain obligations and responsibilities, such as formally apportioning liabilities, which are not allocated therein.
Provider will make available to Recipient the services described in this Exhibit A(22) (the Services). As referenced in
Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to Recipient, or any Subsidiary of Recipient the
Services.
Accordingly, during the Service Period, Provider will provide, and Recipient will use, the Services in a manner consistent with
how similar Services were provided and used prior to Separation and in conformance with the terms and conditions of this Exhibit A(22) and the Agreement. This Exhibit A(22) is hereby incorporated by this reference into Exhibit A of the Agreement.
Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
|
2.1 |
Each Party shall continue to perform its obligations under the Synchrony Agreement consistent with such Partys practices during the twelve months prior to Separation. The Parties each shall cooperate with
the other in good faith to preserve their mutual interest in the operation of the Program and shall reasonably consult with the other with respect to any Program-related decisions that are reasonably likely to affect the other Party.
|
The Parties understand and agree that the Data Sharing
Addendum to the Operating Agreement between Provider and Recipient (Addendum) is hereby incorporated by this reference irrespective of whether or not the Operating Agreement is in effect. In the event of a conflict between this
Exhibit A(22), the Agreement and/or the Addendum related to the obligations of the Parties with regard to data, the Parties hereby agree that the order of priority for interpreting such conflict will go first to the relevant terms of the Addendum,
followed by this Exhibit A(22) and last the Agreement.
|
4.1(a) |
The Charges under this Exhibit A(22) shall be $18,796 plus 7% monthly. |
|
4.1(b) |
All Charges for Services incurred in any month, if any, will be invoiced to Recipient monthly by Provider and subject to the payment terms of the Agreement, unless such amount has already been deducted from a payment by
Provider to Recipient as permitted in Section 7.2 below. |
TRANSITION SERVICES AGREEMENT
EXHIBIT A(22)
|
4.2 |
Chargebacks. Recipient shall continue, consistent with past practice during the twelve months prior to Separation, to be responsible and promptly reimburse Provider for all chargebacks incurred by Provider
under Article V of the Synchrony Agreement as a result of the use of Accounts (as defined by Appendix A of the Synchrony Agreement) on any eBay Website. |
|
5.1 |
The Service Period provided under this Exhibit A(22) will include the Initial Service Period and any extended service periods, renewable in successive one (1) month intervals. |
|
5.2 |
This Exhibit A(22) will terminate on the earlier of: (a) the expiration of the Service Period; (b) the termination of the Synchrony Agreement; (c) an amendment of the Synchrony Agreement removing
Recipient as a party to such agreement; or (d) the mutual agreement of Provider and Recipient to terminate this Exhibit A(22) as reflected in a signed writing. |
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5.3 |
The Service Period for this Exhibit A(22) shall not exceed twelve (12) months from the Effective Time of the Agreement. |
|
6.1 |
Provider Service Manager: VP and GM, Credit, PayPal, Inc. |
|
6.2 |
Recipient Service Manager: Director, Global Payments, eBay Inc. |
ACCEPTED AND AGREED:
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Provider: PayPal, Inc. |
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Recipient: eBay Inc. |
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By: |
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By: |
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Name Printed: |
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Name Printed: |
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Title: |
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Title: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(23)
EXHIBIT A(23)
DEVICE CONFIGURATION SERVICES
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Provider: |
|
Recipient Subsidiary: |
|
Service Period: |
|
Extensions: |
eBay Inc. |
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PayPal, Inc. |
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6 Months |
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Successive one (1) month intervals, not to exceed a total of 18 months |
The purpose of this Exhibit A(23) is to
allow Recipients unsupported, legacy applications, which enables Recipient to configure functionality, based on location, for iOS mobile devices, to continue calling on Providers instance of the service (the Services)
until Providers instance naturally deprecates for Recipient users, within or after six months.
As referenced in Section 2.01 of
the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services.
Accordingly, during the Service Period, Provider will provide, and Recipient will receive, the Services in a manner consistent with how similar Services were provided and used prior to Separation and in conformance with the terms and conditions of
this Exhibit A(23) and the Transition Services Agreement between the Parties (the Agreement). This Exhibit A(23) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Agreement.
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2.1 |
In providing the Services, Provider will continue to support Recipient legacy application users in a manner to be decided in mutual good faith by the Parties. |
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3.1 |
Provider shall perform, or shall cause on or more of its Subsidiaries to perform, all Services to be provided by the Provider as agreed in mutual good faith by the Parties. |
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4.1 |
There will be no Charges for the Services. |
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5.1 |
The Term for the Services provided under this Exhibit A(23) will include the Initial Service Period and any extension service periods, renewable in successive one (1) month intervals. However the Term for
this Exhibit shall not exceed eighteen (18) months from the Effective Time of the Agreement. |
Provider Service Manager: Director, Mobile Platform eBay Inc.
Recipient Service Manager: Sr. Product Manager 1, Consumer PayPal, Inc.
TRANSITION SERVICES AGREEMENT
EXHIBIT A(23)
7. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR PROVIDER
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (23) and for the purposes of the
signature below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set
forth above, no Provider Subsidiary or Provider Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider Subsidiary and Recipient, or between a Recipient
Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Provider Subsidiary, as the case may be, agrees to be
bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
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Provider Subsidiary: PayPal, Inc. |
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Recipient: eBay Inc. |
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By: |
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By: |
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Name Printed: |
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Name Printed: |
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Title: |
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Title: |
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TRANSITION SERVICES AGREEMENT
EXHIBIT A(24.1)
EXHIBIT A(24.1)
TREASURY
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Provider: |
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Recipient Subsidiary: |
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Initial Service Period: |
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Extension: |
eBay Inc. |
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PayPal, Inc. |
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9 Months |
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Successive 1 month service periods (no more than 18 months) |
The purpose of this Exhibit A(24.1) is for Providers Treasury
team (Treasury) to continue assisting Recipient with the development of a second instance of a subscription application for Recipient to use after Separation. The Provider will make available to Recipient the services (the
Services) in a manner to be agreed in good faith by the Parties. As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to
cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services. Provider will provide, and Recipient will use, the Services in a manner consistent with how similar Services were provided and used
prior to Separation and in conformance with the terms and conditions of this Exhibit A(24.1) and the Agreement. This Exhibit A(24.1) is hereby incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Agreement
2. |
SERVICES: SERVICE DESCRIPTION |
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2.1 |
The Providers Treasury will make available to Recipient the Services to assist with the implementation and deployment of Recipients instance of the application to be agreed in good faith by the
Parties. |
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3.1 |
There will be no Charges for the Services. Consideration for the services being performed will be the receipt of services performed by the Recipient in the separate TSA Treasury Exhibit A(24.2).
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4.1 |
The Initial Service Period will be nine (9) months. The Parties may agree to extent the Service Period for one (1) month terms, not to exceed a total of eighteen (18) months, including the Initial
Service Period. |
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5.1 |
Provider Service Managers: |
VP Treasurer
Treasury Manager
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5.2 |
Recipient Service Managers: |
Assistant Treasurer
Senior Treasury Analyst
TRANSITION SERVICES AGREEMENT
EXHIBIT A(24.1)
6. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR PROVIDER
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (24.1) and for the purposes of the
signature below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set
forth above, no Provider Subsidiary or Provider Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider Subsidiary and Recipient, or between a Recipient
Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Provider Subsidiary, as the case may be, agrees to be
bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
eBay Inc.:
PayPal, Inc.:
TRANSITION SERVICES AGREEMENT
EXHIBIT A(24.2)
EXHIBIT A(24.2)
TREASURY
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Provider Subsidiary: |
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Recipient: |
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Initial Service Period: |
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Extension Service Period: |
PayPal, Inc. |
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eBay Inc. |
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9 Months |
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Successive 1 month service periods (no more than 18 months) |
The purpose of this Exhibit A(24.2) is for Recipients Treasury
team (Treasury) to continue receiving assistance from the Provider to make certain changes to its instance of a subscription application for its use after Separation. The Provider will make available to Recipient the services (the
Services) in a manner to be agreed in good faith by the Parties. As referenced in Section 2.01 of the Transition Services Agreement between the Parties (the Agreement), Provider agrees to provide, or to
cause one or more of its Subsidiaries to provide, to the Recipient, or any Subsidiary of the Recipient the Services.
Provider will provide, and Recipient
will use, the Services in a manner consistent with how similar Services were provided and used prior to Separation and in conformance with the terms and conditions of this Exhibit A(24.2) and the Agreement. This Exhibit A(24.2) is hereby
incorporated by this reference into Exhibit A of the Agreement. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.
2. |
SERVICES: SERVICE DESCRIPTION |
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2.1 |
The Providers Treasury will make available to Recipient the Services to assist with the implementation and deployment of Recipients instance of the application to be agreed in good faith by the Parties.
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3.1 |
There will be no Charges for the Services. Consideration for the services being performed will be the receipt of services performed by the Recipient in the separate TSA Treasury Exhibit A(24.1).
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4.1 |
The Initial Service Period will be nine (9) months. The Parties may agree to extent the Service Period for one (1) month terms, not to exceed a total of eighteen (18) months, including the Initial
Service Period. |
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5.1 |
Provider Service Managers: |
Assistant Treasurer
Senior Treasury Analyst
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5.2 |
Recipient Service Managers: |
VP Treasurer
Treasury Manager
TRANSITION SERVICES AGREEMENT
EXHIBIT A(24.2)
6. |
RIGHTS AND OBLIGATIONS OF PROVIDER SUBSIDIARY AND/OR PROVIDER
SUBSIDIARY |
For the purpose of this Section of this Exhibit A (24.2) and for the purposes of the
signature below, the term Provider Subsidiary may be used to reference a subsidiary entity of Provider and the term Recipient Subsidiary may be used to reference a subsidiary entity of Recipient. Except as set
forth above, no Provider Subsidiary or Provider Subsidiary is a party or a third-party beneficiary of the Agreement. Any dispute between a Provider Subsidiary and Recipient, between a Provider Subsidiary and Recipient, or between a Recipient
Subsidiary and a Provider Subsidiary shall be resolved between Recipient and Provider in the manner set forth under the Section 8 of this Agreement, and the Provider Subsidiary and/or the Provider Subsidiary, as the case may be, agrees to be
bound by any resolution resulting therefrom.
ACCEPTED AND AGREED:
eBay Inc.:
PayPal, Inc.:
Exhibit 10.3
TAX MATTERS AGREEMENT
DATED AS OF JULY 17, 2015
BY AND BETWEEN
EBAY
INC.
AND
PAYPAL HOLDINGS, INC.
TABLE OF CONTENTS
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Page |
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Section 1. |
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Definition of Terms |
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1 |
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Section 2. |
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Allocation of Tax Liabilities |
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12 |
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Section 2.01 |
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General Rule |
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12 |
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Section 2.02 |
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Allocation of United States Federal Taxes |
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12 |
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Section 2.03 |
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Allocation of State Taxes |
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13 |
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Section 2.04 |
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Allocation of Foreign Taxes |
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13 |
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Section 2.05 |
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Certain Transaction and Other Taxes |
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14 |
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Section 3. |
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Proration of Taxes for Straddle Periods |
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16 |
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Section 4. |
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Preparation and Filing of Tax Returns |
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16 |
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Section 4.01 |
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General |
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16 |
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Section 4.02 |
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Tax Accounting Practices |
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16 |
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Section 4.03 |
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Consolidated or Combined Tax Returns |
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17 |
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Section 4.04 |
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Right to Review Tax Returns |
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17 |
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Section 4.05 |
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SpinCo Carryback Items and Claims for Refund |
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19 |
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Section 4.06 |
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Apportionment of Earnings and Profits and Tax Attributes |
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19 |
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Section 5. |
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Tax Payments |
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20 |
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Section 5.01 |
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Payment of Taxes |
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20 |
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Section 5.02 |
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Indemnification Payments |
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21 |
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Section 6. |
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Tax Benefits |
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21 |
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Section 6.01 |
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Tax Benefits |
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21 |
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Section 6.02 |
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eBay and SpinCo Income Tax Deductions in Respect of Certain Equity Awards and Incentive Compensation |
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23 |
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Section 7. |
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Tax-Free Status |
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24 |
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Section 7.01 |
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Representations |
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24 |
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Section 7.02 |
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Restrictions on SpinCo |
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24 |
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Section 7.03 |
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Restrictions on eBay |
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26 |
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Section 7.04 |
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Procedures Regarding Opinions and Rulings |
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26 |
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Section 7.05 |
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Liability for Tax-Related Losses |
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27 |
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Section 7.06 |
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Section 336(e) Election |
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29 |
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Section 8. |
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Assistance and Cooperation |
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30 |
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Section 8.01 |
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Assistance and Cooperation |
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30 |
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Section 8.02 |
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Income Tax Return Information |
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30 |
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Section 8.03 |
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Reliance by eBay |
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30 |
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Section 8.04 |
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Reliance by SpinCo |
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31 |
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Section 9. |
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Tax Records |
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31 |
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Section 9.01 |
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Retention of Tax Records |
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31 |
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Section 9.02 |
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Access to Tax Records |
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31 |
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Section 10. |
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Tax Contests |
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31 |
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Section 10.01 |
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Notice |
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31 |
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Section 10.02 |
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Control of Tax Contests |
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32 |
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Section 11. |
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Effective Date; Termination of Prior Intercompany Tax Allocation Agreements |
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34 |
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Section 12. |
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Survival of Obligations |
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34 |
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Section 13. |
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Treatment of Payments; Tax Gross Up |
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34 |
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Section 13.01 |
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Treatment of Tax Indemnity and Tax Benefit Payments |
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34 |
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Section 13.02 |
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Tax Gross Up |
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35 |
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Section 13.03 |
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Interest |
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35 |
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Section 14. |
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Disagreements |
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35 |
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Section 15. |
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Late Payments |
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36 |
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Section 16. |
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Expenses |
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36 |
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ii
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Section 17. |
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General Provisions |
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36 |
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Section 17.01 |
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Addresses and Notices |
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36 |
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Section 17.02 |
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Assignability |
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37 |
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Section 17.03 |
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Waiver |
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37 |
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Section 17.04 |
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Severability |
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37 |
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Section 17.05 |
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Authority |
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37 |
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Section 17.06 |
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Further Action |
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38 |
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Section 17.07 |
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Integration |
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38 |
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Section 17.08 |
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Construction |
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38 |
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Section 17.09 |
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No Double Recovery |
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38 |
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Section 17.10 |
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Counterparts |
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38 |
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Section 17.11 |
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Governing Law |
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39 |
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Section 17.12 |
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Jurisdiction |
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39 |
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Section 17.13 |
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Amendment |
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39 |
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Section 17.14 |
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SpinCo Subsidiaries |
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39 |
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Section 17.15 |
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Successors |
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39 |
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Section 17.16 |
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Injunctions |
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39 |
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iii
TAX MATTERS AGREEMENT
This TAX MATTERS AGREEMENT (this Agreement) is entered into as of July 17, 2015, by and between eBay Inc., a Delaware
corporation (eBay), and PayPal Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of eBay (SpinCo) (collectively, the Companies and each a Company).
RECITALS
WHEREAS, eBay
and SpinCo have entered into a Separation and Distribution Agreement, dated as of June 26, 2015 (the Separation and Distribution Agreement), providing for the separation of the eBay Group from the SpinCo Group;
WHEREAS, pursuant to the terms of the Separation and Distribution Agreement, eBay will, among other things, (i) contribute the PayPal Assets to SpinCo
and its Subsidiaries, (ii) cause SpinCo and its Subsidiaries to assume the PayPal Liabilities, and (iii) effect the Distribution;
WHEREAS, eBay
and its Subsidiaries have engaged in the Internal Contribution and Internal Distribution to facilitate the Distribution;
WHEREAS, for U.S. Federal Income
Tax purposes, it is intended that each of the Internal Distribution and the Distribution shall qualify as transactions that are generally tax free pursuant to Sections 355(a) and 368(a)(1)(D) of the Code;
WHEREAS, as of the date hereof, eBay is the common parent of an affiliated group of corporations, including SpinCo and PayPal, which has elected to file
consolidated U.S. federal income Tax Returns;
WHEREAS, as a result of the Distribution, SpinCo and its subsidiaries will cease to be members of
the affiliated group (as that term is defined in Section 1504 of the Code) of which eBay is the common parent (the Deconsolidation);
WHEREAS, the parties desire to provide for and agree upon the allocation between the parties of liabilities for Taxes arising prior to, as a result of, and
subsequent to the Distribution, and to provide for and agree upon other matters relating to Taxes;
NOW THEREFORE, in consideration of the mutual
agreements contained herein, the parties hereby agree as follows:
Section 1. Definition of Terms. For purposes of
this Agreement (including the recitals hereof), the following terms have the following meanings, and capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Separation and Distribution Agreement:
3P Holdings means PayPal Payment Holdings Pte. Ltd., a Singapore limited company and a wholly owned subsidiary of eBay AG prior to the
Internal Distribution.
3P Holdings Active Trade or Business means the active conduct (as defined in Section 355(b)(2) of
the Code and the regulations thereunder) by 3P Holdings and its separate affiliated
group (as defined in Section 355(b)(3)(B) of the Code) of the PayPal Payments Business and PayPal Credit Business as conducted by China 93, China 94, China 98, and China 311 and the
Swedish marketplace business as conducted by AB immediately prior to the Internal Distribution.
AB means Tradera Sweden AB, a limited
liability company organized under the laws of Sweden.
Accounting Cutoff Date means, with respect to SpinCo, any date as of the end of
which there is a closing of the financial accounting records for such entity.
Adjustment Request means any formal or informal
claim or request filed with any Tax Authority, or with any administrative agency or court, for the adjustment, refund, or credit of Taxes, including (a) any amended Tax Return claiming adjustment to the Taxes as reported on the Tax Return or,
if applicable, as previously adjusted, (b) any claim for equitable recoupment or other offset, and (c) any claim for refund or credit of Taxes previously paid.
Affiliate means any entity that is directly or indirectly controlled by either the person in question or an Affiliate of such
person. Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract or otherwise. The term
Affiliate shall refer to Affiliates of a person as determined immediately after the Distribution.
Agreement shall mean this Tax
Matters Agreement.
Business Day has the meaning set forth in the Separation and Distribution Agreement.
CFC means a controlled foreign corporation as defined in Section 957(a) of the Code.
CFO Certificate shall have the meaning set forth in Section 7.02(e) of this Agreement.
China 93 means eBay Engineering & Research Center (Shanghai) Co. Ltd., a limited liability company organized under the laws of
China and a wholly owned subsidiary of eBay AG.
China 94 means eBay Commerce Technology Operations (Shanghai) Co. Ltd., a
limited liability company organized under the laws of China and a wholly owned subsidiary of eBay AG.
China 98 means eBay
Management (Shanghai) Co. Ltd., a limited liability company organized under the laws of China and a wholly owned subsidiary of eBay AG.
China 311 means Shanghai eBay Network Info. Service Co., Ltd., a limited liability company organized under the laws of China and a
subsidiary of eBay AG.
Code means the U.S. Internal Revenue Code of 1986, as amended.
Companies and Company shall have the meaning provided in the first sentence of this Agreement.
- 2 -
Compensatory Equity Interests shall have the meaning set forth in Section 6.02(a) of this
Agreement.
Contribution means the contribution of assets, including all of the shares of capital stock of PayPal, by eBay to
SpinCo pursuant to the Separation and Distribution Agreement.
Deconsolidation shall have the meaning provided in the
Recitals.
Deconsolidation Date means the last date on which SpinCo qualifies as a member of the affiliated group (as defined in
Section 1504 of the Code) of which eBay is the common parent.
DGCL means the Delaware General Corporation Law.
Distribution shall mean the distribution by eBay of all the common stock of SpinCo pro rata to holders of eBay common
stock.
Distribution Date has the meaning set forth in the Separation and Distribution Agreement.
Distribution-Related Tax Contest shall mean any Tax Contest in which the IRS, another Tax Authority or any other party asserts a
position that could reasonably be expected to adversely affect the Tax-Free Status of the Contribution and Distribution or the Internal Contribution and the Internal Distribution.
eBay shall have the meaning provided in the first sentence of this Agreement.
eBay Adjustment means any proposed adjustment by a Tax Authority or claim for refund asserted in a Tax Contest to the extent eBay would be
exclusively liable for any resulting Tax under this Agreement or exclusively entitled to receive any resulting Tax Benefit under this Agreement.
eBay Affiliated Group shall have the meaning provided in the definition of eBay Federal Consolidated Income Tax Return.
eBay AG means eBay International AG, a limited liability company organized under the laws of Switzerland and a wholly owned
subsidiary of eBay.
eBay Federal Consolidated Income Tax Return means any U.S. federal income Tax Return for the affiliated
group (as that term is defined in Section 1504 of the Code and the regulations thereunder) of which eBay is the common parent (the eBay Affiliated Group).
eBay Foreign Combined Income Tax Return means a consolidated, combined or unitary or other similar Foreign Income Tax Return or any Foreign
Income Tax Return with respect to any profit and/or loss sharing group (e.g., UK group relief), group payment or similar group or fiscal unity that actually includes, by election or otherwise, one or more members of the eBay
Group together with one or more members of the SpinCo Group.
eBay Group means eBay and its Affiliates, excluding any entity
that is a member of the SpinCo Group.
- 3 -
eBay Group Employees shall have the meaning provided in the Employee Matters Agreement.
eBay Separate Return means any Separate Return of eBay or any member of the eBay Group.
eBay State Combined Income Tax Return means a consolidated, combined or unitary or other similar State Income Tax Return that actually
includes, by election or otherwise, one or more members of the eBay Group together with one or more members of the SpinCo Group.
eBay
Subpart F Income Taxes has the meaning set forth in Section 2.02(c).
Employee Matters Agreement means the Employee
Matters Agreement, dated as of July 17, 2015, by and between eBay and SpinCo.
Escalation Committee has the meaning set
forth in the Separation and Distribution Agreement.
Federal Income Tax means any Tax imposed by Subtitle A of the Code, and any
interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Federal Income Tax Return means any
Tax Return of (i) any member of the SpinCo Group (including any consolidated, combined or unitary return), or (ii) any member of the eBay Group (including any consolidated, combined or unitary return), in each case, with respect to Federal
Income Taxes, including any eBay Federal Consolidated Income Tax Return and any SpinCo Federal Consolidated Income Tax Return.
Federal
Other Tax means any Tax imposed by the federal government of the United States of America other than any Federal Income Taxes, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Federal Tax means any Federal Income Tax or Federal Other Tax.
Federal Tax Return means any Tax Return of (i) any member of the SpinCo Group (including any consolidated, combined or unitary
return), or (ii) any member of the eBay Group (including any consolidated, combined or unitary return), in each case, with respect to Federal Taxes.
Fifty-Percent or Greater Interest shall have the meaning ascribed to such term for purposes of Sections 355(d) and (e) of the Code.
Filing Date shall have the meaning set forth in Section 7.05(d) of this Agreement.
Final Determination means the final resolution of liability for any Tax, which resolution may be for a specific issue or adjustment or for
a Tax Period, (a) by IRS Form 870 or 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the taxpayer, or by a comparable form under the laws of a State, local, or foreign taxing jurisdiction, except that a
Form 870 or 870-AD or comparable form shall not constitute a Final Determination to the extent that it reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund or the right of the Tax Authority to
assert a further deficiency in respect of such issue or
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adjustment or for such Tax Period (as the case may be); (b) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable;
(c) by a closing agreement or accepted offer in compromise under Section 7121 or 7122 of the Code, or a comparable agreement under the laws of a State, local, or foreign taxing jurisdiction; (d) by any allowance of a refund or credit
in respect of an overpayment of Income Tax or Other Tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the jurisdiction imposing such Income Tax or Other Tax; or (e) by
any other final disposition, including by reason of the expiration of the applicable statute of limitations or by mutual agreement of the parties.
Foreign Income Tax means any Tax imposed by any foreign country or any possession of the United States, or by any political subdivision of
any foreign country or United States possession, which is an income tax as defined in Treasury Regulations Section 1.901-2, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Foreign Other Tax means any Tax imposed by any foreign country or any possession of the United States, or by any political subdivision of
any foreign country or United States possession, other than any Foreign Income Taxes, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Foreign Tax means any Foreign Income Taxes or Foreign Other Taxes.
Foreign Tax Return means any Tax Return of (i) any member of the SpinCo Group (including any consolidated, combined or unitary
return), or (ii) any member of the eBay Group (including any consolidated, combined or unitary return), in each case, with respect to Foreign Taxes.
Former eBay Group Employee shall have the meaning provided in the Employee Matters Agreement.
Former PayPal Group Employee shall have the meaning provided in the Employee Matters Agreement.
Group means the eBay Group or the SpinCo Group, or both, as the context requires.
High-Level Dispute means any dispute or disagreement (a) relating to liability under Section 7.05 of this Agreement or
(b) in which the amount of liability in dispute exceeds $25 million.
Income Tax means any Federal Income Tax, State Income
Tax or Foreign Income Tax.
Indemnitee shall have the meaning set forth in Section 13.03 of this Agreement.
Indemnitor shall have the meaning set forth in Section 13.03 of this Agreement.
Internal Contribution means the contribution of specified assets, including (i) the stock of AB, (ii) approximately $10,080,000
in cash, (iii) the stock of PayPal International Treasury Centre Sarl, (iv) the stock of PayPal Network Information Services (Shanghai) Co., Ltd., and (v) certain assets utilized in various customer service, research and development,
and administrative functions performed by certain individuals employed by China 93, China 94, China 98, and China 311 for the PayPal Payments Business in China, by eBay AG to 3P Holdings pursuant to the Separation and Distribution Agreement.
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Internal Distribution shall mean the distribution by eBay AG of all the common stock of 3P
Holdings to eBay in a transaction intended to qualify as a distribution that is generally tax free pursuant to Sections 355(a) and 368(a)(1)(D) of the Code.
IRS means the United States Internal Revenue Service.
Joint Return shall mean any Return of a member of the eBay Group or the SpinCo Group that is not a Separate Return.
Notified Action shall have the meaning set forth in Section 7.04(a) of this Agreement.
Other Tax means any Federal Other Tax, State Other Tax, or Foreign Other Tax.
Past Practices shall have the meaning set forth in Section 4.02(a) of this Agreement.
Payment Date means (i) with respect to any eBay Federal Consolidated Income Tax Return, the due date for any required installment of
estimated taxes determined under Section 6655 of the Code, the due date (determined without regard to extensions) for filing the return determined under Section 6072 of the Code, and the date the return is filed, and (ii) with respect
to any other Tax Return, the corresponding dates determined under the applicable Tax Law.
Payor shall have the meaning set
forth in Section 5.02(a) of this Agreement.
PayPal means PayPal, Inc., a Delaware corporation, and a direct wholly owned
subsidiary of eBay prior to the Contribution.
PayPal Credit Business means PayPals domestic consumer and merchant credit
business, known as PayPal Credit, which is part of the PayPal Payments Business.
PayPal Group Employees shall have the meaning
provided in the Employee Matters Agreement.
PayPal Payments Business means PayPals business of providing a technology
platform that enables digital and mobile payments on behalf of consumers and merchants.
Person means any individual,
partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization or a governmental entity or any department, agency or political subdivision thereof, without regard to whether
any entity is treated as disregarded for U.S. Federal Income Tax purposes.
Post-Deconsolidation Period means any Tax Period
beginning after the Deconsolidation Date, and, in the case of any Straddle Period, the portion of such Straddle Period beginning the day after the Deconsolidation Date.
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Pre-Deconsolidation Period means any Tax Period ending on or before the Deconsolidation Date,
and, in the case of any Straddle Period, the portion of such Straddle Period ending on the Deconsolidation Date.
Prime Rate has
the meaning set forth in the Separation and Distribution Agreement.
Privilege means any privilege that may be asserted under
applicable law, including, any privilege arising under or relating to the attorney-client relationship (including the attorney-client and work product privileges), the accountant-client privilege and any privilege relating to internal evaluation
processes.
Proposed Acquisition Transaction means a transaction or series of transactions (or any agreement, understanding or
arrangement, within the meaning of Section 355(e) of the Code and Treasury Regulations Section 1.355-7, or any other regulations promulgated thereunder, to enter into a transaction or series of transactions), whether such transaction is
supported by SpinCo management or shareholders, is a hostile acquisition, or otherwise, as a result of which SpinCo would merge or consolidate with any other Person or as a result of which any Person or Persons would (directly or indirectly)
acquire, or have the right to acquire, from SpinCo and/or one or more holders of outstanding shares of SpinCo Capital Stock, a number of shares of SpinCo Capital Stock that would, when combined with any other changes in ownership of SpinCo Capital
Stock pertinent for purposes of Section 355(e) of the Code, comprise 40% or more of (A) the value of all outstanding shares of stock of SpinCo as of the date of such transaction, or in the case of a series of transactions, the date of the
last transaction of such series, or (B) the total combined voting power of all outstanding shares of voting stock of SpinCo as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such
series. Notwithstanding the foregoing, a Proposed Acquisition Transaction shall not include (A) the adoption by SpinCo of a shareholder rights plan or (B) issuances by SpinCo that satisfy Safe Harbor VIII (relating to acquisitions in
connection with a persons performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulations Section 1.355-7(d). For purposes of determining whether a transaction constitutes
an indirect acquisition, any recapitalization resulting in a shift of voting power or any redemption of shares of stock shall be treated as an indirect acquisition of shares of stock by the non-exchanging shareholders. This definition and the
application thereof is intended to monitor compliance with Section 355(e) of the Code and shall be interpreted accordingly. Any clarification of, or change in, the statute or regulations promulgated under Section 355(e) of the Code shall
be incorporated into this definition and its interpretation.
PTI means any earnings and profits of a foreign corporation that
would be excluded from gross income pursuant to Section 959 of the Code.
Recipient means, with respect to the transfers
occurring pursuant to the Transactions, the Party receiving assets and/or liabilities.
Representation Letters means the
representation letters and any other materials delivered by, or on behalf of, eBay, SpinCo or others to a Tax Advisor in connection with the issuance by such Tax Advisor of a Tax Opinion.
Required Party shall have the meaning set forth in Section 5.02(a) of this Agreement.
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Reserve shall mean a financial statement reserve, in accordance with generally accepted
accounting principles, pursuant to FASB Interpretation No. 48, excluding, for the avoidance of doubt, any reserve related to Taxes imposed with respect to the Transactions.
Responsible Company means, with respect to any Tax Return, the Company having responsibility for preparing and filing such Tax Return under
this Agreement.
Restriction Period shall mean the period beginning on the date hereof and ending on (and including) the
two-year anniversary of the Distribution Date.
Retention Date shall have the meaning set forth in Section 9.01 of this
Agreement.
Section 336(e) Election has the meaning set forth in Section 7.06.
Section 7.02(e) Acquisition Transaction means any transaction or series of transactions that is not a Proposed Acquisition Transaction but
would be a Proposed Acquisition Transaction if the percentage reflected in the definition of Proposed Acquisition Transaction were 30% instead of 40%.
Separate Return means (a) in the case of any Tax Return of any member of the SpinCo Group (including any consolidated, combined or
unitary return), any such Tax Return that does not include any member of the eBay Group and (b) in the case of any Tax Return of any member of the eBay Group (including any consolidated, combined or unitary return), any such Tax Return that
does not include any member of the SpinCo Group.
Separation and Distribution Agreement shall have the meaning set forth in the
recitals of this Agreement.
SpinCo shall have the meaning provided in the first sentence of this Agreement, and references
herein to SpinCo shall include any entity treated as a successor to SpinCo.
SpinCo Active Trade or Business means the active
conduct (as defined in Section 355(b)(2) of the Code and the regulations thereunder) by SpinCo and its separate affiliated group (as defined in Section 355(b)(3)(B) of the Code) of the PayPal Payments Business and PayPal Credit
Business as conducted by PayPal, PayPal (Europe) S.a.r.l. et Cie, S.C.A., and PayPal Pte. Ltd. immediately prior to the Distribution.
SpinCo Capital Stock means all classes or series of capital stock of SpinCo, including (i) the SpinCo Common Stock, (ii) all
options, warrants and other rights to acquire such capital stock and (iii) all instruments properly treated as stock in SpinCo for U.S. federal income tax purposes.
SpinCo Carryback Item means any net operating loss, net capital loss, excess tax credit, or other similar Tax item of any member of the
SpinCo Group which may or must be carried from one Tax Period to another prior Tax Period under the Code or other applicable Tax Law.
SpinCo Common Stock has the meaning ascribed to the term PayPal Shares in the Separation and Distribution Agreement.
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SpinCo Federal Consolidated Income Tax Return shall mean any U.S. federal income Tax Return
for the affiliated group (as that term is defined in Section 1504 of the Code) of which SpinCo is the common parent.
SpinCo
Group means SpinCo and its Affiliates, as determined immediately after the Distribution.
SpinCo Retained Other Taxes
means Other Taxes incurred in the ordinary course of business that have been accrued on the financial statements of any member of the SpinCo Group as of the Distribution Date, excluding, for the avoidance of doubt, Other Taxes imposed with respect
to the Transactions.
SpinCo Separate Return means any Separate Return of SpinCo or any member of the SpinCo Group.
SpinCo Subpart F Income Taxes has the meaning set forth in Section 2.02(c).
State Income Tax means any Tax imposed by any State of the United States or by any political subdivision of any such State or the District
of Columbia, which is imposed on or measured by net income, including state and local franchise or similar Taxes measured by net income, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
State Other Tax means any Tax imposed by any State of the United States or by any political subdivision of any such State or the District
of Columbia, other than any State Income Taxes, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
State Tax means any State Income Taxes or State Other Taxes.
State Tax Return means any Tax Return of (i) any member of the SpinCo Group (including any consolidated, combined or unitary return),
or (ii) any member of the eBay Group (including any consolidated, combined or unitary return), in each case, with respect to State Taxes.
Straddle Period means any Tax Period that begins on or before and ends after the Deconsolidation Date.
Subpart F Income means, collectively, (i) subpart F income, as defined in Section 952 of the Code and (ii) any
investment in United States property, as defined in Section 956 of the Code.
Tax or
Taxes means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer,
import, export, value added, alternative minimum, estimated or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any governmental entity or political subdivision thereof, and any
interest, penalties, additions to tax, or additional amounts in respect of the foregoing.
Tax Advisor means a United States tax
counsel or accountant of recognized national standing.
Tax Advisor Dispute shall have the meaning set forth in Section 14
of this Agreement.
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Tax Allocation Agreement means the Tax Allocation Agreement, by and among eBay and certain of
its Subsidiaries, dated as of January 1, 2003.
Tax Attribute or Attribute shall mean a net operating
loss, net capital loss, unused investment credit, unused foreign tax credit, excess charitable contribution, general business credit or any other Tax Item that could reduce a Tax.
Tax Authority means, with respect to any Tax, the governmental entity or political subdivision thereof that imposes such Tax, and the
agency (if any) charged with the collection of such Tax for such entity or subdivision.
Tax Benefit means any loss, deduction,
refund, credit, or other item reducing Taxes otherwise payable (including, for the avoidance of doubt, the receipt of any distribution from a CFC, to the extent such distribution is treated as being made out of PTI).
Tax Contest means an audit, review, examination, or any other administrative or judicial proceeding with the purpose or effect of
redetermining Taxes (including any administrative or judicial review of any claim for refund).
Tax-Free Status means, with
respect to each of (i) the Contribution and Distribution, taken together, and (ii) the Internal Contribution and the Internal Distribution, taken together, the qualification thereof (a) as a transaction described in Sections 355 and
368(a)(1)(D) of the Code, (b) as a transaction in which the stock distributed thereby is qualified property for purposes of Sections 355(c)(2) and 361(c)(2) of the Code and (c) as a transaction in which eBay, SpinCo and
the members of their respective Groups recognize no income or gain for U.S. federal income tax purposes pursuant to Sections 355, 361 and 1032 of the Code, other than (x) income or gain recognized pursuant to Sections 367(a), 367(b) and/or 1248
and the Treasury Regulations promulgated under such provisions with respect to the Internal Contribution and the Internal Distribution or (y) intercompany items or excess loss accounts taken into account pursuant to the Treasury Regulations
promulgated pursuant to Section 1502 of the Code.
Tax Item means, with respect to any Income Tax, any item of income,
gain, loss, deduction, or credit.
Tax Law means the law of any governmental entity or political subdivision thereof relating to
any Tax.
Tax Opinion means each opinion of a Tax Advisor delivered to eBay in connection with and regarding the Federal Income
Tax treatment of, (i) the Contribution and the Distribution or (ii) the Internal Contribution and the Internal Distribution.
Tax Period means, with respect to any Tax, the period for which the Tax is reported as provided under the Code or other applicable Tax
Law.
Tax Records means any Tax Returns, Tax Return workpapers, documentation relating to any Tax Contests, and any other books
of account or records (whether or not in written, electronic or other tangible or intangible forms and whether or not stored on electronic or any other medium) required to be maintained under the Code or other applicable Tax Laws or under any record
retention agreement with any Tax Authority.
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Tax-Related Losses means (i) all federal, state, local and foreign Taxes (including
interest and penalties thereon) imposed pursuant to any settlement, Final Determination, judgment or otherwise; (ii) all reasonable accounting, legal and other professional fees, and court costs incurred in connection with such Taxes; and
(iii) all reasonable costs and expenses and any damages associated with stockholder litigation or controversies and any amount required to be paid by eBay (or any eBay Affiliate) or SpinCo (or any SpinCo Affiliate) in respect of the liability
of shareholders, whether paid to shareholders or to the IRS or any other Tax Authority, in each case, resulting from the failure of the Contribution and the Distribution or the Internal Contribution and the Internal Distribution to have Tax-Free
Status; provided, that amounts shall be treated as having been required to be paid for purposes of clause (iii) of this definition to the extent they are paid in a good faith compromise of an asserted claim.
Tax Return or Return means any report of Taxes due, any claim for refund of Taxes paid, any information return with
respect to Taxes, or any other similar report, statement, declaration, or document filed or required to be filed under the Code or other Tax Law, including any attachments, exhibits, or other materials submitted with any of the foregoing, and
including any amendments or supplements to any of the foregoing.
