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Sample Business Contracts
Home: Sample Business Contracts:
Dated 2007
VISA EUROPE LIMITED
and
VISA INC.
and
VISA INTERNATIONAL
and
VISA USA
and
INOVANT LLC
FRAMEWORK AGREEMENT
This Framework Agreement, together with its Schedules (which form an inseparable part hereof) (collectively, this “Agreement”) is made on 2007
Between:
| (1) |
Visa Inc. a corporation organized and existing under the laws of the State of Delaware, United States of America with a principal place of business at 900 Metro Center Boulevard, Foster City, California 94404 (“Visa Inc.”); |
| (2) |
Visa Europe Limited a company registered in England and Wales with its registered address at One Sheldon Square, London W2 6TT with company number 5139966 (“Visa Europe”); |
| (3) |
Inovant LLC a Delaware limited liability company (“Inovant”); |
| (4) |
Visa International Services Association a Delaware corporation with a principal place of business at 900 Metro Center Boulevard, Foster City, California 94404 (“Visa International”); and |
| (5) |
Visa U.S.A. Inc. a Delaware corporation with a principal place of business at 123 Mission Street, San Francisco, California 94105 (“Visa USA”). |
Whereas:
| (A) |
Visa Europe was a Regional Group Member of Visa International under a Regional Group Membership Agreement entered into on 1 July 2004; |
| (B) |
Visa International was a membership corporation established in Delaware, USA, which provided authorization, clearing and settlement services and other services ancillary thereto, in relation to Visa payment transactions to its Members; |
| (C) |
Under the Regional Group Membership Agreement, Visa Europe and Visa International provided authorization, clearing, settlement and payment processing services to each other, and services ancillary thereto, in respect of Visa payment transactions; |
| (D) |
Pursuant to a Global Restructuring Agreement entered into on June 15, 2007 (the “Global Restructuring Agreement”), Visa Europe has ultimately exchanged its membership interest in Visa International for shares in Visa Inc. and has ceased to be a member of Visa International; |
| (E) |
To ensure the continued operation of the global Visa payment network, and in particular, to ensure the continued interoperability of the Visa System, the Parties require the services and obligations in this Agreement to be performed and the specified payments to be made, all in accordance with the relevant terms of this Agreement; |
| (F) |
Visa Europe, Visa Inc., Visa USA, Inovant and Visa International are entering into this Agreement for the provision of services to each other and payment in accordance with its terms, including to grant certain licenses as set forth in Schedule 2 and Schedule 3 to Visa Europe in consideration for, inter alia, the Fee. |
It is agreed as follows:
In this Agreement, unless the context otherwise requires, the provisions in this Clause 1 apply:
1
When used in this Agreement, the following terms shall have the respective meanings specified below. Any terms defined in a Schedule shall have the same meaning for the purposes of the main body of this Agreement.
“Base Amount” means (i) $6 million per Quarter, for the period from the Effective Date up to but not including the Payment Date; then (ii) $35.625 million less the product of Notional Rate x $1.146 billion, per Quarter, for the Relevant Period; then (iii) $35.625 million per Quarter, for the period from the end of the Relevant Period to the third anniversary of the Payment Date; and then (iv) $35.625 million plus the product of (x) $35.625 million and (y) the percentage increase of the gross domestic product of the European Union for the period from the third anniversary of the Payment Date to the end of the Quarter immediately preceding the most recent annual anniversary of the Payment Date divided by four (4), as reported by Statistical Office of the European Communities (Eurostat), per Quarter thereafter (provided that the Base Amount in respect of any Quarter or part of any Quarter beginning after the third anniversary of the Payment Date shall never be less than the Base Amount for the previous Quarter).
“Charges” shall have the meaning set forth in Schedule 1.
“Effective Date” shall mean the Restructuring Closing Date (as defined in the Global Restructuring Agreement).
“Fee” means an amount in respect of any Quarter equal to the pro rata amount (based on the number of days in such Quarter for which the relevant Base Amount applies) of the Base Amount for that Quarter less for any part of that Quarter in the Post-IPO Period the product of (Notional Rate x Market Value x Number of days in that Quarter which fall within the Post-IPO Period/365), as adjusted in for any increase or reduction pursuant to Section 6.2 of Schedule 3 (Global Sponsorship). In the event that the Fee for any Quarter is a negative amount, the absolute amount of such negative amount shall be carried forward and subtracted in determining the Fee for the next Quarter (and the negative amount of any such Fee for the following Quarter, including any carry forward from one or more preceding Quarters, shall continue to be applied to subsequent Quarters until the absolute amount of all such carry forwards has been credited towards Fees payable).
“Force Majeure Event” shall have the meaning set forth in Clause 13 of this Agreement.
“Governmental Authority” shall mean any national, federal, state or local government body in any jurisdiction, the European Commission and any other supranational body or any court, tribunal, arbitrator in any jurisdiction.
“Law” shall mean any statute, law or ordinance in any jurisdiction, or any rule or regulation of any Governmental Authority.
“3 month LIBOR” means, for each period, the rate (expressed as a percentage per annum) for deposits in US Dollars for a three-month period that appears on Reuters Page LIBOR01 or any successor service or page for the purpose of displaying the London interbank offered rates of major banks as of 11:00 a.m. (London time) on the LIBOR determination date.
