Visa 2007 Annual Report Download - page 203

Table of Contents
The Bilateral Services
We and Visa Europe provide each other with transitional and ongoing services similar to those services that were provided among Visa U.S.A., Visa
International, Inovant, Visa Canada and Visa Europe prior to our recent reorganization. We provide Visa Europe on an ongoing basis with authorization
services for cross-border transactions involving Visa Europe's region, on the one hand, and the rest of the world, on the other hand, as well as clearing and
settlement system services between Visa Europe's region and the rest of the world. Until Visa Europe's regional clearing and settlement system is deployed,
we will also provide clearing and settlement system services within Visa Europe's region. In addition, the parties share foreign exchange revenues related to
currency conversion for transactions involving European cardholders as well as other cross-border transactions that take place in Visa Europe's region until
Visa Europe's regional clearing and settlement system is deployed, at which time this arrangement will cease. The parties will also use each others' switching
and processing services.
Visa Europe will indemnify us for any claims arising out of the provision of the services brought by Visa Europe's member financial institutions against
us, while we will indemnify Visa Europe for any claims arising out of the provision of the services brought against Visa Europe by our financial institution
customers.
The Put-Call Option Agreement
We and Visa Europe have entered into a put-call option agreement under which Visa Europe will provide us with a call option to require Visa Europe to
cause its members to convey and deliver to us all of the outstanding shares of capital stock of Visa Europe. We may exercise the call option, subject to certain
conditions, at any time following certain triggering events, but in any event not before the closing of our proposed initial public offering.
A triggering event will occur if:
• There is a decline of 25% or greater in the number of merchants in the Visa Europe region that accept Visa-branded products and such rate of
decline is at least twice as much as both:
• the average rate of any decline in the number of merchants in the Visa Europe region that accept general purpose payment cards for the
processing of payment transactions, and
• if the average rate of merchant acceptance of Visa-branded general purpose payment cards has declined outside of Visa Europe's region,
the average rate of any decline in the number of merchants outside Visa Europe that accept Visa-branded general purpose payment cards
for the processing of payment transactions; and
• There is a decline of 45% or more in the number of automatic teller machines, or ATMs, within Visa Europe's region that accept Visa-branded
general purpose payment product cards for the processing of credit and debit transactions, which we refer to as the ATM acceptance rate, where
such decline in the ATM acceptance rate is at least twice:
• the average rate of any decline in the number of ATMs within Visa Europe's region that accept general purpose payment cards for the
processing of credit and debit transactions; and
• if the average rate of ATM acceptance of Visa-branded general purpose payment cards is declining outside of Visa Europe's region, the
average rate of decline in the number of ATMs outside of Visa Europe's region that accept Visa-branded general purpose payment
product cards for the processing of credit and debit transactions; and
• Visa Europe has failed to deliver and implement a remediation plan within six months after the later to occur of the circumstances described
above, or has implemented a remediation plan but the decline in the merchant acceptance rate and ATM acceptance rate has not been stopped
prior to the date that is 12 months after the implementation of the remediation plan.
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