Transaction Taxes has the meaning set forth in Section
2.05(a).
Transactions means the Contribution, the Distribution and the other transactions contemplated by the Separation and
Distribution Agreement (including the Internal Contribution and the Internal Distribution).
Transferor means, with respect to
the transfers occurring pursuant to the Transactions, the Party transferring assets and/or liabilities.
Treasury Regulations
means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Period.
Unqualified Tax
Opinion means an unqualified opinion of a Tax Advisor on which eBay may rely to the effect that (i) a transaction will not affect the Tax-Free Status of the Contribution and the Distribution or
the Internal Contribution and the Internal Distribution, and (ii) will not adversely affect any of the conclusions set forth in any Tax Opinion regarding the Tax-Free Status of the Contribution and the Distribution or the Internal Contribution
and the Internal Distribution; provided, that any tax opinion obtained in connection with a proposed acquisition of SpinCo Capital Stock entered into during the Restriction Period shall not qualify as an Unqualified Tax Opinion
unless such tax opinion concludes that such proposed acquisition will not be treated as part of a plan (or series of related transactions), within the meaning of Section 355(e) of the Code and the Treasury Regulations promulgated
thereunder, that includes the Distribution or the Internal Distribution. Any such opinion must assume that the Contribution and Distribution and the Internal Contribution and the Internal Distribution would have qualified for Tax-Free Status if the
transaction in question did not occur.
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Section 2. Allocation of Tax Liabilities.
Section 2.01 General Rule.
(a) eBay Liability. eBay shall be liable for, and shall indemnify and hold harmless the SpinCo Group from and against any liability
for, Taxes which are allocated to eBay under this Section 2.
(b) SpinCo Liability. SpinCo shall be liable for, and shall
indemnify and hold harmless the eBay Group from and against any liability for, Taxes which are allocated to SpinCo under this Section 2.
Section 2.02 Allocation of United States Federal Taxes. Except as otherwise provided in Section 2.05(b) or (c), Federal Taxes
shall be allocated as follows:
(a) Allocation of Tax Relating to Federal Tax Returns. eBay shall be responsible for any and
all Federal Taxes due with respect to or required to be reported on any Federal Tax Return required to be filed by a member of the eBay Group with respect to any Tax Period (or portion thereof) ending on or prior to the Distribution Date (including
any eBay Federal Consolidated Income Tax Return) (including any increase in such Tax as a result of a Final Determination); provided, however that SpinCo shall be responsible for any such Tax (including any increase in such Tax as a
result of a Final Determination) to the extent such Tax is imposed with respect to any matter for which any member of the SpinCo Group reflected a Reserve in its financial statements on the Distribution Date; provided, further, that
SpinCo shall be responsible for any Federal Other Taxes that are SpinCo Retained Other Taxes (including any increase in such Tax as a result of a Final Determination). For the avoidance of doubt, the amount of any such Reserve (or, in the case of
SpinCo Retained Other Taxes, the amount of any such accrual) shall not be treated as a minimum amount of, or a limitation on, SpinCos responsibility pursuant to Sections 2.02(a), 2.03(a), or 2.04(a).
(b) Certain Post-Distribution Matters. Subject to SpinCos compliance with Section 4.02(c), eBay shall be responsible for any
and all Federal Income Taxes imposed on the SpinCo Group with respect to any Tax Period (or portion thereof) ending on or prior to December 31, 2016 arising solely from the purchase of certain credit receivables prior to the Distribution Date
or the SpinCo Group continuing to purchase or own such credit receivables until the date that is one day before the one-year anniversary of the Distribution Date. eBay shall not be responsible for any Taxes imposed on the SpinCo Group arising from
the purchase, ownership or disposition of credit receivables on or after the one-year anniversary of the Distribution Date.
(c)
Allocation of Certain Subpart F Income Taxes. Except to the extent otherwise provided in Section 2.02(b), and notwithstanding anything to the contrary in the Tax Allocation Agreement, Federal Income Taxes due with respect to any Subpart F
Income required to be included in income by the SpinCo Group under Section 951(a)(1) of the Code with respect to any Straddle Period of any CFC that is a member of the SpinCo Group and was transferred to SpinCo pursuant to the Contribution
shall be allocated as follows: (i) eBay shall be responsible for any such Taxes imposed with respect to Subpart F Income allocable to the portion of such Straddle Period that is a Pre-Deconsolidation Period (including any increase in such Tax
as a result of a Final Determination) (eBay Subpart F Income Taxes), and (ii) SpinCo shall be responsible
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for any such Taxes imposed with respect to Subpart F Income allocable to the portion of such Straddle Period that is a Post-Deconsolidation Period (including any increase in such Tax as a result
of a Final Determination) (SpinCo Subpart F Income Taxes). For this purpose, Subpart F Income shall be allocated between the Pre-Deconsolidation Period and the Post-Deconsolidation Period based on a hypothetical closing of
the books at the end of the Distribution Date.
Section 2.03 Allocation of State Taxes. Except as otherwise provided in
Section 2.05(b) or (c), State Taxes shall be allocated as follows:
(a) Allocation of Tax Relating to State Tax
Returns. eBay shall be responsible for any and all State Taxes due with respect to or required to be reported on any State Tax Return with respect to any Tax Period (or portion thereof) ending on or prior to the Distribution Date (including any
increase in such Tax as a result of a Final Determination) and, for the avoidance of doubt, eBay shall be responsible for any and all State Other Taxes imposed with respect to the Transactions except to the extent SpinCo is otherwise liable for such
State Other Taxes pursuant to Section 7.05; provided, however that SpinCo shall be responsible for any such Tax (including any increase in such Tax as a result of a Final Determination) to the extent such Tax is imposed with
respect to any matter for which any member of the SpinCo Group reflected a Reserve in its financial statements on the Distribution Date; provided, further, that SpinCo shall be responsible for any State Other Taxes that are SpinCo
Retained Other Taxes (including any increase in such Tax as a result of a Final Determination).
(b) Certain Post-Distribution
Matters. Subject to SpinCos compliance with Section 4.02(c), eBay shall be responsible for any and all State Income Taxes imposed on the SpinCo Group with respect to any Tax Period (or portion thereof) ending on or prior to
December 31, 2016 arising solely from the purchase of certain credit receivables prior to the Distribution Date or the SpinCo Group continuing to purchase or own such credit receivables until the date that is one day before the one-year
anniversary of the Distribution Date. eBay shall not be responsible for any Taxes imposed on the SpinCo Group arising from the purchase, ownership or disposition of credit receivables on or after the one-year anniversary of the Distribution Date.
Section 2.04 Allocation of Foreign Taxes. Except as otherwise provided in Section 2.05(b) or (c), Foreign Taxes
shall be allocated as follows:
(a) Allocation of Tax Relating to Foreign Tax Returns. eBay shall be responsible for any and
all Foreign Taxes due with respect to or required to be reported on any Foreign Tax Return with respect to any Tax Period (or portion thereof) ending on or prior to the Distribution Date (including any increase in such Tax as a result of a Final
Determination) and, for the avoidance of doubt, eBay shall be responsible for any and all Foreign Other Taxes imposed with respect to the Transactions except to the extent SpinCo is otherwise liable for such Foreign Other Taxes pursuant to
Section 7.05; provided, however that SpinCo shall be responsible for any such Tax (including any increase in such Tax as a result of a Final Determination) to the extent such Tax is imposed with respect to any matter for which any
member of the SpinCo Group reflected a Reserve in its financial statements on the Distribution Date; provided, further, that SpinCo shall be responsible for any Foreign Other Taxes that are SpinCo Retained Other Taxes (including any
increase in such Tax as a result of a Final Determination).
(b) Certain Post-Distribution Matters. Subject to SpinCos
compliance with Section 4.02(c), eBay shall be responsible for any and all Foreign Income Taxes imposed on the SpinCo Group with respect to any Tax Period (or portion thereof) ending on or prior to December 31, 2016 arising solely from the
purchase of certain credit receivables prior to the Distribution Date or the SpinCo Group continuing to purchase or own such credit receivables until the date that is one day before the one-year anniversary of the Distribution Date. eBay shall not
be responsible for any Taxes imposed on the SpinCo Group arising from the purchase, ownership or disposition of credit receivables on or after the one-year anniversary of the Distribution Date.
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Section 2.05 Certain Transaction and Other Taxes.
(a) Transaction Taxes.
(i) All charges for goods or services in respect of the transfers occurring pursuant to the Transactions,
and related transaction costs, shall be exclusive of any value added, goods and services, sales, use, consumption, excise, service, transfer, stamp, documentary, filing, recordation taxes or similar taxes (Transaction Taxes).
Without limiting any provision of this Agreement, the Recipient shall be responsible for all Transaction Taxes imposed on or assessed with respect to the provision of goods or services by the Transferor. The Transferor shall issue proper invoices
usable by the Recipient to recover (by way of credit or refund) Transaction Taxes in jurisdictions where they are recoverable. The Transferor and the Recipient shall cooperate to minimize any Transaction Taxes and in obtaining any refund, return, or
rebate, or applying an exemption or zero-rating for goods or services giving rise to any Transaction Taxes, including by filing any exemption or other similar forms or providing valid tax identification numbers or other relevant registration
numbers, certificates, or other documents. The Recipient and the Transferor shall cooperate regarding any requests for information, audits, or similar requests by any Tax Authority concerning Transaction Taxes payable with respect to the transfers
occurring pursuant to the Transactions. If, within twelve (12) months following the date any Transaction Taxes are paid pursuant to this Section 2.05(a)(i) by SpinCo or a member of the SpinCo Group to any Taxing Authority, eBay or a member
of the eBay Group in respect of the transfers occurring pursuant to the Transactions, the SpinCo Group is unable, using commercially reasonable efforts, to fully recover (by way of credit or refund) any such Transaction Taxes, SpinCo may seek
reimbursement of such unrecoverable Transaction Taxes from eBay. SpinCos request for reimbursement of such nonrecoverable Transaction Taxes from eBay shall include documentation of the nonrecoverable Transaction Taxes and substantiation that a
refund or credit is not permitted. eBay shall pay any amounts under this Section 2.05(a)(i) to SpinCo within ninety (90) days following the receipt of a substantiated request for reimbursement from SpinCo. To the extent that, after
receiving reimbursement of any such nonrecoverable Transaction Taxes from eBay pursuant to this Section 2.05(a)(i), a member of the SpinCo Group recovers (by way of credit or refund) all or a portion of such Transaction Taxes, SpinCo shall
repay such recovered Transaction Taxes to eBay.
(ii) The Recipient shall be entitled to deduct and withhold
Tax required by applicable law to be withheld on payments made to the Transferor pursuant to the Transactions. To the extent any amounts are so withheld, the Recipient shall timely remit such deducted and withheld amounts to the relevant Tax
Authority and promptly provide the
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Transferor with evidence of such payment. The Transferor agrees to complete and provide to the Recipient or, if required, to the relevant Tax Authority, at least ten (10) days prior to
the payment due date, such forms, certifications, or other documents as may be reasonably requested by the Recipient, in order to reduce or exempt the withholding of any Tax with respect to payments made to the Transferor when and where
applicable by Law. The Recipient and the Transferor shall cooperate regarding any requests for information, audits, or similar requests by any Tax Authority concerning the withholding of any Tax payable with respect to the Transactions.
If, within twelve (12) months following the date any Taxes are withheld by eBay or a member of the eBay Group in respect of payments or other transfers to SpinCo or a member of the SpinCo Group occurring pursuant to the Transactions,
the SpinCo Group is not able to apply or credit any such withheld Taxes against Taxes otherwise payable by the SpinCo Group, SpinCo may seek reimbursement of the amount of such withheld Taxes that cannot be so applied or credited
from eBay. SpinCos request for such reimbursement of such withheld Taxes from eBay shall include documentation of the Taxes withheld and substantiation that a credit or other relief is not permitted. eBay shall pay any amounts under this
Section 2.05(a)(ii) to SpinCo within ninety (90) days following the receipt of a substantiated request for reimbursement from SpinCo. To the extent that, after receiving reimbursement of any such withheld Taxes from eBay pursuant to this
Section 2.05(a)(ii), the SpinCo Group obtains a credit or other relief with respect to all or a portion of such withheld Taxes, SpinCo shall repay such credited Taxes (or, to the extent any such other relief is obtained, an amount equal to the
corresponding reduction in Taxes otherwise payable by the SpinCo Group) to eBay.
(iii) Any penalties or interest
imposed on any Transaction Taxes described in Section 2.05(a)(i) or Tax described in Section 2.05(a)(ii) shall be the responsibility of the Recipient unless such penalties or interest are the result of an action or failure to act by the
Transferor. The amounts for which the Recipient or Transferor is liable pursuant to this Section 2.05(a) shall include all reasonable accounting, legal and other professional fees, and court costs incurred in connection with the relevant
Taxes.
(b) SpinCo Liability. SpinCo shall be liable for, and shall indemnify and hold harmless the eBay Group from and
against any liability for:
(i) any Tax resulting from a breach by SpinCo of any representation or covenant
in this Agreement, the Separation and Distribution Agreement or any Ancillary Agreement; and
(ii) any
Tax-Related Losses for which SpinCo is responsible pursuant to Section 7.05 of this Agreement.
The amounts for which SpinCo is liable
pursuant to Section 2.05(b)(i) shall include all accounting, legal and other professional fees, and court costs incurred in connection with the relevant Taxes.
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(c) eBay Liability. eBay shall be liable for, and shall indemnify and hold harmless the
SpinCo Group from and against any liability for:
(i) any Tax resulting from a breach by eBay of any
representation or covenant in this Agreement, the Separation and Distribution Agreement or any Ancillary Agreement; and
(ii) any Tax-Related Losses for which eBay is responsible pursuant to Section 7.05 of this Agreement.
The amounts for which eBay is liable pursuant to Section 2.05(c)(i) shall include all accounting, legal and other professional fees, and court costs
incurred in connection with the relevant Taxes.
Section 3. Proration of Taxes for Straddle Periods.
(a) General Method of Proration. In the case of any Straddle Period, Tax Items shall be apportioned between Pre-Deconsolidation Periods
and Post-Deconsolidation Periods in accordance with the principles of Treasury Regulations Section 1.1502-76(b) as reasonably interpreted and applied by the Companies. With respect to the eBay Federal Consolidated Income Tax Return for the
taxable year that includes the Distribution, no election shall be made under Treasury Regulation Section 1.1502-76(b)(2)(ii). If the Deconsolidation Date is not an Accounting Cutoff Date, the provisions of Treasury Regulation
Section 1.1502-76(b)(2)(iii) will be applied to ratably allocate the items (other than extraordinary items) for the month which includes the Deconsolidation Date.
(b) Transactions Treated as Extraordinary Item. In determining the apportionment of Tax Items between Pre-Deconsolidation Periods and
Post-Deconsolidation Periods, any Tax Items relating to the Transactions shall be treated as extraordinary items described in Treasury Regulation Section 1.1502-76(b)(2)(ii)(C) and shall (to the extent occurring on or prior to the
Deconsolidation Date) be allocated to Pre-Deconsolidation Periods, and any Taxes related to such items shall be treated under Treasury Regulations Section 1.1502-76(b)(2)(iv) as relating to such extraordinary item and shall (to the extent
occurring on or prior to the Deconsolidation Date) be allocated to Pre-Deconsolidation Periods.
Section 4. Preparation and
Filing of Tax Returns.
Section 4.01 General. Except as otherwise provided in this Section 4, Tax Returns
shall be prepared and filed when due (taking into account extensions) by the Person obligated to file such Tax Returns under the Code or applicable Tax Law. The Companies shall provide, and shall cause their Affiliates to provide, assistance and
cooperation to one another in accordance with Section 8 with respect to the preparation and filing of Tax Returns, including by providing information required to be provided pursuant to Section 8.
Section 4.02 Tax Accounting Practices.
(a) General Rule. Except as otherwise provided in Section 4.02(b) and (c), with respect to any Tax Return that SpinCo has the
obligation and right to prepare and file, or cause to be prepared and filed, for any Straddle Period (or any Tax Period beginning after the Deconsolidation Date to the extent items reported on such Tax Return could reasonably be expected to affect
items reported on any Tax Return that eBay has the obligation or right to prepare and file for any Pre-Deconsolidation Period or any Straddle Period), such Tax Return shall be prepared in
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accordance with past practices, accounting methods, elections or conventions (Past Practices) used with respect to the Tax Returns in question except to the extent otherwise
required by applicable law. Except as otherwise provided in Section 4.02(b), eBay shall prepare any Tax Return which it has the obligation and right to prepare and file, or cause to be prepared and filed, under Section 4.01, in accordance
with reasonable Tax accounting practices selected by eBay.
(b) Reporting of Transactions. Except to the extent otherwise required
by applicable law or as a result of a Final Determination, (A) neither eBay nor SpinCo shall, and shall not permit or cause any member of its respective Group to, take any position that is either inconsistent with the treatment of each of
(i) the Contribution and Distribution, taken together, or (ii) the Internal Contribution and the Internal Distribution, taken together, in each case, as having Tax-Free Status (or analogous status under state or local law) and,
(B) SpinCo shall not, and shall not permit or cause any member of the SpinCo Group to, take any position with respect to an item of income, deduction, gain, loss, or credit on a Tax Return, or otherwise treat such item in a manner which is
inconsistent with the manner such item is reported on a Tax Return required to be prepared or filed by eBay pursuant to Section 4.01 hereof (including, without limitation, the claiming of a deduction previously claimed on any such Tax
Return).
(c) Reporting of Credit Receivables Purchases. Except to the extent otherwise required by (i) a change in
applicable law on or before the one-year anniversary of the Distribution Date, (ii) applicable law after the one-year anniversary of the Distribution Date, or (iii) as a result of a Final Determination, neither SpinCo nor eBay shall, and
neither shall permit or cause any member of its respective Group to, take any position with respect to the purchase, ownership, or disposition of credit receivables that is inconsistent with the Past Practices of eBay and its subsidiaries with
respect to the Tax reporting thereof referred to in Sections 2.02(b), 2.03(b), and 2.04(b). In the event SpinCo determines that it is required to take such an inconsistent position, it shall promptly notify eBay in writing, and the parties
shall cooperate to minimize the amount of Taxes for which eBay may be liable pursuant to Sections 2.02(b), 2.03(b), and 2.04(b).
Section 4.03 Consolidated or Combined Tax Returns. SpinCo will elect and join, and will cause its respective Affiliates to elect
and join, in filing any eBay State Combined Income Tax Returns, eBay Foreign Combined Income Tax Returns and any other Joint Returns that eBay reasonably determines are required to be filed (or that eBay chooses to file) by the Companies or any of
their Affiliates for Tax Periods ending on, before or after the Deconsolidation Date. With respect to any SpinCo Separate Returns relating to any Tax Period (or portion thereof) ending on or prior to the Distribution Date, SpinCo will elect and
join, and will cause its respective Affiliates to elect and join, in filing consolidated, unitary, combined, or other similar joint Tax Returns, to the extent each entity is eligible to join in such Tax Returns, if eBay reasonably determines that
the filing of such Tax Returns is consistent with past reporting practices, or, in the absence of applicable past practices, will result in the minimization of the net present value of the aggregate Tax to the entities eligible to join in such Tax
Returns.
Section 4.04 Right to Review Tax Returns.
(a) General. The Responsible Company with respect to any material Tax Return shall make such Tax Return (or the relevant portions
thereof), related workpapers and other supporting documents available for review by the other Company, to the extent (i) such Tax Return
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relates to Taxes for which such other Company is or would reasonably be expected to be liable, (ii) such other Company is or would reasonably be expected to be liable in whole or in part for
any additional Taxes owing as a result of adjustments to the amount of Taxes reported on such Tax Return, (iii) such Tax Return relates to Taxes for which the other party would reasonably be expected to have a claim for Tax Benefits under this
Agreement, or (iv) reasonably necessary for the other party to confirm compliance with the terms of this Agreement. The Responsible Company shall use reasonable efforts to make such Tax Return, workpapers and other supporting documents
available for review as required under this paragraph promptly once such Tax Return is materially complete, but in any event no later than three (3) weeks in advance of the due date for filing of such Tax Return, such that the other party has a
meaningful opportunity to review and comment on such Tax Return, and shall use reasonable efforts to have such Tax Return modified before filing, taking into account the person responsible for payment of the Tax (if any) reported on such Tax Return.
The Companies shall attempt in good faith to resolve any disagreement arising out of the review of such Tax Return and, failing such resolution, any disagreement shall be resolved in accordance with the disagreement resolution provisions of
Section 14 as promptly as practicable.
(b) Execution of Returns Prepared by Other Party. In the case of any Tax Return which
is required to be prepared and filed by one Company under this Agreement and which is required by law to be signed by the other Company (or by its authorized representative), the Company which is legally required to sign such Tax Return shall not be
required to sign such Tax Return under this Agreement unless there is at least a greater than 50% likelihood of prevailing on the merits for the Tax treatment of each material item reported on the Tax Return.
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Section 4.05 SpinCo Carryback Items and Claims for Refund. SpinCo hereby agrees that,
unless eBay consents in writing (which consent shall not be unreasonably withheld), (i) no Adjustment Request with respect to any Tax Return with respect to which eBay is the Responsible Company (including any Joint Return) or any other Tax
Return reflecting Taxes for which eBay is responsible under Section 2 shall be filed, and (ii) any available elections to waive the right to claim in any Pre-Deconsolidation Period with respect to any Tax Return with respect to which eBay
is the Responsible Company (including any Joint Return) or any Tax Return reflecting both Taxes for which eBay is responsible under Section 2 and Taxes for which SpinCo is responsible under Section 2 any SpinCo Carryback Item arising in a
Post-Deconsolidation Period shall be made, and no affirmative election shall be made to claim any such SpinCo Carryback Item; provided, however, that the parties agree that any such Adjustment Request shall be made with respect to any SpinCo
Carryback Item related to U.S. federal or State Income Taxes, upon the reasonable request of SpinCo, if such SpinCo Carryback Item is necessary to prevent the loss of the federal and/or State Income Tax Benefit of such SpinCo Carryback Item
(including, but not limited to, an Adjustment Request with respect to a SpinCo Carryback Item of a federal or State capital loss arising in a Post-Deconsolidation Period to a Pre-Deconsolidation Period) and such Adjustment Request, based on
eBays sole, reasonable determination, will cause no Tax detriment to eBay, the eBay Group or any member of the eBay Group. Any Adjustment Request which eBay consents to make under this Section 4.05 shall be prepared and filed by the
Responsible Company for the Tax Return to be adjusted; provided, however, that, prior to the filing of any such Adjustment Request, the other Party shall have the right to review such Adjustment Request together with any related
workpapers and other supporting documentation.
Section 4.06 Apportionment of Earnings and Profits and Tax Attributes.
(a) If the eBay Affiliated Group has a Tax Attribute, the portion, if any, of such Tax Attribute apportioned to SpinCo or the
members of the SpinCo Group and treated as a carryover to the first Post-Deconsolidation Period of SpinCo (or such member) shall be determined by eBay in accordance with Treasury Regulations Sections 1.1502-21, 1.1502-21T, 1.1502-22, 1.1502-79 and,
if applicable, 1.1502-79A.
(b) No Tax Attribute with respect to consolidated Federal Income Tax of the eBay Affiliated
Group, other than those described in Section 4.06(a), and no Tax Attribute with respect to consolidated, combined or unitary state, local, or foreign Income Tax, in each case, arising in respect of a Joint Return shall be apportioned to SpinCo
or any member of the SpinCo Group, except as eBay (or such member of the eBay Group as eBay shall designate) determines is otherwise required under applicable law. SpinCo and eBay agree that the California R&D credit shall not be considered a
Tax Attribute to which this Section 4.06 applies.
(c) eBay (or its designee) shall determine the portion, if any, of any Tax
Attribute which must (absent a Final Determination to the contrary) be apportioned to SpinCo or any member of the SpinCo Group in accordance with this Section 4.06 and applicable law and the amount of tax basis, earnings and profits (including,
for the avoidance of doubt, PTI), and tax pools to be apportioned to SpinCo or any member of the SpinCo Group in accordance with this Section 4.06 and applicable law, and shall provide written supporting documentation of the
calculation thereof to SpinCo as soon as reasonably practicable after the information necessary to make such calculation becomes available to eBay. For the absence of doubt, eBay shall not be liable to SpinCo or any member of the SpinCo Group for
any failure of any determination
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under this Section 4.06 to be accurate under applicable law. The parties intend that, to the extent such PTI is subject to allocation under Treasury Regulations Section 1.312-10 and
related rules and to the extent permitted by applicable law, any PTI attributable to income inclusions with respect to which eBay is responsible for Federal Income Taxes pursuant to Section 2.02(b) or (c) shall be allocated to eBay or a
member of the eBay Group.
(d) The written documentation delivered by eBay pursuant to Section 4.06(c) shall be binding on
SpinCo and each member of the SpinCo Group and shall not be subject to dispute resolution. Except to the extent otherwise required by applicable law or pursuant to a Final Determination, SpinCo shall not take any position (whether on a Tax Return or
otherwise) that is inconsistent with the information contained in such written documentation.
Section 5. Tax
Payments.
Section 5.01 Payment of Taxes. In the case of any Tax Return reflecting both Taxes for which eBay is
responsible under Section 2 and Taxes for which SpinCo is responsible under Section 2:
(a) Computation and Payment of Tax
Due. With respect to any such Tax Return, the Responsible Company shall pay any Tax required to be paid to the applicable Tax Authority on or before the relevant Payment Date (and provide notice and proof of payment to the other Company).
(b) Computation and Payment of Liability with Respect to Tax Due. Within 90 days following the earlier of (i) the due
date (taking into account extensions) for filing any such Tax Return (excluding any Tax Return with respect to payment of estimated Taxes or Taxes due with a request for extension of time to file) or (ii) the date on which such Tax Return is
filed, if eBay is the Responsible Company, then SpinCo shall pay to eBay the amount, if any, allocable to the SpinCo Group under the provisions of Section 2, and if SpinCo is the Responsible Company, then eBay shall pay to SpinCo the amount
allocable to the eBay Group under the provisions of Section 2, in each case, plus interest computed at the Prime Rate on the amount of the payment based on the number of days from the earlier of (i) the due date of the Tax Return
(including extensions) or (ii) the date on which such Tax Return is filed, to the date of payment.
(c) Adjustments
Resulting in Underpayments. In the case of any adjustment pursuant to a Final Determination with respect to any such Tax Return, the Responsible Company shall pay to the applicable Tax Authority when due any additional Tax due with respect to
such Return required to be paid as a result of such adjustment pursuant to a Final Determination. The Responsible Company shall compute the amount attributable to the SpinCo Group in accordance with Section 2 and SpinCo shall pay to eBay any
amount due eBay (or eBay shall pay SpinCo any amount due SpinCo) under Section 2 within 90 days from the later of (i) the date the additional Tax was paid by the Responsible Company or (ii) the date of receipt of a written notice and
demand from the Responsible Company for payment of the amount due, accompanied by evidence of payment and a statement detailing the Taxes paid and describing in reasonable detail the particulars relating thereto. Any payments required under this
Section 5.02(c) shall include interest computed at the Prime Rate based on the number of days from the date the additional Tax was paid by the Responsible Company to the date of the payment under this Section 5.01(c).
(d) Notwithstanding anything to the contrary herein, if the amount to be paid pursuant to Section 5.01(b) or (c) (in each
case, excluding interest) is in excess of $25 million, then, no later than the later of (i) five Business Days after the date of receipt of a written notice and demand from the Responsible Company for payment of the amount due, sent by Federal
Express or the equivalent with tracking receipt, accompanied by a statement detailing the Taxes required to be paid and (ii) three Business Days prior to the due date for the payment of such Tax, SpinCo shall pay to eBay any amount due eBay (or
eBay shall pay SpinCo any amount due SpinCo) under Section 2.
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Section 5.02 Indemnification Payments.
(a) If any Company (the Payor) is required under applicable Tax Law to pay to a Tax Authority a Tax
that another Company (the Required Party) is liable for under this Agreement, the Required Party shall reimburse the Payor within 90 days of delivery by the Payor to the Required Party of an invoice for the amount due, accompanied
by evidence of payment and a statement detailing the Taxes paid and describing in reasonable detail the particulars relating thereto. The reimbursement shall include interest on the Tax payment computed at the Prime Rate based on the number of days
from the date of the payment to the Tax Authority to the date of reimbursement under this Section 5.02. Notwithstanding anything to the contrary herein, if the amount to be paid pursuant to this Section 5.02 excluding interest is in excess
of $25 million, then, no later than the later of (i) five Business Days after delivery by the Payor to the Required Party of an invoice for the amount due, sent by Federal Express or the equivalent with tracking receipt, accompanied by a
statement detailing the Taxes required to be paid and describing in reasonable detail the particulars relating thereto, and (ii) three Business Days prior to the due date for the payment of such Tax, the Required Party shall pay the Payor.
(b) All indemnification payments under this Agreement shall be made by eBay directly to SpinCo and by SpinCo directly to eBay;
provided, however, that if the Companies mutually agree with respect to any such indemnification payment, any member of the eBay Group, on the one hand, may make such indemnification payment to any member of the SpinCo Group, on the other
hand, and vice versa.
Section 6. Tax Benefits.
Section 6.01 Tax Benefits.
(a) Except as set forth below, eBay shall be entitled to any refund (and any interest thereon received from the applicable Tax
Authority) of Income Taxes and Other Taxes for which eBay is liable hereunder, SpinCo shall be entitled to any refund (and any interest thereon received from the applicable Tax Authority) of Income Taxes and Other Taxes for which SpinCo is liable
hereunder and a Company receiving a refund to which another Company is entitled hereunder in whole or in part shall pay over such refund (or portion thereof) to such other Company within 90 days after such refund is received (together with interest
computed at the Prime Rate based on the number of days from the date the refund was received to the date the refund was paid over).
(b) If (i) a member of the SpinCo Group actually realizes in cash any Tax Benefit as a result of (A) an adjustment pursuant
to a Final Determination or reporting required by Section 4.02(b)
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or (c) that increases Taxes for which a member of the eBay Group is liable hereunder (or reduces any Tax Attribute of a member of the eBay Group), or (B) any income inclusion by the
SpinCo Group with respect to which eBay is responsible for Federal Income Taxes pursuant to Section 2.02(b) or (c), and, in each case, such Tax Benefit would not have arisen but for such adjustment, reporting or income inclusion (determined on
a with and without basis), or (ii) if a member of the eBay Group actually realizes in cash any Tax Benefit as a result of an adjustment pursuant to a Final Determination or reporting required by Section 4.02(b) or (c) that
increases Taxes for which a member of the SpinCo Group is liable hereunder (or reduces any Tax Attribute of a member of the SpinCo Group) and such Tax Benefit would not have arisen but for such adjustment or reporting (determined on a with and
without basis), SpinCo or eBay, as the case may be, shall make a payment to either eBay or SpinCo, as appropriate, within 90 days following such actual realization of the Tax Benefit, in an amount equal to such Tax Benefit actually realized in
cash (including any Tax Benefit actually realized as a result of the payment), plus interest on such amount computed at the Prime Rate based on the number of days from the date of such actual realization of the Tax Benefit to the date of payment of
such amount under this Section 6.01(b).
(c) No later than 90 days after a Tax Benefit described in Section 6.01(b) is
actually realized in cash by a member of the eBay Group or a member of the SpinCo Group, eBay (if a member of the eBay Group actually realizes such Tax Benefit) or SpinCo (if a member of the SpinCo Group actually realizes such Tax Benefit) shall
provide the other Company with a written calculation of the amount payable to such other Company by eBay or SpinCo pursuant to this Section 6. In the event that eBay or SpinCo disagrees with any such calculation described in this
Section 6.01(c), eBay or SpinCo shall so notify the other Company in writing within 90 days of receiving the written calculation set forth above in this Section 6.01(c). eBay and SpinCo shall endeavor in good faith to resolve such
disagreement, and, failing that, the amount payable under this Section 6 shall be determined in accordance with the disagreement resolution provisions of Section 14 as promptly as practicable.
(d) SpinCo shall be entitled to any refund that is attributable to, and would not have arisen but for, a SpinCo Carryback Item pursuant
to the proviso set forth in Section 4.05; provided, however, SpinCo shall indemnify and hold the members of the eBay Group harmless from and against any and all collateral Tax consequences resulting from or caused by any such Carryback,
including (but not limited to) the loss or postponement of any benefit from the use of Tax Attributes generated by a member of the eBay Group or an Affiliate thereof if (x) such Tax Attributes expire unutilized, but would have been utilized but
for such Carryback, or (y) the use of such Tax Attributes is postponed to a later Tax Period than the Tax Period in which such Tax Attributes would have been utilized but for such Carryback. Any such payment of such refund made by eBay to
SpinCo pursuant to this Section 6.01(d) shall be recalculated in light of any Final Determination (or any other facts that may arise or come to light after such payment is made, such as a carryback of an eBay Group Tax Attribute to a Tax Period
in respect of which such refund is received) that would affect the amount to which SpinCo is entitled, and an appropriate adjusting payment shall be made by SpinCo to eBay such that the aggregate amount paid pursuant to this Section 6.01(d)
equals such recalculated amount (with interest computed at the Prime Rate).
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Section 6.02 eBay and SpinCo Income Tax Deductions in Respect of Certain Equity Awards
and Incentive Compensation.
(a) Allocation of Deductions.
(i) Except as provided in Section 6.02(a)(ii), to the extent permitted by applicable law, Income Tax
deductions arising by reason of exercises of options to acquire eBay or SpinCo stock, vesting of restricted eBay stock or SpinCo stock, or settlement of restricted stock awards, restricted stock units, performance-based restricted stock
units, performance share units, or deferred stock units, in each case, following the Distribution, with respect to eBay stock or SpinCo stock (such options, restricted stock, restricted stock units, performance share units, and deferred stock units,
collectively, Compensatory Equity Interests) held by any Person shall be claimed (i) in the case of an eBay Group Employee or Former eBay Group Employee, solely by the eBay Group, and (ii) in the case of a PayPal Group
Employee or Former PayPal Group Employee, solely by the SpinCo Group. To the extent permitted by applicable law, Income Tax deductions with respect to shares issued under the eBay ESPP or the PayPal ESPP (each as defined in the Employee Matters
Agreement) shall be claimed (i) in the case of eBay shares issued (or SpinCo shares received in respect of eBay shares issued) under the eBay ESPP, solely by the eBay Group, and (ii) in the case of SpinCo shares issued under the PayPal
ESPP, solely by the SpinCo Group.
(ii) To the extent permitted by applicable law, Income Tax deductions
arising by reason of exercises of stock options to acquire eBay or SpinCo stock, following the Distribution, held by any Transferring Director, Continuing eBay Director or Transitioning eBay Group Employee (each as defined in the Employee Matters
Agreement) shall be claimed by the issuing corporation. To the extent permitted by applicable law, Income Tax deductions arising by reason of vesting of restricted eBay stock or SpinCo stock, or settlement of restricted stock units,
performance-based restricted stock units or performance share units, in each case, following the Distribution, with respect to eBay stock or SpinCo stock held by any Transitioning eBay Group Employee shall be claimed solely by the eBay Group. To the
extent permitted by applicable law, Income Tax deductions arising by reason of settlement of deferred stock units with respect to eBay stock or SpinCo stock, following the Distribution, held by any Transferring Director or Continuing eBay Director
shall be claimed by the issuing corporation.
(b) Withholding and Reporting. Tax reporting and withholding with respect to
Compensatory Equity Interests shall be governed by Section 4.02(i) of the Employee Matters Agreement. The party that is entitled to claim the Tax deductions described in Section 6.02(a)(i) with respect to shares issued under the eBay ESPP
or PayPal ESPP shall be responsible for all applicable Taxes (including, but not limited to, withholding and excise taxes) and shall satisfy, or shall cause to be satisfied, all applicable Tax reporting obligations with respect thereto.
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Section 7. Tax-Free Status.
Section 7.01 Representations.
(a) Each of eBay and SpinCo hereby represents and warrants that (A) it has reviewed the Representation Letters and
(B) subject to any qualifications therein, all information, representations and covenants contained in such Representation Letters that relate to such Company or any member of its Group are true, correct and complete.
(b) SpinCo hereby represents and warrants that it has no plan or intention of taking any action, or failing to take any action (or
causing or permitting any member of its Group to take or fail to take any action), in each case, from and after the Distribution Date that could reasonably be expected to cause any representation or factual statement made in this Agreement, the
Separation and Distribution Agreement, the Representation Letters or any of the Ancillary Agreements to be untrue.
(c)
SpinCo hereby represents and warrants that, during the two-year period ending on the Distribution Date, there was no agreement, understanding, arrangement, substantial negotiations or discussions (as such terms are defined in
Treasury Regulations Section 1.355-7(h)) by any one or more officers or directors of any member of the SpinCo Group or by any other person or persons with the implicit or explicit permission of one or more of such officers or directors
regarding an acquisition of all or a significant portion of the SpinCo Capital Stock (or any predecessor); provided, however, that no representation is made regarding any such agreement, understanding, arrangement, substantial
negotiations or discussions (as such terms are defined in Treasury Regulations Section 1.355-7(h)) by any one or more officers, directors, or controlling shareholders of any member of the eBay Group (or another person with the implicit or
explicit permission of one or more of such persons).
Section 7.02 Restrictions on SpinCo.
(a) SpinCo agrees that it will not take or fail to take, or cause or permit any SpinCo Affiliate to take or fail to take, any action
where such action or failure to act would be inconsistent with or cause to be untrue any material information, covenant or representation in this Agreement, the Separation and Distribution Agreement, any of the Ancillary Agreements or any
Representation Letter. SpinCo agrees that it will not take or fail to take, or permit any SpinCo Affiliate to take or fail to take, any action which prevents or could reasonably be expected to prevent Tax-Free Status.
(b) Reserved.