2
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(i) |
The “LIBOR determination date” for any period day shall be based on a day that is both a London Business Day and a New York Business Day or if applicable, the day immediately preceding the day which is deemed both a London Business Day and New York Business Day. |
| |
(ii) |
A “London Business Day” means a day other than a Saturday or Sunday on which dealings in deposits in U.S. dollars are transacted, or with respect to any future date are expected to be transacted. A “New York Business Day” means a day other than a Saturday or Sunday or a day on which banking institutions in the City of New York are authorized or required by law, regulation or executive order to close. |
If 3-month LIBOR cannot be determined as described above, quotations from the London office of three banks involved in the London interbank market will be taken at approximately 11:00 a.m., London time, on the determination date. The arithmetic average from the quotations will be used. These quotations will be for deposits in US Dollars for a three-month period (expressed as a percentage per annum). Offered quotations must be based on a principal amount equal to an amount that is representative of a single transaction in US Dollars in the market at the time.
“Market Value” means an amount equal to the product of (x) the IPO Price (as defined in the Amended and Restated Certificate of Incorporation of Visa Inc. ( the “Restated Visa Inc. Certificate”)) and (y) the number of Class C Redemption Shares of Visa Europe and Visa Europe Services Inc. determined pursuant to Section 4.18(c) of the Restated Visa Inc. Certificate (disregarding for these purposes Section 4.18(e) of the Restated Visa Inc. Certificate).
“Notional Rate” means 3 month LIBOR + 100 basis points for the period from the Payment Date and ending on the first Quarter Date after such date. Starting from the first Quarter Date after the Payment Date, the Notional Rate shall increase by 25 basis points every Quarter, up to a maximum rate of 3 month LIBOR + 200 basis points. For the avoidance of doubt, the Notional Rate applicable for the second Quarter after the Payment Date shall be 3 month LIBOR + 125 basis points.
“Parties” shall mean Visa Inc., Visa Europe, Visa International, Visa USA and Inovant.
“Payment Date” shall mean the earlier to occur of (i) the date one (1) year from the Effective Date, and (ii) the date of filing of an S-1 registration statement for the IPO.
“Person” shall mean any natural person, general partnership, limited partnership, limited liability company, limited liability partnership, joint venture, firm, corporation, association, incorporated organization, unincorporated organization, trust or other enterprise, or any Governmental Authority.
“Post-IPO Period” means the period (if any) from and including the date of admission to trading on an internationally recognized securities exchange of the Class A Common Stock of Visa Inc. to and including the date which is the 369th day after the Inovant US Holdco Merger Effective Time (as defined in the Global Restructuring Agreement).
3
“Quarter” means a period commencing on the Effective Date and ending on the first Quarter Date after such date, and each three-month period thereafter ending on the next subsequent Quarter Date.
“Quarter Date” means 31 March, 30 June, 30 September and 31 December in each calendar year.
“Relevant Period” means the period from and including the Payment Date to and including the date which is the later of (x) the date of admission to trading of the Class A Common Stock of Visa Inc. on an internationally recognized securities exchange and (y) the date which falls on the 369th day after the Inovant US Holdco Merger Effective Time (as defined in the Global Restructuring Agreement).
“Reuters Page LIBOR01” means the display designated on Reuters Page LIBOR01, Inc. or any successor service or page for the purpose of displaying LIBOR offered rates of major banks.
“Value Added Tax” means value added tax as levied within the European Union in accordance with Directive 2006/112/EC and in the United Kingdom in accordance with VATA 1994 and includes any other tax from time to time replacing it.
“VATA 1994” means the Value Added Tax Act 1994.
“Visa Member Risk Policy” shall mean the Visa Member Risk Policy dated October 2005 set forth in Schedule 4.
References to this Agreement include any Schedules to it and references to Clauses are to Clauses of this Agreement.
Headings shall be ignored in construing this Agreement.
The recitals to this Agreement and to the Schedules are included for information purposes only and shall not be legally binding on the parties in any respect whatsoever.
