Visa 2007 Annual Report Download - page 202

Table of Contents
may sublicense the Visa trademarks and technology to its members and other sublicensees, such as processors, for use within Visa Europe's region and in
certain limited circumstances, outside of its region.
From October 1, 2007 through November 8, 2007, the fee payable for the licenses was $6 million per quarter. Thereafter, and until October 5, 2008, the
fee payable for the licenses will be $142.5 million per year, payable quarterly, which we refer to as the quarterly base fee, reduced by an amount equal to
$1.146 billion multiplied by the three-month LIBOR rate plus 100 to 200 basis points. Thereafter, the fee payable for the licenses will be the quarterly base
fee. Beginning November 9, 2010, this fee will be increased annually based on the annual growth of the gross domestic product of the European Union.
Between the closing of our proposed initial public offering and October 5, 2008, the quarterly base fee will be reduced by an amount equal to the product of
the following: (i) our net proposed initial public offering price per share; (ii) (the number of class C (series III) shares held by Visa Europe that
would have been redeemed immediately, but for provisions in our amended and restated certificate of incorporation that permit Visa Europe to that delay the
redemption of such shares until October 6, 2008) and; (iii) the three-month LIBOR rate plus 100 to 200 basis points.
Visa Europe may, at its option, license new trademarks and intellectual property and certain derivative intellectual property developed by the licensors
at a fair market value royalty to be determined by Visa Europe and us at the time of such license grant. In the event that we propose to merge with, or sell all
or a substantial part of its assets to, a competitor of Visa Europe, Visa Europe may, at its option, acquire from us, at a fair market value to be determined by
Visa Europe and us at the time of such acquisition, those intellectual property assets covered by the licenses to the framework agreement as Visa Europe may
require to allow it to continue operating its business in the manner conducted at such time. We may, at our option, license Visa Europe's regional clearing and
settlement system at a fair market value royalty to be determined by and Visa Europe and us at the time of such license grant.
Visa Europe must comply with certain agreed global rules governing the use and interoperability of the Visa trademarks and the interoperability of our
systems with the systems of Visa Europe. If we want to change a global rule or require Visa Europe to implement certain changes that would not have a
positive return for Visa Europe and its members, Visa Europe is not required to implement such rule or change unless we agree to pay for the implementation
costs and expenses that Visa Europe and its members will incur as a consequence of the implementation to the extent necessary to return Visa Europe and its
members to a neutral financial condition.
Both parties will be required to implement system changes required to maintain the interoperability, security, safety and soundness of the Visa system.
Other system changes are required in certain circumstances where the change does not exceed a certain expenditure threshold or where the proposing party
agrees to pay for such change.
In addition, the parties will guarantee the obligations of their respective members to settle transactions between such members, service global
customers, participate in certain global sponsorships, manage certain global programs, establish rules for servicing global merchants, ensure that their
customers and members require acceptance of globally accepted cards, maintain adequate capital levels to support their ongoing business operations and
establish and comply with rules relating to the operation of the Visa enterprise.
For five years following the reorganization, we have agreed not to offer or promote non-Visa branded products and services within the field in Visa
Europe's region and Visa Europe will not offer or promote non-Visa branded products and services within the field outside of its region. We will give Visa
Europe the right of first refusal prior to our proposed offering any core products in the Visa Europe region that are not branded with a Visa mark.
We will also indemnify Visa Europe for any claims arising from activities within the field brought outside Visa Europe's region, and Visa Europe will
indemnify us for any claims from activities within the field brought inside Visa Europe's region. Additionally, we will indemnify Visa Europe for third party
claims of intellectual property infringement arising out of Visa Europe's authorized use of the licensed Visa trademarks and technology.
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