(c)
SpinCo agrees that, from the date hereof until the first day after the Restriction Period, it will (i) maintain its status as a company engaged in the SpinCo Active Trade or Business for purposes of Section 355(b)(2) of the Code and
(ii) not engage in any transaction that would result in it ceasing to be a company engaged in the SpinCo Active Trade or Business for purposes of Section 355(b)(2) of the Code. SpinCo further agrees that, from the date hereof until the
first day after the Restriction Period, it will cause 3P Holdings to (i) maintain its status as a company engaged in the 3P Holdings Active Trade or Business for purposes of Section 355(b)(2) of the Code and (ii) not engage in any
transaction that would result in it ceasing to be a company engaged in the 3P Holdings Active Trade or Business for purposes of Section 355(b)(2) of the Code.
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(d) SpinCo agrees that, from the date hereof until the first day after the Restriction
Period, it will not (i) enter into any Proposed Acquisition Transaction or, to the extent SpinCo has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition Transaction to occur (whether by (a) redeeming
rights under a shareholder rights plan, (b) finding a tender offer to be a permitted offer under any such plan or otherwise causing any such plan to be inapplicable or neutralized with respect to any Proposed Acquisition
Transaction, or (c) approving any Proposed Acquisition Transaction, whether for purposes of Section 203 of the DGCL or any similar corporate statute, any fair price or other provision of SpinCos charter or bylaws or
otherwise), (ii) merge or consolidate with any other Person or liquidate or partially liquidate, (iii) in a single transaction or series of transactions sell or transfer (other than sales or transfers of inventory in the ordinary course of
business) all or substantially all of the assets that were transferred to SpinCo pursuant to the Contribution or sell or transfer 50% or more of the gross assets of the SpinCo Active Trade or Business or 30% or more of the consolidated gross assets
of SpinCo and its Affiliates (such percentages to be measured based on fair market value as of the Distribution Date), (iv) redeem or otherwise repurchase (directly or through a SpinCo Affiliate) any SpinCo stock, or rights to acquire stock,
except to the extent such repurchases satisfy Section 4.05(1)(b) of Revenue Procedure 96-30 (as in effect prior to the amendment by Revenue Procedure 2003-48), (v) amend its certificate of incorporation (or other organizational documents),
or take any other action, whether through a stockholder vote or otherwise, affecting the voting rights of SpinCo Capital Stock (including, without limitation, through the conversion of one class of SpinCo Capital Stock into another class of SpinCo
Capital Stock), (vi) take any other action or actions (including any action or transaction that would be reasonably likely to be inconsistent with any representation or covenant made in the Representation Letters) which in the aggregate (and
taking into account any other transactions described in this subparagraph (d)) would be reasonably likely to have the effect of causing or permitting one or more persons to acquire, directly or indirectly, stock representing a Fifty-Percent or
Greater Interest in SpinCo or otherwise jeopardize the Tax-Free Status of the Distribution or Internal Distribution, or (vii) cause or permit 3P Holdings to take any action or enter into any transaction
described in the preceding clauses (ii) through (vi) (substituting references to SpinCo, the Contribution, the SpinCo Active Trade or Business and SpinCo Capital Stock with references to 3P
Holdings, the Internal Contribution, 3P Holdings Active Trade or Business, and 3P Holdings stock) unless, in each case, prior to taking any such action set forth in the foregoing clauses (i) through (vii), (A) SpinCo shall have requested
that eBay obtain a private letter ruling (or, if applicable, a supplemental private letter ruling) from the IRS and/or any other applicable Tax Authority in accordance with Section 7.04(b) and (d) of this Agreement to the effect that such
transaction will not affect the Tax-Free Status and eBay shall have received such a private letter ruling in form and substance satisfactory to eBay in its reasonable discretion (and in determining whether a private letter ruling is satisfactory,
eBay may consider, among other factors, the appropriateness of any underlying assumptions and managements representations made in connection with such private letter ruling), or (B) SpinCo shall provide eBay with an Unqualified Tax
Opinion in form and substance reasonably satisfactory to eBay (and in determining whether an opinion is satisfactory, eBay may consider, among other factors, the appropriateness of any underlying assumptions and managements representations if
used as a basis for the opinion and eBay may determine that no opinion would be acceptable to eBay) or (C) eBay shall have waived the requirement to obtain such private letter ruling or Unqualified Tax Opinion.
(e) Certain Issuances of SpinCo Capital Stock. If SpinCo proposes to enter into any Section 7.02(e) Acquisition Transaction or, to
the extent SpinCo has the right to prohibit any Section 7.02(e) Acquisition Transaction, proposes to permit any Section 7.02(e) Acquisition Transaction to occur, in each case, during the period from the date hereof until the first day
after the Restriction Period, SpinCo shall provide eBay, no later than ten days following the signing of any written agreement with respect to the Section 7.02(e) Acquisition Transaction, with a written description of such transaction
(including the type and amount of SpinCo Capital Stock to be issued in such transaction) and a certificate of the Chief Financial Officer of SpinCo to the effect that the Section 7.02(e) Acquisition Transaction is not a Proposed Acquisition
Transaction or any other transaction to which the requirements of Section 7.02(d) apply (a CFO Certificate).
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Section 7.03 Restrictions on eBay. eBay agrees that it will not take or fail to take,
or cause or permit any member of the eBay Group to take or fail to take, any action where such action or failure to act would be inconsistent with or cause to be untrue any material information, covenant or representation in this Agreement, the
Separation and Distribution Agreement, any of the Ancillary Agreements or any Representation Letters. eBay agrees that it will not take or fail to take, or cause or permit any member of the eBay Group to take or fail to take, any action which
prevents or could reasonably be expected to prevent Tax-Free Status.
Section 7.04 Procedures Regarding Opinions and Rulings.
(a) If SpinCo notifies eBay that it desires to take one of the actions described in clauses (i) through
(vii) of Section 7.02(d) (a Notified Action), eBay and SpinCo shall reasonably cooperate to attempt to obtain the private letter ruling or Unqualified Tax Opinion referred to in Section 7.02(d), unless eBay shall
have waived the requirement to obtain such private letter ruling or Unqualified Tax Opinion.
(b) Rulings or Unqualified Tax
Opinions at SpinCos Request. At the reasonable request of SpinCo pursuant to Section 7.02(d), eBay shall cooperate with SpinCo and use its reasonable best efforts to seek to obtain, as expeditiously as possible, a private letter
ruling from the IRS (and/or any other applicable Tax Authority, or if applicable, a supplemental private letter ruling) or an Unqualified Tax Opinion for the purpose of permitting SpinCo to take the Notified Action. Further, in no event shall eBay
be required to file any request for a private letter ruling under this Section 7.04(b) unless SpinCo represents that (A) it has reviewed the request for such private letter ruling, and (B) all information and representations, if any,
relating to any member of the SpinCo Group, contained in the related private letter ruling documents are (subject to any qualifications therein) true, correct and complete. SpinCo shall reimburse eBay for all reasonable costs and expenses incurred
by the eBay Group in obtaining a private letter ruling or Unqualified Tax Opinion requested by SpinCo within ten Business Days after receiving an invoice from eBay therefor.
(c) Rulings or Unqualified Tax Opinions at eBays Request. eBay shall have the right to obtain a private letter ruling (or, if
applicable, a supplemental private letter ruling) from the IRS and/or any other applicable Tax Authority) or an Unqualified Tax Opinion at any time in its sole and absolute discretion. If eBay determines to obtain a private letter ruling or an
Unqualified Tax Opinion, SpinCo shall (and shall cause each Affiliate of SpinCo to) cooperate with eBay and take any and all actions reasonably requested by eBay in connection with
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obtaining the private letter ruling or Unqualified Tax Opinion (including, without limitation, by making any representation or covenant or providing any materials or information
requested by the IRS, or other applicable Tax Authority, or Tax Advisor; provided that SpinCo shall not be required to make (or cause any Affiliate of SpinCo to make) any representation or covenant that is inconsistent with historical facts
or as to future matters or events over which it has no control). eBay and SpinCo shall each bear its own costs and expenses in obtaining a private letter ruling or an Unqualified Tax Opinion requested by eBay.
(d) SpinCo hereby agrees that eBay shall have sole and exclusive control over the process of obtaining any private letter ruling
pursuant to Section 7.04(b) or (c), and that only eBay shall apply for such a private letter ruling. In connection with obtaining a private letter ruling pursuant to Section 7.04(b), (A) eBay shall keep SpinCo informed in a timely
manner of all material actions taken or proposed to be taken by eBay in connection therewith; (B) eBay shall (1) reasonably in advance of the submission of any related private letter ruling documents provide SpinCo with a draft copy
thereof, (2) reasonably consider SpinCos comments on such draft copy, and (3) provide SpinCo with a final copy; and (C) eBay shall provide SpinCo with notice reasonably in advance of, and SpinCo shall have the right to attend,
any meetings with the IRS or other applicable Tax Authority (subject to the approval of the IRS or other applicable Tax Authority) that relate to such private letter ruling. Neither SpinCo nor any SpinCo Affiliate directly or indirectly controlled
by SpinCo shall seek any guidance from the IRS or any other Tax Authority (whether written, verbal or otherwise) at any time concerning the Contribution or the Distribution or the Internal Contribution and the Internal Distribution (including the
impact of any transaction on the Contribution, Distribution, Internal Contribution, or Internal Distribution, as applicable). In addition, SpinCos applicable officers, employees, and/or representative shall also be listed on the power of
attorney (IRS Form 2848 or comparable form) provided to the IRS or other applicable Tax Authority in connection with any such private letter ruling request.
Section 7.05 Liability for Tax-Related Losses.
(a) Notwithstanding anything in this Agreement or the Separation and Distribution Agreement to the contrary, subject to
Section 7.05(c), SpinCo shall be responsible for, and shall indemnify and hold harmless eBay and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of any Tax-Related
Losses that are attributable to or result from any one or more of the following: (A) the acquisition (other than pursuant to the Contribution or the Distribution) of all or a portion of SpinCos Capital Stock and/or its or its
subsidiaries assets (including any capital stock of 3P Holdings) by any means whatsoever by any Person, (B) any action or failure to act by SpinCo after the Distribution (including, without limitation, any amendment to SpinCos
certificate of incorporation (or other organizational documents), whether through a stockholder vote or otherwise) affecting the voting rights of SpinCo stock (including, without limitation, through the conversion of one class of SpinCo Capital
Stock into another class of SpinCo Capital Stock), (C) any act or failure to act by SpinCo or any SpinCo Affiliate described in Section 7.02 (regardless whether such act or failure to act is covered by a private letter ruling, Unqualified
Tax Opinion or waiver described in clause (A), (B) or (C) of Section 7.02(d), or a CFO Certificate described in Section 7.02(e)) or (D) any breach by SpinCo of its agreement and representations set forth in
Section 7.01.
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(b) Notwithstanding anything in this Agreement or the Separation and Distribution
Agreement to the contrary, subject to Section 7.05(c), eBay shall be responsible for, and shall indemnify and hold harmless SpinCo and its Affiliates and each of their respective officers, directors and employees from and against, one hundred
percent (100%) of any Tax-Related Losses that are attributable to, or result from any one or more of the following: (A) the acquisition (other than pursuant to the Contribution or the Distribution) of all or a portion of eBays stock
and/or its or its subsidiaries assets (including any capital stock of eBay AG) by any means whatsoever by any Person, (B) any act or failure to act by eBay or a member of the eBay Group described in Section 7.03 or (C) any
breach by eBay of its agreements and representations set forth in Section 7.01(a).
(c) Miscellaneous.
(i) To the extent that any Tax-Related Loss is subject to indemnity under both Sections 7.05(a) and (b), responsibility
for such Tax-Related Loss shall be shared by eBay and SpinCo according to relative fault.
(ii) Notwithstanding
anything in Section 7.05(b) or (c)(i) or any other provision of this Agreement or the Separation and Distribution Agreement to the contrary:
(A) with respect to (I) any Tax-Related Loss resulting from the application of Section 355(e) or Section 355(f)
of the Code (other than as a result of an acquisition of a Fifty-Percent or Greater Interest in eBay or eBay AG) and (II) any other Tax-Related Loss resulting, in whole or in part, from an acquisition after the Distribution of any stock or assets of
SpinCo (or any SpinCo Affiliate) by any means whatsoever by any Person or any action or failure to act by SpinCo affecting the voting rights of SpinCo or 3P Holdings stock, SpinCo shall be responsible for, and shall indemnify and hold harmless eBay
and its Affiliates and each of their respective officers, directors and employees from and against, one hundred percent (100%) of such Tax-Related Loss; and
(B) for purposes of calculating the amount and timing of any Tax-Related Loss for which SpinCo is responsible under this
Section 7.05, Tax-Related Losses shall be calculated by assuming that eBay, the eBay Affiliated Group and each member of the eBay Group (I) pay Tax at the highest marginal corporate Tax rates in effect in each relevant taxable year and
(II) have no Tax Attributes in any relevant taxable year.
(iii) Notwithstanding anything in Section 7.05(a) or
(c)(i) or any other provision of this Agreement or the Separation and Distribution Agreement to the contrary:
(A) with
respect to (I) any Tax-Related Loss resulting from the application of Section 355(e) or Section 355(f) of the Code (other than as a result of an acquisition of a Fifty-Percent or Greater Interest in SpinCo or 3P Holdings) and (II) any
other Tax-Related Loss resulting, in whole or in part, from an acquisition after the Distribution of any stock or assets of eBay (or any eBay Affiliate) by any
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means whatsoever by any Person, eBay shall be responsible for, and shall indemnify and hold harmless SpinCo and its Affiliates and each of their respective officers, directors and employees from
and against, one hundred percent (100%) of such Tax-Related Loss; and
(B) for purposes of calculating the amount and
timing of any Tax-Related Loss for which Bay is responsible under this Section 7.05, Tax-Related Losses shall be calculated by assuming that SpinCo, the SpinCo Group and each member of the SpinCo Group (I) pay Tax at the highest marginal
corporate Tax rates in effect in each relevant taxable year and (II) have no Tax Attributes in any relevant taxable year.
(d)
SpinCo shall pay eBay the amount of any Tax-Related Losses for which SpinCo is responsible under this Section 7.05: (A) in the case of Tax-Related Losses described in clause (i) of the definition of Tax-Related Losses no later
than two Business Days prior to the date eBay files, or causes to be filed, the applicable Tax Return for the year of the Contribution or Distribution, as applicable (the Filing Date) (provided that if such Tax-Related
Losses arise pursuant to a Final Determination described in clause (a), (b) or (c) of the definition of Final Determination, then SpinCo shall pay eBay no later than two Business Days prior to the due date for making payment
with respect to such Final Determination) and (B) in the case of Tax-Related Losses described in clause (ii) or (iii) of the definition of Tax-Related Losses, no later than two Business Days after the date eBay pays such Tax-Related
Losses. eBay shall pay SpinCo the amount of any Tax-Related Losses (described in clause (ii) or (iii) of the definition of Tax-Related Loss) for which eBay is responsible under this Section 7.05 no later than two Business Days after
the date SpinCo pays such Tax-Related Losses. Each Party shall have the right to review the calculation of any Tax-Related Losses prepared by the other Party, including any related workpapers and other supporting documentation.
Section 7.06 Section 336(e) Election. If eBay determines, in its sole discretion, that a protective election under
Section 336(e) of the Code (a Section 336(e) Election) shall be made with respect to the Distribution, SpinCo shall (and shall cause the relevant member of the SpinCo Group to) join with eBay or the relevant member of the
eBay Group in the making of such election and shall take any action reasonably requested by eBay or that is otherwise necessary to give effect to such election (including making any other related election). If a Section 336(e) Election is made
with respect to the Distribution, then this Agreement shall be amended in such a manner as is determined by eBay in good faith to take into account such Section 336(e) Election (including by requiring that, in the event the Contribution and
Distribution fail to have Tax-Free Status and eBay is not entitled to indemnification for the Tax-Related Losses arising from such failure, SpinCo shall pay over to eBay any Tax Benefits actually realized in cash by the SpinCo Group or any member of
the SpinCo Group arising from the step-up in Tax basis resulting from the Section 336(e) Election); provided, such amounts payable shall be reduced by all reasonable costs incurred by SpinCo to amend any Tax Returns or other governmental
filings related to such Section 336(e) Election.
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Section 8. Assistance and Cooperation.
Section 8.01 Assistance and Cooperation.
(a) Each of the Companies shall provide (and cause its Affiliates to provide) the other and its agents, including accounting firms and
legal counsel, with such cooperation or information as such other Company reasonably requests in connection with (i) preparing and filing Tax Returns, (ii) determining the liability for and amount of any Taxes due (including estimated
Taxes) or the right to and amount of any refund of Taxes, (iii) examinations of Tax Returns, and (iv) any administrative or judicial proceeding in respect of Taxes assessed or proposed to be assessed. Such cooperation shall include making
available, upon reasonable notice, all information and documents in their possession relating to the other Company and its Affiliates as provided in Section 9. Each of the Companies shall also make available to the other, as reasonably
requested and available, personnel (including employees and agents of the Companies or their respective Affiliates) responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes.
(b) Any information or documents provided under this Section 8 or Section 9 shall be kept confidential by the Company
receiving the information or documents, except as may otherwise be necessary in connection with the filing of Tax Returns or in connection with any administrative or judicial proceedings relating to Taxes. In no event shall either of the Companies
or any of its respective Affiliates be required to provide the other Company or any of its respective Affiliates or any other Person access to or copies of any information if such action could reasonably be expected to result in the waiver of any
Privilege. In addition, in the event that either Company determines that the provision of any information to the other Company or its Affiliates could be commercially detrimental, violate any law or agreement or waive any Privilege, the parties
shall use reasonable best efforts to permit compliance with its obligations under this Section 8 or Section 9 in a manner that avoids any such harm or consequence.
Section 8.02 Income Tax Return Information. SpinCo and eBay acknowledge that time is of the essence in relation to any request for
information, assistance or cooperation made by eBay or SpinCo pursuant to Section 8.01 or this Section 8.02. SpinCo and eBay acknowledge that failure to conform to the deadlines set forth herein or reasonable deadlines otherwise set by
eBay or SpinCo could cause irreparable harm. Each Company shall provide to the other Company information and documents relating to its Group required by the other Company to prepare Tax Returns. Any information or documents the Responsible Company
requires to prepare such Tax Returns shall be provided in such form as the Responsible Company reasonably requests and in sufficient time for the Responsible Company to file such Tax Returns on a timely basis.
Section 8.03 Reliance by eBay. If any member of the SpinCo Group supplies information to a member of the eBay Group in connection
with a Tax liability and an officer of a member of the eBay Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written request of such member of the eBay Group
identifying the information being so relied upon, the chief financial officer of SpinCo (or any officer of SpinCo as designated by the chief financial officer of SpinCo) shall certify in writing that to his or her knowledge (based upon consultation
with appropriate employees) the information so supplied is accurate and complete. SpinCo agrees to indemnify and hold harmless each member of the eBay Group and its directors, officers and employees from and against any fine, penalty, or other cost
or expense of any kind attributable to a member of the SpinCo Group having supplied, pursuant to this Section 8, a member of the eBay Group with inaccurate or incomplete information in connection with a Tax liability.
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Section 8.04 Reliance by SpinCo. If any member of the eBay Group supplies information
to a member of the SpinCo Group in connection with a Tax liability and an officer of a member of the SpinCo Group signs a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then upon the written
request of such member of the SpinCo Group identifying the information being so relied upon, the chief financial officer of eBay (or any officer of eBay as designated by the chief financial officer of eBay) shall certify in writing that to his or
her knowledge (based upon consultation with appropriate employees) the information so supplied is accurate and complete. eBay agrees to indemnify and hold harmless each member of the SpinCo Group and its directors, officers and employees from and
against any fine, penalty, or other cost or expense of any kind attributable to a member of the eBay Group having supplied, pursuant to this Section 8, a member of the SpinCo Group with inaccurate or incomplete information in connection with a
Tax liability.
Section 9. Tax Records.
Section 9.01 Retention of Tax Records. Each Company shall preserve and keep all Tax Records (including emails and other digitally
stored materials) exclusively relating to the assets and activities of its Group for Pre-Deconsolidation Periods and shall preserve and keep all other Tax Records relating to Taxes of the Groups for Pre-Deconsolidation Tax Periods, for so long as
the contents thereof may become material in the administration of any matter under the Code or other applicable Tax Law, but in any event until the later of (i) the expiration of any applicable statutes of limitations, or (ii) seven years
after the Deconsolidation Date (such later date, the Retention Date). After the Retention Date, each Company may dispose of such Tax Records upon 90 days prior written notice to the other Company. If, prior to
the Retention Date, a Company reasonably determines that any Tax Records which it would otherwise be required to preserve and keep under this Section 9 are no longer material in the administration of any matter under the Code or other
applicable Tax Law and the other Company agrees, then such first Company may dispose of such Tax Records upon 90 days prior notice to the other Company. Any notice of an intent to dispose given pursuant to this Section 9.01 shall include
a list of the Tax Records to be disposed of describing in reasonable detail each file, book, or other record accumulation being disposed. The notified Company shall have the opportunity, at its cost and expense, to copy or remove, within such 90-day
period, all or any part of such Tax Records, and the other Party will then dispose of the same Tax Records.
Section 9.02
Access to Tax Records. The Companies and their respective Affiliates shall make available to each other for inspection and copying during normal business hours upon reasonable notice all Tax Records to the extent reasonably required by the other
Company in connection with the preparation of financial accounting statements, audits, litigation, the preparation of Tax Returns, or the resolution of items under this Agreement.
Section 10. Tax Contests.
Section 10.01 Notice. Each of the Companies shall provide prompt notice, within five business days, by Federal Express or the
equivalent with tracking receipt, to the other of any communication from a Tax Authority regarding any pending or threatened Tax audit, assessment
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or proceeding or other Tax Contest for which it may be entitled to indemnification by the other Company hereunder. Such notice shall include copies of the pertinent portion of any written
communication from a Tax Authority and contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail. The failure of one Company to notify the other of such communication in accordance with the
immediately preceding sentences shall not relieve such other Company of any liability or obligation to pay such Tax or make indemnification payments under this Agreement, except to the extent that the failure timely to provide such notification
actually prejudices the ability of such other Company to contest such Tax liability or increases the amount of such Tax liability.
Section 10.02 Control of Tax Contests.
(a) Separate Company Tax Returns.
(i) Pre-Deconsolidation Date and Straddle Period Separate Returns. In the case of any Tax Contest with respect to any
Separate Return (including any Separate Return with respect to Other Taxes) for any Tax Period ending on or prior to the Distribution Date or any Straddle Period, eBay (in the case of any such Separate Return filed with respect to any Person that,
following the Distribution, is a member of the eBay Group) or SpinCo (in the case of any such Separate Return filed with respect to any Person that, following the Distribution, is a member of the SpinCo group), as applicable, shall have exclusive
control over the Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Sections 10.02(d), 10.02(e), and 10.02(f)(ii) below.
(ii) Post-Deconsolidation Date Separate Returns. In the case of any Tax Contest with respect to any Separate Return
(including any Separate Return with respect to Other Taxes) for any Tax Period beginning after the Distribution Date, the Responsible Company shall have exclusive control over the Tax Contest, including exclusive authority with respect to any
settlement of such Tax liability, subject to Section 10.02(e) below.
(b) eBay Federal Consolidated Income Tax Returns. In the
case of any Tax Contest with respect to any eBay Federal Consolidated Income Tax Return, eBay shall have exclusive control over the Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Sections
10.02(d) and 10.02(f)(i) below.
(c) eBay State Combined Income Tax Returns, eBay Foreign Combined Income Tax Returns, and Other
Joint Returns. In the case of any Tax Contest with respect to any eBay State Combined Income Tax Return, any eBay Foreign Combined Income Tax Return or any Tax Return with respect to Other Taxes that is not described in Section 10.02(a),
eBay shall have exclusive control over the Tax Contest, including exclusive authority with respect to any settlement of such Tax liability, subject to Section 10.02(d) below.
(d) SpinCo Rights. In the case of any Tax Contest with respect to any Tax Return described in Section 10.02(a), (b), or
(c) (other than any Separate Return described in Section 10.02(a)(ii)), if (x) as a result of such Tax Contest, SpinCo could reasonably be expected to become liable for an amount of Tax in excess of $1 million and (y) eBay
has control of such Tax Contest pursuant to Section 10.02(a), (b), or (c), as applicable, then (i) eBay shall consult with
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SpinCo reasonably in advance of taking any significant action in connection with such Tax Contest, (ii) eBay shall consult with SpinCo and offer SpinCo a reasonable opportunity to comment
before submitting any written materials prepared or furnished in connection with such Tax Contest, (iii) eBay shall defend such Tax Contest diligently and in good faith as if it were the only party in interest in connection with such Tax
Contest, (iv) SpinCo shall be entitled to participate in such Tax Contest and receive copies of any written materials relating to such Tax Contest received from the relevant Tax Authority, and (v) eBay shall not settle, compromise or
abandon any such Tax Contest without obtaining the prior written consent of SpinCo, which consent shall not be unreasonably withheld.
(e) eBay Rights. In the case of any Tax Contest with respect to any Tax Return described in Section 10.02(a), if (x) as a
result of such Tax Contest, eBay could reasonably be expected to become liable for an amount of Tax in excess of $1 million and (y) SpinCo has the right to control such Tax Contest pursuant to Section 10.02(a), then (i) SpinCo shall
consult with eBay reasonably in advance of taking any significant action in connection with such Tax Contest, (ii) SpinCo shall consult with eBay and offer eBay a reasonable opportunity to comment before submitting any written materials
prepared or furnished in connection with such Tax Contest, (iii) SpinCo shall defend such Tax Contest diligently and in good faith as if it were the only party in interest in connection with such Tax Contest, (iv) eBay shall be entitled to
participate in such Tax Contest and receive copies of any written materials relating to such Tax Contest received from the relevant Tax Authority, and (v) SpinCo shall not settle, compromise or abandon any such Tax Contest without obtaining the
prior written consent of eBay, which consent shall not be unreasonably withheld. For the avoidance of doubt, this Section 10.02(e) shall apply to any Tax Contest with respect to a SpinCo Federal Consolidated Income Tax Return if, as a result of
such Tax Contest, eBay could reasonably be expected to become liable for Taxes pursuant to Section 2.02(b) or (c).
(f)
Distribution-Related Tax Contests.
(i) In the event of any Distribution-Related Tax Contest as a result of
which SpinCo could reasonably be expected to become liable for any Tax or Tax-Related Losses and which eBay has the right to administer and control pursuant to Section 10.02(b) above, (A) eBay shall consult with SpinCo reasonably in
advance of taking any significant action in connection with such Tax Contest, (B) eBay shall offer SpinCo a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such Tax Contest,
(C) eBay shall defend such Tax Contest diligently and in good faith as if it were the only party in interest in connection with such Tax Contest, and (D) eBay shall provide SpinCo copies of any written materials relating to such Tax
Contest received from the relevant Tax Authority. Notwithstanding anything in the preceding sentence to the contrary, the final determination of the positions taken, including with respect to settlement or other disposition, in any
Distribution-Related Tax Contest shall be made in the sole discretion of eBay and shall be final and not subject to the dispute resolution provisions of Article VII of the Separation and Distribution Agreement.
(ii) In the event of any Distribution-Related Tax Contest with respect to any SpinCo Separate Return, (A) SpinCo
shall consult with eBay reasonably in advance of taking any significant action in connection with such Tax Contest, (B) SpinCo shall
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consult with eBay and offer eBay a reasonable opportunity to comment before submitting any written materials prepared or furnished in connection with such Tax Contest, (C) SpinCo shall
defend such Tax Contest diligently and in good faith as if it were the only party in interest in connection with such Tax Contest, (D) eBay shall be entitled to participate in such Tax Contest and receive copies of any written materials
relating to such Tax Contest received from the relevant Tax Authority, and (E) SpinCo shall not settle, compromise or abandon any such Tax Contest without obtaining the prior written consent of eBay, which consent shall not be unreasonably
withheld.
(g) Power of Attorney.
(i) Each member of the SpinCo Group shall execute and deliver to eBay (or such member of the eBay Group as eBay shall
designate) any power of attorney or other similar document reasonably requested by eBay (or such designee) in connection with any Tax Contest (as to which eBay is the Controlling Party) described in this Section 10.
(ii) Each member of the eBay Group shall execute and deliver to SpinCo (or such member of the SpinCo Group as SpinCo
shall designate) any power of attorney or other similar document reasonably requested by SpinCo (or such designee) in connection with any Tax Contest (as to which SpinCo is the Controlling Party) described in this Section 10.
Section 11. Effective Date; Termination of Prior Intercompany Tax Allocation Agreements. This Agreement shall be effective
as of the Effective Time. As of the Effective Time, (i) all prior intercompany Tax allocation agreements or arrangements solely between or among eBay and/or any of its Subsidiaries, on the one hand, and SpinCo and/or any of its Subsidiaries, on
the other hand (including, for the avoidance of doubt, the Tax Allocation Agreement, by and among eBay and certain of its Subsidiaries, dated as of January 1, 2003), shall be terminated, and (ii) amounts due under such agreements as of the
date on which the Effective Time occurs shall be settled. Upon such termination and settlement, no further payments by or to eBay or any of its Subsidiaries or by or to SpinCo or any of its Subsidiaries, with respect to such agreements shall be
made, and all other rights and obligations resulting from such agreements between the Companies and their Affiliates shall cease at such time. Any payments pursuant to such agreements shall be disregarded for purposes of computing amounts due under
this Agreement; provided that to the extent appropriate, payments made pursuant to such agreements shall be credited to SpinCo or eBay, respectively, in computing their respective obligations pursuant to this Agreement, in the event that such
payments relate to a Tax liability that is the subject matter of this Agreement for a Tax Period that is the subject matter of this Agreement.
Section 12. Survival of Obligations. The representations, warranties, covenants and agreements set forth in this Agreement shall
be unconditional and absolute and shall remain in effect without limitation as to time.
Section 13. Treatment of Payments; Tax
Gross Up.
Section 13.01 Treatment of Tax Indemnity and Tax Benefit Payments. In the absence of any change in Tax
treatment under the Code or other applicable Tax Law, for all Income Tax
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purposes, the Companies agree to treat, and to cause their respective Affiliates to treat, (i) any indemnity payment required by this Agreement or by the Separation and Distribution
Agreement as either a contribution by eBay to SpinCo or a distribution by SpinCo to eBay, as the case may be, occurring immediately prior to the Distribution; and (ii) any payment of interest or State Income Taxes by or to a Tax Authority, as
taxable or deductible, as the case may be, to the Company entitled under this Agreement to retain such payment or required under this Agreement to make such payment.
Section 13.02 Tax Gross Up. If notwithstanding the manner in which payments described in Section 13.01(i) were reported,
there is an adjustment to the Tax liability of a Company as a result of its receipt of a payment pursuant to this Agreement or the Separation and Distribution Agreement, such payment shall be appropriately adjusted so that the amount of such
payment, reduced by the amount of all Income Taxes payable with respect to the receipt thereof (but taking into account all correlative Tax Benefits resulting from the payment of such Income Taxes), shall equal the amount of the payment which the
Company receiving such payment would otherwise be entitled to receive.
Section 13.03 Interest. Anything herein to the
contrary notwithstanding, to the extent one Company (Indemnitor) makes a payment of interest to another Company (Indemnitee) under this Agreement with respect to the period from the
date that the Indemnitee made a payment of Tax to a Tax Authority to the date that the Indemnitor reimbursed the Indemnitee for such Tax payment, the interest payment shall be treated as interest expense to the Indemnitor (deductible to the extent
provided by law) and as interest income by the Indemnitee (includible in income to the extent provided by law). The amount of the payment shall not be adjusted to take into account any associated Tax Benefit to the Indemnitor or increase in Tax to
the Indemnitee.
Section 14. Disagreements. The Companies desire that collaboration will continue between them.
Accordingly, they will try, and they will cause their respective Group members to try, to resolve in good faith all disagreements regarding their respective rights and obligations under this Agreement, including any amendments hereto. In furtherance
thereof, in the event of any dispute or disagreement (other than a High-Level Dispute) (a Tax Advisor Dispute) between any member of the eBay Group and any member of the SpinCo Group as to the interpretation of any provision of
this Agreement or the performance of obligations hereunder, the Tax departments of the Companies shall negotiate in good faith to resolve the Tax Advisor Dispute. If such good faith negotiations do not resolve the Tax Advisor Dispute, then the
matter, upon written request of either Company, will be referred for resolution to the Escalation Committee, which will make a good faith effort to resolve the Tax Advisor Dispute pursuant to the procedures set forth in Article VII of the Separation
and Distribution Agreement. If the Escalation Committee does not agree to a resolution of a Tax Advisor Dispute within thirty (30) days after the reference of the Tax Advisor Dispute to it, then the matter will be referred to a Tax Advisor
acceptable to each of the Companies. The Tax Advisor may, in its discretion, obtain the services of any third-party appraiser, accounting firm or consultant that the Tax Advisor deems necessary to assist it in resolving such disagreement. The Tax
Advisor shall furnish written notice to the Companies of its resolution of any such Tax Advisor Dispute as soon as practical, but in any event no later than 45 days after its acceptance of the matter for resolution. Any such resolution by the Tax
Advisor will be conclusive and binding on the Companies. Following receipt
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of the Tax Advisors written notice to the Companies of its resolution of the Tax Advisor Dispute, the Companies shall each take or cause to be taken any action necessary to implement such
resolution of the Tax Advisor. In accordance with Section 16, each Company shall pay its own fees and expenses (including the fees and expenses of its representatives) incurred in connection with the referral of the matter to the Tax Advisor.
All fees and expenses of the Tax Advisor in connection with such referral shall be shared equally by the Companies. Any High-Level Dispute shall be resolved pursuant to the procedures set forth in Article VII of the Separation and Distribution
Agreement. Nothing in this Section 14 will prevent either Company from seeking injunctive relief if any delay resulting from the efforts to resolve the Tax Advisor Dispute through the Escalation Committee and the Tax Advisor (or any delay
resulting from the efforts to resolve any High-Level Dispute through the procedures set forth in Article VII of the Separation and Distribution Agreement) could result in serious and irreparable injury to either Company. Notwithstanding anything to
the contrary in this Agreement, the Separation and Distribution Agreement or any Ancillary Agreement, eBay and SpinCo are the only members of their respective Group entitled to commence a dispute resolution procedure under this Agreement, and each
of eBay and SpinCo will cause its respective Group members not to commence any dispute resolution procedure other than through such party as provided in this Section 14.
Section 15. Late Payments. Any amount owed by one party to another party under this Agreement which is not paid when due shall
bear interest at the Prime Rate plus two percent, compounded semiannually, from the due date of the payment to the date paid. To the extent interest required to be paid under this Section 15 duplicates interest required to be paid under any
other provision of this Agreement, interest shall be computed at the higher of the interest rate provided under this Section 15 or the interest rate provided under such other provision.
Section 16. Expenses. Except as otherwise provided in this Agreement, each party and its Affiliates shall bear their own expenses
incurred in connection with preparation of Tax Returns, Tax Contests, and other matters related to Taxes under the provisions of this Agreement.
Section 17. General Provisions.
Section 17.01 Addresses and Notices. All notices, requests, claims, demands or other communications under this Agreement shall be
in writing, together with a copy by electronic mail (which shall not constitute notice), and shall be given or made (and shall be deemed to have been duly given or made upon acknowledgment of receipt) by delivery in person, by overnight courier
service, or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this
Section 17.01):
If to eBay:
eBay Inc.
2065 Hamilton Avenue
San Jose, California 95125
Attention: General counsel
Email: mhuber@ebay.com
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If to SpinCo:
PayPal Holdings, Inc.
2211 North
First Street
San Jose, California 95131
Attention: General Counsel
Email: apentland@paypal.com
A Party may, by
notice to the other Party, change the address to which such notices are to be given.
Section 17.02 Assignability. This
Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns; provided, that neither Party nor any such party thereto may assign its rights or delegate its obligations under this
Agreement without the express prior written consent of the other Party hereto. Notwithstanding the foregoing, no such consent shall be required for the assignment of a partys rights and obligations under this Agreement and the Ancillary
Agreements (except as may be otherwise provided in any such Ancillary Agreement) in whole (i.e., the assignment of a partys rights and obligations under this Agreement and all Ancillary Agreements all at the same time) in connection
with a change of control of a Party so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to
the other Party.
Section 17.03 Waiver. Waiver by a Party of any default by the other Party of any provision of this
Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the other Party. No failure or delay by a Party in exercising any right, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.
Section 17.04 Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is
determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and
equitable provision to effect the original intent of the Parties.
Section 17.05 Authority. eBay represents on behalf
of itself and each other member of the eBay Group, and SpinCo represents on behalf of itself and each other member of the SpinCo Group, as follows: (i) each such Person has the requisite corporate or other power and authority and has taken all
corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and (ii) this Agreement has been duly executed and delivered by it and constitutes a valid and
binding agreement of it enforceable in accordance with the terms thereof.
- 37 -
Section 17.06 Further Action. The parties shall execute and deliver all documents,
provide all information, and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement, including the execution and delivery to the other parties and their Affiliates and representatives of such
powers of attorney or other authorizing documentation as is reasonably necessary or appropriate in connection with Tax Contests (or portions thereof) under the control of such other parties in accordance with Section 10.
Section 17.07 Integration. This Agreement, the Ancillary Agreements and the Exhibits, Schedules and appendices hereto and thereto
contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter,
and there are no agreements or understandings between the Parties other than those set forth or referred to herein or therein. In the event of any inconsistency between this Agreement, the Separation and Distribution Agreement, any other agreements
relating to the transactions contemplated by the Separation and Distribution Agreement, or the Tax Allocation Agreement, with respect to matters addressed herein, the provisions of this Agreement shall control.
Section 17.08 Construction. The language in all parts of this Agreement shall in all cases be construed according to its fair
meaning and shall not be strictly construed for or against any party. The captions, titles and headings included in this Agreement are for convenience only, and do not affect this Agreements construction or interpretation. Unless otherwise
indicated, all Section references in this Agreement are to sections of this Agreement.
Section 17.09 No Double
Recovery. No provision of this Agreement shall be construed to provide an indemnity or other recovery for any costs, damages, or other amounts for which the damaged party has been fully compensated under any other provision of this Agreement or
under any other agreement or action at law or equity. Unless expressly required in this Agreement, a party shall not be required to exhaust all remedies available under other agreements or at law or equity before recovering under the remedies
provided in this Agreement.