| |
2.1 |
Subject to Clause 4 of this Agreement, Visa Inc. shall provide to Visa Europe authorization, clearing, settlement and payment processing services and other services ancillary thereto, in relation to Visa payment transactions, and shall bring together Members, or Customers of Visa Inc. and Members, in relation to Visa payment transactions to be effected between them, in accordance with the terms of the Schedules to this Agreement. |
| |
2.2 |
Subject to Clause 4 of this Agreement, Visa Europe shall provide to Visa Inc. authorization, clearing, settlement and payment processing services and other services ancillary thereto, in relation to Visa payment transactions, and shall bring together Customers, or Members |
4
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and Customers of Visa Inc., in relation to Visa payment transactions to be effected between them, in accordance with the terms of the Schedules to this Agreement. |
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3.1 |
In consideration for the rights under this Agreement, Visa Europe shall pay to Visa Inc. amounts comprising (i) the Fee in arrears on each Quarter Date or, if a Quarter Date is not a Business Day, the Business Day immediately following that Quarter Date and (ii) the Charges in accordance with Schedule 1, of which the Fee shall be attributable to Schedules 2 and 3. |
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3.2 |
In consideration of the obligations of Visa Europe under both Clause 2.2 and the Schedules, Visa Inc. shall pay amounts comprising the Charges to Visa Europe in accordance with Schedule 1. |
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3.3 |
Taxes shall be borne by the entity that incurs the tax liability. Visa Europe will co-operate with Visa Inc. in the making by Visa Inc. of any claim under the double tax convention between the United Kingdom and the United States of America to minimize or eliminate any requirement of Visa Europe to deduct or withhold an amount on account of United Kingdom income tax of Visa Inc. from payments hereunder. All amounts payable under this Agreement are exclusive of Value Added Tax, if any, and a Party shall pay any Value Added Tax chargeable under applicable Law on such amounts upon receipt of a valid Value Added Tax invoice. |
| |
3.4 |
All payments shall be made by wire transfer in immediately available funds pursuant to written instructions provided to the payer. Unless otherwise specified, all payments made pursuant to this Agreement and all calculations of amounts due under this Agreement shall be in United States Dollars. |
| |
3.5 |
Whether or not a default is declared by Visa Inc. with respect to any delinquent payment under this Agreement, Visa Inc. shall be entitled to interest equal to the lesser of (i) the 3-month LIBOR rate plus 100 basis points, per month, with such interest rate to increase at the beginning of each subsequent quarter by 25 basis points, for a maximum increase of 200 basis points over the 3-month LIBOR rate or (ii) the maximum rate permissible by applicable Law, on any delinquent payment, until all principal and interest on said payment is paid in full. The acceptance of late payments hereunder shall not constitute a waiver of timely payments, nor shall acceptance of partial payments hereunder cure any default which might exist. |
| 4 |
Interpretation and Construction |
In the event of any actual or alleged discrepancy between the services described in Clauses 2.1 and 2.2 of this Agreement and the services described in the Schedules to this Agreement, only the descriptions and express written provisions of the Schedules shall be considered in construction or interpretation of this Agreement.
5
This Agreement is perpetual and may not be terminated by any Party without mutual written consent of Visa Inc. and Visa Europe, which consent may be withheld by any Party for any or no reason.
Except as specifically provided in paragraph 30 of Schedule 1, Section 4.1 of Schedule 2 and Section 4.1 of Schedule 3, this Agreement may not be transferred, assigned or otherwise disposed of by a Party without the prior written consent of the other Parties.
The Parties agree that, where Visa Europe has granted approval for a Member to open a foreign branch which will be located outside the Territory, Visa Europe shall provide Visa Inc. with written notice of such approval. Within 60 days of such notice, Visa Inc. shall grant such Member a license (a “Member Foreign Branch License”) in respect of such Member’s use of the Licensed Marks in its foreign branch operations, which Member Foreign Branch License shall, among other things, require the Member’s licensed foreign branches to comply with the VIOR, including regulations requiring the payment of any fees payable by Customers. The Member Foreign Branch License shall be non-discriminatory and of substantially similar terms to the licenses granted to Visa Inc.’s own licensees. Notwithstanding the issuance of the Member Foreign Branch License by Visa Inc., it is agreed by the Parties that the relationship with the Member will continue to be managed by Visa Europe.
The Parties agree that, where Visa Inc. has granted approval for a Customer to open a foreign branch which will be located inside the Territory, Visa Inc. shall provide Visa Europe with written notice of such approval. Within 60 days of such notice, Visa Europe shall grant such Customer a license (a “Customer Foreign Branch License”) in respect of such Customer’s use of the Licensed Marks in its foreign branch operations, which Customer Foreign Branch License shall, among other things, require the Customer’s licensed foreign branches to comply with the VEOR, including regulations requiring the payment of any fees payable by Members. The Customer Foreign Branch License shall be non-discriminatory and of substantially similar terms to the licenses granted to Visa Europe’s own sublicensees. Notwithstanding the issuance of the Customer Foreign Branch License by Visa Europe, it is agreed by the Parties that the relationship with the Customer will continue to be managed by Visa Inc.
| |
7.3 |
The provisions of this Clause 7 are not intended to change the relationships of Visa Inc. and Visa Europe with respect to foreign branches existing as of the Effective Date. |
6
From and after the Effective Date, each of Visa Inc. and Visa Europe hereby covenants and agrees to maintain capital levels sufficient to support its ongoing business operations and associated risk, borrowing capacity for settlement liquidity and other general purposes and to support satisfactory credit ratings.
Visa Inc. and Visa Europe agree to provide the guarantees and honor the obligations set out in Schedule 5.
| |
10.1 |
Visa Europe shall procure and maintain, at its sole cost and expense, at all times while performing under this Agreement, comprehensive general liability insurance cover with a reputable insurance company, provided that appropriate cover is commercially available, in an amount and covering such risks as may be decided upon by Visa Europe’s board audit committee as the adequate level of cover from time to time. |
| |
10.2 |
Visa Europe shall provide Visa Inc., on Visa Inc.’s request, with a copy of the policy certificate or other evidence confirming the existence of such insurance. |
A Party shall be deemed to be in default of the terms and conditions set out in Clauses 1 to 22 of this Agreement if such Party materially breaches any of its agreements or covenants contained in Clauses 1 to 22 of this Agreement.