Section 17.10 Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party. Each Party acknowledges that it and each other Party is
executing certain of the Ancillary Agreements by facsimile, stamp or mechanical signature, and that delivery of an executed counterpart of a signature page to this Agreement (whether executed by manual, stamp or mechanical signature) by
facsimile or by email in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement. Each Party expressly adopts and confirms each such facsimile, stamp or mechanical signature (regardless of whether
delivered in person, by mail, by courier, by facsimile or by email in portable document format (PDF)) made in its respective name as if it were a manual signature delivered in person, agrees that it will not assert that any such signature or
delivery is not adequate to bind such Party to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other Party at any time, it will as promptly as reasonably practicable cause this
Agreement to be manually executed (such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier.
- 38 -
Section 17.11 Governing Law. This Agreement (and any claims or disputes arising out
of or related hereto or to the transactions contemplated hereby or to the inducement of any party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be
governed by and construed and interpreted in accordance with the Laws of the State of Delaware irrespective of the choice of laws principles of the State of Delaware including all matters of validity, construction, effect, enforceability,
performance and remedies.
Section 17.12 Jurisdiction. If any dispute arises out of or in connection with this
Agreement, except as expressly contemplated by another provision of this Agreement, the parties irrevocably (and the parties will cause each other member of their respective Group to irrevocably) (a) consent and submit to the exclusive
jurisdiction of federal and state courts located in Delaware, (b) waive any objection to that choice of forum based on venue or to the effect that the forum is not convenient, and (c) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT
TO TRIAL OR ADJUDICATION BY JURY.
Section 17.13 Amendment. No provisions of this Agreement shall be deemed waived,
amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to enforce such waiver, amendment, supplement or
modification.
Section 17.14 SpinCo Subsidiaries. If, at any time, SpinCo acquires or creates one or more subsidiaries
that are includable in the SpinCo Group, they shall be subject to this Agreement and all references to the SpinCo Group herein shall thereafter include a reference to such subsidiaries.
Section 17.15 Successors. This Agreement shall be binding on and inure to the benefit of any successor by merger, acquisition of
assets, or otherwise, to any of the parties hereto (including but not limited to any successor of eBay, SpinCo or PayPal succeeding to the Tax attributes of either under Section 381 of the Code), to the same extent as if such successor had been
an original party to this Agreement.
Section 17.16 Injunctions. The parties acknowledge that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. The parties hereto shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court having jurisdiction, such remedy being in addition to any other remedy to which they may be entitled at law or in equity.
- 39 -
IN WITNESS WHEREOF, each party has caused this Agreement to be executed on its behalf by a duly authorized
officer on the date first set forth above.
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EBAY INC. |
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By: |
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/s/ John J. Donahoe |
Name: |
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John J. Donahoe |
Title: |
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President and Chief Executive Officer |
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PAYPAL HOLDINGS, INC. |
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By: |
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/s/ Daniel H. Schulman |
Name: |
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Daniel H. Shulman |
Title: |
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President and CEO-Designee |
[Signature Page to Tax Matters Agreement]
- 40 -
Exhibit 10.4
EMPLOYEE MATTERS AGREEMENT
BY
AND BETWEEN
EBAY INC.
AND
PAYPAL HOLDINGS, INC.
DATED
AS OF JULY 17, 2015
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS |
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1 |
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Section 1.01. |
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Definitions |
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1 |
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Section 1.02. |
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Interpretation |
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8 |
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ARTICLE II GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES |
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8 |
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Section 2.01. |
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General Principles |
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8 |
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Section 2.02. |
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Service Credit |
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10 |
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Section 2.03. |
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Benefit Plans |
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10 |
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Section 2.04. |
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Plan Administration and Non-U.S. Benefit Plans |
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11 |
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Section 2.05. |
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Individual Agreements |
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13 |
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Section 2.06. |
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Collective Bargaining |
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13 |
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Section 2.07. |
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Non-U.S. Regulatory Compliance |
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13 |
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ARTICLE III ASSIGNMENT OF EMPLOYEES |
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14 |
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Section 3.01. |
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Employees |
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14 |
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ARTICLE IV EQUITY, INCENTIVE AND EXECUTIVE COMPENSATION |
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15 |
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Section 4.01. |
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Generally; Definitions |
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15 |
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Section 4.02. |
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Equity Incentive Awards |
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18 |
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Section 4.03. |
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Employee Stock Purchase Plans |
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28 |
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Section 4.04. |
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Non-Equity Incentive Plans |
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29 |
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Section 4.05. |
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Director Compensation |
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30 |
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ARTICLE V RETIREMENT PLANS |
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31 |
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Section 5.01. |
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PayPal 401(k) Plan |
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31 |
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Section 5.02. |
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Non-U.S. Retirement Plans |
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32 |
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ARTICLE VI NONQUALIFIED DEFERRED COMPENSATION PLAN |
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33 |
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Section 6.01. |
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PayPal Deferred Compensation Plan |
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33 |
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Section 6.02. |
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Participation; Distributions |
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33 |
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ARTICLE VII WELFARE BENEFIT PLANS |
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34 |
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Section 7.01. |
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Welfare Plans |
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34 |
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Section 7.02. |
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COBRA |
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36 |
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Section 7.03. |
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Paid Time Off, Holidays and Leaves of Absence |
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37 |
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Section 7.04. |
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Severance and Unemployment Compensation |
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37 |
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Section 7.05. |
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Sabbatical Plans and Sabbatical Trusts |
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37 |
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Section 7.06. |
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Workers Compensation |
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38 |
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Section 7.07. |
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Insurance Contracts |
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38 |
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Section 7.08. |
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Third-Party Vendors |
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Section 7.09. |
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Fringe Benefits |
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38 |
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ARTICLE VIII NON-U.S. EMPLOYEES |
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39 |
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ARTICLE IX MISCELLANEOUS |
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39 |
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Section 9.01. |
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Employee Records |
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39 |
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Section 9.02. |
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Preservation of Rights to Amend |
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40 |
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Section 9.03. |
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Fiduciary Matters |
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41 |
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Section 9.04. |
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Further Assurances |
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41 |
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Section 9.05. |
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Counterparts; Entire Agreement; Corporate Power |
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41 |
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Section 9.06. |
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Governing Law |
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42 |
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Section 9.07. |
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Assignability |
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42 |
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Section 9.08. |
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Third-Party Beneficiaries |
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42 |
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Section 9.09. |
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Notices |
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42 |
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Section 9.10. |
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Severability |
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43 |
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Section 9.11. |
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Force Majeure |
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43 |
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Section 9.12. |
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Headings |
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43 |
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Section 9.13. |
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Survival of Covenants |
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44 |
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Section 9.14. |
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Waivers of Default |
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44 |
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Section 9.15. |
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Dispute Resolution |
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44 |
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Section 9.16. |
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Specific Performance |
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44 |
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Section 9.17. |
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Amendments |
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44 |
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Section 9.18. |
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Interpretation |
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44 |
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Section 9.19. |
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Limitations of Liability |
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45 |
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Section 9.20. |
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Mutual Drafting |
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45 |
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Schedule 1.01(a) |
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eBay Fringe Benefit Plans |
Schedule 1.01(b) |
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eBay Welfare Plans |
Schedule 2.03(a) |
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eBay Benefit Plans to Be Replicated by PayPal (subject to the terms of the Agreement) |
Schedule 2.03(b) |
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eBay Benefit Plans Not Required to Be Replicated by PayPal |
-ii-
EMPLOYEE MATTERS AGREEMENT
This EMPLOYEE MATTERS AGREEMENT, dated as of July 17, 2015 (this Agreement), is by and between eBay Inc., a Delaware
corporation (eBay), and PayPal Holdings, Inc., a Delaware corporation (PayPal).
R E C I T A L S:
WHEREAS, the board of directors of eBay (the eBay Board) has determined that it is in the best interests of eBay and
its shareholders to create a new publicly traded company that shall operate the PayPal Business (as defined below);
WHEREAS, in
furtherance of the foregoing, the eBay Board has determined that it is appropriate and desirable to separate the PayPal Business from the eBay Business (the Separation) and, following the Separation, make a distribution, on a pro
rata basis, to holders of eBay Shares on the Record Date of all the outstanding PayPal Shares owned by eBay (the Distribution);
WHEREAS, in order to effectuate the Separation and Distribution, eBay and PayPal have entered into a Separation and Distribution Agreement,
dated as of July 17, 2015 (the Separation and Distribution Agreement); and
WHEREAS, in addition to the matters
addressed by the Separation and Distribution Agreement, the Parties desire to enter into this Agreement to set forth the terms and conditions of certain employment, compensation and benefit matters that have been agreed by the Parties in connection
with the Separation.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions . For purposes of this Agreement, the following terms shall have the meanings set forth below.
Capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings ascribed to them in the Separation and Distribution Agreement.
Action shall have the meaning set forth in the Separation and Distribution Agreement.
Affiliate shall have the meaning set forth in the Separation and Distribution Agreement.
Agreement shall have the meaning set forth in the preamble to this Agreement and shall include all Schedules hereto and all
amendments, modifications, and changes hereto entered into pursuant to Section 9.17.
Ancillary Agreement shall have the meaning set forth in the Separation and
Distribution Agreement.
Assets shall have the meaning set forth in the Separation and Distribution Agreement.
Benefit Plan shall mean any contract, agreement, policy, practice, program, plan, trust, commitment or arrangement
providing for benefits, perquisites, fringe benefits or compensation of any nature from an employer to any Employee, or to any family member, dependent, or beneficiary of any such Employee, including cash or deferred arrangement plans, profit
sharing plans, pension plans, thrift plans, supplemental pension plans and health and welfare plans, stock option, stock purchase, restricted stock, restricted stock units, deferred stock award and other equity and/or equity-based compensation plans
and contracts, commitments and arrangements providing for terms of employment, severance benefits, change of control protections or benefits, travel and accident, life, accidental death and dismemberment, disability and accident insurance, tuition
reimbursement, travel reimbursement, paid time off, sick, personal or bereavement days, leaves of absences and holidays and sabbatical leave; provided, however, the term Benefit Plan does not include any
government-sponsored benefits, such as workers compensation, government-sponsored retirement plans, unemployment or any similar plans, programs or policies or Individual Agreements.
COBRA shall mean the U.S. Consolidated Omnibus Budget Reconciliation Act of 1985, as codified at Section 601 et
seq. of ERISA and at Section 4980B of the Code.
Code shall have the meaning set forth in the Separation and
Distribution Agreement.
Continuing eBay Director shall mean each member of the eBay Board, as of the Effective Time,
who continues to serve on the eBay Board immediately after the Effective Time.
Distribution shall have the meaning set
forth in the recitals to this Agreement.
Distribution Date shall have the meaning set forth in the Separation and
Distribution Agreement.
eBay shall have the meaning set forth in the preamble to this Agreement.
eBay 401(k) Plan shall mean the eBay Inc. 401(k) Savings Plan, as amended and restated effective January 1, 2015.
eBay 401(k) Trust shall have the meaning set forth in Section 5.01(b).
eBay Benefit Plan shall mean any Benefit Plan established, sponsored or maintained by eBay or any of its Subsidiaries
immediately prior to the Effective Time, excluding any PayPal Benefit Plan.
eBay Board shall have the meaning set
forth in the recitals to this Agreement.
-2-
eBay Business shall have the meaning set forth in the Separation and
Distribution Agreement.
eBay Change of Control shall have the meaning set forth in Section 4.02(g).
eBay Compensation Committee shall mean the Compensation Committee of the eBay Board.
eBay Deferred Compensation Plan shall mean the eBay Inc. Deferred Compensation Plan, effective January 1, 2008.
eBay Equity Plan shall mean any equity compensation plan sponsored or maintained by eBay immediately prior to the Effective
Time, including the eBay Inc. 2008 Equity Incentive Award Plan, eBay Inc. 2003 Deferred Stock Unit Plan, eBay Inc. 2001 Equity Incentive Plan eBay Inc. 1999 Global Equity Incentive Plan eBay Inc. 1998 Directors Stock Option Plan, eBay Inc. 1998
Equity Incentive Plan, Braintree, Inc. 2011 Equity Incentive Plan, Bill Me Later 2000 Stock Incentive Plan, NPX Technologies LTD Amended and Restated 2005 Share Option Plan, CyberActive Security LTD. 2014 Israeli Employee Share Option Plan,
Paydiant, Inc. 2011 Stock Option and Grant Plan, Paydiant Inc. Stock Restriction Agreements, Hunch Inc. 2007 Stock Plan, Magento, Inc. 2010 Equity Incentive Plan, SHUTL Limited Enterprise Management Incentive Scheme, StubHub, Inc. 2000 Stock Plan,
Venmo Inc. 2010 Equity Compensation Plan, uLocate Communications, Inc. 2003 Stock Option and Incentive Plan, and Zong S.A. Equity Incentive Plan.
eBay Fringe Benefit Plans shall mean the eBay fringe benefit plans as in effect immediately prior to the Effective Time and
listed on Schedule 1.01(a).
eBay Group shall have the meaning set forth in the Separation and Distribution
Agreement.
eBay Group Employees shall have the meaning set forth in Section 3.01(a).
eBay HSA shall have the meaning set forth in Section 7.01(c).
eBay Incentive Plans shall mean the eBay Incentive Plan and any other non-equity based incentive plan maintained by eBay as
in effect immediately prior to the Effective Time and listed on Schedule 1.01(a).
eBay IP shall have the
meaning set forth in the Separation and Distribution Agreement.
eBay Liability shall have the meaning set forth in the
Separation and Distribution Agreement.
eBay Non-U.S. Retirement Plan means an eBay Benefit Plan, the primary purpose
of which is to provide retirement benefits to eBay Group Employees and/or Former eBay Group Employees who are or were employed by a non-U.S. Subsidiary of eBay.
-3-
eBay Sabbatical Plans shall mean the eBay Inc. Sabbatical Plan, as amended and
restated effective December 1, 2014, and any other sabbatical policies or programs maintained by eBay outside of the United States, as applicable, as in effect immediately prior to the Effective Time and listed on Schedule 1.01(b).
eBay Sabbatical Trusts shall mean the eBay Inc. Sabbatical Plan Trust Agreement effective June 1, 2005, and any
other trusts or other funding arrangements maintained for the benefit of any eBay Sabbatical Plans outside of the United States, as applicable, as in effect immediately prior to the Effective Time and listed on Schedule 1.01(b).
eBay Welfare Plan shall mean any Welfare Plan established, sponsored, maintained or contributed to by eBay or any of its
Subsidiaries for the benefit of Employees or Former Employees, including each Welfare Plan listed on Schedule 1.01(b) but excluding any PayPal Welfare Plan.
Effective Time shall have the meaning set forth in the Separation and Distribution Agreement.
Employee shall mean any eBay Group Employee or PayPal Group Employee.
Employment Taxes shall have the meaning set forth in Section 2.01(e).
ERISA shall mean the U.S. Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated
thereunder.
Exchange Act shall have the meaning set forth in the Separation and Distribution Agreement.
Force Majeure shall have the meaning set forth in the Separation and Distribution Agreement.
Former eBay Group Employee shall mean any individual who is a former employee of the eBay Group as of the Effective Time
and who is not a Former PayPal Group Employee.
Former Employees shall mean Former eBay Group Employees and Former
PayPal Group Employees.
Former PayPal Group Employee shall mean (i) any individual identified as a Former PayPal
Group Employee on the list previously prepared by eBay, and (ii) any individual who is a former employee of eBay or any of its Subsidiaries or former Subsidiaries as of the Effective Time, in each case, whose most recent employment with eBay
was with a member of the PayPal Group or the PayPal Business.
Governmental Authority shall have the meaning set forth
in the Separation and Distribution Agreement.
-4-
HIPAA shall mean the U.S. Health Insurance Portability and Accountability Act
of 1996, as amended, and the regulations promulgated thereunder.
Individual Agreement shall mean any individual
(i) offer letter or employment contract, (ii) retention, severance or change of control agreement, (iii) expatriate (including any international assignee) contract or agreement (including agreements and obligations regarding
repatriation, relocation, equalization of taxes and living standards in the host country), (iv) proprietary information and/or inventions agreement or (v) any agreement containing restrictive covenants (including confidentiality,
intellectual property assignment, license, waiver and disclosure provisions, non-competition and non-solicitation provisions) between a member of the eBay Group or PayPal Group and a PayPal Group Employee or any Former PayPal Group Employee, or
between a member of the eBay Group or PayPal Group and an eBay Group Employee or any Former eBay Group Employee, as applicable, as in effect immediately prior to the Effective Time.
Intellectual Property Matters Agreement shall have the meaning set forth in the Separation and Distribution Agreement.
Intellectual Property Rights shall have the meaning set forth in the Separation and Distribution Agreement.
IRS shall mean the United States Internal Revenue Service.
Law shall have the meaning set forth in the Separation and Distribution Agreement.
Liabilities shall have the meaning set forth in the Separation and Distribution Agreement.
NASDAQ shall have the meaning set forth in the Separation and Distribution Agreement.
Non-U.S. eBay Benefit Plan shall mean an eBay Benefit Plan established, maintained, or contributed to by a member of the
eBay Group that is primarily for the benefit of eBay Group Employees who are or were employed by a non-U.S. Subsidiary of eBay.
Non-U.S. PayPal Benefit Plan shall mean a PayPal Benefit Plan established, maintained, or contributed to by a member of the
PayPal Group that is primarily for the benefit of PayPal Group Employees who are or were employed by a non-U.S. Subsidiary of PayPal or eBay.
Offering Period shall have the meaning set forth in the eBay ESPP or PayPal ESPP, as the context requires.
Party shall mean a party to this Agreement.
PayPal shall have the meaning set forth in the preamble to this Agreement.
-5-
PayPal 401(k) Plan shall mean the PayPal 401(k) Savings Plan, to be adopted by
PayPal prior to or on the Distribution as described in Section 5.01.
PayPal 401(k) Trust shall have the
meaning set forth in Section 5.01(a).
PayPal Benefit Plan shall mean any Benefit Plan established,
sponsored, maintained or contributed to by a member of the PayPal Group as of or after the Effective Time.
PayPal
Board shall mean the Board of Directors of PayPal.
PayPal Business shall have the meaning set forth in the
Separation and Distribution Agreement.
PayPal Change of Control shall have the meaning set forth in
Section 4.02(g).
PayPal Compensation Committee shall mean the Compensation Committee of the PayPal Board.
PayPal Deferred Compensation Plan shall mean a PayPal Deferred Compensation Plan established pursuant to
Section 6.01.
PayPal Designees shall have the meaning set forth in the Separation and Distribution
Agreement.
PayPal Fringe Benefit Plans shall mean the PayPal fringe benefit plans to be established by PayPal pursuant
to Section 7.09.
PayPal Group shall have the meaning set forth in the Separation and Distribution
Agreement.
PayPal Group Employees shall have the meaning set forth in Section 3.01(a).
PayPal HSA shall have the meaning set forth in Section 7.01(c).
PayPal Incentive Plans shall mean the PayPal Incentive Plans established pursuant to Section 4.04(a).
PayPal IP shall have the meaning set forth in the Separation and Distribution Agreement.
PayPal Liabilities shall have the meaning set forth in the Separation and Distribution Agreement.
PayPal Non-U.S. Retirement Plan means a PayPal Benefit Plan, the primary purpose of which is to provide retirement benefits
to PayPal Group Employees and/or Former PayPal Group Employees who are or were employed by a non-U.S. Subsidiary of PayPal or eBay.
PayPal Sabbatical Plans shall mean the PayPal Sabbatical Plans established by PayPal pursuant to Section 7.05.
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PayPal Sabbatical Trusts shall mean the Sabbatical Trusts established by
PayPal pursuant to Section 7.05.
PayPal Welfare Plans shall mean the Welfare Plans established, sponsored,
maintained or contributed to by any member of the PayPal Group for the benefit of PayPal Group Employees and Former PayPal Group Employees.
Person shall have the meaning set forth in the Separation and Distribution Agreement.
QDRO shall mean a qualified domestic relations order within the meaning of Section 206(d) of ERISA and
Section 414(p) of the Code.
Qualification Requirements shall mean, in the aggregate, the tax qualification
requirements of Section 401(a) of the Code, the tax exemption requirements of Section 501(a) of the Code, and the requirements described in Sections 401(k) and 401(m) of the Code in respect of a plan intended to meet such
requirements.
Record Date shall have the meaning set forth in the Separation and Distribution Agreement.
Securities Act shall mean the U.S. Securities Act of 1933, as amended, together with the rules and regulations promulgated
thereunder.
Separation shall have the meaning set forth in the recitals to this Agreement.
Separation and Distribution Agreement shall have the meaning set forth in the recitals to this Agreement.
Subsidiary shall have the meaning set forth in the Separation and Distribution Agreement.
Third Party shall have the meaning set forth in the Separation and Distribution Agreement.
Tax shall have the meaning set forth in Section 2.01(e).
Tax Matters Agreement shall have the meaning set forth in the Separation and Distribution Agreement.
Transferred Account Balances shall have the meaning set forth in Section 7.01(d).
Transferring Director shall mean each member of the PayPal Board, as of the Effective Time, who served on the eBay Board
immediately prior to the Effective Time.
Transitioning eBay Group Employee shall mean an eBay Group Employee covered
under the Transition Success and Retention Program, whose last date of employment with
-7-
the eBay Group is the Distribution Date, and who is not becoming a PayPal Group Employee upon the Separation.
Transition Services Agreement shall have the meaning set forth in the Separation and Distribution Agreement.
Transition Success and Retention Program shall mean the Transition Success and Retention Program adopted by the eBay Board
on December 15, 2014.
U.S. shall mean the United States of America.
Welfare Plan shall mean any welfare plan (as defined in Section 3(1) of ERISA) or a cafeteria
plan under Section 125 of the Code, and any benefits offered thereunder, and any other plan offering health benefits (including medical, prescription drug, dental, vision, mental health and substance abuse), disability benefits, or life,
accidental death and dismemberment, and business travel insurance, pre-tax premium conversion benefits, dependent care assistance programs, employee assistance programs, paid time-off programs, contribution funding toward a health savings account,
flexible spending accounts or severance.
Section 1.02. Interpretation. Section 10.16 of the Separation and Distribution
Agreement is hereby incorporated by reference.
ARTICLE II
GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES
Section 2.01. General Principles.
(a) Acceptance and Assumption of PayPal Liabilities. On or prior to the Effective Time, but in any case prior to the Distribution, and
except as expressly set forth in this Agreement, PayPal and the applicable PayPal Designees shall accept, assume and agree to faithfully perform, discharge and fulfill all of the following Liabilities in accordance with their respective terms (each
of which shall be considered a PayPal Liability), regardless of when or where such Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Effective Time, regardless of where or against whom
such Liabilities are asserted or determined (including any Liabilities arising out of claims made by eBays or PayPals respective directors, officers, Employees, Former Employees, agents, Subsidiaries or Affiliates against any member of
the eBay Group or the PayPal Group) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of
the eBay Group or the PayPal Group, or any of their respective directors, officers, Employees, Former Employees, agents, Subsidiaries or Affiliates:
(i) any and all wages, salaries, incentive compensation (as the same may be modified by this Agreement), equity compensation
(as the same may be modified by this Agreement), commissions, bonuses and any other employee compensation or benefits payable, provided or made available to or on behalf of any PayPal Group Employees and Former PayPal Group Employees after the
Effective Time, without regard to when such wages, salaries, incentive compensation, equity compensation, commissions,
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bonuses or other employee compensation or benefits are or may have been awarded or earned;
(ii) any and all Liabilities whatsoever with respect to claims made by or with respect to any PayPal Group Employees or Former
PayPal Group Employees in connection with any Benefit Plan obligations not retained or assumed by any member of the eBay Group pursuant to this Agreement, the Separation and Distribution Agreement or any Ancillary Agreement or as otherwise provided
in Section 7.01(e); and
(iii) any and all Liabilities expressly assumed or retained by any member of the PayPal
Group pursuant to this Agreement.
(b) Acceptance and Assumption of eBay Liabilities. On or prior to the Effective Time, but in any
case prior to the Distribution and except as set forth in this Agreement, eBay and certain members of the eBay Group designated by eBay shall accept, assume and agree to faithfully perform, discharge and fulfill all of the following Liabilities held
by PayPal or any PayPal Designee and eBay and the applicable members of the eBay Group shall be responsible for such Liabilities in accordance with their respective terms (each of which shall be considered an eBay Liability), regardless of when or
where such Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Effective Time, regardless of where or against whom such Liabilities are asserted or determined (including any Liabilities
arising out of claims made by eBays or PayPals respective directors, officers, Employees, Former Employees, agents, Subsidiaries or Affiliates against any member of the eBay Group or the PayPal Group) or whether asserted or determined
prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the eBay Group or the PayPal Group, or any of their respective
directors, officers, Employees, Former Employees, agents, Subsidiaries or Affiliates:
(i) any and all wages, salaries,
incentive compensation (as the same may be modified by this Agreement), equity compensation (as the same may be modified by this Agreement), commissions, bonuses and any other employee compensation or benefits payable, provided or made available to
or on behalf of any eBay Group Employees and Former eBay Group Employees after the Effective Time, without regard to when such wages, salaries, incentive compensation, equity compensation, commissions, bonuses or other employee compensation or
benefits are or may have been awarded or earned;
(ii) any and all Liabilities whatsoever with respect to claims made by or
with respect to any eBay Group Employees or Former eBay Group Employees in connection with any Benefit Plan obligations not retained or assumed by any member of the PayPal Group pursuant to this Agreement, the Separation and Distribution Agreement
or any Ancillary Agreement; and
(iii) any and all Liabilities expressly assumed or retained by any member of the eBay
Group pursuant to this Agreement.
(c) Unaddressed Liabilities. To the extent that this Agreement does not address particular
Liabilities under any Benefit Plan or with respect to any Employees and the
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Parties later determine that they should be allocated in connection with the Distribution, the Parties shall agree in good faith on the allocation, taking into account the handling of comparable
Liabilities under this Agreement.
(d) Fiduciary Liability Insurance. Treatment of claims covered by fiduciary liability insurance
shall be governed by Section 5.1 of the Separation and Distribution Agreement.
(e) Employment Tax Liabilities and Responsibilities
for Audit.
(i) The eBay Group shall be liable for, and shall indemnify and hold harmless the PayPal Group from and
against any Liability for, any payroll, social security, workers compensation, unemployment, disability or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any governmental entity
or political subdivision thereof, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing (collectively, Employment Taxes) that relate to any eBay Group Employee, Former eBay Group Employee
or Transitioning eBay Group Employee, whether any such Liability has arisen, or may arise, in respect of any taxable period (or portion thereof) that ends on or prior to the Distribution Date.
(ii) The PayPal Group shall be liable for, and shall indemnify and hold harmless the eBay Group from and against any Liability
for, any Employment Taxes that relate to any PayPal Group Employee or Former PayPal Group Employee, whether any such Liability has arisen, or may arise, in respect of any taxable period (or portion thereof) that ends on or prior to the Distribution
Date.
(iii) The Party that has Liability for the relevant Employment Taxes as provided in Section 2.01(e)(i)
or (ii) above, as applicable, shall also be responsible for, and have exclusive control (including for purposes of settlement of Liability) over, any ongoing or future audit, review, examination, or any other administrative or judicial
proceeding with the purpose or effect of redetermining such relevant Employment Taxes (including any administrative or judicial review of any claim for refund) or which may otherwise be in respect of such relevant Employment Taxes.
Section 2.02. Service Credit. The PayPal Benefit Plans shall, and PayPal shall cause each member of the PayPal Group to, recognize
each PayPal Group Employees and each Former PayPal Group Employees full service with eBay or any of its Subsidiaries or predecessor entities at or before the Effective Time, to the same extent that such service was recognized by eBay for
similar purposes prior to the Effective Time as if such full service had been performed for a member of the PayPal Group, for purposes of eligibility, vesting and determination of level of benefits under any such PayPal Benefit Plan but only with
respect to those PayPal Benefit Plans in existence immediately following the Effective Time.
Section 2.03. Benefit Plans.
(a) Establishment of Benefit Plans. Except as otherwise specified herein, before the Effective Time, PayPal shall, or shall cause
an applicable member of the PayPal Group to, adopt Benefit Plans (and related trusts and other funding instruments, if applicable), which
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through December 31, 2015 shall have substantially the same terms as of immediately prior to the Effective Time (or such other standard as is specified in this Agreement with respect to any
particular Benefit Plan) to those of the corresponding eBay Benefit Plans, including in particular those listed on Schedule 2.03(a); provided, however, that PayPal may limit participation in any such PayPal Benefit Plan to
PayPal Group Employees and Former PayPal Group Employees who participated in the corresponding eBay Benefit Plan immediately prior to the Effective Time. Notwithstanding the foregoing, PayPal may make such changes, modifications or amendments to the
PayPal Benefit Plans as may be required by applicable Law or as are necessary and appropriate to reflect the Separation or vendor limitations.
(b) Benefit Plans Not Required to Be Adopted. Notwithstanding Section 2.03(a) above, PayPal shall not be required to adopt
any Benefit Plan (or related trust, if applicable) (i) to the extent that such adoption would not be permitted under applicable Law, regulation, practice, or vendor limitations, (ii) if the parties agree that such Benefit Plan should not
be so adopted by PayPal, or (iii) if such Benefit Plan is listed on Schedule 2.03(b). With respect to any eBay Benefit Plan not listed on Schedule 2.03(a) and Schedule 2.03(b), the parties shall agree in good
faith on the treatment of such plan taking into account the handling of any comparable plan under this Agreement.
(c) Information and
Operation. eBay shall, subject to and in compliance with applicable Law, provide PayPal with information describing each eBay Benefit Plan election made by a PayPal Group Employee, Former PayPal Group Employee and (with respect to any fees
payable after the Effective Time), any Continuing eBay Director or Transferring Director, that may have application to PayPal Benefit Plans from and after the Effective Time, and PayPal shall use its commercially reasonable efforts to administer the
PayPal Benefit Plans using those elections; and, further, to the extent necessary in order for eBay to administer any eBay Benefit Plan, PayPal shall provide eBay with such same information. Each Party shall, upon reasonable request, provide the
other Party and the other Partys respective Affiliates, agents, and vendors all information reasonably necessary to the other Partys operation or administration of its Benefit Plans.
Section 2.04. Plan Administration and Non-U.S. Benefit Plans.
(a) No Duplication or Acceleration of Benefits. Notwithstanding anything to the contrary in this Agreement, the Separation and
Distribution Agreement or any Ancillary Agreement, (i) no participant in any PayPal Benefit Plan shall receive service credit or benefits to the extent that receipt of such service credit or benefits would result in duplication of benefits
provided to such participant by the corresponding eBay Benefit Plan or any other plan, program or arrangement sponsored or maintained by a member of the eBay Group and (ii) no participant in any eBay Benefit Plan shall receive service credit or
benefits to the extent receipt of such service credit or benefits would result in duplication of benefits provided to such participant in the corresponding PayPal Benefit Plan or any other plan, program or agreement sponsored or maintained by a
member of the PayPal Group. Furthermore, unless expressly provided for in this Agreement, the Separation and Distribution Agreement or in any Ancillary Agreement or required by applicable Law, no provision in this Agreement shall be construed to
create any right to accelerate vesting or entitlements under any Benefit Plan sponsored or maintained by a member of
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the eBay Group or member of the PayPal Group on the part of any Employee or Former Employee, including in connection with the termination of employment.
(b) No Expansion of Participation. Unless otherwise expressly provided in this Agreement, as otherwise determined or agreed to by eBay
and PayPal, as required by applicable Law, or as explicitly set forth in a PayPal Benefit Plan, a PayPal Group Employee or Former PayPal Group Employee shall be entitled to participate in the PayPal Benefit Plans at the Effective Time only to the
extent that such PayPal Group Employee or Former PayPal Group Employee was entitled to participate in the corresponding eBay Benefit Plan as in effect immediately prior to the Effective Time (to the extent that such PayPal Group Employee or Former
PayPal Group Employee does not participate in the respective PayPal Benefit Plan immediately prior to the Effective Time), it being understood that this Agreement does not expand (i) the number of PayPal Group Employees or Former PayPal Group
Employees entitled to participate in any PayPal Benefit Plan or (ii) the participation rights of PayPal Group Employees or Former PayPal Group Employees in any PayPal Benefit Plans beyond the rights of such PayPal Group Employees or Former
PayPal Group Employees under the corresponding eBay Benefit Plans, in each case, after the Effective Time. Unless otherwise expressly provided by this Agreement or otherwise agreed by the Parties, as of the Effective Time, a PayPal Group Employee or
Former PayPal Group Employee shall not be a participant in an eBay Benefit Plan.
(c) Transition Services. The Parties acknowledge
that eBay Group and PayPal Group may (i) agree that eBay Group may provide certain PayPal Benefit Plan administration for a period of time after the Distribution Date and (ii) share certain tools and programs relating to human resource
functions as specified under the Transition Services Agreement and, if required by HIPAA or other applicable privacy laws, shall enter into any applicable business associate agreement with respect to such arrangement.
(d) Beneficiaries. References to eBay Group Employees, Former eBay Group Employees, PayPal Group Employees, Former PayPal Group
Employees, and non-employee directors of either eBay or PayPal (including Continuing eBay Directors and Transferring Directors), shall be deemed to include reference to their beneficiaries, dependents, survivors and alternate payees, as applicable.
(e) Non-U.S. Benefit Plan. Prior to the Distribution Date, the PayPal Group shall, subject to and in compliance with applicable
Law, except as otherwise mutually agreed upon by the parties or as otherwise provided in Section 2.03(b), adopt the Non-U.S. PayPal Benefit Plans, with terms comparable to those of the corresponding Non-U.S. eBay Benefit Plans through
December 31, 2015 or undertake negotiations to this extent within the mandatory time periods provided by applicable Law, as applicable; provided, however, that PayPal may limit participation in any Non-U.S. PayPal Benefit Plan to
PayPal Group Employees who participated in the corresponding Non-U.S. eBay Benefit Plan immediately prior to the Distribution Date except where such differentiation is prohibited by applicable Law.
Section 2.05. Individual Agreements.
(a) Assignment by eBay. To the extent necessary, eBay shall assign, or cause an applicable member of the eBay Group to assign, to PayPal
or another member of the PayPal
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Group, as designated by PayPal, all Individual Agreements between such member of the eBay Group and any PayPal Group Employee or Former PayPal Group Employee, with such assignment to be effective
as of the Effective Time; provided, however, that to the extent that assignment of any such Individual Agreement is not permitted by the terms of such agreement or by applicable Law, effective as of the Effective Time, each member of
the PayPal Group shall be considered to be a successor to each member of the eBay Group for purposes of, and a third-party beneficiary with respect to, such Individual Agreement, such that each member of the PayPal Group shall enjoy all of the
rights and benefits under such agreement (including rights and benefits as a third-party beneficiary and the right to enforce any such agreement), with respect to the business operations of the PayPal Group; provided, further, that in
no event shall eBay be permitted to enforce any Individual Agreement (including any agreement containing non-competition or non-solicitation covenants) against a PayPal Group Employee or Former PayPal Group Employee for action taken in such
individuals capacity as a PayPal Group Employee or Former PayPal Group Employee unless the Parties mutually agree that such action is commercially reasonable under the circumstances as they exist at such time.
(b) Assumption by PayPal. Effective as of the Effective Time, PayPal will assume and honor, or will cause a member of the PayPal Group
to assume and honor, any Individual Agreement to which any PayPal Group Employee or Former PayPal Group Employee is a party with any member of the eBay Group, and all obligations and responsibilities of the applicable member of the eBay Group
thereunder.
(c) Residual Intellectual Property Rights under any Individual Agreement. Effective as of the Effective Time,
notwithstanding the fact that any Individual Agreement that contains covenants regarding Intellectual Property Rights with respect to both eBay IP and PayPal IP may be retained or assumed by either a member of the eBay Group or the PayPal Group, as
applicable, the party that is not retaining or assuming any such Individual Agreement shall nevertheless retain all rights and benefits under such agreement with respect to its Intellectual Property Rights, including the right to enforce any such
covenants.
Section 2.06. Collective Bargaining. Effective no later than immediately prior to the Effective Time, to
the extent necessary under and permitted by applicable Law, PayPal shall, in compliance with applicable Law, cause the appropriate member of the PayPal Group to (a) assume all collective bargaining agreements (including any national, sector or
local collective bargaining agreement), works council and other similar labor relations agreements and arrangements that cover PayPal Group Employees and/or Former PayPal Group Employees, and all Liabilities arising under any such collective
bargaining, works council and other similar labor relations agreements and arrangements, and (b) join any industrial, employer or similar association or federation if membership is required for such relevant collective bargaining, works council
and other similar labor relations agreement or arrangement to continue to apply and cover the relevant PayPal Group Employees and Former PayPal Group Employees, as applicable.
Section 2.07. Non-U.S. Regulatory Compliance. The Parties shall have the authority to adjust the treatment described in this
Agreement, including the treatment under any Benefit Plan, with respect to PayPal Group Employees and/or Former PayPal Group Employees who are located outside of the United States in order to ensure compliance with the applicable Laws of countries
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outside of the United States or to preserve the Tax benefits provided under local Tax Law before the Distribution or as are necessary and appropriate to reflect the Separation or vendor
limitations.
ARTICLE III
ASSIGNMENT OF EMPLOYEES
Section 3.01. Employees.
(a) Assignment and Transfer of Employees. Effective no later than immediately prior to the Effective Time and except as otherwise agreed
by the Parties, (i) the applicable member of the Parties shall have taken such actions as are necessary to ensure to the extent possible that each individual who is intended to be an employee of the PayPal Group as of immediately after the
Effective Time (including any such individual who is not actively working as of the Effective Time as a result of an illness, injury or leave of absence (including due to a short-term or long-term disability) approved by the eBay Human Resources
department or otherwise taken in accordance with applicable Law) (collectively, the PayPal Group Employees) is employed by a member of the PayPal Group as of immediately after the Effective Time, on terms and conditions of
employment which are substantially comparable to the terms of employment governing such individuals prior to their assignment and (ii) the Parties shall have taken such actions as are necessary to ensure to the extent possible that each
individual who is intended to be an employee of the eBay Group as of immediately after the Effective Time (including any such individual who is not actively working as of the Effective Time as a result of an illness, injury or leave of absence
(including due to a short-term or long-term disability) approved by the eBay Human Resources department or otherwise taken in accordance with applicable Law) and any other individual employed by the eBay Group as of the Effective Time who is not a
PayPal Group Employee (collectively, the eBay Group Employees) is employed by a member of the eBay Group as of immediately after the Effective Time, on terms and conditions of employment which are substantially comparable to the
terms of employment governing such individuals prior to their assignment. Each of the Parties agrees to execute, and to seek to have the applicable Employees execute, such documentation, if any, as may be necessary to reflect such assignment and/or
to comply with applicable Law in relation to the automatic transfer of the employment of applicable Employees including, but not limited to, any transfer pursuant to any regulation or other legislation that has implemented the Acquired Rights
Directive 2001. To the extent applicable, independent contractors shall also be allocated between the PayPal Group and the eBay Group by the Parties taking such actions as are necessary to ensure that each individual who is intended to be an
independent contractor of either Party or both Parties immediately after the Effective Time is an independent contractor of either Party or both Parties as applicable.
(b) At-Will Status. Nothing in this Agreement shall create any obligation to any Employee on the part of any member of the eBay Group or
any member of the PayPal Group to (i) continue the employment of any Employee or permit the return from a leave of absence for any period after the date of this Agreement (except as required by applicable Law) or (ii) change the employment
status of any Employee from at-will, to the extent that such Employee is an at-will employee under applicable Law.
(c) Severance. Except as required by applicable Law the Parties acknowledge and agree that the Distribution and the assignment, transfer
or continuation of the employment of
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Employees as contemplated by this Section 3.01 shall not be deemed an involuntary termination of employment entitling any PayPal Group Employee or eBay Group Employee to severance
payments or benefits, provided that any severance payments or benefits that become payable notwithstanding the intent of the Parties shall be subject to Section 7.04.
(d) Not a Change of Control/Change in Control. The Parties acknowledge and agree that neither the consummation of the Separation,
Distribution nor any transaction contemplated by this Agreement, the Separation and Distribution Agreement or any other Ancillary Agreement shall be deemed a change of control, change in control, or term of similar import for
purposes of any Benefit Plan sponsored or maintained by any member of the eBay Group or member of the PayPal Group.
(e) Payroll and
Related Taxes. Except as otherwise agreed by the Parties, for purposes of United States payroll taxes with respect to PayPal Group Employees or group of PayPal Group Employees, the Parties and their respective Affiliates agree to implement this
treatment by utilizing solely Section 4 of Revenue Procedure 2004-53, STANDARD PROCEDURE FOR PREDECESSORS AND SUCCESSORS.
(f)
Information and Consultation. The Parties shall comply, or shall cause their respective Affiliates to comply, with any obligations to inform, consult with, negotiate and/or obtain the consent of, or formal rendering of advice from, all
applicable labor or trade unions, works councils and any other employee representative bodies and shall make any notifications necessary as a result of the Separation, Distribution or any of the transactions contemplated by this Agreement, as
required by applicable Law or any written agreement.
ARTICLE IV
EQUITY, INCENTIVE AND EXECUTIVE COMPENSATION
Section 4.01. Generally; Definitions.
(a) Generally. Each eBay Equity Award that is outstanding as of immediately prior to the Effective Time shall be adjusted as described
below; provided, however, that, effective immediately prior to the Effective Time, the eBay Compensation Committee may provide for different adjustments with respect to some or all eBay Equity Awards to the extent that the eBay
Compensation Committee deems such adjustments necessary and appropriate and in accordance with the terms of the applicable eBay Equity Plan. Any adjustments made by the eBay Compensation Committee pursuant to the foregoing sentence shall be deemed
incorporated by reference herein as if fully set forth below and shall be binding on the Parties and their respective Affiliates. Before the Effective Time, the PayPal Equity Plan shall be established, with such terms as are necessary to permit the
implementation of the provisions of Section 4.02.
(b) Definitions. For ease of reference, the following additional
terms as used in this Agreement (and specifically this Article IV) shall have the meanings set forth below.
Distributed
PayPal Stock Value shall mean the product obtained by multiplying (x) the Post-Spin PayPal Stock Value by (y) the Distribution Ratio.
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Distribution Ratio shall have the meaning set forth in the Separation and
Distribution Agreement.
eBay Equity Awards shall mean, collectively, eBay Options, eBay RSU Awards, eBay Restricted
Stock Awards, eBay PSU Awards, eBay DSU Awards and eBay PBRSU Awards.
eBay DSU Award shall mean a deferred stock unit
award, granted pursuant to the eBay Equity Plan, that is outstanding immediately prior to the Effective Time.
eBay
ESPP shall mean the eBay Inc. Employee Stock Purchase Plan, effective November 1, 2012 and any sub-plan maintained outside of the U.S.
eBay ESPP Option shall mean an option granted pursuant to the eBay ESPP, that is outstanding prior to the Effective Time.
eBay Option shall mean an option to purchase eBay Shares granted pursuant to an eBay Equity Plan that is outstanding
as of immediately prior to the Effective Time.
eBay Option Exercise Price Ratio shall mean, with respect to an eBay
Option or eBay ESPP Option, as applicable, the quotient obtained by dividing (x) the per share exercise price of such eBay Option or eBay ESPP Option, as applicable, immediately prior to the Effective Time, by (y) the Pre-Spin eBay Stock
Value.
eBay PBRSU Award shall mean a performance-based restricted stock unit award, which, for accounting purposes,
has been deemed granted and outstanding as of immediately prior to the Effective Time.
eBay PSU Award shall mean a
performance stock unit award, granted pursuant to an eBay Equity Plan, that is outstanding immediately prior to the Effective Time.
eBay Restricted Stock Award shall mean a restricted stock award, granted pursuant to an eBay Equity Plan, that is
outstanding as of immediately prior to the Effective Time, which does not otherwise become vested solely by virtue of the Distribution.
eBay Retained Award Conversion Ratio shall mean the quotient obtained by dividing (x) the Pre-Spin eBay Stock Value,
by (y) the Post-Spin eBay Stock Value.
eBay RSU Award shall mean a restricted stock unit award, granted pursuant
to an eBay Equity Plan, that is outstanding as of immediately prior to the Effective Time, which is not otherwise accelerated solely by virtue of the Distribution.
eBay Shares shall have the meaning set forth in the Separation and Distribution Agreement.
eBay Stock Value Ratio shall mean the quotient obtained by dividing (x) the Pre-Spin eBay Stock Value by (y) the
sum of (1) the Distributed PayPal Stock Value and (2) the Post-Spin eBay Stock Value.
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PayPal DSU Award shall mean a deferred stock unit award issued under the
PayPal Equity Plan, in respect of a corresponding eBay DSU Award that has been assumed by PayPal in accordance with Section 4.02(e).
PayPal Equity Award Conversion Ratio shall mean the quotient obtained by dividing (x) the Pre-Spin eBay Stock Value,
by (y) the Post-Spin PayPal Stock Value.
PayPal Equity Awards shall mean, collectively, PayPal Options, PayPal
RSU Awards, PayPal PBRSU Awards, PayPal PSU Awards, PayPal Restricted Stock Awards and PayPal DSU Awards.
PayPal Equity
Plan shall mean the PayPal 2015 Equity Incentive Plan, to be adopted by PayPal prior to the Distribution Date as described in Section 4.01.
PayPal ESPP shall mean the PayPal Employee Stock Purchase Plan, to be adopted by PayPal prior to the Distribution Date as
described in Section 4.03.
PayPal ESPP Option shall mean an option to purchase PayPal Shares issued under
the PayPal ESPP in respect of a corresponding eBay ESPP Option that has been assumed by PayPal in accordance with Section 4.03.
PayPal Option shall mean an option to purchase PayPal Shares issued under the PayPal Equity Plan in respect of a
corresponding eBay Option that has been assumed by PayPal in accordance with Section 4.02(a).
PayPal PBRSU
Award shall mean a performance base restricted stock unit award issued under the PayPal Equity Plan, in respect of a corresponding eBay PBRSU Award that has been assumed by PayPal in accordance with Section 4.02(c).
PayPal PSU Award shall mean a performance stock unit award issued under the PayPal Equity Plan in respect of a
corresponding eBay PSU Award that has been assumed by PayPal in accordance with Section 4.02(c).
PayPal Restricted
Stock Award shall mean a restricted stock award issued under the PayPal Equity Plan in respect of a corresponding eBay Restricted Stock Award that has been assumed by PayPal in accordance with Section 4.02(d).
PayPal RSU Award shall mean a restricted stock unit award issued under the PayPal Equity Plan in respect of a corresponding
eBay RSU Award that has been assumed by PayPal in accordance with Section 4.02(b).
PayPal Shares shall
have the meaning set forth in the Separation and Distribution Agreement.
PayPal Stock Value Ratio shall mean the
quotient obtained by dividing (x) the Pre-Spin eBay Stock Value by (y) the sum of (1) the Post-Spin PayPal Stock Value and (2) the quotient obtained by dividing (A) the Post-Spin eBay Stock Value by (B) the Distribution
Ratio.
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Post-Spin eBay DSU Award shall mean an eBay DSU Award, as adjusted as of the
Effective Time in accordance with Section 4.02(e).
Post-Spin eBay Equity Awards shall mean, collectively,
Post-Spin eBay Options, Post-Spin eBay RSU Awards, Post-Spin eBay PBRSU Awards, Post-Spin eBay PSU Awards and Post-Spin eBay DSU Awards.
Post-Spin eBay ESPP Option shall mean an eBay ESPP Option, as adjusted as of the Effective Time in accordance with
Section 4.03.
Post-Spin eBay Option shall mean an eBay Option, as adjusted as of the
Effective Time in accordance with Section 4.02(a).
Post-Spin eBay PBRSU Award shall mean an eBay PBRSU
Award, as adjusted or granted, as applicable, in accordance with Section 4.02(c).
Post-Spin eBay PSU Award
shall mean an eBay PSU Award, as adjusted as of the Effective Time in accordance with Section 4.02(d).
Post-Spin
eBay RSU Award shall mean an eBay RSU Award, as adjusted as of the Effective Time in accordance with Section 4.02(b).
Post-Spin eBay Stock Value shall mean the opening per-share price of eBay Shares on the NASDAQ on the first regular trading
session (9:30 am to 4:00 pm EST) after the Distribution Date.
Post-Spin PayPal Stock Value shall mean the
opening per-share price of PayPal Shares on the NASDAQ on the first regular trading session (9:30 am to 4:00 pm EST) after the Distribution Date.
Pre-Spin eBay Stock Value shall mean the closing per-share price of eBay Shares trading regular way with due
bills on the NASDAQ on the last regular trading session (9:30 am to 4:00 pm EST) on the Distribution Date.
Section 4.02. Equity Incentive Awards.
(a) Stock Options. Each eBay Option that is outstanding immediately prior to the Effective Time shall be converted as of the
Effective Time into either a Post-Spin eBay Option or a PayPal Option, as described below:
(i) eBay Group
Employees who are not Transitioning eBay Group Employees. Each vested and unvested eBay Option held by an eBay Group Employee (and not otherwise adjusted as provided in subsection (iii) hereof) and each vested and exercisable eBay Option
held by a Former eBay Group Employee (if any) shall (1) be converted, as of the Effective Time, into a Post-Spin eBay Option through an adjustment thereto as provided in this Section 4.02(a)(i), and (2) otherwise be subject to
the same terms and conditions (including with respect to vesting and expiration of exercise period,
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as applicable) after the Effective Time as applicable to such corresponding eBay Option immediately prior to the Effective Time, in accordance with the following:
(A) the number of eBay Shares subject to such Post-Spin eBay Option (rounded down to the nearest whole share) shall be equal to
the product obtained by multiplying (x) the number of eBay Shares subject to the corresponding eBay Option immediately prior to the Effective Time, by (y) the eBay Retained Award Conversion Ratio; and
(B) the per share exercise price of such Post-Spin eBay Option (rounded up to the nearest cent) shall be equal to the product
obtained by multiplying (x) the Post-Spin eBay Stock Value, by (y) the eBay Option Exercise Price Ratio.
(ii)
PayPal Group Employees. Each vested and unvested eBay Option held by a PayPal Group Employee and each vested and exercisable eBay Option held by a Former PayPal Group Employee (if any) shall (1) be converted, as of the Effective Time,
into a PayPal Option outstanding under the PayPal Equity Plan through an adjustment thereto as provided in this Section 4.02(a)(ii), and (2) otherwise be subject to the same terms and conditions (including with respect to vesting
and expiration of exercise period, as applicable) after the Effective Time as applicable to such eBay Option immediately prior to the Effective Time, in accordance with the following:
(A) the number of PayPal Shares subject to such PayPal Option (rounded down to the nearest whole share) shall be equal to the
product obtained by multiplying (x) the number of eBay Shares subject to the corresponding eBay Option immediately prior to the Effective Time, by (y) the PayPal Equity Award Conversion Ratio; and
(B) the per share exercise price of such PayPal Option (rounded up to the nearest cent) shall be equal to the product obtained
by multiplying (x) the Post-Spin PayPal Stock Value, by (y) the eBay Option Exercise Price Ratio of the corresponding eBay Option.
(iii) Transitioning eBay Group Employees. Each vested eBay Option that is outstanding as of immediately prior to the
Effective Time and held by a Transitioning eBay Group Employee shall (1) be converted, as of the Effective Time, through an adjustment thereto as provided in this Section 4.02(a)(iii), into both a Post-Spin eBay Option outstanding
under the eBay Equity Plan and a PayPal Option outstanding under the PayPal Equity Plan and (2) otherwise be subject to the same terms and conditions (including with respect to vesting and expiration of exercise period, as applicable) after the
Effective Time as were applicable to such eBay Option immediately prior to the Effective Time (as such terms and conditions may be modified by the Transition Success and Retention Program) in accordance with the following:
(A) the number of eBay Shares subject to such Post-Spin eBay Option shall be equal to the product (rounded down to the nearest
whole share)
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obtained by multiplying (x) the number of eBay Shares subject to the corresponding eBay Option immediately prior to the Effective Time, by (y) the eBay Stock Value Ratio; and
(B) the per share exercise price of such Post-Spin eBay Option shall be equal to the quotient (rounded up to the nearest cent)
obtained by dividing (x) the per share exercise price of the corresponding eBay Option immediately prior to the Effective Time, by (y) the eBay Retained Award Conversion Ratio; and
(C) the number of PayPal Shares subject to such PayPal Option shall be equal to the product (rounded down to the nearest whole
share) obtained by multiplying (x) the number of eBay Shares subject to the corresponding eBay Option immediately prior to the Effective Time, by (y) the PayPal Stock Value Ratio; and
(D) the per share exercise price of such PayPal Option shall be equal to the quotient (rounded up to the nearest cent) obtained
by dividing (x) the per share exercise price of the corresponding eBay Option immediately prior to the Effective Time, by (y) the PayPal Equity Award Conversion Ratio.
(iv) Directors. Each vested and unvested eBay Option that is outstanding and held by an eBay non-employee director as of
immediately prior to the Effective Time shall (1) be converted, as of the Effective Time, through an adjustment thereto as provided in this Section 4.02(a)(iv), into both a Post-Spin eBay Option outstanding under the eBay Equity
Plan and a PayPal Option outstanding under the PayPal Equity Plan and (2) otherwise be subject to the same terms and conditions (including with respect to vesting and expiration, as applicable) after the Effective Time as were applicable to
such eBay Option immediately prior to the Effective Time, in accordance with the following:
(A) the number of eBay Shares
subject to such Post-Spin eBay Option shall be equal to the product (rounded down to the nearest whole share) obtained by multiplying (x) the number of eBay Shares subject to the corresponding eBay Option immediately prior to the Effective
Time, by (y) the eBay Stock Value Ratio;
(B) the per share exercise price of such Post-Spin eBay Option shall be
equal to the quotient (rounded up to the nearest cent) obtained by dividing (x) the per share exercise price of the corresponding eBay Option immediately prior to the Effective Time, by (y) the eBay Retained Award Conversion Ratio; and
(C) the number of PayPal Shares subject to such PayPal Option shall be equal to the product (rounded down to the nearest
whole share) obtained by multiplying (x) the number of eBay Shares subject to the corresponding eBay Option immediately prior to the Effective Time, by (y) the PayPal Stock Value Ratio;
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(D) the per share exercise price of such PayPal Option shall be equal to the
quotient (rounded up to the nearest cent) obtained by dividing (x) the per share exercise price of the corresponding eBay Option immediately prior to the Effective Time, by (y) the PayPal Equity Award Conversion Ratio.
Notwithstanding anything to the contrary in this Section 4.02(a), the exercise price, the number of eBay Shares and PayPal Shares subject to each
Post-Spin eBay Option and PayPal Option, as applicable, and the terms and conditions of exercise of such options, shall be determined in a manner consistent with the requirements of Section 409A of the Code; provided, further,
that, in the case of any eBay Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code as of immediately prior to the Effective Time, the exercise price, the number of eBay Shares and
PayPal Shares subject to such option, and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code.
(b) RSU Awards. Each eBay RSU Award that is outstanding immediately prior to the Effective Time shall be converted as of the
Effective Time into either a Post-Spin eBay RSU Award or a PayPal RSU Award, as described below:
(i) eBay
Group Employees who are not Transitioning eBay Group Employees. Each eBay RSU Award held by an eBay Group Employee who is not a Transitioning eBay Group Employee shall (1) be converted as of the Effective Time, into a Post-Spin eBay RSU
Award through an adjustment thereto as provided in this Section 4.02(b)(i), and (2) otherwise be subject to the same terms and conditions (including with respect to vesting) after the Effective Time as applicable to such eBay RSU
Award immediately prior to the Effective Time, in accordance with the following: the number of eBay Shares subject to each Post-Spin eBay RSU Award (rounded down to the nearest whole share) shall be equal to the product obtained by multiplying
(x) the number of eBay Shares subject to the corresponding eBay RSU Award immediately prior to the Effective Time, by (y) the eBay Retained Award Conversion Ratio.
(ii) Transitioning eBay Group Employees. Each eBay RSU Award that is outstanding as of immediately prior to the
Effective Time and held by a Transitioning eBay Group Employee shall (1) be converted as of the Effective Time, through an adjustment thereto as provided in this Section 4.02(b)(ii), into a Post-Spin eBay RSU Award outstanding under
the eBay Equity Plan and a PayPal RSU Award outstanding under the PayPal Equity Plan and (2) otherwise be subject to the same terms and conditions after the Effective Time as were applicable to such eBay RSU Award prior to the Effective Time as
such terms and conditions may be modified by the Transition Success and Retention Program, in accordance with the following:
(A) the number of shares subject to the Post-Spin eBay RSU Award shall remain the same number of eBay Shares subject to
the eBay RSU Award immediately prior to the Effective Time; and
(B) the number of shares subject to the PayPal RSU Award
shall be equal to the product (rounded down to the nearest whole share) obtained by multiplying (x) the number of eBay Shares subject to the eBay RSU Award immediately prior to the Effective Time, by (y) the Distribution Ratio.
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(iii) PayPal Group Employees. Each eBay RSU Award held by a PayPal
Group Employee shall (1) be converted as of the Effective Time into a PayPal RSU Award outstanding under the PayPal Equity Plan through an adjustment thereto as provided in this Section 4.02(b)(iii) and (2) otherwise be subject
to the same terms and conditions (including with respect to vesting) after the Effective Time as applicable to such eBay RSU Award immediately prior to the Effective Time, in accordance with the following: the number of PayPal Shares subject to
such PayPal RSU Award (rounded down to the nearest share) shall be equal to the product obtained by multiplying (x) the number of eBay Shares subject to the corresponding eBay RSU Award immediately prior to the Effective Time, by (y) the
PayPal Equity Award Conversion Ratio.
(c) PBRSU Awards and PSU Awards.
(i) Adjustment of Performance Targets of PBRSU Awards for eBay Group Employees who are not Transitioning eBay Group Employees, and
PayPal Group Employees. As of the Effective Time, each target eBay PBRSU Award with a fiscal year 2014-2015 performance period or a fiscal year 2015-2016 performance period that has been granted under the applicable eBay Equity Plan and is
outstanding immediately prior to the Effective Time (an Outstanding eBay PBRSU Award), if any, shall be converted as of the Effective Time into either a target Post-Spin eBay PBRSU Award or a target PayPal PBRSU Award, in either
such case with the performance criteria for the 2014-2015 eBay PBRSU Awards being adjusted such that the performance goal for 2015 shall be based on the performance of the relevant business unit, rather than eBay Inc., in accordance with the
following:
(A) Target PBRSU Awards for eBay Group Employees who are not Transitioning eBay Group
Employees. Any Outstanding eBay PBRSU Award held by an eBay Group Employee (and not described in subsection (iii) hereof) shall (1) be converted as of the Effective Time, through an adjustment thereto as provided in this
Section 4.02(c)(i)(A), into a target Post-Spin eBay PBRSU Award and (2) otherwise be subject to the same terms and conditions (including with respect to vesting and performance conditions) after the Effective Time as applicable to
such Outstanding eBay PBRSU Award immediately prior to the Effective Time, in accordance with the following: the target number of eBay Shares subject to such target Post-Spin eBay PBRSU Award shall be equal to the product (rounded down to the
nearest whole share) obtained by multiplying (x) the number of eBay Shares subject to the corresponding Outstanding eBay PBRSU Award immediately prior to the Effective Time, by (y) the eBay Retained Award Conversion Ratio.
(B) Target PBRSU Award for PayPal Group Employees. Any Outstanding eBay PBRSU Award held by a PayPal Group Employee
shall (1) be converted as of the Effective Time, into a target Post-Spin PayPal PBRSU Award through an adjustment thereto as provided in this Section 4.02(c)(i)(B), and (2) otherwise be subject to the same terms and conditions
(including with respect to vesting and performance conditions) after the Effective Time as applicable to such Outstanding eBay PBRSU
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Award immediately prior to the Effective Time, in accordance with the following: the target number of PayPal Shares subject to such target PayPal PBRSU Award (rounded down to the nearest whole
share) shall be equal to the product obtained by multiplying (x) the number of eBay Shares subject to the corresponding Outstanding eBay PBRSU Award immediately prior to the Effective Time, by (y) the PayPal Equity Award Conversion Ratio.
(ii) PBRSU Awards to be Granted to eBay Group Employees who are not Transitioning eBay Group Employees, and PayPal
Employees. With respect to any target eBay PBRSU Award with a fiscal year 2014-2015 performance period or a fiscal year 2015-2016 performance period (collectively, Future PBRSU Awards) which has not yet been granted pursuant
to the applicable eBay Equity Plan, the following provisions shall apply:
(A) any eBay Group Employee who would,
in accordance with the normal practices of eBay, be granted Future PBRSU Awards pursuant to the applicable eBay Equity Plan, shall be granted, subject to the eBay Groups actual achievement of applicable performance goals and such eBay Group
Employees continuous service with any member of the eBay Group through the date of grant, a number of RSUs subject to the Future PBRSU Awards pursuant to the applicable eBay Equity Plan, determined using the formula provided in
Section 4.02(c)(i)(A) above, as if such Future PBRSU Awards had been Outstanding eBay PBRSU Awards as of immediately prior to the Effective Time and otherwise determined under the normal grant practices of eBay; and
(B) any PayPal Group Employee who would, if he or she had remained an eBay Group Employee through the date Future PBRSU Awards
would, in accordance with the normal practices of eBay, have been granted, shall be granted, subject to the PayPal Groups actual achievement of applicable performance goals and such PayPal Group Employees continuous service with any
member of the PayPal Group from the Distribution Date through the date of grant, a number of RSUs subject to the PayPal PBRSU Awards pursuant to the PayPal Equity Plan, determined using the formula provided in Section 4.02(c)(i)(B)
above, as if the Future PBRSU Awards to which such PayPal PBRSU Awards correspond had been Outstanding eBay PBRSU Awards as of immediately prior to the Effective Time, and otherwise determined under the applicable grant practices of PayPal.
(iii) PBRSU Awards and PSU Awards for Transitioning eBay Group Employees. Each Outstanding eBay PBRSU Award and eBay PSU Award
that is outstanding as of immediately prior to the Effective Time and held by a Transitioning eBay Group Employee shall (1) be converted, as of the Effective Time, into a Post-Spin eBay PBRSU Award and Post-Spin eBay PSU Award, respectively,
outstanding under the eBay Equity Plan and a PayPal PBRSU Award and a PayPal PSU Award, respectively, outstanding under the PayPal Equity Plan through an adjustment thereto as provided in this Section 4.02(iii), and (2) otherwise be
subject to the same terms and conditions after the Effective Time as were applicable to such Outstanding eBay PBRSU Award and eBay PSU Award, respectively, prior to the Effective Time (as such terms and conditions may be modified by the Transition
Success and Retention Program) in accordance with the following:
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(A) the number of shares subject to the Post-Spin eBay PBRSU Award and Post-Spin
eBay PSU Award, respectively, shall be equal to the same number of eBay Shares subject to the Outstanding eBay PBRSU Award and eBay PSU Award, respectively, immediately prior to the Effective Time; and
(B) the number of shares subject to the PayPal PBRSU Award and PayPal PSU Award, respectively, shall be equal to the product
(rounded down to the nearest whole share) obtained by multiplying (x) the number of eBay Shares subject to the Outstanding eBay PBRSU Award and eBay PSU Award, respectively, immediately prior to the Effective Time, by (y) the Distribution
Ratio.
(d) Restricted Stock Awards. Each eBay Restricted Stock Award that is outstanding as of immediately prior to the
Effective Time and held by a PayPal Group Employee shall (1) be converted, as of the Effective Time, into a PayPal Restricted Stock Award outstanding under the PayPal Equity Plan as provided in this Section 4.02(d) and
(2) otherwise be subject to the same terms and conditions (including with respect to vesting) after the Effective Time as were applicable to such eBay Restricted Stock Award prior to the Effective Time, in accordance with the following: the
number of PayPal Shares subject to such PayPal Restricted Stock Award shall be equal to the product (rounded down to the nearest whole share) obtained by multiplying (x) the number of eBay Shares subject to the corresponding eBay Restricted
Stock Award immediately prior to the Effective Time, by (y) the PayPal Equity Award Conversion Ratio.
(e) DSU Awards.
Each eBay DSU Award that is outstanding and held by a non-employee director of eBay as of immediately prior to the Effective Time shall (1) be converted, as of the Effective Time, into a Post-Spin eBay DSU Award outstanding under the eBay
Equity Plan and a PayPal DSU Award outstanding under the PayPal Equity Plan as provided in this Section 4.02(e) and (2) otherwise be subject to the same terms and conditions (including with respect to vesting) after the Effective
Time as were applicable to such eBay DSU Award prior to the Effective Time, in accordance with the following:
(i) the
number of shares subject to the Post-Spin eBay DSU Award shall be equal to the same number of eBay Shares subject to the eBay DSU Award immediately prior to the Effective Time; and
(ii) the number of shares subject to the PayPal DSU Award shall be equal to the product (rounded down to the nearest whole
share) obtained by multiplying (x) the number of eBay Shares subject to the eBay DSU Award immediately prior to the Effective Time by (y) the Distribution Ratio.
(f) Miscellaneous Terms.
(i) With respect to Post-Spin eBay Equity Awards and PayPal Equity Awards: (A) employment or service with the eBay Group or the PayPal
Group, as applicable, prior to the Effective Time shall be treated as employment with or service to eBay with respect to Post-Spin eBay Equity Awards held by any person who is employed by or provides services to any member of the eBay Group
immediately following the Effective Time (including any Continuing eBay Director); and (B) employment with or service to the eBay Group or the PayPal Group, as
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applicable, prior to the Effective Time shall be treated as employment with or service to PayPal with respect to PayPal Equity Awards held by any person who is employed by or provides services to
any member of the PayPal Group immediately following the Effective Time (including any Transferring Director). In addition, (I) none of the Separation, the Distribution or any employment transfer described in Section 3.01(a), nor
the fact that upon Separation certain nonemployee members of the eBay Board will serve as Continuing eBay Directors but (relative to any PayPal Equity Award) cease to provide services to the PayPal Group and other nonemployee members of the eBay
Board will serve as Transferring Directors but (relative to Post-Spin eBay Equity Awards) cease to provide services to the eBay Group, shall constitute a termination of employment or service for any Employee or any such nonemployee member of the
eBay Board for purposes of any Post-Spin eBay Equity Award or any PayPal Equity Award, as applicable, and (II) after the Effective Time, for any equity award adjusted under this Section 4.02, any reference to a change of
control, change in control or similar definition in an award agreement, offer letter, employment agreement, equity side letter or eBay Equity Plan applicable to such award (x) with respect to Post-Spin eBay Equity Awards,
shall be deemed to refer to a change of control, change in control or similar definition as set forth in the applicable award agreement, offer letter, employment agreement, equity side letter or eBay Equity Plan (an
eBay Change of Control), and (y) with respect to PayPal Equity Awards, shall be deemed to refer to a change in control as defined in the PayPal Equity Plan (a PayPal Change of Control).
(ii) Any determination in respect of any Post-Spin eBay Equity Award held by a nonemployee of eBay shall be made by the Compensation Committee
of the eBay Board or its designee, and any determination in respect of any Post-Spin PayPal Equity Award held by a nonemployee of PayPal shall be made by the Compensation Committee of the PayPal Board or its designee.
(iii) The PayPal Equity Plan shall assume and honor the terms of all QDROs and any other domestic relations orders in effect under the eBay
Equity Plan (and any award agreements granted thereunder) in respect of PayPal Group Employees and Former PayPal Group Employees immediately prior to the Distribution Date (for PayPal Group Employees and Former PayPal Group Employees, as
applicable).
(g) Settlement and Forfeiture of Equity Awards.
(i) Allocation of Responsibility for Settlement of Equity Awards. Except as otherwise provided in this Section 4.02(h) and
Section 4.02(i), after the Effective Time, Post-Spin eBay Equity Awards, regardless of whether held by Employees, Former Employees, Transitioning eBay Group Employees, Continuing eBay Directors or Transferring Directors, shall be settled
by eBay, and PayPal Equity Awards, regardless of whether held by Employees, Former Employees, Transitioning eBay Group Employees, Continuing eBay Directors or Transferring Directors shall be settled by PayPal. eBay and PayPal shall cooperate, in
accordance with the terms of Section 2.03(c), to coordinate the prompt settlement of any such awards that become vested on the Distribution Date and any such awards that are exercised on or after the Distribution Date, as applicable, in
accordance with the terms of Section 4.02(j).
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(ii) Forfeiture of Equity Awards. Following the Effective Time, if any Post-Spin
eBay Equity Award held by a PayPal Group Employee, Former PayPal Group Employee or Transferring Director shall fail to become vested, such Post-Spin eBay Equity Award shall be forfeited to eBay, and if any PayPal Equity Award held by an eBay Group
Employee, Former eBay Group Employee or Continuing eBay Director shall fail to become vested, such PayPal Equity Award shall be forfeited to PayPal.
(h) Equity Award Tax Reporting, Withholding and Deductions.
(i) Tax Withholding for PayPal Equity Awards. Upon the vesting, payment or settlement, as applicable, of PayPal Equity Awards, the
PayPal Group shall be solely responsible for ensuring (A) the satisfaction of all applicable tax withholding requirements with respect to each PayPal Group Employee, Former PayPal Group Employee and Transitioning eBay Group Employee and
(B) the collection and remittance of applicable withholding taxes to the appropriate Governmental Authority in respect of all PayPal Equity Awards for which PayPal is entitled to claim a tax deduction pursuant to clause (v) below.
Notwithstanding the foregoing, however, for all PayPal Equity Awards (other than PayPal Options) held by the Transitioning eBay Group Employees, PayPal shall be responsible for the collection of applicable withholding taxes and shall remit all such
withheld amounts to the eBay Group (with eBay Group being responsible for remittance of such amounts to the appropriate Governmental Authority).
(ii) Tax Withholding for Post-Spin eBay Equity Awards. Upon the vesting, payment or settlement, as applicable, of Post-Spin eBay Equity
Awards, the eBay Group shall be solely responsible for ensuring (A) the satisfaction of all applicable tax withholding requirements with respect to each eBay Group Employee, Former eBay Group Employee and Transitioning eBay Group Employee and
(B) the collection and remittance of applicable withholding taxes to the appropriate Governmental Authority in respect of all eBay Equity Awards for which eBay is entitled to claim a tax deduction pursuant to clause (v) below.
(iii) Applicable Withholding Rates. The applicable tax withholding requirements for any Employee, Former Employee and
Transitioning eBay Group Employee subject to tax in the United States shall be based on the minimum statutory rates and except as otherwise required by applicable Law, for Employees, Former Employees and Transitioning eBay Group Employees subject to
tax outside the United States shall be based on the maximum statutory requirements.
(iv) Tax Reporting. Following
the Effective Time: (A) the eBay Group shall be responsible for all income, payroll and other tax reporting in respect of all Post-Spin eBay Equity Awards held by eBay Group Employees, Former eBay Group Employees, Transitioning eBay Group
Employee, Continuing eBay Directors and Transferring Directors for which eBay is entitled to claim a tax deduction pursuant to clause (v) below, as applicable, and (B) the PayPal Group shall be responsible for all income, payroll and other
tax reporting in respect of all PayPal Equity Awards held by PayPal Group Employees, Former PayPal Group Employees, Transitioning eBay Group Employees, Continuing eBay Directors and Transferring Directors for which PayPal is entitled to claim a tax
deduction pursuant to clause (v) below.
(v) Tax Deductions. Following the Effective Time, the entitlement to Tax (as
defined in the Tax Matters Agreement) deductions in respect of eBay Equity Awards and PayPal Equity Awards, as applicable, shall be governed by Section 6.02 of the Tax Matters Agreement.
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(i) Cooperation. Each of the Parties shall establish an appropriate administration system
in order to administer, in an orderly manner, (i) exercises of vested Post-Spin eBay Options and PayPal Options, (ii) the vesting and forfeiture of unvested Post-Spin eBay Equity Awards and PayPal Equity Awards, and (iii) the
withholding and reporting requirements with respect to all equity awards. Each of the Parties shall use their reasonable best efforts together to unify and consolidate all indicative data and payroll and employment information on regular timetables
and make certain that each applicable Persons data and records in respect of such awards are correct and updated on a timely basis. The foregoing shall include employment status (e.g., disability or termination of employment) and other
information that may be required for vesting and forfeiture of awards and tax withholding/remittance, and any proceedings referenced in Section 2.01(e), compliance with trading windows and compliance with the requirements of the Exchange Act
and other applicable Laws.
(j) Establishment of PayPal Equity Plan. Effective as of or prior to the Effective Time, the
PayPal Board shall (i) adopt the PayPal Equity Plan under which the PayPal Options, PayPal RSU Awards, PayPal PBRSU Awards, PayPal Restricted Stock Awards, PayPal PSU Awards and PayPal DSU Awards, as applicable, shall be granted and
(ii) cause PayPal to assume the obligations under the eBay Equity Awards that are, pursuant to this Agreement, being replaced with the applicable PayPal Options, PayPal RSU Awards, PayPal PBRSU Awards, PayPal Restricted Stock Awards, PayPal PSU
Awards and PayPal DSU Awards. To the extent necessary for any such awards to qualify for transitional relief under Treasury Regulation Section 1.162-27(f)(4)(iii), eBay shall take the necessary action to grant or approve the PayPal Equity
Awards. The PayPal Equity Plan shall have substantially comparable terms, as of immediately prior to the Effective Time, as the eBay Equity Plan under which the corresponding eBay Equity Awards were governed prior to the Distribution with such
changes as are necessary and appropriate to reflect the Separation and such other changes, modifications or amendments to the PayPal Equity Plans as may be required by applicable Law. PayPal shall also assume and honor the terms of all QDROs and any
other domestic relations orders in effect under the eBay Equity Plan in respect of PayPal Group Employees immediately prior to the Distribution Date (for PayPal Group Employees) for all purposes of PayPal Equity Awards under the PayPal Equity
Plan.
(k) Registration and Other Regulatory Requirements. PayPal agrees to file Forms S-1, S-3 and/or S-8
registration statements with respect to, and to cause to be registered pursuant to the Securities Act, the PayPal Shares authorized for issuance under the PayPal Equity Plan, as required pursuant to the Securities Act, no later than the Effective
Time and in any event before the date of issuance of any PayPal Shares pursuant to the PayPal Equity Plan. The parties shall take such additional actions as are deemed necessary or advisable to effectuate the foregoing provisions of Article
IV, including compliance with securities Laws and other legal requirements associated with equity compensation awards in affected non-U.S. jurisdictions.
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Section 4.03. Employee Stock Purchase Plans.
(a) eBay ESPP. Each eBay ESPP Option that is outstanding immediately prior to the Effective Time shall be converted as of the Effective
Time into either a Post-Spin eBay ESPP Option or a PayPal ESPP Option as described below:
(i) Each eBay ESPP Option held
by an eBay Group Employee shall (1) be converted as of the Effective Time into a Post-Spin eBay ESPP Option through an adjustment thereto as provided in this Section 4.03, and (2) otherwise be subject to the same terms and
conditions (including with respect to expiration) after the Effective Time as applicable to such eBay ESPP Option immediately prior to the Effective Time, in accordance with the following:
(A) The maximum number of eBay Shares subject to such Post-Spin eBay ESPP Option for the purchase period in effect on the
Distribution Date (rounded down to the nearest whole share) shall be equal to the product obtained by multiplying (x) the maximum number of shares subject to the eBay ESPP Option, by (y) the eBay Retained Award Conversion Ratio; and
(B) the per share offering date purchase price for each Offering Period in effect on the Distribution Date of such Post-Spin
eBay ESPP Option (rounded up to the nearest cent) shall be equal to the product obtained by multiplying (x) the Post-Spin eBay Stock Value, by (y) the eBay Option Exercise Price Ratio of the corresponding eBay ESPP Option.