| 12 |
Compliance with Applicable Laws |
| |
12.1 |
The Parties shall perform their respective obligations hereunder in a manner that complies with all applicable Laws. |
| |
12.2 |
If permitted by applicable Laws, each Party shall immediately notify the other Parties of any material claim or demand which is communicated to such Party from any Governmental Authorities that enforce applicable Laws or audit a Party’s compliance therewith, regarding such Party’s activities (provided such claim or demand is related to this Agreement) or any action pertaining to the foregoing which is commenced against such Party by any Person and shall keep the other Parties apprized of the status and disposition of all such claims, demands and litigation, provided however, that nothing in this Agreement shall relieve a Party of its obligation to comply with all applicable Laws. |
7
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13.1
|
If any Party is unable to perform its obligations pursuant to this Agreement (other than under Schedule 11) due to or resulting from one or more of the following causes: Act of God, including but not limited to floods, storms, earthquakes, hurricanes, tornadoes or other severe weather or climatic conditions; act of a public enemy, war, or terrorist attack, blockade, riot, insurrection, or embargoes, strikes, unforeseeable shortages of materials beyond its control; or other unforeseeable causes beyond its control (each a “Force Majeure Event”), then, subject to Clause 13.2, such Party’s performance shall be excused but only to the extent of and for the duration of said Force Majeure Event.
|
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13.2 |
In the event of a Force Majeure Event that prevents Visa Europe from meeting its payment obligations to Visa Inc. under this Agreement, Visa Europe shall be excused from such payment obligations for the duration of the Force Majeure Event. After the Force Majeure Event ceases, provided that Visa Europe is able to pay Visa Inc. all due payments that Visa Europe was unable to pay Visa Inc. as a consequences of the Force Majeure Event (“Force Majeure Payment”), Visa Europe shall be obliged to pay Visa Inc. the Force Majeure Payment save that Visa Europe shall not be obliged to pay interest on such payment in accordance with Clause 3.5 of this Agreement (Interest on Late Payment), but Visa Inc. shall be entitled to interest on the Force Majeure Payment at LIBOR rate calculated from the date on which the Force Majeure Payment became due until all principal and interest on such Force Majeure Payment is paid in full. If after the Force Majeure Event ceases, Visa Europe is unable to pay Visa Inc. the Force Majeure Payment as a consequence of the Force Majeure Event, Visa Europe shall have 6 months from date on which the Force Majeure Event ceases within which to pay Visa Inc. the Force Majeure Payment save that Visa Europe shall not be obliged to pay interest on such payment in accordance with Clause 3.5 of this Agreement, but Visa Inc. shall be entitled to interest on the Force Majeure Payment at LIBOR rate calculated from the date on which the Force Majeure Payment became due until all principal and interest on such Force Majeure Payment is paid in full. |
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13.3 |
In the event of a Force Majeure Event, the disabled Party shall immediately notify the other Parties in writing of the Force Majeure Event and the expected duration of same. The disabled Party shall use its best efforts to resume performance under this Agreement. |
| 14 |
Relationship of the Parties |
The Parties are independent contractors and nothing contained in this Agreement shall be construed to create any other relationship among the Parties. No Party is authorized to enter into any agreement for or on behalf of another Party, collect any obligation due or owed to the other, accept service of process for the other, or bind another in any manner whatsoever or purport to act on behalf of another Party in any respect.
8
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1
|
See paragraph 22 of Schedule 1
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This Agreement may be executed in one or more counterparts, all of which together 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, in person or by telecopier, receipt acknowledged, to the other Parties.
This Agreement, including the Schedules and exhibits hereto, including any written amendments to the foregoing satisfying the requirements of Clause 18, and the Global Restructuring Agreement and the Put-Call Option Agreement, including the schedules and exhibits thereto, constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede any previous agreements and understandings between the Parties with respect to such matters. All Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule but not otherwise defined therein shall be defined as set forth in this Agreement or the Global Restructuring Agreement, as the case may be. There are no restrictions, promises, representations, warranties, agreements or undertakings of any Party hereto with respect to the transactions contemplated by this Agreement, the Global Restructuring Agreement and the Put-Call Option Agreement, other than those set forth herein or therein or in any other document required to be executed and delivered hereunder or thereunder. With respect to the licenses and other transactions contemplated hereby, if any term or condition set forth in Schedules 1, 2 or 3 of this Agreement is inconsistent or conflicts with any term or condition of the Global Restructuring Agreement, the terms of Schedules 1, 2 and 3 shall govern.
| 17 |
Severability and Enforceability |
| |
17.1 |
The invalidity of any provisions of this Agreement shall not affect the validity, force or effect of the remaining provisions hereof. If it is ever held that any restriction hereunder is too broad to permit enforcement of such restriction to its fullest extent, each Party hereby consents and agrees that such scope may be modified accordingly in any proceeding brought to enforce such restriction. Any prohibition against or unenforceability of any provision of this Agreement in any jurisdiction, including the state whose Law governs this Agreement, shall not invalidate the provision or render it unenforceable in any other jurisdiction. To the extent permitted by applicable Law, the Parties waive any provision of Law which renders any provision of this Agreement prohibited or unenforceable in any respect. |
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17.2 |
If any part of the Fee is not paid by Visa Europe on the due date for payment under Clause 3, that non-payment shall not entitle Visa Inc. to terminate any of the licenses granted pursuant to this Agreement as set out in Schedules 2 and 3. |
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17.3 |
Except in the event that this Agreement is terminated by mutual written consent in accordance with Clause 5, Visa Europe’s obligation to pay the specified Fee on each Quarter shall be independent of the quantity of services, if any, being received under Schedule 1 and shall not be affected by any breaches or other claims under Schedule 1. The Parties acknowledge that Visa Inc.’s obligation to grant the perpetual licenses herein and Visa Europe’s obligation to pay the specified Fee are material obligations under this Agreement. |
9
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17.4 |
Notwithstanding Clause 17.2, and subject to any rights that are contained in Schedule 1 in the event that either Party fails to pay the Charges in accordance with Schedule 1, the obligations on the Party due to receive the payment pursuant to Schedule 1 may be suspended or terminated to the extent provided pursuant to paragraph 14 of Schedule 1. |
This Agreement may be amended, modified, superseded or cancelled and any of the terms, covenants, representations, warranties or conditions hereof may be waived only by an instrument in writing signed by each of the Parties or, in the case of a waiver, by or on behalf of the Party waiving compliance.