(ii) Each eBay ESPP Option held by a PayPal Group Employee shall be converted as of the Effective Time into a PayPal ESPP
Option outstanding under the PayPal ESPP Plan and shall, except as otherwise provided in this Section 4.03, be subject to the same terms and conditions (including with respect to expiration) after the Effective Time as applicable to such
eBay ESPP Option immediately prior to the Effective Time in accordance with the following:
(A) The maximum number of
PayPal Shares subject to such PayPal ESPP Option for the purchase period in effect on the Distribution Date (rounded down to the nearest whole share), shall be equal to the product obtained by multiplying (1) the maximum number of share subject
to an eBay Option, by (2) the PayPal Equity Award Conversion Ratio; and
(B) the per share offering date purchase
price for the Offering Period in effect on the Distribution Date of such PayPal ESPP Option (rounded up to the nearest cent), shall be equal to the product obtained by multiplying (1) the Post-Spin PayPal Stock Value, by (2) the eBay
Option Exercise Price Ratio of the corresponding eBay ESPP Option.
Notwithstanding anything to the contrary in this Section 4.03, in the case
of any eBay ESPP Option to which Section 421 of the Code applies by reason of its qualification under Section 423 of the Code as of immediately prior to the Effective Time, the exercise price, the number of eBay Shares and PayPal Shares
subject to such option, and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code.
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(b) Establishment of PayPal ESPP. Prior to the Effective Time, PayPal shall
(i) adopt the PayPal ESPP under which the PayPal ESPP Options shall be granted and (ii) assume the obligations under the eBay ESPP Options that are, pursuant to this Agreement, being replaced with the PayPal ESPP Options. The PayPal ESPP
may have terms that are comparable to those in effect, as of immediately prior to the Effective Time, under which the corresponding eBay ESPP Options were governed prior to the Distribution, including with such changes as are necessary and
appropriate to reflect the Separation and such other changes, modifications or amendments to the PayPal Equity Plans as may be required by applicable Law. The PayPal ESPP will include authority to grant options which do not meet the requirements of
Section 423(b) of the Code (as well as options which meet such requirements).
(c) Elections under the ESPP.
PayPal and eBay shall use their reasonable best efforts to cooperate to facilitate: (i) the carryover of current elections made by each PayPal Group Employee in effect under the eBay ESPP to the PayPal ESPP and (ii) the transfer of
contributions associated with such elections from the eBay ESPP to the PayPal ESPP.
(d) Tax Reporting and Deductions.
Following the Effective Time, (i) the eBay Group shall be responsible for all income, payroll and other tax reporting in respect of eBay shares issued (or PayPal shares received in respect of eBay shares issued) under the eBay ESPP, and
(ii) the entitlement to Tax (as defined in the Tax Matters Agreement) deductions in respect of shares issued under the eBay ESPP and PayPal ESPP, as applicable, shall be governed by Section 6.02 of the Tax Matters Agreement.
Section 4.04. Non-Equity Incentive Plans.
(a) Corporate Bonus Plans.
(i) No later than the Effective Time, PayPal shall establish the PayPal Incentive Plans, which, through December 31, 2015, shall have
substantially comparable terms as of immediately prior to the Effective Time as the corresponding eBay Incentive Plans in which the PayPal Group Employee participated as of immediately prior to the Effective Time, with such changes to the applicable
performance goals as may be necessary in order to reflect the PayPal Business following the Separation, and such other changes, modifications or amendments to the PayPal Incentive Plans as may be required by applicable Law. PayPal Group Employees
shall be eligible to participate in the PayPal Incentive Plans as of the Effective Time to the extent that they were eligible to participate in the eBay Incentive Plans as of immediately prior to the Effective Time.
(ii) The applicable determining body, person or group of persons of the PayPal Group shall be responsible for determining all bonus awards
that would otherwise be payable under the PayPal Incentive Plans to PayPal Group Employees or Former PayPal Group Employees for any performance periods that are open when the Effective Time occurs. The PayPal Group shall also determine for PayPal
Group Employees or Former PayPal Group Employees (A) the extent to which established performance criteria (as interpreted by the
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applicable determining body, person or group of persons of the PayPal Group, in its sole discretion) have been met, and (B) the payment level for each PayPal Group Employee or Former PayPal
Group Employee. The PayPal Group shall assume all Liabilities with respect to any such bonus awards payable to PayPal Group Employees or Former PayPal Group Employees for any performance periods that are open when the Effective Time occurs and
thereafter, and any other Liabilities relating to PayPal Group Employees or Former PayPal Group Employees under the eBay Incentive Plans and no member of the eBay Group shall have any obligations with respect thereto.
(iii) The applicable determining body, person or group of persons of eBay Group shall be responsible for determining all bonus awards that
would otherwise be payable under the eBay Incentive Plans to eBay Group Employees or Former eBay Group Employees for any performance periods that are open when the Effective Time occurs. The eBay Group shall also determine for eBay Group Employees
or Former eBay Group Employees (A) the extent to which established performance criteria (as interpreted by the applicable determining body, person or group of persons of the eBay Group, in its sole discretion) have been met, and (B) the
payment level for each eBay Group Employee or Former eBay Group Employee. The eBay Group shall retain (or assume as necessary) all Liabilities with respect to any such bonus awards payable to eBay Group Employees or Former eBay Group Employees for
any performance periods that are open when the Effective Time occurs and thereafter, and no member of the PayPal Group shall have any obligations with respect thereto.
(b) eBay Retained Bonus Plans. No later than the Effective Time, the eBay Group shall continue to retain (or assume as necessary) any
incentive compensation plan (including any sales incentive or other incentive plans applicable at the individual business unit level) for the exclusive benefit of eBay Group Employees and Former eBay Group Employees, whether or not sponsored by the
eBay Group, and, from and after the Effective Time, shall be solely responsible for all Liabilities thereunder.
(c) PayPal Retained
Bonus Plans. No later than the Effective Time, the PayPal Group shall continue to retain (or assume as necessary) any incentive plan (including any sales incentive or other incentive plans applicable at the individual business unit level) for
the exclusive benefit of PayPal Group Employees and Former PayPal Group Employees, whether or not sponsored by the PayPal Group, and, from and after the Effective Time, shall be solely responsible for all Liabilities thereunder.
Section 4.05. Director Compensation.
(a) Director Compensation Allocable to Service. eBay shall be responsible for the payment of any fees for service on the eBay Board that
are earned at, before, or after the Effective Time, and PayPal shall not have any responsibility for any such payments. With respect to any PayPal non-employee director, PayPal shall be responsible for the payment of any fees for service on the
PayPal Board that are earned at any time after the Effective Time and eBay shall not have any responsibility for any such payments. Notwithstanding the foregoing, PayPal shall commence paying quarterly cash retainers to PayPal non-employee directors
in respect of the quarter in which the calendar date immediately following the Distribution Date occurs; provided that eBay will pay PayPal an amount equal to the portion of such payment that is attributable to
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Transferring Directors service to eBay on and prior to the Effective Time (including, for the avoidance of doubt, the grant date fair value of any PayPal deferred stock units that may be
issued in respect of any partial quarterly service on the eBay Board during the quarter on which the Distribution Date occurs, if applicable). For the avoidance of doubt, eBay Equity Awards held by non-employee directors as of immediately prior to
the Effective Time shall be treated as described in Section 4.02.
(b) Impact of Change of Control on Director Equity
Awards. With respect to provisions related to vesting of eBay Equity Awards and, to the extent applicable, following the Effective Time, PayPal Equity Awards, an eBay Change of Control shall be treated as a PayPal Change of Control for purposes
of PayPal Equity Awards held, after the Effective Time, by Continuing eBay Directors, and a PayPal Change of Control shall be treated as an eBay Change of Control for purposes of Post-Spin eBay Equity Awards held by Transferring Directors.
ARTICLE V
RETIREMENT
PLANS
Section 5.01. PayPal 401(k) Plan.
(a) Establishment of Plan. Effective on or before the Distribution Date, the PayPal Board shall adopt and establish the PayPal
401(k) Plan and a related trust (the PayPal 401(k) Trust) which shall be intended to meet the Qualification Requirements (including under Sections 401(k) and (m) of the Code) and which through December 31, 2015
shall have substantially the same terms as of immediately prior to the Distribution Date as the eBay 401(k) Plan. Notwithstanding the foregoing, PayPal may make such changes, modifications or amendments to the PayPal 401(k) Plan as may be required
by applicable Law or as are necessary and appropriate to reflect the Separation or which result from vendor limitations. Before the Distribution Date, PayPal shall provide eBay with (i) a copy of the PayPal 401(k) Plan, PayPal 401(k) Trust and
volume submitter approval letter and (ii) a copy of certified resolutions of the PayPal Board (or its authorized committee or other delegate) evidencing adoption of the PayPal 401(k) Plan and PayPal 401(k) Trust and the assumption by the PayPal
401(k) Plan of the Liabilities described in Section 5.01(b).
(b) Transfer of Account Balances. No later
than 30 days following the Effective Time (or such other times as mutually agreed to by the parties), eBay shall cause the trustee of the eBay 401(k) Plan to transfer from the trust which forms a part of the eBay 401(k) Plan (the eBay
401(k) Trust) to the PayPal 401(k) Trust, the account balances of PayPal Group Employees under the eBay 401(k) Plan, determined as of the date of the transfer. Unless otherwise agreed by the parties, such transfers shall be made in kind,
including promissory notes evidencing the transfer of outstanding loans. Any Asset and Liability transfers pursuant to this Section 5.01 shall comply in all respects with Sections 414(l) and 411(d)(6) of the Code and if required,
shall be made not less than thirty (30) days after eBay shall have filed the notice under Section 6058(b) of the Code. The parties agree that to the extent that any assets are not transferred in kind, the assets transferred will be mapped
into an appropriate investment vehicle.
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(c) PayPal 401(k) Plan Provisions. The PayPal 401(k) Plan shall provide that:
(i) PayPal Group Employees shall be eligible to participate in the PayPal 401(k) Plan as of the Effective Time to the
extent that they were eligible to participate in the eBay 401(k) Plan as of immediately prior to the Effective Time;
(ii)
the account balance of each PayPal Group Employee under the eBay 401(k) Plan as of the date of the transfer of Assets from the eBay 401(k) Plan (including any outstanding promissory notes relating to outstanding loans) shall be credited to such
individuals account under the PayPal 401(k) Plan; and
(iii) the PayPal 401(k) Plan shall assume and honor the terms
of all QDROs in effect under the eBay 401(k) Plan in respect of PayPal Group Employees immediately prior to the Effective Time (for PayPal Group Employees).
(d) Plan Fiduciaries. For all periods at and after the Effective Time, the parties agree that the applicable fiduciaries of each
of the eBay 401(k) Plan and the PayPal 401(k) Plan, respectively, shall have the authority with respect to the eBay 401(k) Plan and the PayPal 401(k) Plan, respectively, to determine the investment alternatives, the terms and conditions with respect
to those investment alternatives and such other matters as are within the scope of their duties under ERISA and the terms of the applicable plan documents.
(e) No Distributions. No PayPal Group Employee shall be entitled to a right to a distribution of his or her benefit under the
eBay 401(k) Plan as a result of his or her transfer of employment from the eBay Group to the PayPal Group nor as a result of the completion of the Separation.
Section 5.02. Non-U.S. Retirement Plans.
(a) Establishment of PayPal Non-U.S. Retirement Plans. Before the Effective Time, subject to and in compliance with applicable
Law or as otherwise provided in Section 2.03(b), the applicable determining body, person or group of persons of the PayPal Group shall adopt and establish PayPal Non-U.S. Retirement Plans for PayPal Group Employees and Former PayPal
Group Employees which through December 31, 2015 shall have terms comparable to those terms as of immediately prior to the Distribution Date as the eBay Non-U.S. Retirement Plans. Notwithstanding the foregoing, the applicable determining body,
person or group of persons of the PayPal Group may make such changes, modifications, or amendments to the PayPal Non-U.S. Retirement Plans as may be required by applicable Law or as are necessary to reflect the Separation.
(b) Transfer of Assets and Assumption of Liabilities. As soon as practicable following the Effective Time, subject to and in
compliance with applicable Law, account balances (including statutory contributions and funds), or contracts of the PayPal Group Employees and, if applicable, Former PayPal Group Employees, shall be transferred from a member of the eBay Group or the
eBay Non-U.S. Retirement Plan to a member of the PayPal Group or the PayPal Non-U.S. Retirement Plan, as applicable. In the event any Non-U.S. Retirement Plan is a defined benefit plan, then if permissible under applicable Law, the Parties shall
cooperate to transfer the Assets and Liabilities, with respect to the benefits of PayPal Group Employees and Former PayPal
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Group Employees, in a manner reasonably acceptable to the Parties in consultation with the applicable actuary for, or other relevant third-party administrator or other service provider of, any
such plan. As of the Effective Time and subject to the transfer described herein, eBay and the eBay Non-U.S. Retirement Plans shall be relieved of all Liabilities for those benefits transferred and PayPal shall, and shall cause the PayPal Non-U.S.
Retirement Plan, to assume all Liabilities under the eBay Non-U.S. Retirement Plans for the benefits of PayPal Group Employees and, if applicable, Former PayPal Group Employees determined immediately prior to the Effective Time. For the avoidance of
doubt, in any non-U.S. jurisdiction where account balances, contracts or assets relating to benefits are not permitted to be transferred, eBay shall remain liable to the extent it is otherwise liable under applicable Law with respect to such
benefits relating to account balances, contracts or assets not transferred.
ARTICLE VI
NONQUALIFIED DEFERRED COMPENSATION PLAN
Section 6.01. PayPal Deferred Compensation Plan.
(a) Establishment of the Deferred Compensation Plan. Before the Effective Time, PayPal shall establish the PayPal Deferred Compensation
Plan, which through December 31, 2015, shall have substantially the same terms as of immediately prior to the Effective Time as the eBay Deferred Compensation Plan. Notwithstanding the foregoing, PayPal may make such changes, modifications or
amendments to the PayPal Deferred Compensation Plan as may be required by applicable Law or as are necessary and appropriate to reflect the Separation. The PayPal Deferred Compensation Plan shall assume and honor the terms of all QDROs and any other
domestic relations orders in effect under the eBay Deferred Compensation Plan in respect of PayPal Group Employees immediately prior to the Effective Time.
(b) Assumption of Liabilities from eBay. As of the Effective Time, PayPal shall, and shall cause the PayPal Deferred Compensation Plan
to, assume all Liabilities under the eBay Deferred Compensation Plan for the benefits of PayPal Group Employees determined as of immediately prior to the Effective Time, and the eBay Deferred Compensation Plan shall be relieved of all Liabilities
for those benefits. eBay shall retain all Liabilities under the eBay Deferred Compensation Plan for the benefits for eBay Group Employees, Former eBay Group Employees and Former PayPal Group Employees. From and after the Effective Time, PayPal Group
Employees shall cease to be participants in the eBay Deferred Compensation Plan.
Section 6.02. Participation; Distributions.
The Parties acknowledge that none of the transactions contemplated by this Agreement, the Separation and Distribution Agreement or any Ancillary Agreement will trigger a payment or distribution of compensation under any of the eBay Deferred
Compensation Plans or the PayPal Deferred Compensation Plans for any participant and, consequently, that the payment or distribution of any compensation to which such participant is entitled under any of the eBay Deferred Compensation Plans or the
PayPal Deferred Compensation Plans will occur upon such participants separation from service from the PayPal Group or at such other time as provided in the applicable PayPal Nonqualified Plan or participants deferral election.
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ARTICLE VII
WELFARE BENEFIT PLANS
Section 7.01. Welfare Plans.
(a) Establishment of PayPal Welfare Plans. Before the Effective Time and except as otherwise set forth in this Article VII,
PayPal shall, or shall cause the applicable member of the PayPal Group to, or shall engage in negotiations to, establish the PayPal Welfare Plans (including statutorily required plans such as provident funds, gratuity and insurance to the extent
applicable), which through December 31, 2015 shall have terms substantially similar in the aggregate as of immediately prior to the Effective Time as to those of the corresponding eBay Welfare Plans. Notwithstanding the foregoing, PayPal may
make such changes, modifications or amendments to the PayPal Welfare Plans as may be required by applicable Law or as are necessary and appropriate to reflect the Separation or which result from vendor limitations.
(b) Waiver of Conditions; Benefit Maximums. PayPal shall use commercially reasonable efforts to cause the PayPal Welfare Plans to:
(i) with respect to initial enrollment as of the Effective Time, waive (A) all limitations as to preexisting conditions,
exclusions, and service conditions with respect to participation and coverage requirements applicable to any PayPal Group Employee or Former PayPal Group Employee, other than limitations that were in effect with respect to the PayPal Group Employee
or Former PayPal Group Employee under the applicable eBay Welfare Plan as of immediately prior to the Effective Time, and (B) any waiting period limitation or evidence of insurability requirement applicable to a PayPal Group Employee or Former
PayPal Group Employee other than limitations or requirements that were in effect with respect to such PayPal Group Employee or Former PayPal Group Employee under the applicable eBay Welfare Plans as of immediately prior to the Effective Time; and
(ii) take into account (A) with respect to aggregate annual, lifetime, or similar maximum benefits available under
the PayPal Welfare Plans, a PayPal Group Employees or Former PayPal Group Employees prior claim experience under the eBay Welfare Plans and any eBay Benefit Plan that provides leave benefits; and (B) any eligible expenses incurred
by a PayPal Group Employee or Former PayPal Group Employee during the portion of the plan year of the applicable eBay Welfare Plan ending as of the Effective Time to be taken into account under such PayPal Welfare Plan for purposes of satisfying all
deductible, coinsurance, and maximum out-of-pocket requirements applicable to such PayPal Group Employee or Former PayPal Group Employee for the applicable plan year to the same extent as such expenses were taken into account by eBay for similar
purposes prior to the Effective Time as if such amounts had been paid in accordance with such PayPal Welfare Plan.
(c) Health Savings
Accounts. Before the Effective Time, PayPal shall, or shall cause a member of the PayPal Group to, establish a PayPal Welfare Plan that will provide health savings account benefits to PayPal Group Employees on and after the Effective Time (a
PayPal HSA). It is the intention of the Parties that all activity under a PayPal Group Employees health
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savings account under an eBay Welfare Plan (a eBay HSA) for the year in which the Effective Time occurs be treated instead as activity under the corresponding account under the
PayPal HSA, such that (i) any period of participation by a PayPal Group Employee in an eBay HSA during the year in which the Effective Time occurs will be deemed a period when such PayPal Group Employee participated in the corresponding PayPal
HSA; (ii) all expenses incurred during such period will be deemed incurred while such PayPal Group Employees coverage was in effect under the corresponding PayPal HSA; (iii) all elections and reimbursements made with respect to such
period under the eBay HSA will be deemed to have been made with respect to the corresponding PayPal HSA; and (iv) for purposes of determining the total annual employer contribution made on behalf of a PayPal Group Employee, employer
contributions made with respect to such period under the eBay HSA will be deemed to have been made with respect to the corresponding PayPal HSA.
(d) Flexible Spending Accounts. The Parties shall use commercially reasonable efforts to ensure that as of the Effective Time any health
or dependent care flexible spending accounts of PayPal Group Employees (whether positive or negative) (the Transferred Account Balances) under eBay Welfare Plans that are health or dependent care flexible spending account plans
are transferred, as soon as practicable after the Effective Time, from the eBay Welfare Plans to the corresponding PayPal Welfare Plans. Such PayPal Welfare Plans shall assume responsibility as of the Effective Time for all outstanding health or
dependent care claims under the corresponding eBay Welfare Plans of each PayPal Group Employee for the year in which the Effective Time occurs and shall assume and agree to perform the obligations of the corresponding eBay Welfare Plans from and
after the Effective Time. As soon as practicable after the Effective Time, and in any event within 30 days after the amount of the Transferred Account Balances is determined or such later date as mutually agreed upon by the Parties, PayPal shall pay
eBay the net aggregate amount of the Transferred Account Balances, if such amount is positive, and eBay shall pay PayPal the net aggregate amount of the Transferred Account Balances, if such amount is negative.
(e) Allocation of Welfare Liabilities. Except as otherwise set forth in Article VII:
(i) The eBay Group and the eBay Welfare Plans shall remain responsible for all Liabilities to, or in respect of, PayPal Group
Employees and Former PayPal Group Employees relating to or arising in connection with any claims relating to medical, dental, hospitalization, vision, prescription drug or other health arrangement, long-term disability, life, accidental death and
dismemberment and business travel accident insurance, which claims are incurred before the Effective Time and the PayPal Group and the PayPal Group Welfare Plans shall be responsible for all Liabilities to, or in respect of, PayPal Group Employees
and Former PayPal Group Employees relating to or arising in connection with any claims for medical, dental, hospitalization, vision, prescription drug or other health arrangement, long-term disability, life, accidental death and dismemberment and
business travel accident insurance, which claims are incurred at or after the Effective Time;
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(ii) With respect to claims for short-term disability (a) the PayPal Group
shall be responsible for (i) claims incurred in respect of PayPal Group Employees and Former PayPal Group Employees, occurring at or after the Effective Time and (ii) amounts owed with respect to the period commencing on the Effective Time
with respect to a claim incurred prior to the Effective Time (for the avoidance of doubt, if a PayPal Group Employee is on short-term disability on the Effective Time for a claim incurred prior to the Effective Time, the PayPal Group shall be
responsible for short-term disability payments with respect to the period commencing at the Effective Time and if such claim as incurred prior to the Effective Time becomes a long-term disability claim, such claim shall be subject to the provision
of subsection (i) hereof);
(iii) The PayPal Group shall assume Liability relating to, arising out of or resulting
from all other welfare coverage or claims incurred by or on behalf of any PayPal Group Employee or Former PayPal Group Employee under any eBay Welfare Plan or PayPal Welfare Plan before, at or after the Effective Time;
(iv) For these purposes, a claim or Liability is deemed to be incurred: (a) with respect to medical, dental, vision and/or
prescription drug benefits, upon the rendering of health services giving rise to such claim or Liability; (b) with respect to life insurance, accidental death and dismemberment and business travel accident insurance, upon the occurrence of the
event giving rise to such claim or Liability; and (c) with respect to disability benefits, upon the date of an Employees disability, as determined by the disability benefit insurance carrier or claim administrator, giving rise to such
claim or Liability;
(v) The eBay Group and the eBay Welfare Plans shall remain liable for any Liabilities relating to
audit or compliance of the eBay Welfare Plans; and
(vi) At and after the Effective Time, no eBay Welfare Plan shall
provide coverage to any PayPal Group Employee or Former PayPal Group Employee.
(f) Establishment of High Deductible Health
Plan. Effective as of the Effective Time, PayPal shall or cause a member of the PayPal Group to establish a high deductible health plan option with related health savings account and limited purpose health care spending account benefits.
Section 7.02. COBRA. The eBay Group shall be responsible for complying with, and providing coverage pursuant to, the
health care continuation requirements of COBRA, and the corresponding provisions of the eBay Welfare Plans with respect to any Employees and any Former Employees (and their covered dependents) who incur a qualifying event or loss of coverage (within
the meaning of COBRA) before the Effective Time. Effective as of the Effective Time, the PayPal Group shall be responsibility for complying with, and providing coverage pursuant to, the health care continuation requirements of COBRA, and the
corresponding provisions of the PayPal Welfare Plans with respect to any PayPal Group Employees or Former PayPal Group Employees (and their covered dependents) who incur a qualifying event or loss of coverage (within the meaning of COBRA) under the
PayPal Welfare Plans at or after the Effective Time. The Parties agree that the consummation of the transactions contemplated by the Separation and Distribution Agreement shall not constitute a COBRA qualifying event for any purpose of COBRA for
purposes of applying the principals set forth in this Section 7.02.
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Section 7.03. Paid Time Off, Holidays and Leaves of Absence. Effective as of the
Effective Time, the PayPal Group shall assume all Liabilities of the eBay Group with respect to paid time off, holiday, annual leave or other leave of absence, and required payments related thereto regardless of whether such liabilities originated
prior to the Effective Time, for each PayPal Group Employee or Former PayPal Group Employee unless otherwise required by applicable Law. The eBay Group shall retain all Liabilities with respect to paid time off, holiday, annual leave or other leave
of absence (including sabbatical leave), and required payments related thereto, for each eBay Group Employee and Former eBay Group Employee.
Section 7.04. Severance and Unemployment Compensation. Effective as of the Effective Time, the PayPal Group shall assume any and
all Liabilities to, or relating to, PayPal Group Employees and Former PayPal Group Employees in respect of severance and unemployment compensation, regardless of whether the event giving rise to the Liability occurred before, at or after the
Effective Time. The eBay Group shall be responsible for any and all Liabilities to, or relating to, eBay Group Employees and Former eBay Group Employees in respect of severance and unemployment compensation, regardless of whether the event giving
rise to the Liability occurred before, at or after the Effective Time.
Section 7.05. Sabbatical Plans and Sabbatical Trusts.
Effective as of the Effective Time, the applicable determining body, person or group of persons of the PayPal Group shall establish the PayPal Sabbatical Plans, which through December 31, 2015 shall have substantially the same terms as of
immediately prior to the Effective Time as the corresponding eBay Sabbatical Plans. Notwithstanding the foregoing, the applicable determining body, person or group of persons of the PayPal Group may make such changes, modifications or amendments to
the PayPal Sabbatical Plans as may be required by applicable Law or as are necessary and appropriate to reflect the Separation. PayPal shall adopt the PayPal Sabbatical Trusts. From and after the Effective Time, the PayPal Group and the PayPal
Sabbatical Plans and PayPal Sabbatical Trusts shall be responsible for and assume all Liabilities relating to PayPal Group Employees and Former PayPal Group Employees that would have been satisfied by the eBay Group and the eBay Sabbatical Trusts
had the Distribution not occurred, and neither any member of the eBay Group nor the eBay Sabbatical Plans or eBay Sabbatical Trusts shall have any Liabilities with respect thereto. In connection with the establishment by the PayPal Group of the
PayPal Sabbatical Plans, as of the Effective Time, the applicable determining body, person or group of persons of the eBay Group shall, or shall cause the eBay Sabbatical Trusts to, transfer Assets (whether in cash or in kind as determined by eBay)
to the PayPal Sabbatical Trusts in an amount equal to the product of (i) the fair market value of the Assets of the eBay Sabbatical Trusts immediately prior to the Effective Time (or such other date or time as may be agreed by the Parties) and
(ii) the percentage of Liabilities to be assumed by the PayPal Group under the eBay Sabbatical Plans as of April 1, 2015 (or such other date or time as may be agreed by the Parties) out of the total Liabilities of the eBay Sabbatical Plans
as of April 1, 2015 (or such other date or time as may be agreed by the Parties) (for the avoidance of doubt and as an example, if PayPal Groups portion of the liability of the eBay Sabbatical Plans is 41.24%, the PayPal Sabbatical Trusts
will receive 41.24% of the Assets of the eBay Sabbatical Trusts, subject to any adjustments described below). For purposes of the preceding sentence, Liabilities under the eBay Sabbatical Plans shall be measured as of immediately prior to
April 1, 2015 (or such other date or time as may be agreed by the Parties) on a target funding basis without regard to interest discounting and otherwise based on the assumptions set forth in the December 31, 2014 actuarial valuation for
the eBay Sabbatical Plan
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prepared by Buck Consultants, LLC. The amount of assets to be transferred shall be adjusted for earnings and distributions, if any, through the actual date of transfer.
Section 7.06. Workers Compensation. With respect to claims for workers compensation in the United States,
(a) the PayPal Group shall be responsible for claims in respect of PayPal Group Employees and Former PayPal Group Employees, occurring at or after the Effective Time, (b) the eBay Group shall be responsible for all claims in respect of
eBay Group Employees and Former eBay Group Employees, whether occurring at or after the Effective Time and (c) the eBay Group should be responsible for all claims in respect of PayPal Group Employees and Former PayPal Group Employees occurring
before the Effective Time. The treatment of workers compensation claims by PayPal with respect to eBay insurance policies shall be governed by Section 5.1 of the Separation and Distribution Agreement; provided, that for purposes of claims
referenced in this Section 7.06, a claim shall be deemed incurred when the injury giving rise to any claim made under the applicable workers compensation policy occurs.
Section 7.07. Insurance Contracts. To the extent that any eBay Welfare Plan is funded through the purchase of an insurance
contract or is subject to any stop loss contract, the Parties will cooperate and use their commercially reasonable efforts to replicate such insurance contracts for PayPal (except to the extent that changes are required under applicable state
insurance Laws or filings by the respective insurers) and to maintain any pricing discounts or other preferential terms for both eBay and PayPal for a reasonable term. Neither Party shall be liable for failure to obtain such insurance contracts,
pricing discounts, or other preferential terms for the other Party. Each Party shall be responsible for any additional premiums, charges, or administrative fees that such Party may incur pursuant to this Section 7.07.
Section 7.08. Third-Party Vendors. Except as provided below, to the extent that any eBay Welfare Plan is administered by a
third-party vendor, the Parties will cooperate and use their commercially reasonable efforts to replicate any contract with such third-party vendor for PayPal and to maintain any pricing discounts or other preferential terms for both eBay and PayPal
for a reasonable term. Neither Party shall be liable for failure to obtain such pricing discounts or other preferential terms for the other Party. Each Party shall be responsible for any additional premiums, charges, or administrative fees that such
Party may incur pursuant to this Section 7.08.
Section 7.09. Fringe Benefits. Effective as of the Effective Time,
PayPal shall or shall cause the applicable member of the PayPal Group to adopt the PayPal Fringe Benefit Plans, which through December 31, 2015 shall have terms that are substantially similar in the aggregate as of immediately prior to the
Effective Time as those of the eBay Fringe Benefit Plans. Notwithstanding the foregoing, PayPal may make such changes, modifications or amendments to the PayPal Fringe Benefit Plans as may be required by applicable Law or as are necessary and
appropriate to reflect the Separation or which result from vendor limitations. As of the Effective Time, PayPal shall, and shall cause the PayPal Fringe Benefit Plans to, assume all Liabilities under the eBay Fringe Benefit Plans for the benefits of
PayPal Group Employees and Former PayPal Group Employees regardless of whether the event giving rise to the Liability occurred before, at or after the Effective Time, and the eBay Fringe Benefit Plans shall be relieved of all Liabilities for those
benefits. eBay shall retain all Liabilities under the eBay Fringe Benefit Plans for the benefits for eBay Group Employees and Former eBay Group Employees and after the Effective Time,
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PayPal Group Employees and Former PayPal Group Employees shall cease to be participants in the eBay Fringe Benefit Plans.
ARTICLE VIII
NON-U.S. EMPLOYEES
PayPal Group Employees and Former PayPal Group Employees who are residents outside of the United States or otherwise are subject to
non-U.S. Law and their related benefits and Liabilities shall be treated in the same manner as the PayPal Group Employees and Former PayPal Group Employees, respectively, who are residents of the United States and are not subject to non-U.S. Law.
Notwithstanding anything in this Agreement to the contrary, all actions taken with respect to non-U.S. Employees or U.S. Employees working in non-U.S. jurisdictions, including any action under a Benefit Plan, shall be subject to and accomplished in
accordance with applicable Law in the custom of the applicable jurisdictions and PayPal may make such changes, modifications or amendments to the PayPal Benefit Plans as may be required by applicable Law, vendor limitations or as are necessary to
reflect the Separation.
ARTICLE IX
MISCELLANEOUS
Section 9.01.
Employee Records.
(a) Sharing of Information. Subject to and in compliance with any limitations imposed by applicable Law,
eBay and PayPal (acting directly or through members of the eBay Group or the PayPal Group, respectively) shall provide to the other and their respective authorized agents and vendors all information necessary (including information for purposes of
determining benefit eligibility, participation, vesting and calculation of benefits) on a timely basis under the circumstances for the parties to perform their respective duties under this Agreement. To the extent that such information is maintained
by a third party vendor, each party shall use its commercially reasonable best efforts to require the third party vendor to provide the necessary information and assist in resolving discrepancies or obtaining missing data.
(b) Transfer of Personnel Records and Authorization. Subject to and in compliance with any limitation imposed by applicable Law and to
the extent that it has not done so before the Effective Time, eBay shall transfer to PayPal any and all employment records (including any Form I-9, Form W-2 or other IRS and relevant tax forms applicable in any non-U.S. jurisdiction) with respect to
PayPal Group Employees and Former PayPal Group Employees and other records reasonably required by PayPal to enable PayPal properly to carry out its obligations under this Agreement. Subject to and in compliance with any limitation imposed by
applicable Law and to the extent that it has not done so before the Effective Time, PayPal shall transfer to eBay any and all employment records (including any Form I-9, Form W-2 or other IRS and relevant Tax forms applicable in any non-U.S.
jurisdiction) with respect to eBay Group Employees and Former eBay Group Employees and other records reasonably required by eBay to enable eBay properly to carry out its obligations under this Agreement. The transfer of records generally shall occur
as soon as administratively practicable at or after the Effective Time. Each Party will permit the other Party reasonable access to Employee records, to the extent reasonably necessary for such accessing Party to carry out its obligations hereunder.
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(c) Access to Records. To the extent not inconsistent with this Agreement, the Separation
and Distribution Agreement or any applicable privacy protection Laws or regulations, reasonable access to Employee-related and benefit plan-related records after the Effective Time will be provided to members of the eBay Group and members of the
PayPal Group pursuant to the terms and conditions of Article VI of the Separation and Distribution Agreement.
(d) Maintenance of
Records. With respect to retaining, destroying, transferring, sharing, copying and permitting access to all Employee-related information, eBay and PayPal shall comply with all applicable Laws, regulations and internal policies, and shall
indemnify and hold harmless each other from and against any and all Liability, claims, actions, and damages that arise from a failure (by the indemnifying Party or its Subsidiaries or their respective agents) to so comply with all applicable Laws,
regulations and internal policies applicable to such information.
(e) Cooperation. Each Party shall use commercially reasonable
efforts to cooperate and work together to unify, consolidate and share (to the extent permissible under applicable privacy/data protection laws) all relevant documents, resolutions, government filings, data, payroll, employment and benefit plan
information on regular timetables and cooperate as needed with respect to (i) any claims or reasonable inquiry under or audit of or litigation with respect to any employee benefit plan, policy or arrangement contemplated by this Agreement,
(ii) efforts to seek a determination letter, private letter ruling or advisory opinion from the IRS or U.S. Department of Labor, or other comparable non-U.S. letter, ruling or opinion from any other Governmental Authority as applicable, in any
such case on behalf of any employee benefit plan, policy or arrangement contemplated by this Agreement, (iii) any filings that are required to be made or supplemented to the IRS, U.S. Pension Benefit Guaranty Corporation, U.S. Department of
Labor or any other Governmental Authority and (iv) any audits by a Governmental Authority or corrective actions in either case, relating to any Benefit Plan, labor or payroll practices, including but not limited to with respect to any
Employment Taxes, and (v) reconciliation and administration of post-closing compensation, benefit, employment, and payroll issues; provided, however, that requests for cooperation must be reasonable and not interfere with daily
business operations.
(f) Confidentiality. Notwithstanding anything in this Agreement to the contrary, all confidential records and
data relating to Employees to be shared or transferred pursuant to this Agreement shall be subject to Section 6.9 of the Separation and Distribution Agreement and the requirements of applicable Law.
(g) Interaction with Other Agreements. To the extent not inconsistent with this Agreement or any applicable privacy protection
Laws or regulations, the foregoing rights and obligations of this Section 9.01 shall be in addition to any similar or related rights and obligations that may be provided or applicable to members of the eBay Group or members of the PayPal Group,
as applicable, under the Separation and Distribution Agreement, Tax Matters Agreement and/or Intellectual Property Matters Agreement, if and as applicable.
Section 9.02. Preservation of Rights to Amend. The rights of each member of the eBay Group and each member of the PayPal Group to
amend, waive, or terminate any plan, arrangement, agreement, program, or policy referred to herein shall not be limited in any way by this Agreement.
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Section 9.03. Fiduciary Matters. eBay and PayPal each acknowledges that actions
required to be taken pursuant to this Agreement may be subject to fiduciary duties or standards of conduct under ERISA or other applicable Law, and no Party shall be deemed to be in violation of this Agreement if it fails to comply with any
provisions hereof based upon its good-faith determination (which determination may include, but shall not be required to be, based on advice from counsel experienced in such matters) that to do so would violate such a fiduciary duty or standard.
Each Party shall be responsible for taking such actions as are deemed necessary and appropriate to comply with its own fiduciary responsibilities and shall fully release and indemnify the other Party for any Liabilities caused by the failure to
satisfy any such responsibility.
Section 9.04. Further Assurances. Each Party hereto shall take, or cause to be taken, any
and all reasonable actions, including the execution, acknowledgment, filing and delivery of any and all documents and instruments that any other Party hereto may reasonably request in order to effect the intent and purpose of this Agreement and the
transactions contemplated hereby.
Section 9.05. Counterparts; Entire Agreement; Corporate Power.
(a) This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.
(b) This Agreement, the
Separation and Distribution Agreement and the Ancillary Agreements and the Exhibits, Schedules and appendices hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous
agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties other than those set forth or referred to herein or
therein. eBay represents on behalf of itself and, to the extent applicable, each other member of the eBay Group, and PayPal represents on behalf of itself and, to the extent applicable, each other member of the PayPal Group, as follows:
(i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action
necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and
(ii) this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable
in accordance with the terms hereof.
(c) Each Party acknowledges that it and each other Party is executing this Agreement by facsimile,
stamp or mechanical signature and that delivery of an executed counterpart of a signature page to this Agreement (whether executed by manual, stamp or mechanical signature) by facsimile or by email in portable document format (PDF) shall be
effective as delivery of such executed counterpart of this Agreement. Each Party expressly adopts and confirms each such facsimile, stamp or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by
email in portable document format (PDF)) made in its respective name as if it were a manual signature delivered in person, agrees that it will not
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assert that any such signature or delivery is not adequate to bind such Party to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request
of the other Party at any time, it will as promptly as reasonably practicable cause this Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier.
Section 9.06. Governing Law. This Agreement (and any claims or disputes arising out of or related hereto or to the transactions
contemplated hereby or to the inducement of any Party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in
accordance with the laws of the State of Delaware, irrespective of the choice of Laws principles of the State of Delaware, including all matters of validity, construction, effect, enforceability, performance and remedies.
Section 9.07. Assignability. This Agreement will be binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns; provided, that neither Party may assign its rights or delegate its obligations under this Agreement without the express prior written consent of the other Party. Notwithstanding the foregoing, no such consent will
be required for (i) the assignment of a Partys rights and obligations under this Agreement in whole or in part to any of its Subsidiaries; provided, that no such assignment shall release such Party from any liability or obligation under
this Agreement; or (ii) the assignment of a Partys rights and obligations under this in whole (i.e., the assignment of a partys rights and obligations under this Agreement, the Separation and Distribution Agreement and all
Ancillary Agreements all at the same time) in connection with a change of control of a Party so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an
agreement in form and substance reasonably satisfactory to the other Party. Nothing herein is intended to, or will be construed to, prohibit either Party or any member of its Group from being party to or undertaking a change of control.
Section 9.08. Third-Party Beneficiaries. The provisions of this Agreement are solely for the benefit of the Parties and are not
intended to confer upon any other Person except the Parties any rights or remedies hereunder. There are no third-party beneficiaries of this Agreement and this Agreement shall not provide any other third person with any remedy, claim, Liability,
reimbursement, claim of action or other right in excess of those existing without reference to this Agreement. Nothing in this Agreement is intended to amend any employee benefit plan or affect the applicable plan sponsors right to amend or
terminate any employee benefit plan pursuant to the terms of such plan. The provisions of this Agreement are solely for the benefit of the Parties, and no current or former Employee, officer, director, independent contractor, consultant, alternative
workforce (AWF) individual or any other individual associated therewith shall be regarded for any purpose as a third-party beneficiary of this Agreement.
Section 9.09. Notices. All notices, requests, claims, demands or other communications under this Agreement shall be in writing,
together with a copy by electronic mail (which shall not constitute notice) and shall be given or made (and shall be deemed to have been duly given or made upon acknowledgement of receipt) by delivery in person, by overnight courier service, by
facsimile, or by registered or certified mail (postage prepaid, return receipt requested) to the
-42-
respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 9.09):
If to eBay, to:
eBay Inc.
2065 Hamilton Avenue
San Jose,
California 95125
Attention: General Counsel
Email: mhuber@ebay.com
If to
PayPal, to:
PayPal Holdings, Inc.
2211 North First Street
San
Jose, California 95131
Attention: General Counsel
Email: apentland@paypal.com
A
Party may, by notice to the other Party, change the address to which such notices are to be given.
Section 9.10.
Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated
thereby. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.
Section 9.11. Force Majeure. No Party shall be deemed in default of this Agreement or, unless otherwise expressly provided
therein, any Ancillary Agreement for any delay or failure to fulfill any obligation (other than a payment obligation) hereunder or thereunder so long as and to the extent to which any delay or failure in the fulfillment of such obligation is
prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. In the event of any such excused delay, the time for performance of such obligation (other than a payment obligation) shall be extended for a period equal
to the time lost by reason of the delay. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide written notice to the other Party of the nature and extent of
any such Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement and the Ancillary Agreements, as applicable, as soon as reasonably practicable.
Section 9.12. Headings. The article, section and paragraph headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
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Section 9.13. Survival of Covenants. Except as expressly set forth in this Agreement,
the covenants, representations and warranties and other agreements contained in this Agreement, and Liability for the breach of any obligations contained herein, shall survive the Separation and the Distribution and shall remain in full force and
effect in accordance with its terms.
Section 9.14. Waivers of Default. Waiver by a Party of any default by the other Party of
any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the other Party. No failure or delay by Party in exercising any right, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.
Section 9.15. Dispute Resolution. The dispute resolution procedures set forth in Article VII of the Separation and
Distribution Agreement shall apply to any dispute, controversy or claim arising out of or relating to this Agreement.
Section 9.16.
Specific Performance. Subject to Article VII of the Separation and Distribution Agreement, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party or Parties
who are, or are to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief (on an interim or permanent basis) in respect of its rights or their rights under this Agreement, in addition to any and
all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that the remedies at Law for any breach or threatened breach, including monetary damages, may be inadequate compensation for
any loss and that any defense in any Action for specific performance that a remedy at Law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are hereby waived by each of the Parties.
Section 9.17. Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by a Party,
unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to enforce such waiver, amendment, supplement or modification.
Section 9.18. Interpretation. In this Agreement, (a) words in the singular shall be deemed to include the plural and vice
versa and words of one gender shall be deemed to include the other genders as the context requires; (b) the terms hereof, herein, and herewith and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole (including all of the Schedules, Exhibits and Appendices hereto and thereto) and not to any particular provision of this Agreement; (c) Article, Section, Schedule, Exhibit, and Appendix references
are to the Articles, Sections, Schedules, Exhibits, and Appendices to this Agreement unless otherwise specified; (d) unless otherwise stated, all references to any agreement shall be deemed to include the exhibits, schedules and annexes to such
agreement; (e) the word including and words of similar import when used in this Agreement shall mean including, without limitation, unless otherwise specified; (f) the word or shall not be exclusive;
(g) unless otherwise specified in a particular case, the word days refers to calendar days; (h) references to business day shall mean any day other than a Saturday, a Sunday or a day on which banking institutions
are generally authorized or required by law to close in the United States or San Jose,
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California; (i) references herein to this Agreement or any other agreement contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the date on which it
is executed and as it may be amended, modified or supplemented thereafter, unless otherwise specified; and (j) unless expressly stated to the contrary in this Agreement, all references to the date hereof, the date of this
Agreement, hereby and hereupon and words of similar import shall all be references to July 17, 2015.
Section 9.19. Limitations of Liability. Notwithstanding anything in this Agreement to the contrary, neither PayPal or any member
of the PayPal Group, on the one hand, nor eBay or any member of the eBay Group, on the other hand, shall be liable under this Agreement to the other for any indirect, punitive, exemplary, remote, speculative or similar damages in excess of
compensatory damages of the other arising in connection with the transactions contemplated hereby (other than any such Liability with respect to a Third-Party Claim).
Section 9.20. Mutual Drafting. This Agreement shall be deemed to be the joint work product of both Parties and any rule of
construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable to this Agreement.
[Remainder of page intentionally left blank]
-45-
IN WITNESS WHEREOF, the Parties have caused this Employee Matters Agreement to be executed by
their duly authorized representatives.
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EBAY INC. |
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By: |
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/s/ John J. Donahoe |
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Name: John J. Donahoe |
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Title: President and Chief Executive Officer |
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PAYPAL HOLDINGS, INC. |
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By: |
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/s/ Daniel H. Schulman |
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Name: Daniel H. Schulman |
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Title: President and CEO-Designee |
[Signature Page to Employee Matters Agreement]
Schedule 1.01(a)
eBay Fringe Benefit Plans
Adoption
Assistance
Family Care Resources (Child/Eldercare, etc.)
Pre-paid Legal Benefits
Survivor Counseling
Tuition Assistance
Schedule 1.01(b)
eBay Welfare Plans
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Plan / Program / Policy |
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Vendor |
Medical: PPO 300 |
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Blue Shield CA |
Medical: PPO 750 |
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Blue Shield CA |
Medical: EPO |
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Blue Shield CA |
Medical: CDHP |
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Blue Shield CA |
Medical: HMO |
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Kaiser CA |
Medical: HMO |
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Kaiser CO |
Medical: HMO |
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Select Health |
Medical: HMO |
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HealthNet |
Health Savings Account |
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Health Equity |
Pharmacy |
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CVS/Caremark |
Stop Loss |
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Voya |
Dental |
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Delta |
Vision |
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VSP |
EAP National Plan (except Nebraska) |
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Magellan |
EAP Nebraska Plan |
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Arbor |
Expert Medical Opinion |
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Advance Medical |
Health Care FSA |
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Your Spending Account |
Dependent Care FSA |
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Your Spending Account |
Basic Life |
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MetLife |
Supp Life Employee |
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MetLife |
Supp Life Spouse |
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MetLife |
Supp Life Child |
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MetLife |
Basic AD&D |
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AC Newman |
Supp AD&D |
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AC Newman |
Healthy San Francisco |
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Healthy San Francisco |
STD |
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N/A |
SDI (NY, HI) |
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MetLife |
VDI eBay |
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State of CA |
VDI PayPal |
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State of CA |
LTD basic |
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MetLife |
LTD exec |
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TBD (MetLife) |
Sabbatical |
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N/A |
Leave Administration |
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Sedgwick |
PTO eBay Inc. |
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N/A |
BTA |
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ACE American |
EAP Non-US |
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Optum |
International Medical, Dental, Vision |
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CIGNA |
Schedule 2.03(a)
eBay Benefit Plans to Be Replicated by PayPal (subject to the terms of the Agreement)
Equity, Incentive and Executive Compensation Plans
eBay Equity Plan (including any sub-plans maintained in any non-U.S. jurisdiction)
eBay Incentive Plan
eBay Employee Stock Purchase Plan (including
any sub-plans maintained in any non-U.S. jurisdiction)
Retirement and Deferred Compensation Plans
eBay Inc. 401(k) Savings Plan
eBay Inc. Deferred Compensation
Plan
Welfare Plans
Schedule 1.01(b)
is incorporated herein by reference
Fringe Benefit Plans
Schedule 1.01(a) is incorporated herein by reference
Schedule 2.03(b)
eBay Benefit Plans Not Required to Be Replicated by PayPal
Transition Success and Retention Program
Medicaid HMO HMSA
PTO eBay Enterprise
Exhibit 10.5
INTELLECTUAL PROPERTY MATTERS AGREEMENT
BY AND AMONG
EBAY INC.,
EBAY INTERNATIONAL AG,
PAYPAL
HOLDINGS, INC.,
PAYPAL, INC.,
PAYPAL PTE. LTD.
AND
PAYPAL PAYMENTS PTE. HOLDINGS S.C.S.
DATED AS OF JULY 17, 2015
TABLE OF CONTENTS
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Page |
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1. OWNERSHIP OF INTELLECTUAL PROPERTY |
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1 |
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1.1 |
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eBay Ownership |
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1 |
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1.2 |
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PayPal Ownership |
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1 |
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1.3 |
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Transfers |
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2 |
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2. COVENANTS NOT TO SUE |
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2 |
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2.1 |
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By eBay |
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2 |
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2.2 |
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By PPI |
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2 |
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2.3 |
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Termination |
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3 |
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3. LICENSE GRANTS |
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4 |
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3.1 |
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Licensed PayPal Software |
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4 |
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3.2 |
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Licensed eBay Software |
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6 |
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3.3 |
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Sublicensing Conditions |
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7 |
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3.4 |
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Reservation of Rights |
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8 |
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3.5 |
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Consideration |
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8 |
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4. COOPERATION |
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8 |
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5. CONFIDENTIAL INFORMATION |
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9 |
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5.1 |
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Confidentiality |
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9 |
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5.2 |
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No Release; Return or Destruction |
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9 |
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5.3 |
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Third-Party Information; Privacy or Data Protection Laws |
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9 |
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5.4 |
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Residual Information |
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10 |
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5.5 |
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Protective Arrangements |
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10 |
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6. TERM AND TERMINATION |
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10 |
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6.1 |
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Term |
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10 |
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6.2 |
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Termination |
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10 |
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6.3 |
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Survival |
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10 |
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7. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES |
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11 |
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8. LIMITATION OF LIABILITY |
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11 |
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9. MISCELLANEOUS |
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11 |
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9.1 |
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Assignability |
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11 |
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9.2 |
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Bankruptcy |
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11 |
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9.3 |
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Amendments |
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12 |
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9.4 |
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Severability |
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12 |
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9.5 |
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Governing Law |
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12 |
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9.6 |
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Dispute Resolution |
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12 |
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Page |
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9.7 |
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Waivers of Default |
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12 |
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9.8 |
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Counterparts; Entire Agreement |
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12 |
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9.9 |
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Interpretation |
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13 |
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9.10 |
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Notices |
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13 |
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9.11 |
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Third-Party Beneficiaries |
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13 |
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9.12 |
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Force Majeure |
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14 |
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9.13 |
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No Set-Off |
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14 |
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9.14 |
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Expenses |
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14 |
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9.15 |
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Headings |
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14 |
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9.16 |
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Survival of Covenants |
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14 |
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9.17 |
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Specific Performance |
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14 |
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9.18 |
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Performance |
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14 |
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9.19 |
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Mutual Drafting |
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15 |
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ii
INTELLECTUAL PROPERTY MATTERS AGREEMENT
This INTELLECTUAL PROPERTY MATTERS AGREEMENT (Agreement), dated as of July 17, 2015, is by and among eBay Inc., a Delaware
corporation (eBay), eBay International AG, a company organized under the laws of Switzerland (eBay AG), PayPal Holdings, Inc., a Delaware corporation (PayPal), PayPal, Inc., a Delaware
corporation (PPI), PayPal Pte. Ltd., a company organized under the laws of Singapore (3PL), and PayPal Payments Pte. Holdings S.C.S., a company organized under the laws of Luxembourg (PPLUX)
(collectively, the Parties and each, individually, a Party). Unless otherwise defined herein, all capitalized terms used in this Agreement will have the meanings set forth in Exhibit A. Any
capitalized term used and not otherwise defined in this Agreement will have the meaning ascribed to such term in the Separation and Distribution Agreement between eBay and PayPal, dated as of June 26, 2015 (the Separation and
Distribution Agreement).
RECITALS
WHEREAS, the board of directors of eBay (the eBay Board) has determined that it is in the best interests of eBay and its shareholders to
create a new publicly traded company that will operate the PayPal Business;
WHEREAS, in furtherance of the foregoing, the eBay Board has determined that
it is appropriate and desirable to separate the PayPal Business from the eBay Business (the Separation) and, following the Separation, make a distribution, on a pro rata basis, to holders of eBay Shares on the Record Date
of all the outstanding PayPal Shares owned by eBay (the Distribution);
WHEREAS, to effectuate the Separation and the Distribution,
eBay and PayPal have entered into the Separation and Distribution Agreement; and
WHEREAS, to facilitate and provide for an orderly transition in
connection with the Separation and the Distribution, the Parties desire to enter into this Agreement to (i) memorialize their mutual agreement as to each Partys ownership of Technology and Intellectual Property Rights as of the IPMA
Effective Time and (ii) set forth the terms and conditions pursuant to which each Party will, effective as of the IPMA Effective Time, grant certain rights to the other Parties.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties, intending to be legally bound, hereby agree as follows:
1. |
OWNERSHIP OF INTELLECTUAL PROPERTY |
1.1 |
eBay Ownership. The Parties acknowledge and agree that: (i) as between the Parties and their Groups, eBay and the eBay Group own all right, title and interest in and to the eBay IP; and (ii) such
ownership includes the exclusive right of eBay and the eBay Group to conduct clearance, prosecute, maintain, protect, enforce and defend eBays and the eBay Groups interest in the eBay IP, including to file any Intellectual Property
Rights applications anywhere in the world, to abandon prosecution of such applications, and to discontinue payment of any maintenance or renewal fees with respect to any patents. |
1.2 |
PayPal Ownership. The Parties acknowledge and agree that: (i) as between the Parties and their Groups, PayPal and the PayPal Group own all right, title and interest in and to the PayPal IP; and
(ii) such ownership includes the exclusive right of PayPal and the PayPal Group to conduct clearance, prosecute, maintain, protect, enforce and defend PayPals and the PayPal Groups interest in the PayPal IP, including to file any
Intellectual Property Rights applications anywhere in the world, to abandon prosecution of such applications, and to discontinue payment of any maintenance or renewal fees with respect to any patents. |
1
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a. |
By eBay. If eBay or any eBay Group member assigns, sells, transfers or grants enforcement rights to any Person (such Person, the eBay IP Transferee) with respect to any Intellectual Property
Rights for which eBay or any eBay Group Member has granted a license or covenant not to sue under this Agreement (an eBay IP Transfer), eBay covenants that it, or the applicable eBay Group member, will cause the eBay IP Transferee
to execute a written agreement in which the eBay IP Transferee agrees that (i) the eBay IP Transferee will take title or rights to such Intellectual Property Rights subject to this Agreement (and the licenses and covenants not to sue granted by
eBay and the eBay Group members hereunder) and (ii) PayPal and the PayPal Group members are express third-party beneficiaries of such agreement. Any purported eBay IP Transfer in violation of this Section 1.3a is null and void. For the
avoidance of doubt, the foregoing obligation does not apply with respect to any Intellectual Property Rights that eBay or any eBay Group member may acquire after the Effective Time (by way of merger, acquisition, stock purchase, asset purchase or
otherwise) other than those Intellectual Property Rights for which eBay expressly grants a covenant not to sue under Section 2.1. |
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b. |
By PayPal. If PayPal or any PayPal Group member assigns, sells, transfers or grants enforcement rights to any Person (such Person, the PayPal IP Transferee) with respect to any Intellectual
Property Rights for which PayPal or any PayPal Group member has granted a license or covenant not to sue under this Agreement (an PayPal IP Transfer), PayPal covenants that it, or the applicable PayPal Group member, will cause the
PayPal IP Transferee to execute a written agreement in which the PayPal IP Transferee agrees that (i) the PayPal IP Transferee will take title or rights to such Intellectual Property Rights subject to this Agreement (and the licenses and
covenants not to sue granted by PPI and the PayPal Group members hereunder) and (ii) eBay and the eBay Group members are express third-party beneficiaries of such agreement. Any purported PayPal IP Transfer in violation of this
Section 1.3b is null and void. For the avoidance of doubt, the foregoing obligation does not apply with respect to any Intellectual Property Rights that PayPal or any PayPal Group member may acquire after the Effective Time (by way of merger,
acquisition, stock purchase, asset purchase or otherwise) other than those Intellectual Property Rights for which PPI expressly grants a covenant not to sue under Section 2.2. |
2.1 |
By eBay. eBay hereby covenants and agrees that, for the duration of the eBay CNS Period, neither it nor any member of the eBay Group will bring suit or otherwise assert any claim against any PayPal Covenantee
before any court, arbitrator, mediator, tribunal or administrative agency anywhere in the world alleging infringement of any eBay Patents based on any PayPal Covenantee making, using, importing, offering for sale or selling any PayPal Product, in
each case at any time prior to the expiration or termination of the eBay CNS Period. |
2.2 |
By PPI. PPI hereby covenants and agrees that, for the duration of the PayPal CNS Period, neither it nor any member of the PayPal Group will bring suit or otherwise assert any claim against any eBay Covenantee
before any court, arbitrator, mediator, tribunal or administrative agency anywhere in the world alleging infringement of any PayPal Patents based on any eBay Covenantee making, using, importing, offering for sale or selling any eBay Product, in each
case at any time prior to the expiration or termination of the PayPal CNS Period. |
2
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(i) |
Specified eBay Patents. With respect to the Specified eBay Patents, eBay may terminate the covenant set forth in Section 2.1 before the expiration of the eBay CNS Period by delivering written notice thereof
to PayPal upon PayPals breach of any material term of the Operating Agreement that remains uncured for a period of 120 days after eBays delivery to PayPal of written notice thereof; provided, however, that: (A) eBay may not do so
until the Parties have completed the dispute resolution procedures set forth in Section 9.6; and (B) any such termination will also automatically and immediately result in termination of the covenant set forth in Section 2.2 before
the expiration of the PayPal CNS Period. In addition, upon the consummation of a PayPal Specified Change-of-Control, the covenant set forth in Section 2.1 will, with respect to the Specified eBay Patents, automatically become limited to and
thereafter apply solely with respect to the particular PayPal Products (including the particular sub-components and sub-assemblies within such PayPal Products) offered by the PayPal Covenantees at the time of such PayPal Specified Change-of-Control
(and not, for the avoidance of doubt, any other products or services, including those of any other Person). |
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(ii) |
Other eBay Patents. Other than with respect to the Specified eBay Patents, eBay may terminate the covenant set forth in Section 2.1 before the expiration of the eBay CNS Period by delivering written notice
thereof to PayPal upon the occurrence of either of the following events: (A) PayPals breach of any material term of the Operating Agreement that remains uncured for a period of 120 days after eBays delivery to PayPal of written
notice thereof (provided, however, that eBay may not do so until the Parties have completed the dispute resolution procedures set forth in Section 9.6); or (B) upon the consummation of a PayPal Specified Change-of-Control; provided,
however, that any termination pursuant to this Section 2.3a(ii) will, other than with respect to the Specified PayPal Patents, also automatically and immediately result in termination of the covenant set forth in Section 2.2 before the
expiration of the PayPal CNS Period. |
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(i) |
Specified PayPal Patents. With respect to the Specified PayPal Patents, PPI may terminate the covenant set forth in Section 2.2 before the expiration of the PayPal CNS Period by delivering written notice
thereof to eBay upon eBays breach of any material term of the Operating Agreement that remains uncured for a period of 120 days after PPIs delivery to eBay of written notice thereof; provided, however, that: (A) PPI may not do so
until the Parties have completed the dispute resolution procedures set forth in Section 9.6; and (B) any such termination will also automatically and immediately result in termination of the covenant set forth in Section 2.1 before
the expiration of the eBay CNS Period. In addition, upon the consummation of an eBay Specified Change-of-Control, the covenant set forth in Section 2.2 will, with respect to the Specified PayPal Patents, automatically become limited to and
thereafter apply solely with respect to the particular eBay Products (including the particular sub-components and sub-assemblies within such eBay Products) offered by the eBay Covenantees at the time of such eBay Specified Change-of-Control (and
not, for the avoidance of doubt, any other products or services, including those of any other Person). |
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(ii) |
Other PayPal Patents. Other than with respect to the Specified PayPal Patents, PPI may terminate the covenant set forth in Section 2.2 before the expiration of the PayPal CNS Period by delivering written
notice thereof to eBay upon the occurrence of either of the following events: (A) eBays breach of any material term of the Operating Agreement that remains uncured for a period of 120 days after PPIs delivery to eBay of written
notice thereof (provided, however, that eBay may not do so until the Parties have completed the dispute resolution procedures set forth in Section 9.6); or (B) upon the consummation of an eBay Specified Change-of-Control; provided,
however, that any termination pursuant to this Section 2.3b(ii) will, other than with respect to the Specified eBay Patents, also automatically and immediately result in termination of the covenant set forth in Section 2.1 before the
expiration of the eBay CNS Period. |
3.1 |
Licensed PayPal Software |
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a. |
Subject to the terms and conditions of this Agreement, PPI hereby grants, in all those territories where it is authorized to grant such license, 3PL hereby grants, in all those territories where it is authorized to
grant such license, and PPLUX hereby grants, in all those territories where it is authorized to grant such license, to eBay and each eBay Group member, as appropriate (i.e., in the territories in which the applicable eBay or eBay Group member
operates), an irrevocable, non-exclusive, non-transferable (subject to Section 9.1), fully paid-up, royalty-free right and license, with no right to sublicense (except as expressly provided in Section 3.1b), under any and all copyrights
and trade secrets in the Licensed PayPal Software owned by PPI or any PayPal Group member as of the Effective Time, to use, reproduce and prepare derivative works of the Licensed PayPal Software, in each case solely for eBays and any eBay
Group members internal business operations. |
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b. |
Subject to the terms and conditions of this Agreement, eBay and each eBay Group member may grant sublicenses under the license set forth in Section 3.1a of the same or lesser scope to their Affiliates, suppliers,
contractors and consultants authorizing such sublicensees to exercise any or all of such rights solely on behalf of, for the benefit of and at the direction of eBay and each eBay Group member (and not for the benefit of such suppliers, contractors
and consultants). |
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c. |
eBay acknowledges that the Source Code (including its structure and organization) for the Licensed PayPal Software constitutes valuable trade secrets of PayPal and the PayPal Group. Accordingly, eBay will not (and will
ensure that each eBay Group member does not): |
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(i) |
disclose or otherwise grant access to the Source Code for the Licensed PayPal Software to any Person other than to any employee of eBay or any eBay Group member, or to any Affiliate, supplier, contractor or consultant
to which eBay or any eBay Group member grants a sublicense under Section 3.1b, in each case on a need-to-know basis solely for purposes authorized under this Agreement; |
4
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(ii) |
disclose or otherwise grant access to the Source Code for the Licensed PayPal Software to any Person unless, prior to any such disclosure or access, such Person has entered into an enforceable written agreement
obligating such Person to (1) maintain the confidentiality of the Source Code (including its structure and organization) for the Licensed PayPal Software and (2) use the Source Code for the Licensed PayPal Software solely for purposes
authorized under this Agreement; |
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(iii) |
reproduce all or any portion of the Source Code for the Licensed PayPal Software, in any form or medium, except as necessary for exercising its rights under this Section 3.1, or for archival storage;
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(iv) |
allow hard copy printouts of any portion of the Source Code for the Licensed PayPal Software to exist except within secured locations; or |
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(v) |
allow soft copy versions of any portion of the Source Code for the Licensed PayPal Software to reside on computers or networks unless such computers or networks are password protected (with such passwords only being
made available to Persons who are authorized to access such Source Code pursuant to the terms hereof). |
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d. |
If, after obtaining approval to do so in accordance with at least as rigorous an internal legal and business approval process as eBay uses as of the Effective Time, eBay or any eBay Group member determines that it is
necessary or desirable to distribute any Licensed PayPal Software as open source software (as such term is commonly understood in the software industry), eBay may notify PPI thereof in writing and the Parties will discuss whether PPI, 3PL and PPLUX
are willing to amend the terms of this Agreement to allow eBay or any eBay Group member to do so; provided, in no event will PPI, 3PL or PPLUX have any obligation to accommodate any such request by eBay. |
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e. |
The license granted under Section 3.1a to each eBay Group member that is a Subsidiary of eBay will apply only while such Person is and remains a Subsidiary of eBay; provided, if eBay determines, in connection with
the sale or other divestiture of any Subsidiary of eBay, that it is necessary or desirable to grant such Subsidiary a sublicense under the license granted under Section 3.1a, eBay may notify PPI thereof in writing and the Parties will discuss
whether PPI, 3PL and PPLUX are willing to amend the terms of this Agreement to allow eBay to do so; provided, in no event will PPI, 3PL or PPLUX have any obligation to accommodate any such request by eBay. |
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f. |
PayPal acknowledges and agrees that, subject to PayPals and any PayPal Group members ownership of any Licensed PayPal Software upon which any such derivative work is based (in whole or in part), as between
the Parties, eBay will own all property rights, including Intellectual Property Rights, in and to any derivative work of any Licensed PayPal Software developed solely by eBay or any eBay Group member under the license set forth in Section 3.1a
(each, an eBay Derivative Work). If and to the extent that, as a matter of law in any jurisdiction, either: (i) PayPal or any PayPal Group member retains any right, title and interest in and to any eBay Derivative Work
(excluding, for the avoidance of doubt, any Licensed PayPal Software upon which any such eBay Derivative work is based (in whole or in part)), then PayPal and each PayPal Group member hereby assigns, conveys and transfers to eBay any such right,
title and interest; or (ii) PayPal or any PayPal Group member cannot assign any such right, title or interest, then such eBay Derivative Work will be deemed to be Licensed PayPal Software for purposes of the license set forth in
Section 3.1a. |
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3.2 |
Licensed eBay Software |
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a. |
Subject to the terms and conditions of this Agreement, eBay hereby grants, in all those territories where it is authorized to grant such license, and eBay AG hereby grants, in all those territories where it is
authorized to grant such license, to PayPal and each PayPal Group member, as appropriate (i.e., in the territories in which PayPal or the applicable PayPal Group member operates), an irrevocable, non-exclusive, non-transferable (subject to
Section 9.1), fully paid-up, royalty-free right and license, with no right to sublicense (except as expressly provided in Section 3.2b), under any and all copyrights and trade secrets in the Licensed eBay Software owned by eBay or any eBay
Group member as of the Effective Time, to use, reproduce and prepare derivative works of the Licensed eBay Software, in each case solely for PayPals and any PayPal Group members internal business operations. |
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b. |
Subject to the terms and conditions of this Agreement, PayPal and each PayPal Group member may grant sublicenses under the license set forth in Section 3.2a of the same or lesser scope to their Affiliates,
suppliers, contractors and consultants authorizing such sublicensees to exercise any or all of such rights solely on behalf of, for the benefit of and at the direction of PayPal and each PayPal Group member (and not for the benefit of such
suppliers, contractors and consultants). |
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c. |
PayPal acknowledges that the Source Code (including its structure and organization) for the Licensed eBay Software constitutes valuable trade secrets of eBay and the eBay Group. Accordingly, PayPal will not (and will
ensure that each PayPal Group member does not): |
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(i) |
disclose or otherwise grant access to the Source Code for the Licensed eBay Software to any Person other than to any employee of PayPal or any PayPal Group member, or to any Affiliate, supplier, contractor or consultant
to which PayPal or any PayPal Group member grants a sublicense under Section 3.2b, in each case on a need-to-know basis solely for purposes authorized under this Agreement; |
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(ii) |
disclose or otherwise grant access to the Source Code for the Licensed eBay Software to any Person unless, prior to any such disclosure or access, such Person has entered into an enforceable written agreement obligating
such Person to (1) maintain the confidentiality of the Source Code (including its structure and organization) for the Licensed eBay Software and (2) use the Source Code for the Licensed eBay Software solely for purposes authorized under
this Agreement; |
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(iii) |
reproduce all or any portion of the Source Code for the Licensed eBay Software, in any form or medium, except as necessary for exercising its rights under this Section 3.2, or for archival storage;
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(iv) |
allow hard copy printouts of any portion of the Source Code for the Licensed eBay Software to exist except within secured locations; or |
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(v) |
allow soft copy versions of any portion of the Source Code for the Licensed eBay Software to reside on computers or networks unless such computers or networks are password protected (with such passwords only being made
available to Persons who are authorized to access such Source Code pursuant to the terms hereof). |
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d. |
If, after obtaining approval to do so in accordance with at least as rigorous an internal legal and business approval process as eBay uses as of the Effective Time, PayPal or any PayPal Group member determines that it
is necessary or desirable to distribute any Licensed eBay Software as open source software (as such term is commonly understood in the software industry), PayPal may notify eBay thereof in writing and the Parties will discuss whether eBay and eBay
AG are willing to amend the terms of this Agreement to allow PayPal or any PayPal Group member to do so; provided, in no event will eBay or eBay AG have any obligation to accommodate any such request by PayPal. |
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e. |
The license granted under Section 3.2a to each PayPal Group member that is a Subsidiary of PayPal will apply only while such Person is and remains a Subsidiary of PayPal; provided, if PayPal determines, in
connection with the sale or other divestiture of any Subsidiary of PayPal, that it is necessary or desirable to grant such Subsidiary a sublicense under the license granted under Section 3.2a, PayPal may notify eBay thereof in writing and the
Parties will discuss whether eBay and eBay AG are willing to amend the terms of this Agreement to allow PayPal to do so; provided, in no event will eBay or eBay AG have any obligation to accommodate any such request by PayPal. |
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f. |
eBay acknowledges and agrees that, subject to eBays and any eBay Group members ownership of any Licensed eBay Software upon which any such derivative work is based (in whole or in part), as between the
Parties, PPI will own all property rights, including Intellectual Property Rights, in and to any derivative work of any Licensed eBay Software developed solely by PayPal or any PayPal Group member under the license set forth in Section 3.2a
(each, an PayPal Derivative Work). If and to the extent that, as a matter of law in any jurisdiction, either: (i) eBay or any eBay Group member retains any right, title and interest in and to any PayPal Derivative Work
(excluding, for the avoidance of doubt, any Licensed eBay Software upon which any such PayPal Derivative work is based (in whole or in part)), then eBay and each eBay Group member hereby assigns, conveys and transfers to PPI any such right, title
and interest; or (ii) eBay or any eBay Group member cannot assign any such right, title or interest, then such PayPal Derivative Work will be deemed to be Licensed eBay Software for purposes of the license set forth in Section 3.2a.
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3.3 |
Sublicensing Conditions. The right to grant any sublicense authorized to be granted hereunder is, in each case, subject to the following restrictions and conditions: |
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a. |
Each sublicense must be in writing and must include a provision that identifies PPI (in the case of any sublicense granted by eBay or any eBay Group member under Section 3.1) or eBay (in the case of any sublicense
granted by PayPal or any PayPal Group member under Section 3.2) as an intended third-party beneficiary thereof; |
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b. |
A copy of each sublicense must be delivered to PPI (in the case of any sublicense granted by eBay or any eBay Group member under Section 3.1) or eBay (in the case of any sublicense granted by PayPal or any PayPal
Group member under Section 3.2) within thirty (30) days after it is executed; |
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c. |
Neither Party nor any member of such Partys Group will grant any sublicense hereunder to any other Person that exceeds the scope of the licenses granted to such Party and such Partys Group hereunder. If such
a sublicense is granted, it will be null and void. |
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d. |
Each sublicense must be subject to the applicable terms and conditions of this Agreement, including (i) any and all provisions regarding warranty disclaimers and limitations of liability on the licensing
Partys behalf, (ii) any and all restrictions on the use or exploitation of the licensed Technology contained in this Agreement, (iii) any provisions regarding ownership and (iv) any provisions regarding protection of
confidential or proprietary information; |
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e. |
Each sublicense will terminate upon termination of this Agreement and must include a statement to that effect therein; and |
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f. |
Neither Party nor any member of such Partys Group may make any representations or warranties on behalf of the other Party or any member of the other Partys Group to any sublicensee. |
3.4 |
Reservation of Rights. All rights not expressly granted by a Party under this Agreement are reserved by such Party. Nothing in this Agreement will be deemed to grant, by implication, estoppel, or otherwise, a
license under a Partys Intellectual Property Rights that is not expressly set forth in this Agreement. For clarity, nothing contained in this Agreement obligates any Party to license to any other Party any Technology or Intellectual Property
Rights of any other Person (a) for which such Party does not have the rights to do so or (b) that, as a result of granting such license, would require the payment of fees or other consideration by such Party or its Affiliates to any other
Person. |
3.5 |
Consideration. To the extent any consideration is required with respect to the license set forth in Section 3.1a, the terms relating to the payment of such consideration will be set forth in a separate
written agreement to be mutually agreed by the relevant Parties. The Parties intend that the licenses set forth in Section 3.2a qualify as tax-free transfers of property pursuant to sections 351 and/or 368(a)(1)(D) and 355 of the U.S. Internal
Revenue Code of 1986, as amended. |
The Parties will each perform such acts, execute and deliver such
information, instruments and documents, and do all such other things as may be reasonably necessary to accomplish the transactions contemplated in this Agreement, including, without limitation, providing or executing any affidavits, providing any
testimony, and/or rendering any other assistance, as is necessary or useful for: (a) eBay or any eBay Group member to secure and perfect sole and exclusive ownership of, and obtain registrations in the name of solely eBay or any eBay Group
member, for the eBay IP and any part thereof; and (b) PayPal or any PayPal Group member to secure and perfect sole and exclusive ownership of, and obtain registrations in the name of solely PayPal or any PayPal Group member, for the PayPal IP
and any part thereof. Such acts may include: (i) execution of prosecution-related documents; (ii) assistance in the registration of Intellectual Property Rights (including providing prosecution files in the possession or under the or
control of such Party or members of its Group); and (iii) assistance in the enforcement of Intellectual Property Rights (including providing documents and materials in the possession or under the or control of such Party or members of its Group
and making its employees available to testify as a witness), provided that the other Party pays or reimburses such Party the reasonable out-of-pocket costs and expenses incurred by such Party in connection therewith.