Each Party hereto agrees to perform any further acts and to execute and deliver any documents which may be reasonably necessary to carry out the provisions hereof.
Unless otherwise provided in this Agreement, all activities of the Parties under this Agreement and the exercise of their rights granted hereunder shall be at the relevant Party’s sole cost and expense and at no cost to the other Party.
All notices, requests, permissions, waivers and other communications hereunder or otherwise in connection herewith shall be in writing and shall be deemed to have been duly given (a) three (3) Business Days following dispatch by registered or certified mail, postage prepaid, (b) upon confirmation of receipt, if sent by facsimile, (c) when delivered, if delivered personally to the intended recipient and (d) one (1) Business Day following dispatch by overnight delivery via a national or international courier service and, in each case, addressed to the Party at the following address for such Party:
If to Visa Inc.:
Visa Inc.
Attention: General Counsel
900 Metro Center Boulevard
Foster City, California 94404
U.S.A.
Facsimile: **
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**
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Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
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10
With copies to, which shall not constitute notice:
White & Case LLP
Attention: Kevin Keogh, Esq. / S. Ward Atterbury, Esq.
1155 Avenue of the Americas
New York
New York 10036
Facsimile: (212) 354-8113
If to Visa Europe Limited:
Visa Europe Limited
Attention: General Counsel
1 Sheldon Square
London, W2 6TT
United Kingdom
Facsimile:
With copies to, which shall not constitute notice:
Linklaters LLP
Attention: Robert Thornton Smith, Esq.
1345 Avenue of the Americas
New York, NY 10105
U.S.A.
Facsimile: (212) 903-9100
If to Visa International:
Visa International
Attention: General Counsel
P.O. Box 8999
San Francisco
11
California 94128-8999
Facsimile: **
With copies to, which shall not constitute notice:
White & Case LLP
Attention: Kevin Keogh, Esq. / S. Ward Atterbury, Esq.
1155 Avenue of the Americas
New York
New York 10036
Facsimile: (212) 354-8113
If to Visa USA:
Visa USA
Attention: General Counsel
P.O. Box 8999
San Francisco
California 94128-8999
Facsimile: **
With copies to, which shall not constitute notice:
Holme, Roberts & Owen LLP
Attention: Dean Salter, Esq.
1700 Lincoln Street
Suite 4100
Denver
Colorado 80203-4541
If to Inovant LLC:
Inovant LLC
Attention: General Counsel
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**
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Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
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12
PO Box 8999
San Francisco
California 94128-8999
Facsimile: **
or to such other addresses as shall be furnished in writing by any such Party to the other Parties hereto in accordance with the provisions of this Clause 21.
This Agreement and its enforcement will be governed by, and construed in accordance with, the Laws of the State of New York, United States of America without reference to the choice of law principles thereof. However, if the Laws of any state or country require terms other than or in addition to those contained herein, then this Agreement shall be deemed modified so as to comply with the applicable Laws of such state or country, but only to the extent necessary to prevent the invalidity of this Agreement or any material provision hereof, the imposition of fines or penalties, or the creation of civil or criminal liability as a result thereof. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR DISPUTES RELATING HERETO.
In witness whereof, the parties hereto have caused this Agreement to be duly executed.
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| SIGNED by |
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| on behalf of Visa Inc. |
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} |
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| SIGNED by |
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| on behalf of Visa Europe Limited |
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} |
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| SIGNED by |
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| on behalf of Visa International |
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} |
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| SIGNED by |
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| on behalf of Visa USA |
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} |
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| SIGNED by |
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| on behalf of Inovant LLC |
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} |
14
Schedule 1
BILATERAL SERVICES
Table of Contents
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Contents
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Page |
| 1 |
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Definitions and Interpretation |
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2 |
| 2 |
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Services to be Provided |
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2 |
| 3 |
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[Intentionally Left Blank] |
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2 |
| 4 |
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Service Provision |
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3 |
| 5 |
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Existing Agreements |
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6 |
| 6 |
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Standards of Care |
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7 |
| 7 |
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Service Levels and Credits |
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7 |
| 8 |
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Global Rules, Systems Changes and Business Enhancement Releases |
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10 |
| 9 |
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Information Access and Retention |
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14 |
| 10 |
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Authorised Representatives |
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17 |
| 11 |
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Business Continuity/IT Disaster Recovery |
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17 |
| 12 |
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Regulatory Compliance |
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17 |
| 13 |
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Charges |
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20 |
| 14 |
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Invoicing and Payment |
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22 |
| 15 |
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Service Standard |
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23 |
| 16 |
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Change Control Process |
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24 |
| 17 |
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Audit Rights |
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26 |
| 18 |
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Intellectual Property Rights |
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29 |
| 19 |
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Warranties and Representations |
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30 |
| 20 |
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Liability |
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30 |
| 21 |
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Indemnities |
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32 |
| 22 |
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Force Majeure |
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34 |
| 23 |
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Confidentiality |
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36 |
| 24 |
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Data Protection and Security |
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38 |
| 25 |
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Information Rights and Step-In Rights |
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38 |
| 26 |
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Term and Termination |
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39 |
| 27 |
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Migration Assistance |
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41 |
| 28 |
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Consequence of Termination |
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42 |
| 29 |
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Dispute Resolution |
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43 |
| 30 |
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Assignment |
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47 |
| 31 |
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No Waiver |
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47 |
| 32 |
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Third Party Rights |
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48 |
| 33 |
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Rates and Cash Disbursement Fees |
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48 |
| 34 |
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Switching and Processing |
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49 |
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| ATTACHMENT 1 Definitions |
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52 |
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| ATTACHMENT 2 Service Catalogue |
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[•] |
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| ATTACHMENT 3 Statement of Work |
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[•] |
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| ATTACHMENT 4 Global Programmes |
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[•] |
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| ATTACHMENT 5 Service Level Agreement |
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[•] |
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| ATTACHMENT 6 Pricing and Financial Programs |
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[•] |
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| ATTACHMENT 7 Data Protection Agreement |
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[•] |
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| ATTACHMENT 8 Interoperability Procedures and Practices |
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[•] |
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Schedule 1
BILATERAL SERVICES SCHEDULE
Background
| A. |
WHEREAS, Visa Inc. (“Visa”) owns certain Intellectual Property necessary for Visa Europe Limited (“Europe”) to provide Visa branded products in the Territory as well as provide and receive the Services subject to this Schedule; |
| B. |
WHEREAS, Visa has granted to Europe a license to such Intellectual Property, including trademarks, software and other technology under that certain Technology License Agreement and Trademark License Agreement as contained in Schedule 2 and Schedule 3 respectively (the “License Agreements”), in order for Europe to receive services hereunder and as contemplated under that certain Global Restructuring Agreement, dated as of [•]; |
| C. |
WHEREAS, the Parties desire to maintain consistent operating standards to provide Interoperability; |
| D. |
WHEREAS, the Parties desire to provide for a seamless service to Visa and Europe cardholders; and |
| E. |
WHEREAS, each Party wishes to procure services from the other in order to achieve the aforementioned objectives. |
| 1 |
Definitions and Interpretation |
This Schedule shall be interpreted in accordance with Attachment 1 (Definitions).
| 2 |
Services to be Provided |
| 2.1 |
Visa shall provide Europe the Visa Services in accordance with the terms of this Schedule from the Effective Date, and in such cases Visa shall be deemed the “Service Provider” and Europe the “Service Recipient”. |
| 2.2 |
Europe shall provide Visa the Europe Services in accordance with the terms of this Schedule from the Effective Date, and in such cases Europe shall be deemed the “Service Provider” and Visa the “Service Recipient.” |
| 2.3 |
In addition to the services, functions and responsibilities set out in the Service Catalogue, the Services shall be deemed to include and the Service Provider shall provide (i) all of the activities, functions and obligations that the Service Catalogue requires the Service Provider to provide and (ii) all activities, functions, responsibilities and obligations not specifically described in the Service Catalogue but are necessary for, required for, incidental to or customarily included as part of the provision of services described in the Service Catalogue and which the Service Provider was providing prior to or on the Effective Date. |
| 3 |
[INTENTIONALLY LEFT BLANK]. |
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| 4.1 |
The Service Provider shall provide: |
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4.1.1 |
the SRI Services for the Term, unless terminated earlier in accordance with paragraph 26.4; |
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4.1.2 |
the Optional Services for the Optional Services Term unless terminated earlier in accordance with paragraph 26.5 or 26.6; |
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4.1.3 |
the Transitional Services for the Transitional Services Term unless terminated earlier in accordance with paragraph 26.5 or 26.6; |
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4.1.4 |
Professional Services, including enhancements and modifications to existing Services, provided in accordance with a Statement of Work as further provided in paragraph 16.1 or 16.2; and |
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4.1.5 |
New Services as added to the Service Catalogue either by agreement of the Parties pursuant to paragraph 16.3 or paragraph 4.5.3. |
Notwithstanding the agreed upon term for an Optional Service, a Service Provider may not cease providing such a Service at the agreed price less than eighteen (18) months after notifying the Service Recipient that it is unwilling to continue to provide the Optional Service beyond the then current term for the Optional Service on the same commercial terms; provided, that, where:
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4.1.6 |
the term of an Optional Service is less than eighteen (18) months; and |
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4.1.7 |
the Service Provider did not notify the Service Recipient at the beginning of that term that it was not willing to provide the Optional Service beyond that term; and |
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4.1.8 |
before the expiry of the then current term, the Service Recipient requests that the Service Provider continues to provide the Optional Service beyond the term, |
the Service Provider shall not be obliged to carry on providing the Optional Service beyond the period of its prior written notice of its unwillingness to continue providing the Optional Service, such prior written notice to be no less than the term of the Optional Service. If the Parties are interested in extending the term of the Optional Service they shall meet in order to try to agree on the price and term for any such extension.