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5. |
CONFIDENTIAL INFORMATION |
5.1 |
Confidentiality. Subject to Section 5.5, from and after the Effective Time until the five (5) year anniversary of the Effective Time (other than in the case of any item of Technical Information, for
which the obligations in this Section 5 will continue until such time as any of the exceptions set forth in clauses (A) through (C) of this Section 5.1 have been satisfied with respect to such item of Technical Information), each
of eBay and PayPal, on behalf of itself and each member of its respective Group, agrees: (a) to hold, and to cause its respective Representatives to hold, in strict confidence, with at least the same degree of care that applies to eBays
confidential and proprietary information pursuant to policies in effect as of the Effective Time, all confidential and proprietary information concerning the other Party or any member of the other Partys Group or their respective businesses
that is either (i) in its possession (including confidential and proprietary information in its possession prior to the date hereof) or (ii) furnished by any such other Party or any member of such Partys Group or their respective
Representatives at any time pursuant to this Agreement; and (b) not to use any such confidential and proprietary information other than for such purposes as are expressly permitted hereunder, except, in each case, to the extent that such
confidential and proprietary information is or was: (A) in the public domain or generally available to the public, other than as a result of a disclosure by such Party or any member of such Partys Group or any of their respective
Representatives in violation of this Agreement; (B) later lawfully acquired from other sources by such Party (or any member of such Partys Group) which sources are not themselves bound by a confidentiality obligation or other contractual,
legal or fiduciary obligation of confidentiality with respect to such confidential and proprietary information; or (C) independently developed or generated without reference to or use of any proprietary or confidential information of the other
Party or any member of such Partys Group. If any confidential and proprietary information of one Party or any member of its Group is disclosed to the other Party or any member of such other Partys Group in connection with this Agreement,
then such disclosed confidential and proprietary information will be used only for purposes of exercising its rights under and in accordance with this Agreement. |
5.2 |
No Release; Return or Destruction. Each Party agrees not to release or disclose, or permit to be released or disclosed, any information addressed in Section 5.1 to any other Person, except its
Representatives who need to know such information in their capacities as such (who will be advised of their obligations hereunder with respect to such information), and except in compliance with Section 5.5. Without limiting the foregoing, when
any such information is no longer needed for the purposes contemplated by this Agreement, each Party will, at its option and as promptly as practicable after receiving a written request from the other Party, either: (a) return to the other
Party all such information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon); or (b) certify to the other Party that it has destroyed such information (and such copies thereof and such notes,
extracts or summaries based thereon); provided, that such Partys Representatives may retain one (1) copy of such information to the extent required by applicable Law or professional standards, and will not be required to destroy any such
information located in back-up, archival electronic storage). |
5.3 |
Third-Party Information; Privacy or Data Protection Laws. Each Party acknowledges that it and members of its Group may presently have and,
following the Effective Time, may gain access to or possession of confidential or proprietary information of, or personal information relating to, Third Parties: (a) that was received under confidentiality or non-disclosure agreements entered
into between such Third Parties, on the one hand, and the other Party or members of such Partys Group, on the other hand, prior to the Effective Time; or (b) that, as between the Parties, was originally collected by the other Party or
members of such Partys Group and that may be subject to and protected by privacy, data protection or other applicable Laws. Subject to the Data Sharing |
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Agreement and any other Ancillary Agreement, each Party agrees that it will hold, protect and use, and will cause the members of its Group and its and their respective Representatives to hold,
protect and use, in strict confidence the confidential and proprietary information of, or personal information relating to, Third Parties in accordance with privacy, data protection or other applicable Laws and the terms of any agreements that were
either entered into before the Effective Time or affirmative commitments or representations that were made before the Effective Time by, between or among the other Party or members of the other Partys Group, on the one hand, and such Third
Parties, on the other hand. |
5.4 |
Residual Information. Notwithstanding anything to the contrary herein, each Party and the members of such Partys Group will be free to use for any purpose the Residual Information resulting from access
Representatives of such Party or the members of its Group have had to confidential and proprietary information concerning the other Party or any member of the other Partys Group. The Parties acknowledge and understand that the foregoing does
not constitute a license under any patents or copyrights. |
5.5 |
Protective Arrangements. In the event that a Party or any member of its Group either determines on the advice of its counsel that it is required to disclose any information pursuant to applicable Law or receives
any request or demand under lawful process or from any Governmental Authority to disclose or provide information of the other Party (or any member of the other Partys Group) that is subject to the confidentiality provisions hereof, such Party
will notify the other Party (to the extent legally permitted) as promptly as practicable under the circumstances prior to disclosing or providing such information and will cooperate, at such other Partys cost and expense, in seeking any
appropriate protective order reasonably requested by the other Party. In the event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand reasonably determines that
its failure to disclose or provide such information will actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide information to the extent required by such
Law (as so advised by its counsel) or by lawful process or such Governmental Authority provided such Party identifies such information as confidential, and the disclosing Party will promptly provide the other Party with a copy of the information so
disclosed, in the same form and format so disclosed, together with a list of all Persons to whom such information was disclosed, in each case to the extent legally permitted. |
6.1 |
Term. This Agreement is effective as of the IPMA Effective Time and, unless earlier terminated by the Parties in accordance with Section 6.2, will remain in effect until the expiration of the last to expire
Intellectual Property Right under which any Party grants any other Party a license or covenant not to sue hereunder. |
6.2 |
Termination. This Agreement may not be terminated except by an agreement in writing signed by a duly authorized officer of each of the Parties. |
6.3 |
Survival. The terms and conditions of the following provisions will survive termination of this Agreement: Section 1, Section 2, Section 3, Section 5, Section 7, Section 8 and
Section 9. The termination of this Agreement will not relieve either Party of any Liability under this Agreement that accrued prior to such termination. |
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7. |
DISCLAIMER OF REPRESENTATIONS AND WARRANTIES |
NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, THE TECHNOLOGY AND INTELLECTUAL PROPERTY RIGHTS LICENSED BY THE PARTIES PURSUANT TO THIS AGREEMENT ARE FURNISHED AS IS, WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT, QUALITY, USEFULNESS, COMMERCIAL UTILITY, ADEQUACY, COMPLIANCE WITH ANY LAW, DOMESTIC OR FOREIGN, AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR
COURSE OF PERFORMANCE.
8. |
LIMITATION OF LIABILITY |
EXCEPT FOR ANY LIABILITY ARISING FROM OR RELATING TO A BREACH
BY EBAY OR PAYPAL, ANY MEMBER OF SUCH PARTYS GROUP, OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OF ANY LICENSE SET FORTH IN SECTION 3 OR THE TERMS OF SECTION 5, NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER
PAYPAL OR ANY MEMBER OF THE PAYPAL GROUP, ON THE ONE HAND, NOR EBAY OR ANY MEMBER OF THE EBAY GROUP, ON THE OTHER HAND, WILL BE LIABLE UNDER THIS AGREEMENT TO THE OTHER FOR ANY INDIRECT, PUNITIVE, EXEMPLARY, REMOTE, SPECULATIVE OR SIMILAR DAMAGES IN
EXCESS OF COMPENSATORY DAMAGES OF THE OTHER ARISING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY.
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a. |
This Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided, that no Party may assign its rights or delegate its obligations under this
Agreement without the express prior written consent of the other Parties. Notwithstanding the foregoing, no such consent will be required for (i) the assignment of a Partys rights and obligations under this Agreement in whole or in part
to any of its Subsidiaries; provided, that no such assignment will release such Party from any liability or obligation under this Agreement; or (ii) the assignment of a Partys rights and obligations under this Agreement in whole (i.e.,
the assignment of a partys rights and obligations under this Agreement, the Separation and Distribution Agreement and all Ancillary Agreements all at the same time) in connection with a change of control of a Party so long as the resulting,
surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to the other Party. Nothing herein is intended to, or will be
construed to, prohibit either Party or any member of its Group from being party to or undertaking a change of control. |
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b. |
Effective immediately after the IPMA Effective Time, PayPal hereby assigns to PayPal, Inc. all of its rights, entitlements and obligations under Section 3.2. |
9.2 |
Bankruptcy. All rights and licenses granted under this Agreement are, and will be deemed to be, for purposes of Section 365(n) of the
United States Bankruptcy Code (the Bankruptcy Code), licenses of rights to intellectual property as defined under Section 101(35A) of the Bankruptcy Code, and if a case under the Bankruptcy Code is filed by or
against a Party, and in that case this |
11
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Agreement is rejected pursuant to Section 365 of the Bankruptcy Code, then the other Parties may exercise all rights provided by Section 365(n) of the Bankruptcy Code, including the
right to retain their rights and the full benefits under the licenses granted by such Party hereunder. |
9.3 |
Amendments. No provisions of this Agreement will be deemed waived, amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the
authorized representative of the Party against whom it is sought to enforce such waiver, amendment, supplement or modification. |
9.4 |
Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and will in no way be affected,
impaired or invalidated thereby. Upon such determination, the Parties will negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties. |
9.5 |
Governing Law. This Agreement (and any claims or disputes arising out of or related hereto or to the transactions contemplated hereby or to the inducement of any party to enter herein, whether for breach of
contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) will be governed by and construed and interpreted in accordance with the Laws of the State of Delaware irrespective of the choice of laws principles
of the State of Delaware including all matters of validity, construction, effect, enforceability, performance and remedies. |
9.6 |
Dispute Resolution. Article VII of the Separation and Distribution Agreement is incorporated by reference into this Agreement, mutatis mutandis, except that: (a) each reference to this
Agreement, any Ancillary Agreement or each Ancillary Agreement in the Separation and Distribution Agreement will be deemed to refer to this Agreement; and (b) the phrase in the Delaware Court of Chancery (or,
if such court does not have subject matter jurisdiction thereof, any other federal or state court located in the State of Delaware with subject matter jurisdiction) will be deemed to be replaced with the phrase exclusively in any state
or federal court located in the County of Santa Clara, State of California. |
9.7 |
Waivers of Default. Waiver by a Party of any default by any other Party of any provision of this Agreement will not be deemed a waiver by the waiving Party of any subsequent or other default, nor will it
prejudice the rights of any other Party. No failure or delay by a Party in exercising any right, power or privilege under this Agreement will operate as a waiver thereof, nor will a single or partial exercise thereof prejudice any other or further
exercise thereof or the exercise of any other right, power or privilege. |
9.8 |
Counterparts; Entire Agreement. This Agreement may be executed in one or more counterparts, all of which will be considered one and the same agreement, and will become effective when one or more counterparts have
been signed by each of the Parties and delivered to the other Parties. This Agreement, and the Exhibits, Schedules and appendices hereto, contain the entire agreement among the Parties with respect to the subject matter hereof, supersede all
previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings among the Parties other than those set forth or referred to
herein or therein. |
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9.9 |
Interpretation. In this Agreement: (a) words in the singular will be deemed to include the plural and vice versa and words of one gender will be deemed to include the other genders as the context requires;
(b) the terms hereof, herein, and herewith and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules, Exhibits and
Appendices hereto) and not to any particular provision of this Agreement; (c) Article, Section, Schedule, Exhibit and Appendix references are to the Articles, Sections, Schedules, Exhibits and Appendices to this Agreement unless otherwise
specified; (d) unless otherwise stated, all references to any agreement will be deemed to include the exhibits, schedules and annexes to such agreement; (e) the word including and words of similar import when used in this
Agreement will mean including, without limitation, unless otherwise specified; (f) the word or will not be exclusive; (g) unless otherwise specified in a particular case, the word days refers to calendar
days; (h) references to business day will mean any day other than a Saturday, a Sunday or a day on which banking institutions are generally authorized or required by law to close in the United States or San Jose, California;
(i) references herein to this Agreement or any other agreement contemplated herein will be deemed to refer to this Agreement or such other agreement as of the date on which it is executed and as it may be amended, modified or supplemented
thereafter, unless otherwise specified; and (j) unless expressly stated to the contrary in this Agreement, all references to the date hereof, the date of this Agreement, hereby and hereupon and
words of similar import will all be references to July 17, 2015. |
9.10 |
Notices. All notices, requests, claims, demands or other communications under this Agreement will be in writing, together with a copy by electronic mail (which will not constitute notice), and will be given or
made (and will be deemed to have been duly given or made upon acknowledgment of receipt) by delivery in person, by overnight courier service, or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at
the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 9.10): |
If to eBay or any eBay Group member, to:
eBay Inc.
2065 Hamilton Avenue
San Jose, California 95125
Attention: General Counsel
Email: mhuber@ebay.com
If to
PayPal or PayPal Group member, to:
PayPal, Inc.
2211 North First Street
San
Jose, California 95131
Attention: General Counsel
Email: apentland@paypal.com
A
Party may, by notice to the other Parties, change the address to which such notices are to be given.
9.11 |
Third-Party Beneficiaries. The provisions of this Agreement are solely for the benefit of each of eBay, PayPal and its Group and are not
intended to confer upon any Person except eBay, PayPal and its Group any rights or remedies hereunder. There are no third-party beneficiaries of this Agreement and this Agreement does not, and is not intended to, provide any other Person any
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13
remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement. For the avoidance of doubt, the covenants not to sue set
forth herein are not intended to confer upon any Person except the PayPal Covenantees (in the case of Section 2.1) and the eBay Covenantees (in the case of Section 2.2) any rights, remedies or defenses hereunder.
9.12 |
Force Majeure. No Party will be deemed in default of this Agreement for any delay or failure to fulfill any obligation (other than a payment obligation) hereunder so long as and to the extent to which any delay
or failure in the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. In the event of any such excused delay, the time for performance of such obligations (other than a
payment obligation) will be extended for a period equal to the time lost by reason of the delay. A Party claiming the benefit of this provision will, as soon as reasonably practicable after the occurrence of any such event, (a) provide written
notice to the other Party of the nature and extent of any such Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement as soon as reasonably practicable.
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9.13 |
No Set-Off. Except as otherwise mutually agreed to in writing by the Parties, neither eBay, PayPal nor any member of such Partys Group will have any right of set-off or other similar rights with respect to
(a) any amounts received pursuant to this Agreement; or (b) any other amounts claimed to be owed to eBay, PayPal or any member of its Group arising out of this Agreement. |
9.14 |
Expenses. Except as otherwise expressly set forth in this Agreement, or as otherwise agreed to in writing by the Parties, all fees, costs and expenses whenever incurred in connection with the preparation,
execution, delivery and implementation of this Agreement and the consummation of the transactions contemplated hereby will be borne by the Party or its applicable Subsidiary incurring such fees, costs or expenses. |
9.15 |
Headings. The article, section and paragraph headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. |
9.16 |
Survival of Covenants. Except as expressly set forth in this Agreement, the covenants, representations and warranties contained in this Agreement, and Liability for the breach of any obligations contained herein,
will survive the Separation and the Distribution and will remain in full force and effect in accordance with their terms. |
9.17 |
Specific Performance. Subject to the provisions of Section 9.6, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party or
Parties who are, or are to be, thereby aggrieved will have the right to specific performance and injunctive or other equitable relief in respect of its or their rights under this Agreement, in addition to any and all other rights and remedies at law
or in equity, and all such rights and remedies will be cumulative. The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any
action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by each of the Parties. |
9.18 |
Performance. eBay will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in
this Agreement to be performed by any member |
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of the eBay Group. PayPal will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by any member
of the PayPal Group. Each Party (including its permitted successors and assigns) further agrees that it will (a) give timely notice of the terms, conditions and continuing obligations contained in this Agreement to all of the other members of
its Group and (b) cause all of the other members of its Group not to take any action or fail to take any such action inconsistent with such Partys obligations under this Agreement or the transactions contemplated hereby.
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9.19 |
Mutual Drafting. This Agreement will be deemed to be drafted jointly by the Parties and any rule of construction that a document will be interpreted or construed against a drafter of such document will not be
applicable. |
[Remainder of page intentionally left blank]
15
IN WITNESS WHEREOF, the Parties have caused this Intellectual Property Matters Agreement to be executed by their
duly authorized representatives.
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EBAY INC. |
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By: |
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/s/ John J. Donahoe |
|
|
Name: John J. Donahoe |
|
|
Title: President and Chief Executive Officer |
|
EBAY INTERNATIONAL AG |
|
|
By: |
|
/s/ Anthony Glasby |
|
|
Name: Anthony Glasby |
|
|
Title: Authorized Signatory |
|
PAYPAL HOLDINGS, INC. |
|
|
By: |
|
/s/ Daniel H. Schulman |
|
|
Name: Daniel H. Schulman |
|
|
Title: President and CEO-Designee |
|
PAYPAL, INC. |
|
|
By: |
|
/s/ Daniel H. Schulman |
|
|
Name: Daniel H. Schulman |
|
|
Title: President |
|
PAYPAL PTE. LTD. |
|
|
By: |
|
/s/ Anthony Glasby |
|
|
Name: Anthony Glasby |
|
|
Title: Authorized Signatory |
|
PAYPAL PAYMENTS PTE. HOLDINGS S.C.S. |
|
|
By: |
|
/s/ Robert Caplehorn |
|
|
Name: Robert Caplehorn |
|
|
Title: Director |
[Signature Page to Intellectual Property Matters Agreement]
EXHIBIT A
DEFINITIONS
For purposes of this
Agreement, the following definitions will apply to the terms set forth below wherever they appear:
1. |
2015 H2 Product Roadmap Term Sheet means the 2015 H2 Product Roadmap Term Sheet between eBay and PayPal entered into by eBay and PayPal in connection with the Separation. |
2. |
Change-of-Control means, with respect to a Party, the occurrence after the Effective Time of any of the following: (a) the sale, conveyance or disposition, in one or a series of related
transactions, of all or substantially all of the assets of such Party to a third party that is not an Affiliate of such Party prior to such transaction or the first of such related transactions; (b) the consolidation, merger or other business
combination of a Party with or into any other Person, immediately following which the stockholders of the Party prior to such transaction fail to own in the aggregate the Majority Voting Power of the surviving Party in such consolidation, merger or
business combination or of its ultimate publicly traded parent Person; or (c) a transaction or series of transactions in which any Person or group (as such term is used in Section 13(d) of the Exchange Act) acquires the
Majority Voting Power of such Party (other than a reincorporation or similar corporate transaction in which each of such Partys stockholders own, immediately thereafter, interests in the new parent company in substantially the same percentage
as such stockholder owned in such Party immediately prior to such transaction). |
3. |
Develop means to create, prepare, produce, author, edit, amend, conceive, develop, assemble, reduce to practice or, in the case of works of authorship, to fix in a tangible medium of expression.
|
4. |
eBay CNS Period means: (a) other than with respect to the Specified eBay Patents, a period of 5 years after the Effective Time; and (b) with respect to the Specified eBay Patents, until the
expiration of the last valid claim of any Specified eBay Patent. |
5. |
eBay Covenantee means any member of the eBay Group (only for so long as any such Person continues to be a member of the eBay Group) other than (a) any Person that is not a Subsidiary of eBay as
of the Effective Time, (b) GSI Commerce, Inc. DBA eBay Enterprise Group, Inc. (GSI), (c) X.commerce, Inc. DBA Magento, Inc. (Magento) and (d) any Person that is a Subsidiary of GSI or Magento.
|
6. |
eBay IP means all Technology and Intellectual Property Rights to which the Separation and Distribution Agreement allocates ownership to eBay as an eBay Asset. |
7. |
eBay Products means the products, platforms, services and solutions of eBay and its Subsidiaries, excluding those offered in connection with the activities of the Enterprise segment of eBay
(a) as it was conducted at any time prior to the Effective Time by either Party or any member of its Group or (b) as it may be conducted at any time after the Effective Time by eBay or any member of the eBay Group. |
8. |
eBay Specified Change-of-Control means a Change-of-Control of eBay with any PayPal Specified Person or their direct or indirect Subsidiaries or controlled Affiliates. |
9. |
Intellectual Property Rights means all rights of the following types, which may exist or be created under the laws of any
jurisdiction in the world: (a) rights associated with works of |
A-1
|
authorship, including exclusive exploitation rights, copyrights and moral rights; (b) trademark and trade name rights and similar rights; (c) trade secret rights; (d) patent and
industrial property rights; (e) other proprietary rights in Technology; (f) rights in or relating to registrations, renewals, extensions, combinations, divisions, and reissues of, and applications for, any of the rights referred to in
clauses (a) through (e) of this definition; and (g) together with, in each of clauses (a) through (f) of this definition, all claims for damages by reason of past infringement, misappropriation, or other unauthorized use
thereof, with the right to sue for, and collect the same. |
10. |
IPMA Effective Time means 11:58:59 p.m., New York City time, on the Distribution Date. |
11. |
Majority Voting Power means a majority of the voting power in the election of directors of all outstanding voting securities of the Person in question. |
12. |
PayPal Covenantee means any member of the PayPal Group (only for so long as any such Person continues to be a member of the PayPal Group) other than any Person that is not a Subsidiary of PayPal as of
the Effective Time. |
13. |
PayPal CNS Period means: (a) other than with respect to the Specified PayPal Patents, a period of 5 years after the Effective Time; and (b) with respect to the Specified PayPal Patents,
until the expiration of the last valid claim of any Specified PayPal Patent. |
14. |
PayPal IP means: (a) all Technology and Intellectual Property Rights to which the Separation and Distribution Agreement allocates ownership to PayPal as a PayPal Asset; (b) all Technology
that is Developed by or on behalf of PayPal or any PayPal Group member, alone or jointly with eBay, under the Product Development Agreement and all Intellectual Property Rights embodied therein or relating thereto; and (c) all Technology that
is Developed by or on behalf of PayPal or any PayPal Group member, alone or jointly with eBay, under the 2015 H2 Product Roadmap Term Sheet and all Intellectual Property Rights embodied therein or relating thereto. |
15. |
PayPal Products means the products, platforms, services and solutions of PayPal and its Subsidiaries. |
16. |
PayPal Specified Change-of-Control means a Change-of-Control of PayPal with any eBay Specified Person or their direct or indirect Subsidiaries or controlled Affiliates. |
17. |
Technical Information means Information that embodies or describes any Technology of a Party or any member of such Partys Group. |
18. |
Technology means sales methodologies and processes, training protocols and similar methods and processes, algorithms, APIs, apparatus, circuit designs and assemblies, gate arrays, net lists, test
vectors, databases, data collections, diagrams, formulae, inventions (whether or not patentable), innovations, products, services, know-how, logos, marks (including brand names, product names, logos, and slogans), methods, network configurations and
architectures, processes, proprietary information, protocols, schematics, specifications, software, software code (in any form, including source code and executable or object code), subroutines, techniques, user interfaces, URLs, web sites, works of
authorship and other forms of technology (whether or not embodied in any tangible form and including all tangible embodiments of the foregoing, such as instruction manuals, laboratory notebooks, prototypes, samples, studies and summaries).
|
A-2
Exhibit 99.1
eBay Inc. Unaudited Pro Forma Consolidated Financial Information
San Jose, California, July 20, 2015 - On July 17, 2015, eBay Inc. (eBay) completed the previously announced distribution of 100%
of the outstanding common stock of PayPal Holdings, Inc. (PayPal) to eBays shareholders (the Distribution). Beginning in the third quarter of 2015, PayPals historical financial results for periods prior to the
Distribution will be reflected in eBays consolidated financial statements as discontinued operations.
The following unaudited pro forma
consolidated statements of income of eBay for the three months ended March 31, 2015 and for the year ended December 31, 2014 are presented as if the Distribution had occurred as of January 1, 2014 and give effect to the elimination of
the historical PayPal financial results due to the Distribution, as well as other pro forma adjustments to reflect the impact of certain service agreements entered into at the time of the Distribution. The following unaudited pro forma consolidated
statements of income of eBay for the years ended December 31, 2012 and 2013 only give effect to the elimination of the historical PayPal financial results as if the Distribution had occurred as of January 1, 2012. The following unaudited
pro forma consolidated balance sheet of eBay as of March 31, 2015 is presented as if the Distribution occurred on March 31, 2015.
The following
pro forma financial statements are based on information currently available including certain assumptions and estimates. They are intended for informational purposes only, and do not purport to represent what eBays financial position and
results of operations actually would have been had the Distribution occurred on the dates indicated, or to project eBays financial position or results of operations for any future date or period.
The following unaudited pro forma consolidated financial statements have been derived from eBays historical consolidated financial statements as of and
for the three years ended December 31, 2014 and the interim unaudited period ending March 31, 2015. The unaudited pro forma consolidated financial statements and the accompanying notes should be read in conjunction with (i) the
audited consolidated financial statements, the accompanying notes and Managements Discussion and Analysis of Financial Condition and Results of Operations included in eBays Annual Report on Form 10-K for the year ended
December 31, 2014 and (ii) the unaudited consolidated financial statements, the accompanying notes and Managements Discussion and Analysis of Financial Condition and Results of Operations included in eBays Quarterly
Report on Form 10-Q for the three months ended March 31, 2015.
The information in the Historical columns in the unaudited pro forma
consolidated statements of income and the unaudited pro forma consolidated balance sheet was derived from eBays historical consolidated financial statements for the periods and as of the date presented and does not reflect any adjustments
related to the Distribution and related events.
The information in the PayPal Separation columns in the unaudited pro forma consolidated
statements of income was derived from eBays audited consolidated financial statements and the related accounting records for the years ended December 31, 2014, 2013, and 2012, and the unaudited consolidated financial statements for the
three months ended March 31, 2015 and reflects the financial results of the PayPal business, adjusted to include certain costs directly attributable to PayPal and to exclude corporate overhead costs that were previously allocated to PayPal for
each period, as described in PayPals audited combined financial statements for the three years ended December 31, 2014 and unaudited condensed combined financial statements as of and for the three months ended March 31, 2015 included
in PayPals information statement dated June 29, 2015 (the Information Statement), which has been filed as an exhibit to eBays Current Report on Form 8-K with the SEC on
June 30, 2015. The information in the PayPal Separation columns in the unaudited pro forma consolidated balance sheet was derived from eBays unaudited consolidated financial statements and the related accounting records as of
March 31, 2015, adjusted to include certain assets and liabilities that were transferred to PayPal pursuant to the separation and distribution agreement. The information in the foregoing PayPal Separation columns should be read in
conjunction with PayPals audited combined financial statements and notes thereto as of and for the three years ended December 31, 2014 and unaudited condensed combined financial statements and notes thereto as of March 31, 2015 included in the
Information Statement.
The information in the Other Pro Forma Adjustments columns in the unaudited pro forma consolidated statements of
income and the unaudited pro forma consolidated balance sheet reflects additional pro forma adjustments which are further described in the accompanying notes.
eBay Inc.
Unaudited Pro Forma Consolidated Statement of Income
Three Months Ended March 31, 2015
(dollars and shares in millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical |
|
|
PayPal Separation |
|
|
Other Pro Forma Adjustments |
|
|
Notes |
|
Pro Forma eBay |
|
Net revenues |
|
$ |
4,448 |
|
|
$ |
(2,109 |
) |
|
$ |
21 |
|
|
(a)(b) |
|
$ |
2,360 |
|
Cost of net revenues |
|
|
1,450 |
|
|
|
(826 |
) |
|
|
16 |
|
|
(c)(d)(e) |
|
|
640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
2,998 |
|
|
|
(1,283 |
) |
|
|
5 |
|
|
|
|
|
1,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
794 |
|
|
|
(245 |
) |
|
|
|
|
|
|
|
|
549 |
|
Product development |
|
|
485 |
|
|
|
(229 |
) |
|
|
|
|
|
|
|
|
256 |
|
General and administrative |
|
|
665 |
|
|
|
(338 |
) |
|
|
|
|
|
|
|
|
327 |
|
|
|
|
|
|
|
Provision for transaction and loan losses |
|
|
264 |
|
|
|
(188 |
) |
|
|
|
|
|
|
|
|
76 |
|
Amortization of acquired intangible assets |
|
|
58 |
|
|
|
(13 |
) |
|
|
|
|
|
|
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
2,266 |
|
|
|
(1,013 |
) |
|
|
|
|
|
|
|
|
1,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
732 |
|
|
|
(270 |
) |
|
|
5 |
|
|
|
|
|
467 |
|
Interest and other, net |
|
|
8 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
740 |
|
|
|
(269 |
) |
|
|
5 |
|
|
|
|
|
476 |
|
Provision for income taxes |
|
|
(114 |
) |
|
|
38 |
|
|
|
(2 |
) |
|
(f) |
|
|
(78 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
626 |
|
|
$ |
(231 |
) |
|
$ |
3 |
|
|
|
|
$ |
398 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.51 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.51 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
1,216 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,216 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
1,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
eBay Inc.
Unaudited Pro Forma Consolidated Statement of Income
Year End December 31, 2014
(dollars and shares in millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical |
|
|
PayPal Separation |
|
|
Other Pro Forma Adjustments |
|
|
Notes |
|
Pro Forma eBay |
|
Net revenues |
|
$ |
17,902 |
|
|
$ |
(7,895 |
) |
|
$ |
72 |
|
|
(a)(b) |
|
$ |
10,079 |
|
Cost of net revenues |
|
|
5,732 |
|
|
|
(3,140 |
) |
|
|
57 |
|
|
(c)(d)(e) |
|
|
2,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
12,170 |
|
|
|
(4,755 |
) |
|
|
15 |
|
|
|
|
|
7,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
3,587 |
|
|
|
(1,028 |
) |
|
|
|
|
|
|
|
|
2,559 |
|
Product development |
|
|
2,000 |
|
|
|
(879 |
) |
|
|
|
|
|
|
|
|
1,121 |
|
General and administrative |
|
|
1,843 |
|
|
|
(892 |
) |
|
|
|
|
|
|
|
|
951 |
|
Provision for transaction and loan losses |
|
|
958 |
|
|
|
(689 |
) |
|
|
|
|
|
|
|
|
269 |
|
Amortization of acquired intangible assets |
|
|
268 |
|
|
|
(53 |
) |
|
|
|
|
|
|
|
|
215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
8,656 |
|
|
|
(3,541 |
) |
|
|
|
|
|
|
|
|
5,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
3,514 |
|
|
|
(1,214 |
) |
|
|
15 |
|
|
|
|
|
2,315 |
|
Interest and other, net |
|
|
17 |
|
|
|
7 |
|
|
|
|
|
|
|
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
3,531 |
|
|
|
(1,207 |
) |
|
|
15 |
|
|
|
|
|
2,339 |
|
Provision for income taxes |
|
|
(3,485 |
) |
|
|
195 |
|
|
|
(6 |
) |
|
(f) |
|
|
(3,296 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
46 |
|
|
$ |
(1,012 |
) |
|
$ |
9 |
|
|
|
|
$ |
(957 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.77 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.77 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
1,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
1,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
eBay Inc.
Unaudited Pro Forma Consolidated Statement of Income
Year End December 31, 2013
(dollars and shares in millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical |
|
|
PayPal Separation |
|
|
Pro Forma eBay |
|
Net revenues |
|
$ |
16,047 |
|
|
$ |
(6,640 |
) |
|
$ |
9,407 |
|
Cost of net revenues |
|
|
5,036 |
|
|
|
(2,696 |
) |
|
|
2,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
11,011 |
|
|
|
(3,944 |
) |
|
|
7,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
3,060 |
|
|
|
(794 |
) |
|
|
2,266 |
|
Product development |
|
|
1,768 |
|
|
|
(712 |
) |
|
|
1,056 |
|
General and administrative |
|
|
1,703 |
|
|
|
(724 |
) |
|
|
979 |
|
Provision for transaction and loan losses |
|
|
791 |
|
|
|
(551 |
) |
|
|
240 |
|
|
|
|
|
Amortization of acquired intangible assets |
|
|
318 |
|
|
|
(41 |
) |
|
|
277 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
7,640 |
|
|
|
(2,822 |
) |
|
|
4,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
3,371 |
|
|
|
(1,122 |
) |
|
|
2,249 |
|
Interest and other, net |
|
|
95 |
|
|
|
7 |
|
|
|
102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
3,466 |
|
|
|
(1,115 |
) |
|
|
2,351 |
|
Provision for income taxes |
|
|
(610 |
) |
|
|
189 |
|
|
|
(421 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
2,856 |
|
|
$ |
(926 |
) |
|
$ |
1,930 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.20 |
|
|
|
|
|
|
$ |
1.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
2.18 |
|
|
|
|
|
|
$ |
1.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
1,295 |
|
|
|
|
|
|
|
1,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
1,313 |
|
|
|
|
|
|
|
1,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
eBay Inc.
Unaudited Pro Forma Consolidated Statement of Income
Year End December 31, 2012
(dollars and shares in millions except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical |
|
|
PayPal Separation |
|
|
Pro Forma eBay |
|
Net revenues |
|
$ |
14,072 |
|
|
$ |
(5,591 |
) |
|
$ |
8,481 |
|
Cost of net revenues |
|
|
4,216 |
|
|
|
(2,236 |
) |
|
|
1,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
9,856 |
|
|
|
(3,355 |
) |
|
|
6,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
2,913 |
|
|
|
(672 |
) |
|
|
2,241 |
|
Product development |
|
|
1,573 |
|
|
|
(655 |
) |
|
|
918 |
|
General and administrative |
|
|
1,567 |
|
|
|
(669 |
) |
|
|
898 |
|
Provision for transaction and loan losses |
|
|
580 |
|
|
|
(401 |
) |
|
|
179 |
|
|
|
|
|
Amortization of acquired intangible assets |
|
|
335 |
|
|
|
(45 |
) |
|
|
290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
6,968 |
|
|
|
(2,442 |
) |
|
|
4,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
2,888 |
|
|
|
(913 |
) |
|
|
1,975 |
|
Interest and other, net |
|
|
196 |
|
|
|
(10 |
) |
|
|
186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
3,084 |
|
|
|
(923 |
) |
|
|
2,161 |
|
Provision for income taxes |
|
|
(475 |
) |
|
|
105 |
|
|
|
(370 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
2,609 |
|
|
$ |
(818 |
) |
|
$ |
1,791 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.02 |
|
|
|
|
|
|
$ |
1.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
1.99 |
|
|
|
|
|
|
$ |
1.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
1,292 |
|
|
|
|
|
|
|
1,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
1,313 |
|
|
|
|
|
|
|
1,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
eBay Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2015
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical |
|
|
PayPal Separation |
|
|
Other Pro Forma Adjustments |
|
|
Notes |
|
Pro Forma eBay |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,473 |
|
|
$ |
(2,352 |
) |
|
$ |
(2,100 |
) |
|
(g) |
|
$ |
1,021 |
|
Short-term investments |
|
|
4,206 |
|
|
|
(23 |
) |
|
|
(470 |
) |
|
(g) |
|
|
3,713 |
|
Accounts receivable, net |
|
|
703 |
|
|
|
(49 |
) |
|
|
|
|
|
|
|
|
654 |
|
Loans and interest receivable, net |
|
|
3,578 |
|
|
|
(3,566 |
) |
|
|
|
|
|
|
|
|
12 |
|
Funds receivable and customer accounts |
|
|
10,891 |
|
|
|
(10,891 |
) |
|
|
|
|
|
|
|
|
|
|
Other current assets |
|
|
1,663 |
|
|
|
(482 |
) |
|
|
|
|
|
|
|
|
1,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
26,514 |
|
|
|
(17,363 |
) |
|
|
(2,570 |
) |
|
|
|
|
6,581 |
|
Long-term investments |
|
|
5,647 |
|
|
|
(31 |
) |
|
|
(1,230 |
) |
|
(g) |
|
|
4,386 |
|
Property and equipment, net |
|
|
2,947 |
|
|
|
(1,185 |
) |
|
|
|
|
|
|
|
|
1,762 |
|
Goodwill |
|
|
8,965 |
|
|
|
(3,134 |
) |
|
|
|
|
|
|
|
|
5,831 |
|
Intangible assets, net |
|
|
481 |
|
|
|
(152 |
) |
|
|
|
|
|
|
|
|
329 |
|
Other assets |
|
|
287 |
|
|
|
(30 |
) |
|
|
157 |
|
|
(h) |
|
|
414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
44,841 |
|
|
$ |
(21,895 |
) |
|
$ |
(3,643 |
) |
|
|
|
$ |
19,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt |
|
$ |
868 |
|
|
$ |
|
|
|
|
|
|
|
|
|
$ |
868 |
|
Accounts payable |
|
|
393 |
|
|
|
(124 |
) |
|
|
|
|
|
|
|
|
269 |
|
Funds payable and amounts due to customers |
|
|
10,891 |
|
|
|
(10,891 |
) |
|
|
|
|
|
|
|
|
|
|
Accrued expenses and other current liabilities |
|
|
5,145 |
|
|
|
(1,841 |
) |
|
|
21 |
|
|
(h) |
|
|
3,325 |
|
Deferred revenue |
|
|
190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
190 |
|
Income taxes payable |
|
|
124 |
|
|
|
(46 |
) |
|
|
|
|
|
|
|
|
78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
17,611 |
|
|
|
(12,902 |
) |
|
|
21 |
|
|
|
|
|
4,730 |
|
Deferred and other tax liabilities, net |
|
|
768 |
|
|
|
(345 |
) |
|
|
157 |
|
|
(h) |
|
|
580 |
|
Long-term debt |
|
|
6,795 |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,795 |
|
Other liabilities |
|
|
129 |
|
|
|
(40 |
) |
|
|
|
|
|
|
|
|
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
25,303 |
|
|
|
(13,287 |
) |
|
|
178 |
|
|
|
|
|
12,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value; 3,580 shares authorized; 1,210 shares outstanding |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
Additional paid-in capital |
|
|
14,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
14,084 |
|
Treasury stock at cost, 402 shares |
|
|
(15,054 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(15,054 |
) |
Retained earnings |
|
|
19,526 |
|
|
|
(8,466 |
) |
|
|
(3,821 |
) |
|
(g)(h) |
|
|
7,239 |
|
Accumulated other comprehensive income |
|
|
980 |
|
|
|
(142 |
) |
|
|
|
|
|
|
|
|
838 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
19,538 |
|
|
|
(8,608 |
) |
|
|
(3,821 |
) |
|
|
|
|
7,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
44,841 |
|
|
$ |
(21,895 |
) |
|
$ |
(3,643 |
) |
|
|
|
$ |
19,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
eBay Inc.
Unaudited Pro Forma Consolidated Financial Information
Note 1. Other Pro Forma Adjustments
(a) Reflects the impact of
fees earned by eBay from PayPal for referral services and user penetration, pursuant to the terms of the operating agreement. These fees would have been $59 million and $17 million for the year ended December 31, 2014 and the quarter ended
March 31, 2015, respectively, consisting of fees for customers acquired and incentives for the usage of PayPal products (including credit products) on certain eBay properties.
(b) Reflects the impact of fees earned by eBay from PayPal for shared data centers and information technology facility owned by eBay which are governed by the
colocation services agreements. After the Distribution, eBay will manage and own data centers and information technology facilities shared with PayPal and will charge PayPal based on actual usage of those data centers, inclusive of management fees.
These fees would have been $13 million and $4 million for the year ended December 31, 2014 and the quarter ended March 31, 2015, respectively.
(c) Reflects the impact of transaction fees for payment services provided by PayPal to eBay pursuant to the terms of certain commercial agreements negotiated
between the parties. These charges would have been $77 million and $20 million for the year ended December 31, 2014 and the quarter ended March 31, 2015, respectively.
(d) Reflects the impact of charges to PayPal from eBay for shared data centers and information technology facilities that eBay leases which are governed by
the colocation services agreements. After the Distribution, eBay will manage data centers and information technology facilities shared with PayPal and will charge PayPal based on actual usage of those data centers, inclusive of management fees.
These charges would have been $32 million and $8 million for the year ended December 31, 2014 and the quarter ended March 31, 2015, respectively.
(e) Reflects the impact of charges to eBay from PayPal for usage of the Phoenix and Denver data centers, owned by PayPal, pursuant to the colocation services
agreement. After the Distribution, PayPal will charge eBay a percentage of depreciation based on actual usage of those data centers. These charges would have been $12 million and $4 million for the year ended December 31, 2014 and the quarter
ended March 31, 2015, respectively.
(f) Reflects the tax effect of pro forma adjustments using the respective statutory tax rate for the year ended
December 31, 2014 and the quarter ended March 31, 2015.
(g) Reflects a cash contribution of $3.8 billion to PayPal from eBay that was made
subsequent to March 31, 2015.
(h) Reflects $157 million indemnification asset and $21 million indemnification liability. In addition, a $157 million
long term income tax payable is required to be reported gross of the related indemnification asset. Pursuant to the terms of the tax matters agreement, PayPal and eBay will indemnify the other party for certain taxes payable and uncertain tax
positions.
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