| 4.2 |
Unanticipated Services |
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4.2.1 |
Until 30 September 2008 the Service Provider shall not cease to provide or replace any service provided as of the Effective Date that it provides to itself, other members of its group or its other customers without using commercially reasonable efforts to carry out due diligence to determine the impact, if any, on the Service Recipient. |
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4.2.2 |
If the Service Provider becomes aware that the service it intends to cease to provide or replace with another service is an Unanticipated Service it will not cease to provide or replace the provision of such Service to the Service Recipient without providing the Service Recipient with reasonably prompt prior written notice. |
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4.2.3 |
Upon the request of the Service Recipient, made no later than 30 September 2008, the Service Provider will continue to provide an Unanticipated Service in substantially the same manner as such service was provided to the Service Recipient prior to the Effective Date; provided, that: (i) the Service Provider may charge a reasonable sum for the Unanticipated Service based on the resulting additional cost (if any) to the Service Provider of providing such Service over and above the cost of providing Services already documented under this Schedule; (ii) the Service Recipient shall use commercially reasonable efforts to make itself self-sufficient with respect to such Services, except where such Services are deemed SRI Services pursuant to paragraph 4.5.3, as soon as reasonably possible but in no event later than three (3) years after the Effective Date; and (iii) provision of the Unanticipated Service does not materially interfere with the Service Provider’s ability to comply with Applicable Law. |
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4.2.4 |
Unanticipated Services shall not include insurance-related services, liquidity services or information technology procurement services. |
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4.2.5 |
Any Unanticipated Service provided pursuant to this paragraph 4.2 shall be deemed to be an Optional Service under this Schedule unless agreed otherwise between the Parties or deemed an SRI Service pursuant to paragraph 4.5.3. |
| 4.3 |
Switching and Processing Services |
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4.3.1 |
Europe or its designated agents shall process all VE Transactions in accordance with the Global Rules. Europe shall procure services from Visa for processing and routing of Member-issued Card transactions occurring outside the Territory in accordance with the Global Rules, except where the Parties have agreed in writing otherwise or a Europe Competitor is not required by Visa to use such services. |
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4.3.2 |
Visa or its designated agents shall process all VI Transactions in accordance with the Global Rules. Visa shall procure services from Europe for processing and routing of Customer-issued Card transactions occurring inside the Territory in accordance with the Global Rules, except where the Parties have agreed in writing otherwise or a Visa Competitor is not required by Europe to use such services. |
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4.3.3 |
Unless otherwise agreed in writing, Visa shall not process any VE Transactions and Europe shall not process any VI Transactions. |
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| 4.4 |
[INTENTIONALLY LEFT BLANK] |
| 4.5 |
Transformation Criteria |
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4.5.1 |
An SRI Service shall cease being an SRI Service if agreed by the Parties or if it fails to meet (i) either of the criteria as set forth in paragraph 4.5.2 (the “Transformation Criteria”) and (ii) the procedural requirements set forth in paragraph 4.5.4 and 4.5.5. |
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4.5.2 |
The “Transformation Criteria” means all of the criteria below: |
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(i) |
The Service is required by the Service Recipient and it is not possible for any party other than the Service Provider to provide it either: |
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(a) |
on a commercially reasonable basis; or |
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(b) |
on a basis that the Service Recipient is willing to accept. |
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(ii) |
The Service is required to be provided by the Service Provider to the Service Recipient to preserve their ability to provide products and services in the manner required for Interoperability pursuant to the Global Rules and Interoperability cannot be maintained without the Service Recipient receiving the Service from the Service Provider. Services required for Interoperability by the Global Rules include those services provided by each Party to the other that are required for cross territory processing. |
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4.5.3 |
Where an Optional Service, New Service or Unanticipated Service meets the requirements set out in paragraph 4.5.2(ii), then either Party, if it can demonstrate such requirements, may notify the other that it believes such Service must be reclassified as an SRI Service, subject to the Expedited Dispute Resolution Procedure. The Parties may also classify or reclassify (as the case may be) such Services as SRI Services by agreement. |
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4.5.4 |
In the event that either Party determines that an SRI Service should, pursuant to the Transformation Criteria, either be (i) reclassified as an Optional Service or (ii) terminated at the end of the period remaining on the pricing term for such SRI Service, the Party seeking reclassification shall notify the other Party that it believes the Transformation Criteria is met. Within ninety (90) days, the notified Party shall perform an assessment of the reclassification with the full cooperation of the Party seeking the reclassification. If, after performing the assessment, the notified Party does not agree to the reclassification, it shall inform the Party seeking reclassification within ten (10) days of completing the assessment. |
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4.5.5 |
The Party seeking reclassification may require the Parties’ Authorised Representatives to meet within forty-five (45) days to discuss the reclassification and, if they still cannot agree, submit the issue to the Expedited Dispute
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Resolution Procedure, which shall determine if the Transformation Criteria are met and, if so, a reasonable time period for the Service Recipient to find an alternative source for such Services and carry out orderly migration to that alternative source. Notwithstanding an Expedited Dispute Resolution Procedure’s finality pursuant to paragraph 29.3, either Party may once again propose reclassification of an SRI Service no less than three (3) years after a determination pursuant to the Expedited Dispute Resolution Procedure that an SRI Service may not be reclassified.
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| 5.1 |
All pre-existing agreements solely between Visa and/or its predecessors including Visa International Services Association, Visa USA Incorporated, Visa Canada Limited and Inovant LLC, as one party, and Europe, as the other party, that concern the provision of services to each other, shall terminate as of the Effective Date. |
| 5.2 |
The Statements of Work entered into prior to the date of this Schedule as set out in Attachment 3 (Statements of Work) shall be deemed to be Statements of Work under this Schedule. |
| 5.3 |
Subject to paragraphs 5.1, 5.2 and 5.4, where, prior to the Effective Date, the Parties have entered into a written commitment which does not relate to technology projects, shared funding arrangements or Derivative Works as defined in the License Agreements, but does relate to the performance of a Service, such commitments shall be deemed to be a Statement of Work under this Schedule, provided, that, such commitment has been executed by both Parties as of the Effective Date. |
| 5.4 |
VROL and VIM Global Shared Development Programmes |
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5.4.1 |
Europe will only fund the VROL and VIM global shared development programmes as set out in this paragraph 5.4 and Attachment 4 (Global Programmes) unless otherwise agreed in writing between the Parties. |
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5.4.2 |
The funding for the VROL and VIM global shared development programmes, as set out in this paragraph 5.4 and Attachment 4 (Global Programmes), shall only be provided to Visa when the Parties have agreed the governance arrangements for these programmes. |
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5.4.3 |
Europe’s contribution to: |
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(i) |
the VROL global shared development programme for the period from ** to ** shall be capped at ** dollars and no cents ($**); and |
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**
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Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
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(ii) |
the VIM global shared development programme for the period from ** to ** shall be capped at ** dollars and no cents ($**). |
| 6.1 |
The Service Provider shall ensure that all of the Services: |
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6.1.1 |
conform to the relevant description set out in the Service Catalogue; |
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6.1.2 |
are otherwise supplied in accordance with this Schedule; |
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6.1.3 |
are provided in a manner that meets or exceeds the Service Levels; and |
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6.1.4 |
to the extent not addressed by a Service Level, are provided in accordance with Good Industry Practice and in a timely manner. |
| 6.2 |
Each Party, whether in its capacity as Service Provider, Service Recipient or otherwise shall comply with the standards set forth by the Payment Card Industry Security Standards Council for so long as Visa is a member of such body and ensure that Members (in the case of Europe), Customers (in the case of Visa) and their respective Processors are accountable for compliance with such standards. |
| 7 |
Service Levels and Credits |
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7.1.1 |
The Service Recipient and the Service Provider shall perform and receive the Services in accordance with their respective rights and obligations as set forth in Attachment 5 (Service Level Agreement) and in a manner that meets or exceeds the Service Levels. |
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7.1.2 |
The Service Provider shall provide the Service Recipient with a report detailing its compliance with objectives for each Service Level on a monthly basis (unless the agreed Service Level states that such reporting should take place on a different basis). The Service Provider shall be responsible for using such accurate tools, processes and methodologies as it reasonably requires for the measurement and reporting of performance to ensure that the Service Recipient receives correct reports of the Service. |
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7.2.1 |
Either Party may notify the other Party of its desire to review certain Service Levels by the anniversary of the Effective Date of each year. The Parties’ Authorised Representatives will meet within sixty (60) days of the date of receipt of such notice by the other Party; provided, that, such meetings are not required more than once annually. |
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**
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Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.
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7.2.2 |
In the event the Parties cannot agree on a Service Level change within fifteen (15) days of the meeting between the Parties’ Authorised Representatives, the Party requesting a Service Level change may require, within thirty (30) days, that the Parties’ Chief Operating Officers meet to discuss the basis for such change. Subject to an adjustment of the Service Levels in accordance with paragraph 15.3, each existing Service Level shall remain in effect until a new Service Level is agreed to in writing and executed by an Authorised Representative of each Party. |
| 7.3 |
Service Level Failure |
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7.3.1 |
If the Service Provider fails to provide the Services in accordance with the Service Levels, then the Service Provider shall, upon becoming aware of any failure to meet a Service Level that constitutes a Critical Performance Failure: |
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(i) |
as soon as practicable notify the Service Recipient of the missed Service Level in writing; |
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(ii) |
meet with the Service Recipient, by phone or in person, to discuss the factors causing such failure, and the Service Provider’s plan to avoid such failure in the future; |
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(iii) |
perform root cause analysis to identify possible causes for the failure; |
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(iv) |
correct such failure as soon as practicable but, in any event, within any period of time set out in the Service Level Agreement; |
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(v) |
provide the Service Recipient with a written report detailing the cause of, and procedure for correcting, such failure; and |
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(vi) |
take any necessary measures as are reasonably required to ensure that such failures are minimised and will not recur. |
For failures to meet Service Levels that are not Critical Performance Failures, the Service Provider shall:
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(vii) |
provide the Service Recipient notice of the missed Service Level in accordance with paragraph 7.1.2; |
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(viii) |
correct such failure within a reasonable time but, in any event, within any period of time set out in the Service Level Agreement; and |
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(ix) |
take measures in accordance with Good Industry Practice to ensure that such failures are minimised and will not recur. |
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7.3.2 |
Any costs incurred by the Service Provider in connection with any participation in the activities set out in paragraph 7.3.1 shall be borne by the Service Provider unless and to the extent that any failure to provide Services in accordance with relevant Service Levels was due to the negligence, error, omission or other failure
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of the Service Recipient, including any failure of the Service Recipient to provide proper notification to the Service Provider pursuant to paragraph 9.4.
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7.3.3 |
At the Service Recipient’s request, the Service Provider will reprocess any data that was initially processed by such Service Provider incorrectly and promptly rectify any | |
